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       As filed with the Securities and Exchange Commission on July 20, 2001

                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                              Washington, DC 20549

                                      FORM 10-K/A

[X]     Annual report pursuant to Section 13 or 15(d) of the Securities Exchange
Act  of  1934  for  the  fiscal  year  ended  December  31,  2000
                                              -------------------
                                       OR
[  ]     Transition  report  pursuant  to  Section 13 or 15(d) of the Securities
Exchange  Act  of  1934

                           Commission File No. 0-17139
                                               -------

                                   Genus, Inc.
             (Exact name of registrant as specified in its charter)

       CALIFORNIA                               94-2790804

(State or other jurisdiction of     (I.R.S. Employer Identification Number)
incorporation or organization)

1139 Karlstad Drive, Sunnyvale, CA                   94089
(Address of principal executive offices)           (Zip Code)

Registrant's  telephone  number,  including  area  code  (408)  747-7120
Securities  Registered  Pursuant  to  Section  12(b)  of  the  Act:  None
Securities Registered Pursuant to Section 12(g) of the Act: Common Stock, no par
value

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


Indicate  by  check mark if disclosure of delinquent filers pursuant to Item 405
of  Regulation  S-K  is  not contained herein, and will not be contained, to the
best  of  Registrant's  knowledge, in definitive proxy or information statements
incorporated  by  reference  in Part III of this Form 10-K/A or any amendment to
this  Form  10-K/A. [   ]


The  aggregate  market  value  of the voting stock held by non-affiliates of the
Registrant,  based  upon the closing sale price of the common stock on March 22,
2001  in  the over-the-counter market as reported by the Nasdaq National Market,
was  approximately $49.5 million Shares of common stock held by each officer and
director  and by each person who owns 5% or more of the outstanding voting stock
have  been  excluded  in  that such persons may be deemed to be affiliates. This
determination  of affiliate status is not necessarily a conclusive determination
for  other  purposes.


As  of  July  10,  2001,  Registrant  had  22,263,497  shares  of  common stock
outstanding.



                       DOCUMENTS INCORPORATED BY REFERENCE

Parts  of  the  following  document are incorporated by reference in Part III of
this Form 10-K/A Report: Proxy Statement for Registrant's 2001 Annual Meeting of
Shareholders  -  Items  10,  11,  12  and  13

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                                     PART I

ITEM  1.

OVERVIEW

     Since  1982,  we  have been supplying advanced manufacturing systems to the
semiconductor  industry  worldwide.  Major  semiconductor  manufacturers use our
leading-edge  thin  film  deposition equipment and process technology to produce
integrated circuits, commonly called chips, that are incorporated into a variety
of products, including personal computers, communications equipment and consumer
electronics.  We pioneered the development of chemical vapor deposition tungsten
silicide,  which  is  used  in  certain  critical  steps  in  the manufacture of
integrated  circuits. In addition, today we are leading the commercialization of
atomic  layer  deposition,  also  known  as  ALD  technology. This technology is
designed  to  enable  a wide spectrum of thin film applications such as aluminum
oxide,  tungsten nitride and other advanced dielectric insulating and conducting
metal  barrier  materials  for  advanced  integrated  circuit  manufacturing.

     In 2000, we announced our marketing strategy of targeting non-semiconductor
markets,  as  we  are  confident  that  our  developed  films can serve multiple
applications  in both semiconductors and non-semiconductor segments. In addition
to  expanding  our  total  available  market,  this strategy of diversifying our
customer  base is intended to gain us some protection against cyclical downturns
in  the semiconductor industry.  We think our emerging ALD technology will prove
effective  in  expanding  and  diversifying  our  customer  base.

     We  continue  to  develop  enabling thin film technology that addresses the
scaling  challenges  facing  the  semiconductor  industry  relating  to gate and
capacitor  materials.  These  challenges have been labeled as "red zones" by the
International  Technology Roadmap for Semiconductors (ITRS) because there are no
known  solutions  that allow for further reduction in feature sizes and improved
performance.  Our  innovative  thin  film  technology  solutions are designed to
enable  chip  manufacturers  to  simplify  and  advance their integrated circuit
production processes and lower their total cost of manufacturing per chip, known
as  cost  of  ownership.

     As it is in the semiconductor industry, non-semiconductor business segments
have scaling initiatives as well.  For example, the making of thin film magnetic
heads  in  the  data  storage industry has scaling requirements analogous to the
scaling  trends in semiconductors.  A key part of our business strategy includes
providing  enabling  thin  film  solutions  for  non-semiconductor applications.

     We  provide  a  production-proven  platform  that  is  used  for  both  the
development  and  volume  production  of  new  thin  films in integrated circuit
manufacturing.  This  platform  is  based  on  a  common architecture and a high
percentage  of common parts that are designed to provide manufacturers with high
reliability  and  low  cost  of  ownership  across  a  wide  range  of thin film
deposition  applications. The modular design of our system permits manufacturers
to  add  capacity and to service their manufacturing systems easily. In addition
to  the  modular  platform  architecture,  our systems operate on a standardized
software  that  is  designed  to  support  a  wide range of thin film deposition
processes.  Furthermore,  our  patented process chamber design incorporated into
our flagship LYNX product family can be configured for chemical vapor deposition
(CVD),  plasma  enhanced  CVD, metal organic CVD and ALD with minimal changes to
the  chamber  design.

     Our  global  customer  base  consists of semiconductor manufacturers in the
United  States,  Europe  and  Asia.  Our current customers include semiconductor
manufacturers such as Infineon Technologies, Micron Technology, Inc. and Samsung
Electronics Company, Ltd.  Recently, we gained a new, non-semiconductor customer
in  the  United  States,  Read-Rite  Corporation,  which  is  an  independent
manufacturer  of  magnetic recording heads for hard disk drives and a recognized
technology  leader  in  the  data  storage  industry.

                                        2
<PAGE>


INDUSTRY  BACKGROUND

     The manufacture of a chip requires a number of complex steps and processes.
Most  integrated  circuits  are  built on a base of silicon, called a wafer, and
consist  of  two  main structures. The lower structure is made up of components,
typically  transistors  or  capacitors,  and the upper structure consists of the
circuitry  that connects the components. Building an integrated circuit requires
the  deposition of a series of film layers, which may be conductors, dielectrics
(insulators),  or  semiconductors.  The  overall  growth  of  the  semiconductor
industry  and  the  increasing  complexity  of  integrated  circuits have led to
increasing  demand  for  advanced  semiconductor  equipment.  Although  the
semiconductor  industry  has grown over 30 years with an average compound annual
growth rate (CAGR) of 17%, it is prone to cyclic variations. Typically there are
periods  of  high demand followed by periods of low demand. Each cycle is one to
three  years  of  high growth and one to three years of low growth. Currently we
are entering a period of a down cycle after two years of overheated high demand.
In  spite  of a forecasted flat year of growth in the semiconductor industry for
2001,  Genus  is planning the execution of 30% growth (down from 66% in the year
2000).  This  is  rationalized by the diversity and demand of Genus' new product
base  and  our  entry  into  new  markets.

     INDUSTRY DRIVERS: LOWERING THE COST PER FUNCTION AND INCREASING PERFORMANCE

     The  growth of computer markets and the emergence and growth of new markets
such  as  wireless  communications  and  digital  consumer  electronics  have
contributed  to  recent growth in the semiconductor industry. This increase also
has  been  fueled by the semiconductor industry's ability to supply increasingly
complex,  higher  performance  integrated  circuits,  while continuing to reduce
cost.  The  increasing  complexity  of  integrated circuits and the accompanying
reductions in feature size require more advanced and expensive wafer fabrication
equipment  which  can  increase  the  average cost of advanced wafer fabrication
facilities. Technological advances in semiconductor manufacturing equipment have
historically enabled integrated circuit manufacturers to lower cost per function
and  improve  performance  dramatically  by:

-     reducing  feature  size of integrated circuits and the introduction of new
      materials  with  scaled  dimensions;
-     increasing  the  wafer  size;
-     increasing  manufacturing  yields;  and
-     improving  the  utilization  of  wafer  fabrication  equipment.

     REDUCING  FEATURE SIZES AND ADDING NEW ENABLING THIN FILMS. Smaller feature
sizes allow more circuits to fit on one wafer. These reductions have contributed
significantly  to  reducing  the  manufacturing cost per chip. The semiconductor
industry  is  driven  by  performance  (mainly the increased speed for logic and
memory  signals)  and  increased  chip  density (mainly the increased density of
memory  and  logic  capacity). In addition to the continued reduction in feature
sizes,  there  is  a  paradigm  shift  for  the  use of new materials to improve
performance  of  integrated  circuits.  New  materials  are  required  for gate,
capacitor  and  interconnect  application  segments  within  the  semiconductor
manufacturing  process.  The  adoption  of new types of thin film conducting and
insulating  materials  will  accelerate  the  trend  toward  higher  levels  of
semiconductor  performance  and integration while maintaining the historic trend
of  reduction  of  cost  per  function.

     LARGER  WAFER  SIZES.  By  increasing  the  wafer  size, integrated circuit
manufacturers  can  produce  more  circuits per wafer, thus reducing the overall
manufacturing costs per chip. Leading-edge wafer fabrication lines are currently
using  200  millimeter (mm) wafers, up from the 100mm wafers used ten to fifteen
years  ago.  Currently,  many  integrated  circuit  makers  are commencing pilot
production  lines  using  300mm wafers. We believe that most major manufacturers
will  add  300mm  production  capabilities  within  the  next one to four years.

     HIGHER  MANUFACTURING  YIELDS.  In  the  last  fifteen years, manufacturing
yields,  or the percentage of good integrated circuits per wafer, have increased
substantially,  while the time to reach maximum yield levels

                                        3
<PAGE>

during  a production lifecycle has decreased significantly. As the complexity of
chips  increases, manufacturers must continually reduce defect density to obtain
higher  yields.

     IMPROVED EQUIPMENT UTILIZATION AND INTRODUCING NEW EQUIPMENT ARCHITECTURES.
The  utilization  of  semiconductor manufacturing lines has improved in the last
ten  years.  Manufacturing  lines  now  operate  continuously.  In addition, new
architectures  of  production equipment are being explored that allow for higher
throughputs, better reliability, high quality, and low overall cost-of-ownership
as  measured  by  the  total  cost  to process each wafer through the equipment.

     While  these  production techniques are important for reducing the cost per
function  of  chips,  we believe that the most beneficial production solution is
likely to combine feature size reduction and the use of new thin film materials.

     RED  ZONE  CHALLENGES  FACING  THE  SEMICONDUCTOR  INDUSTRY

     The semiconductor industry is driven by the need for higher performance and
greater  chip  density  as  measured by an increasing number of functions on the
chip. The semiconductor industry has historically been able to double the number
of  transistors  on  a  given space of silicon every 18 to 24 months by reducing
feature  sizes.  However,  as the industry approaches feature size dimensions of
0.15  micron  and  below,  the  industry  will  face  significant challenges and
roadblocks  pertaining  to  improving  device  performance  and  feature  size
reduction.  These  challenges have been labeled "red zones" by the International
Technology  Roadmap  for  Semiconductors because there are no known solutions to
allow  for  further  reduction  in feature sizes and improved performance. It is
estimated  that semiconductor manufacturers need approximately two to four years
to  research,  develop and commercially produce a new type of chip. Accordingly,
we  expect  semiconductor  manufacturers to begin their research and development
activities as well as capital purchases to support those activities at least two
years  before  producing  a  new  chip.

     As part of its strategy to solve the challenges posed by the red zones, the
semiconductor  industry is moving towards the use of ultra-thin dielectrics with
high  insulating  capabilities  for  gate  dielectrics and capacitors as well as
ultra-thin metal barriers for copper-based interconnect processes. Emerging thin
films  with  high  dielectric  capabilities  for gate and capacitor applications
include metal oxides such as aluminum oxide. In these ultra-thin dielectric film
applications,  the  thickness  and  quality  must be highly controlled while the
films  need  to be deposited in a high-volume, cost-effective manner. Ultra-thin
metal  nitride  barrier  films,  such as those made of tungsten nitride, must be
developed  to  support  copper-based  interconnect schemes. Reduction of feature
size  requires innovations in new types of thin film deposition technologies and
equipment  to  deposit  new  films.

THE  GENUS  SOLUTION

     We  are  an  innovative  supplier  of  thin  film  deposition  equipment to
semiconductor  and non-semiconductor manufacturers and are focused on developing
enabling  thin  film  technology to solve the challenges posed by the red zones.
Our  patented  multi-purpose process chamber serves as the foundation for all of
our  current products. Our products are designed to deliver high throughput, low
cost  of  ownership  and  quick  time  to  market,  enhancing  the  ability  of
manufacturers to achieve productivity gains. We support our innovative thin film
deposition  systems  with  a  focused  level  of  customer  service.

     INNOVATIVE  THIN  FILM  SOLUTIONS

     Our  systems  and  processes  are  designed to provide innovative thin film
solutions that address technical and manufacturing problems of the semiconductor
industry.  We  provide  our  customers  with  advanced systems and processes for
depositing  thin  films  such  as  CVD  tungsten silicide, tungsten nitride, and
blanket tungsten, and ALD films such as aluminum oxide, tantalum oxide, titanium
oxide,  zirconium  oxide,  hafnium oxide, titanium nitride and tungsten nitride.
These  innovative  thin films solve certain key device and

                                        4
<PAGE>

interconnect  problems  faced by semiconductor manufacturers as they scale their
device  geometries  below  0.13  micron.

     VERSATILE  PRODUCTION  PLATFORM

     Our  Lynx  series  of  systems  is  based  on a common outsourced, reliable
wafer-handling  robotic  platform.  The Lynx systems are designed to be flexible
and  can  be  configured  for multiple deposition processes, such as CVD, plasma
enhanced  CVD,  metal  organic CVD and ALD. Our Lynx systems offer the following
advantages:

-  a  production-proven  platform  which  allows for easier and faster migration
   from  research  and  development  to  production;
-  a  platform  based  upon a large number of standardized parts used across our
   systems  to  enhance  reliability;  and
-  a  modular  design  that  allows  for  simplified  service.

     In  addition,  all  of  our  systems  are  designed  with  a graphical user
interface  that  automates  tasks  and  allows  for comprehensive viewing of the
real-time  status  of  the systems. Our software supports our customers' process
development  needs with the ability to run a different set of processes for each
wafer.

     LOW  COST  OF  OWNERSHIP

     Our  Lynx  series  equipment  offers  low  cost  of  ownership by featuring
multiple  deposition  processes  capabilities, production-proven process chamber
design,  advanced  software  architecture  and reliable wafer handling. Based on
feedback  from  our  installed  customer  base,  we estimate that our production
systems  consistently  achieve  greater than 90% availability, and that the mean
time  between failure of our system is greater than 300 hours.  In addition, our
customers  have confirmed that we offer among the lowest costs of operation.  We
are  committed  to  improving  these  results,  achieving  these  same levels of
performance  or  better  with  our  new  thin  film  products.

     CUSTOMER  SUPPORT

     We  believe we deliver superior customer support and service to enhance our
long-term  customer relationships. We maintain an international customer support
infrastructure  with  fully  staffed customer support facilities in Japan, Korea
and  the  United States. We provide training for two customer engineers with all
of  our  equipment  installations  as  well as 24 hours a day, seven days a week
product support. We offer warranties consisting of a two-year parts warranty and
a  one-year  labor  warranty  that  provides  a  dedicated  technician  on site.


MARKETS  AND  APPLICATIONS

     In  2000,  we  continued  expanding  our  product  line  with new films and
applications that allow us to serve broader markets. In 1999, Genus had tungsten
silicide and tungsten nitride for gate and barrier applications and we were just
introducing  ALD  technology.  As  we turn into 2001, we have tungsten silicide,
tungsten  nitride  and blanket tungsten by conventional CVD, and aluminum oxide,
tantalum  oxide,  titanium  oxide,  hafnium oxide and zirconium oxide as well as
titanium  nitride  and  tungsten  nitride  by  ALD.  In  addition, Genus has the
demonstrated capability to integrate these ALD films as alloys and nanolaminates
(layered structures) for the engineering of specialized capabilities on its Lynx
series  platforms.  These  10  films  serve  the  Company  for  applications  in
semiconductors  for  gate,  capacitor  and  interconnect,  as  well  as
non-semiconductor  applications  (e.g.,  in  particular, aluminum oxide for thin
film  magnetic  heads  of  hard  disk drives).  In the near term, our key target
applications  are  gate and capacitor for semiconductors, while ALD

                                        5
<PAGE>

interconnect  barriers  may  be marketed in the years 2002-2003. We are also now
marketing  certain  of  our dielectrics for gap applications in thin film heads.

     The  2001  estimated  market  for  silicide  is  $400 million; for gate and
capacitor  dielectric  film  tools  the  estimated  market  is $700 million; the
estimated  market  for  metal  barriers is $1.4 billion. Genus has increased its
potential  market  from  approximately  $400  million  in 1998 to more than $2.5
billion today.  If we assume that these segments have a historic CAGR (+17%), we
estimate a total available market (TAM) of  $3.4 billion for 2003 and $4 billion
by  2005.  It  is  also  reasonable to assume, as many key dielectrics and metal
barrier  films  migrate  from  CVD  toward  ALD  technology,  that an increasing
fraction  of  this  TAM  can be applicable to the Genus product suite. Genus has
already  shipped its ALD dielectric and metal system for capacitor appliqu , and
its dielectric system (with enabling engineering specializations) for logic gate
application.  As  far  as  the  non-semiconductor segments are concerned, we now
have  business  in  the  thin film magnetic head specialty market, for which gap
dieletrics  has an estimated TAM level of approximately $30-50 million per year.

     By  focusing on a broader set of film markets, we believe we can reduce our
dependence  on  the volatile dynamic-random-access memory (DRAM) market, as well
as  benefit from participation in the logic segment and non-semiconductor market
opportunities.  In  summary,  we  are  now participating in semiconductor memory
with  gate and capacitor films, in semiconductor logic with advanced gate films,
and in non-semiconductor gap dielectrics for thin film magnetic heads.  We moved
from solely memory applications to this level of diversification in the last two
years.

     We  focus  on  the  following  thin  film  market  segments:

     CVD  SILICIDE  AND  METAL,  AND ALD DIELECTRICS AND METAL BARRIERS FOR GATE
STACK  FILMS

     CVD  tungsten  silicide  is used to reduce the electrical resistance of the
gate  material in a transistor device structure. Our tungsten silicide gate thin
films  are  used in DRAM integrated circuit production. In the future, we expect
the  tungsten  gate  material  to  migrate  from  tungsten  silicide  to the low
resistance  tungsten  gate films, such as RInG that we have developed and beyond
that  to use various metal barrier films in combination with high-k dielectrics.

     CAPACITOR  FILMS

     Genus  is  commercializing  its  ALD  technology  with  the  application to
advanced  capacitors.  These include: cylinder ("stacked"), trench, embedded, rf
and  decoupling  capacitor  applications.  Genus  is  in beta phase with several
applications  and  customers  using  both  ALD  dielectric  and  metal electrode
barriers.  The  state  of the art has been advanced due to high conformality and
high  quality  Genus  ALD  films. The opportunity to increase the number of beta
sites  and  move  to  pilot  production  exists.

     BARRIER  METAL  INTERCONNECT  THIN  FILMS

     We are currently commercializing new thin film CVD barrier metal films such
as  tungsten  nitride.  CVD tungsten nitride has better film characteristics and
can  more  uniformly  cover  device  structures than conventional physical vapor
deposition  barrier  thin  films  such  as  titanium  nitride. We expect our CVD
tungsten  nitride  barrier thin films to have applications in multi-layer copper
interconnect  processes.

     NON-SEMICONDUCTOR  FILMS

     Genus  has  developed  a market for its ALD films in the thin film magnetic
head  (reader)  market. This market developed because of a production ready-made
solution  that  the  Genus  ALD  dielectrics  provide for the scaling of the gap
dielectrics.  The  market is scaling to thinner films, ideally suited to the ALD
approach.  Other  non-semiconductor  markets  are targeted, these include: MRAM.
Optical  interconnects  /  filters,  Organic LED's MEMS, and photomasks, in fact
anywhere  that film uniformity and conformality are

                                        6
<PAGE>

enabling.  However, it is too early to predict timing of the penetration in many
of  these  markets.


PRODUCTS  AND  TECHNOLOGY

     We  have developed our product strategy around the Lynx system concept. The
Lynx  system  integrates  platform  and  process  modules  with our standardized
operating  software.  The  Lynx system refers specifically to the vacuum robotic
wafer  handler  and its wafer controlling software. The Lynx process modules are
generically  appropriate for CVD, plasma enhanced CVD, metal organic CVD and ALD
technologies.

     All  of  our  current  thin film systems are built on a common platform and
marketed  in  the  context  of the Lynx series. Each Lynx product includes wafer
handling  robotics, dual loadlocks, control electronics and system software. The
Lynx  system  can  be used for the deposition of advanced dielectrics and copper
ultra-thin  barrier  seed.  The  Lynx  product line addresses both 200 and 300mm
wafer  sizes  and  is  designed  for  the  deposition of the following thin film
applications:

CVD  --
-     tungsten  silicide-monosilane
-     tungsten  silicide-dichlorosilane
-     tungsten  nitride
-     tungsten
ALD  --
-     aluminum  oxide
-     advanced  metal  oxides  (e.g.,  tantalum oxide, titanium oxide, zirconium
      oxide,  hafnium  oxide)
-     nanolaminates  and  alloys
-     metal  barrier  films  (e.g.,  titanium  nitride  and  tungsten  nitride)

     LYNX  SERIES

     LYNX2. The LYNX2 system is currently used in production by manufacturers of
advanced  DRAM  devices  of  0.35 to 0.18 micron. LYNX2 systems support over 120
process modules in high volume production. Production availability for the LYNX2
system  runs from 90-95%. LYNX2 platforms are also used for customer development
and  pilot manufacturing for more advanced semiconductor applications below 0.18
micron. The LYNX2 features a wafer handling platform that is compatible with the
Modular  Equipment  Standards  Committee  (MESC). This platform uses a centrally
located,  dual-end  effector  robot for high throughput operation. The system is
controlled  by  a  graphical  user  interface  that  provides  the operator with
real-time  information  such  as recipe, set points, hardware status and service
features.  The  modular  design  of  the LYNX2 allows the addition of up to four
process  modules,  which  can  be run serially or in parallel. The LYNX2 process
module  design  also offers a multi-zone resistive heater for more uniform wafer
heating,  two-zone  showerheads  for  improved film composition uniformity and a
state-of-the-art gas delivery system that minimizes chamber-to-chamber variance.
In  the case of ALD, fast gas switching has been developed for high productivity
ALD.

     LYNX3.  We  introduced  the  LYNX3  in  January 1999 as our first 300mm low
pressure  CVD process module in a beta system. The LYNX3 process module is based
on  a  newly  developed  and  patented  process  chamber concept that results in
exceptional  uniformity.  The  LYNX3  is  designed  to  run  all films currently
supported  by  the  LYNX2,  as  well as all films currently in development.  The
LYNX3  system will support up to five process modules, which can be run serially
or  in  parallel.  We are currently developing an advanced version of the LYNX3,
which  is designed to be a "bridge tool", capable of running either 200 or 300mm
wafers.

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<PAGE>

     The range of thin films that can be deposited using the LYNX product family
include:

-     ALD  DIELECTRICS.  In  July  1999,  we  announced  the availability of ALD
aluminum  oxide.  ALD has many possible applications in the semiconductor market
including  as a high dielectric constant oxide for either capacitors or for gate
dielectrics,  as  an  etch  stop  for  advanced  structures,  or  for  hard mask
applications.  We  made other advanced ALD dielectrics available during 2000. We
believe  that  our  ALD  aluminum  oxide-based  technology  will  find near-term
opportunities in the DRAM capacitor application. Other ALD dielectrics will find
longer-term  applications  in  both  capacitor  and  gate dielectric structures.

-      ALD  METAL  BARRIERS.  Metal  barrier films have been developed and offer
application for metal gate (work function control as well as barrier), capacitor
electrodes,  contact  and interconnect barriers. The applications are current in
the  case  of  capacitor  electrodes and contact barrier. For interconnects they
will  likely  come  to be needed below the 90nm feature size, where barrier film
thicknesses decrease below 100 angstroms. Somewhat beyond 2005, there will be an
interest  in  these  barriers  for  metal  gate  electrodes.

-     TUNGSTEN  SILICIDE.  In addition to our mainstream production silane-based
tungsten silicide film, we offer dichlorosilane LRS silicide, a low resistivity,
low  stress  CVD  tungsten  silicide.  DRAM  manufacturers  can use LRS tungsten
silicide  for  increased  yields  and  faster  device  speeds.

-     RING.  We  introduced  the  industry's  first plasma enhanced CVD tungsten
nitride  barrier film in 1997, Rapid Integrated Gate or RInG. The application is
for  tungsten gates with a built-in tungsten nitride barrier that can be rapidly
integrated  for  gates  using  rapid thermal annealing processes. This film is a
low-cost  candidate  for  production  using  tungsten  gate  technology.

-     METAL  OXIDE  ALLOYS AND NANOLAMINATES. With the development of Genus ALD,
the Company has been able to demonstrate a film flexibility otherwise not known.
For  example, Genus LYNX ALD system can provide the flexibility to deposit up to
3  compound films in alloy and / or nanolaminate form. The capability has become
enabling  for  the  "engineering"  of composite films for optimal performance in
next generation semiconductor devices. Composites of both dielectrics and metals
can  be  achieved.

     GENUS  8700  SERIES AND 6000 SERIES. While we no longer actively sell these
thin  film products, we continue to sell spare parts and provide service for the
installed  base  worldwide.

CUSTOMER  SUPPORT

     We  believe  that  our  customer  support  organization  is  critical  to
establishing and maintaining the long-term customer relationships that often are
the  basis upon which semiconductor manufacturers select their equipment vendor.
Our customer support organization is headquartered in Sunnyvale, California with
additional  employees  located  in  Japan,  South Korea and Europe.  Our support
personnel  are  available  on  a  24-hour  a day, seven days a week basis with a
maximum  one-hour  response  time.  All  support  personnel  have  technical
backgrounds,  with  process,  mechanical  and  electronics  training,  and  are
supported  by  our  engineering  and  applications  personnel. Support personnel
install  systems, perform warranty and out-of-warranty service and provide sales
support.

     We offer a 12-month labor warranty and a 24-month parts warranty. Our labor
warranty  includes  having on-site dedicated support technician during the labor
warranty  period.  We  also offer training to our customers at our headquarters.


                                        8
<PAGE>

SALES  AND  MARKETING

     We  maintain  direct sales and service offices in the United States, Japan,
South  Korea  and  Europe.  From  these  offices and other locations, we provide
customer  support  directly  and  maintain "spares depots" for our products.  We
also  have  sales  representatives  in the northwestern U.S., Taiwan, Singapore,
Malaysia  and  China.

CUSTOMERS

    We  rely  on  a limited number of customers for a substantial portion of our
net  sales.  Our major customers in 2000 included Samsung, Micron Technology and
Infineon.  Samsung and Micron accounted for 91% and 5% of our net sales in 2000.
In  early  2001,  we  gained  a  new  customer,  a  leading US-based supplier of
components  for  the data storage industry, with a multiple system order for our
ALD  technology.

BACKLOG

     We  schedule  production  of  our systems based on both backlog and regular
sales  forecasts.  We  include  in  backlog only those systems for which we have
accepted  purchase orders and assigned shipment dates within the next 12 months.
All  orders are subject to cancellation or delay by the customer with limited or
no  penalty. Our backlog was approximately $9.6 million as of December 31, 2000.
The  year-to-year  fluctuation  is  due  primarily to the cyclical nature of the
semiconductor  industry.  Our  backlog at any particular date is not necessarily
representative of actual sales to be expected for any succeeding period, and our
actual  sales  for  the  year  may  not  meet or exceed the backlog represented.
Because  of  possible changes in delivery schedules and cancellations of orders,
our  backlog  at any particular date is not necessarily representative of actual
sales  for  any  succeeding  period.  In  particular, during periods of industry
downturns  we  have  experienced significant delays relating to orders that were
previously  booked  and  included  in  backlog.

RESEARCH  AND  DEVELOPMENT

     We focus our research and development efforts on developing innovative thin
film  products.  During  recent periods, we have devoted a significant amount of
resources  to  the Lynx2 and Lynx3 systems and ALD films. We expect to focus our
future  efforts  on  our  Lynx  ALD  system  for  200 and 300mm applications for
advanced  film technologies. We maintain a Class 1 applications laboratory and a
separate  thin  films  development area in California. By basing our products on
the  Lynx system, we believe that we can focus our development activities on the
process  chamber  and  develop  new products quickly and at relatively low cost.

     Our  research  and  development  expenses  were $8.7 million for 2000, $5.4
million  for 1999 and $8.9 million for 1998, representing 21.3%, 18.9% and 27.5%
of net sales, respectively. Our research and development expenses were higher in
2000  primarily  due  to  investments  made  in  productizing  ALD  and  300mm,
development of ALD films.  Research and development expenses associated with our
current thin film product line were $8.7 million for 2000, $5.4 million for 1999
and  $5.4  million  for 1998, representing 21.3% of thin film net sales in 2000,
18.9%  in  1999  and  47.7%  in  1998.

     The  worldwide  semiconductor industry is characterized by rapidly changing
technology,  evolving industry standards and continuous improvements in products
and services. Because of continual changes in these markets, we believe that our
future  success will depend upon our ability to continue to improve our existing
systems  and  process  technologies, and to develop systems and new technologies
that  compete  effectively.  We  must  adapt  our  systems  and  processes  to
technological  changes  and  to  support  emerging industry standards for target
markets.  We  cannot  be  sure  that  we  will  complete our existing and future
development  efforts within our anticipated schedule or that our new or enhanced
products  will  have  the  features  to  make  them  successful.

                                        9
<PAGE>

     We  may  experience difficulties that could delay or prevent the successful
development,  introduction  or  marketing  of new or improved systems or process
technologies.  These  new  and improved systems and process technologies may not
meet  the  requirements  of  the  marketplace  and  achieve  market  acceptance.

Furthermore,  despite  testing by us, difficulties could be encountered with our
products  after  shipment,  resulting  in  loss  of  revenue  or delay in market
acceptance  and  sales,  diversion  of  development  resources,  injury  to  our
reputation  or  increased  service and warranty costs. The success of new system
introductions  is  dependent on a number of factors, including timely completion
of  new  system  designs  and market acceptance. If we are unable to improve our
existing  systems  and  process  technologies  or to develop new technologies or
systems,  we  may  lose  sales  and  customers.

COMPETITION

     The  global  semiconductor  fabrication  equipment  industry  is  intensely
competitive  and  is  characterized  by rapid technological change and demanding
customer  service  requirements. Our ability to compete depends upon our ability
to  continually  improve our products, processes and services and our ability to
develop  new  products  that  meet  constantly  evolving  customer requirements.

     A substantial capital investment is required by semiconductor manufacturers
to  install  and  integrate  new  fabrication  equipment  into  a  semiconductor
production  line.  As a result, once a semiconductor manufacturer has selected a
particular  supplier's products, the manufacturer often relies for a significant
period  of time upon that equipment for the specific production line application
and  frequently  will  attempt  to  consolidate  its  other  capital  equipment
requirements  with  the  same  supplier.  It  is  difficult  for us to sell to a
particular  customer  for  a  significant period of time after that customer has
selected  a  competitor's  product,  and it may be difficult for us to unseat an
existing  relationship that a potential customer has with one of our competitors
in  order  to  increase  sales  of  our  products  to  that  customer.

     Each  of  our  product  lines competes in markets defined by the particular
wafer fabrication process it performs. In each of these markets we have multiple
competitors.  At  present, however, no single competitor competes with us in all
of  the  same  market  segments  in  which  we  compete.  Competitors in a given
technology  tend  to  have  different  degrees of market presence in the various
regional  geographic  markets.  Competition  is based on many factors, primarily
technological  innovation, productivity, total cost of ownership of the systems,
including  yield, price, product performance and throughput capability, quality,
contamination  control,  reliability  and  customer support. We believe that our
competitive  position  in  each  of  our  markets is based on the ability of our
products  and  services  to  address  customer  requirements  related  to  these
competitive  factors.

     We  compete principally with other methods of thin film deposition, such as
CVD  and physical vapor deposition, in the overall thin film systems market. Our
direct  competitors  in the tungsten silicide market includes Applied Materials,
Inc.  and  Tokyo  Electron, Ltd. Competition from these competitors increased in
1999  and  in  2000,  and  we  expect  that  such  competition  will continue to
intensify.  We  believe  that  we  compete  favorably on each of the competitive
elements  in  this  market.

     We may not be able to maintain our competitive position against current and
potential  competition.  New  products,  pricing  pressures,  rapid  changes  in
technology  and other competitive actions from both new and existing competitors
could  materially  affect  our  market  position.  Some  of our competitors have
substantially greater installed customer bases and greater financial, marketing,
technical and other resources than we do and may be able to respond more quickly
to  new  or  changing opportunities, technologies and customer requirements. Our
competitors  may  introduce  or acquire competitive products that offer enhanced
technologies and improvements. In addition, some of our competitors or potential
competitors have greater name recognition and more extensive customer bases that
could  be  leveraged  to gain market share to our detriment. We believe that the
semiconductor  equipment  industry  will  continue  to  be  subject to increased
consolidation, which will increase the number of larger, more powerful companies
and  increase  competition.

                                       10
<PAGE>

MANUFACTURING  AND  SUPPLIERS

     Our  manufacturing  operations  are  based  in  our  Sunnyvale,  California
facility  and  consist  of  procurement,  subassembly,  final assembly, test and
reliability  engineering.  Our  manufacturing  facility maintains and operates a
Class-1 cleanroom to demonstrate integrated applications with its customers. The
LYNX family systems are based on an outsourced wafer handling platform, enabling
us  to  use  a  large number of common subassemblies and components. Many of the
major  assemblies  are  procured  completely  from outside sources. We focus our
internal  manufacturing  efforts  on  those  precision  mechanical  and
electro-mechanical  assemblies  that differentiate our systems from those of our
competitors.

     Most  of  the  components  for  our  thin  film  systems  are  produced  in
subassemblies  by  independent  domestic  suppliers  according to our design and
procurement  specifications.  We  anticipate  that the use of such subassemblies
will  continue  to  increase  in  order  to  achieve  additional  manufacturing
efficiencies.  Many  of  these  components  are obtained from a limited group of
suppliers.  We  generally acquire these components on a purchase order basis and
not under long-term supply contracts. Our reliance on outside vendors generally,
and  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.

     Because the manufacture of certain of these components and subassemblies is
an  extremely  complex  process  and  can  require  long  lead  times,  we could
experience  delays  or  shortages caused by suppliers. Historically, we have not
experienced  any  significant  delays  in  manufacturing  due to an inability to
obtain  components,  and  we  are  not  currently aware of any specific problems
regarding  the  availability  of  components  that might significantly delay the
manufacturing  of  our  systems in the future. However, the inability to develop
alternate  sources  or to obtain sufficient source components as required in the
future,  could  result in delays of product shipments that would have a material
adverse  effect  on our business, results of operations and financial condition.

     We  are  subject  to  a variety of federal, state and local laws, rules and
regulations  relating  to  the use, storage, discharge and disposal of hazardous
chemicals  used  during  our  sales demonstrations and research and development.
Failure to comply with present or future regulations could result in substantial
liability  to us, suspension or cessation of our operations, restrictions on our
ability  to  expand at our present locations or requirements for the acquisition
of  significant  equipment  or  other  significant  expense.  To  date,  we have
adequately  complied  with  environmental rules and regulations. Such compliance
has  not  materially  affected  our  operations.

INTELLECTUAL  PROPERTY

     We  believe  that  because  of  the  rapid  technological  change  in  the
semiconductor  industry,  our  future  prospects  will depend primarily upon the
expertise  and  creative  skills  of  our  personnel  in process technology, new
product development, marketing, application engineering and product engineering,
rather  than  on  patent  protection. Nevertheless, we have a policy to actively
pursue  domestic  and foreign patent protection to cover technology developed by
us.  We  hold 23 United States patents with thirteen patent applications pending
in  the United States as well as several foreign patents and patent applications
covering  various  aspects  of our products and processes. Where appropriate, we
intend  to  file  additional  patent applications to strengthen our intellectual
property  rights.

     Although  we  attempt  to  protect our intellectual property rights through
patents, copyrights, trade secrets and other measures, we cannot be sure that we
will  be  able  to  protect our technology adequately, and our competitors could
independently  develop  similar  technology,  duplicate  our  products or design
around our patents. To the extent we wish to assert our patent rights, we cannot
be sure that any claims of our patents will be sufficiently broad to protect our
technology  or  that  our  pending  patent  applications  will  be  approved. In
addition,  there  can  be no assurance that any patents issued to us will not be
challenged,  invalidated  or  circumvented,  that any rights granted under these
patents  will provide adequate protection to us, or that we will have sufficient
resources  to  protect  and  enforce  our  rights. 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.

                                       11
<PAGE>

     As  is  customary  in  our  industry,  from time to time we receive or make
inquiries  regarding  possible  infringement  of  patents  or other intellectual
property  rights.  Although  there  are  no  pending claims against us regarding
infringement  of  any  existing patents or other intellectual property rights or
any  unresolved  notices  that we are infringing intellectual property rights of
others,  such  infringement claims could be asserted against us or our suppliers
by  third  parties  in  the  future. Any claims, with or without merit, could be
time-consuming,  result  in  costly  litigation,  cause product shipment delays,
subject us to significant liabilities to third parties, require us to enter into
royalty  or  licensing  agreements, or prevent us from manufacturing and selling
our products. If our products were found to infringe a third party's proprietary
rights,  we  could  be required to enter into royalty or licensing agreements in
order  to  continue  to  be  able  to  sell  our  products. Royalty or licensing
agreements,  if  required,  may not be available on terms acceptable to us or at
all,  which  could  seriously  harm  our business. Our involvement in any patent
dispute  or  other  intellectual  property  dispute  or  action to protect trade
secrets  and  know-how  could  have  a  material adverse effect on our business.

EMPLOYEES

     As  of  March  15,  2001, we employed approximately 139 full-time employees
worldwide.  The  success  of  our future operations depends in large part on our
ability  to  recruit  and  retain qualified employees, particularly those highly
skilled  design,  process  and  test  engineers  involved  in the manufacture of
existing  systems  and  the  development  of  new  systems  and  processes.  The
competition for such personnel is intense, particularly in the San Francisco bay
area,  where  our  headquarters  are  located.  At  times  we  have  experienced
difficulty  in  attracting  new  personnel,  and  we  may  not  be successful in
retaining  or  recruiting  sufficient  key  personnel in the future. None of our
employees  is represented by a labor union, and we have never experienced a work
stoppage,  slowdown  or strike. We consider our relationships with our employees
to  be  good.

SALE  OF  ASSETS

     In  July 1998, we sold selected assets and transferred selected liabilities
related to the MeV ion implant equipment product line to Varian Associates, Inc.

     MeV  Ion  Implant  Market

     Ion  implantation  is  the  process by which a beam of electrically charged
dopant  atoms  (ions)  are  accelerated and driven into the surface of a silicon
wafer.  This  process  alters  the  electrical characteristics of the silicon by
making  it  more  or  less  conductive.

     The  market  for  ion  implanters consisted of three primary segments: high
current,  medium current and high energy. High and medium current ion implanters
made  up  approximately  67%  of  the  total  ion  implant  market  in  1998.

     Ion  implant  sales  accounted  for  65%  of  total  revenues  for  1998.

     Information  regarding our foreign and domestic operations and export sales
is  included  in  Note  12  of  Notes  to  Consolidated  Financial  Statements.



RECENT  DEVELOPMENTS

     On  March 28, 2001, we converted our existing $10 million Venture Bank line
of credit to an asset-based line of credit. Amounts available under the line are
based  on 80% of eligible accounts receivable, and borrowings under the line are
secured  by  all  corporate  assets  and  bear interest at 9.6% per annum and an
administrative  fee of a quarter of one percent on all advances.  This line will
not  have  accounts  receivable  customer  concentration limitations, will allow
borrowing against foreign receivables, and will have no financial covenants.  It
will  expire  in  March,  2002.

                                       12
<PAGE>

     In  March  2001,  we  received an order from a major Japanese semiconductor
manufacturer for a 300mm ALD system to be used for gate stack applications. This
is our first order for 300mm ALD technology, and the first order from a Japanese
customer  since  we reopened our Genus Japan office.  The system is scheduled to
ship  during  the  fourth  quarter  of  2001.

     In  March  2001,  we received a multiple system purchase order from a major
thin  film head (disk drive) manufacturer for multiple ALD systems.  This is the
first  order  for  our  ALD technology for a non-semiconductor application.  The
first  system  is  scheduled  for  delivery  early in the second quarter and the
second  system  is  scheduled  for  shipment  no  later  than December 31, 2001.

ITEM  2.  PROPERTIES

     We  maintain  our  headquarters, manufacturing and research and development
operations  in  Sunnyvale,  California.  We have a lease for a facility totaling
approximately  100,500  square  feet.  Our lease expires in October 2002, with a
current  annual  rental  expense of approximately $772,000. In 2000 we subleased
approximately  38,000 square feet to a third parties.  In December, 2000, one of
the  parties  terminated  their sublease, and we reclaimed 11,000 square feet of
office space.  We currently sublease approximately 27,000 square feet to a third
party.  We also lease sales and support offices in Seoul, South Korea, Tokyo and
Japan.  We believe that our existing facilities are adequate to meet our current
requirements  and that suitable additional or substitute space will be available
as  needed.  However,  our  future  growth may require that we secure additional
facilities  or  expand  our  current  facilities  further before the term of our
headquarters  lease  expires.  Any  move to new facilities or expansion could be
disruptive  and  cause  us  to incur significant unexpected expense. Our present
lease  expires  in  October of 2002 and we have an option to renew the lease for
five  years  at  95%  of  fair  market  value.


ITEM  3.  LEGAL  PROCEEDINGS

In May of 1999, Varian Semiconductor Equipment Associates, Inc. ("Varian") filed
a  Statement  of  Claims  with  the  American Arbitration Society of Santa Clara
County,  California  seeking to enforce certain provisions of the April 15, 1998
Asset  Purchase  Agreement  by  and between Varian and Genus (the "Asset Sale").
The  dispute  specifically  involved ownership rights of certain high energy ion
implanter  assets.  Varian and Genus entered into a Settlement and Mutual Rlease
(the "Release") in January of 2000.  As partial consideration under the Release,
Genus  agreed  to relinquish its ownership interest in certain funds provided to
Varian  in  conjunction with the Asset Sale.  These funds were held in an escrow
account  maintained  by  Varian,  the  amount  of  which  was  $543,000


     In  July  1999,  we  were  named  as a co-defendant in a claim filed at the
Superior  Court  of  the  state  of  California  for  the county of Santa Clara,
involving  an  automobile accident by one of our former employees which resulted
in  the  death  of  an  individual.  Significant general, punitive and exemplary
damages are being sought by the plaintiffs. Recently, a demand was placed by the
plaintiff  that  is  within our insurance policy limits. While we believe we are
not at fault in this matter, we have instructed our insurance carrier to pay the
demand  in an effort to avoid the costs associated with going to trial. Although
the outcome of this matter is not presently determinable, we do not believe that
resolution  of  this matter will have a material adverse effect on our financial
position  or  results  of  operations.

    We  may  in  the  future be party to litigation arising in the course of our
business, including claims that we allegedly infringe third party trademarks and
other  intellectual property rights. Such claims, even if not meritorious, could
result  in  the  expenditure  of significant financial and managerial resources.


                                       13
<PAGE>

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

    None.

                                     PART II


ITEM  5.   MARKET  FOR  THE  REGISTRANT'S  COMMON EQUITY AND RELATED STOCKHOLDER
MATTERS

Common  Stock  Information

     Our  common stock is traded in the over-the-counter market under the NASDAQ
symbol  GGNS.  The only class of Genus securities that is traded is Genus common
stock.  The  high and low closing sales prices for 2000 and 1999 set forth below
are as reported by the NASDAQ National Market System.  At March 22, 2001, we had
372  registered  shareholders  as  reported  by  Mellon  Investor Services.  The
closing sales price of Genus common stock on December 29, 2000, the last trading
day  in  2000,  was  $  1-19/32.


<TABLE>
<CAPTION>

                    2000                  1999
                    ----                   ----
                  HIGH      LOW       HIGH       LOW
                -------  --------  -------    --------
<S>             <C>        <C>       <C>        <C>    <C>
First Quarter.  $16-3/4  $  4-1/4    $2-7/16  $ 1-5/32
Second Quarter   12-5/16    5-5/8     3-3/8     1-1/4
Third Quarter.   10         3-13/16    3-3/4    2-9/32
Fourth Quarter   4-3/4      1-19/32   5-7/16    1-31/32
</TABLE>



   We  have not paid cash dividends on our common stock since inception, and our
Board  of  Directors  presently intends to reinvest our earnings, if any, in our
business.  Accordingly, it is anticipated that no cash dividends will be paid to
holders of common stock in the foreseeable future. Additionally, our $10 million
accounts  receivable based line of credit does not allow for the distribution of
dividends.

                                       14
<PAGE>


ITEM  6.  SELECTED  FINANCIAL  DATA

                            SELECTED CONSOLIDATED FINANCIAL DATA


<TABLE>
<CAPTION>


                                                                    YEARS  ENDED  DECEMBER  31,
                                                                     ---------------------------

                                                          2000      1999     1998(1)     1997       1996
                                                        --------  --------  ---------  ---------  ---------
<S>                                                     <C>         <C>         <C>          <C>        <C>
                                                                  (IN THOUSANDS, EXCEPT SHARE DATA)
CONSOLIDATED STATEMENT OF OPERATIONS DATA:
Net sales. . . . . . . . . . . . . . . . . . . . . . .  $40,638   $28,360   $ 32,431   $ 84,286   $ 82,509
Costs and expenses:
  Costs of goods sold. . . . . . . . . . . . . . . . .   24,385    16,628     29,600     54,762     55,537
  Research and development . . . . . . . . . . . . . .    8,659     5,368      8,921     12,327     14,639
  Selling, general and administrative. . . . . . . . .   10,093     7,930     14,115     20,326     17,901
  Restructuring and other(2)(3). . . . . . . . . . . .        0       543      7,308          0      5,890
                                                        --------  --------  ---------  ---------  ---------
Loss from operations . . . . . . . . . . . . . . . . .   (2,499)   (2,109)   (27,513)    (3,129)   (11,458)
Other income (expense), net. . . . . . . . . . . . . .      108       669        (86)    (1,363)        53
                                                        --------  --------  ---------  ---------  ---------
Loss before provision for income taxes and
  cumulative effect of change in accounting principle    (2,391)   (1,440)   (27,599)    (4,492)   (11,405)
Provision for (benefit from) income taxes. . . . . . .      490       177          1     14,844     (2,200)
                                                        --------  --------  ---------  ---------  ---------
Loss before cumulative effect of change in
  accounting principle . . . . . . . . . . . . . . . .   (2,881)   (1,617)   (27,600)   (19,336)    (9,205)
Cumulative effect of change in accounting principle      (6,770)        0          0          0          0
                                                        --------  --------  ---------  ---------  ---------
Net loss . . . . . . . . . . . . . . . . . . . . . . .   (9,651)   (1,617)   (27,600)   (19,336)    (9,205)
Deemed dividends on preferred stock. . . . . . . . . .        0         0     (1,903)         0          0
                                                        --------  --------  ---------  ---------  ---------
Net loss attributable to common shareholders . . . . .  $(9,651)  $(1,617)  $(29,503)  $(19,336)  $ (9,205)
                                                        ========  ========  =========  =========  =========
Net income (loss) per share before cumulative effect
  of change in accounting principle
  Basic. . . . . . . . . . . . . . . . . . . . . . . .    (0.15)    (0.09)     (1.71)     (1.15)     (0.56)
  Diluted. . . . . . . . . . . . . . . . . . . . . . .    (0.15)    (0.09)     (1.71)     (1.15)     (0.56)
Net income (loss) per share:
  Basic. . . . . . . . . . . . . . . . . . . . . . . .    (0.51)    (0.09)     (1.71)     (1.15)     (0.56)
  Diluted. . . . . . . . . . . . . . . . . . . . . . .    (0.51)    (0.09)     (1.71)     (1.15)     (0.56)
Cumulative effect of change in accounting principle (4)
  Basic. . . . . . . . . . . . . . . . . . . . . . . .    (0.36)
  Diluted. . . . . . . . . . . . . . . . . . . . . . .    (0.36)
Shares used in computing net income (loss) per share:
  Basic. . . . . . . . . . . . . . . . . . . . . . . .   18,937    18,134     17,248     16,860     16,423
  Diluted. . . . . . . . . . . . . . . . . . . . . . .   18,937    18,134     17,248     16,860     16,423
</TABLE>


The  following  are  pro  forma  amounts with the change in accounting principle
related  to  revenue  recognition  applied retroactively to years prior to 2000.

<TABLE>
<CAPTION>

<S>                                                          <C>       <C>       <C>       <C>          <C>
Sales . . . . . . . . . . . .                            $ 40,638  $ 27,992  $ 33,599       *            *
Net income (loss) . . . . . .                              (2,881)   (3,232)  (25,963)      *            *
Net income (loss) per share:
  Basic . . . . . . . . . . .                            $  (0.15)  $ (0.18) $  (1.51)      *            *
  Diluted . . . . . . . . . .                            $  (0.15)  $ (0.18) $  (1.51)      *            *
</TABLE>

                                       15
<PAGE>

<TABLE>
<CAPTION>

                                                                  DECEMBER  31,
                                                 ------------------------------------------
                                                   2000     1999     1998     1997     1996
                                                  -------  -------  -------  -------  -------
<S>                                               <C>      <C>      <C>      <C>      <C>
                                                                   (IN THOUSANDS)
CONSOLIDATED BALANCE SHEET DATA:
Cash and cash equivalents. . . . . . . . . . . .  $ 3,136  $ 6,739  $ 8,125  $ 8,700  $11,827
Working capital. . . . . . . . . . . . . . . . .      896   14,151   15,799   30,774   39,290
Total assets . . . . . . . . . . . . . . . . . .   44,535   27,744   31,827   76,738   89,132
Long-term debt and capital lease obligations . .        0        0       50      971    1,260
Redeemable Series B convertible preferred stock.        0        0      773        0        0
Total shareholders' equity . . . . . . . . . . .  $11,292  $19,378  $19,953  $48,357  $68,251
</TABLE>

     (1)  In  1998,  we  sold  the  ion  implant  equipment  product  line.
     (2)  In  1996,  we  incurred a charge of $5.9 million relating primarily to
          payroll costs associated with the reduction in workforce and inventory
          and  demonstration  equipment  write-downs.
     (3)  In 1998, we recorded a restructuring charge related to the sale of the
          ion  implant  equipment product line and the restructuring of the thin
          film  operation.


     (4)  In  2000,  the  Company  changed its accounting method for recognizing
          revenue  to  comply  with  Staff  Accounting  Bulletin  number  101.


*  Data  is  not  available  to  provide  pro forma information for these years.

                                       16
<PAGE>


ITEM 7.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF  OPERATIONS


     The  following  discussion  and  analysis  of  our  financial condition and
results of operations is being provided using both the historical method and the
new  SAB  101  method.  This  data  should be read in conjunction with "Selected
Consolidated  Financial  Data"  and  our  consolidated  financial statements and
related  notes  included  elsewhere  in  this  Annual  Report on Form 10-K/A. In
addition to historical information, the discussion in this Annual Report on Form
10-K/A  contains  certain  forward-looking  statements  that  involve  risks and
uncertainties. Our actual results could differ materially from those anticipated
by  these  forward-looking  statements due to factors, including but not limited
to,  those set forth under "Risk Factors" and elsewhere in this Annual Report on
Form  10-K/A.


OVERVIEW


     We  are  a  leading  supplier  of  advanced  manufacturing  systems for the
worldwide  semiconductor  industry.  Semiconductor  manufacturers  use  our
leading-edge  thin  film  deposition equipment and process technology to produce
integrated circuits, commonly called chips, that are incorporated into a variety
of products, including personal computers, communications equipment and consumer
electronics.  We pioneered the development of chemical vapor deposition tungsten
silicide,  which  is  used  in  certain  critical  steps  in  the manufacture of
integrated circuits. In addition, we are leading the commercialization of atomic
layer  deposition,  also known as ALD technology. This technology is designed to
enable  a  wide  spectrum  of  thin  film  applications  such as aluminum oxide,
tungsten  nitride  and  other  advanced  dielectric and conducting metal barrier
materials  for  advanced  integrated  circuit  manufacturing.


     We  also  continue  to develop enabling thin film technology that addresses
the  scaling  challenges  facing  the  semiconductor  industry relating to gate,
capacitor and interconnect materials. These challenges have been labeled as "red
zones"  by the International Technology Roadmap for Semiconductors because there
are  no  known  solutions  that allow for further reduction in feature sizes and
improved performance. Our innovative thin film technology solutions are designed
to  enable  chip  manufacturers to simplify and advance their integrated circuit
production processes and lower their total cost of manufacturing per chip, known
as  cost  of  ownership.

     We  provide  a  production  proven  platform  that  is  used  for  both the
development  and  production  of  new  thin  films  in  integrated  circuit
manufacturing.  This  platform  is  based  on  common  architecture  and  a high
percentage  of  common parts that is designed to provide manufacturers with high
reliability  and  low  cost  of  ownership  across  a  wide  range  of thin film
deposition  applications. The modular design of our system permits manufacturers
to  add  capacity and service their manufacturing systems easily. In addition to
the  modular  platform  architecture,  our  systems  operate  on  a standardized
software  that  is  designed  to  support  a  wide range of thin film deposition
processes.  Furthermore,  our  patented process chamber design incorporated into
our  flagship  LYNX  product  family  can  be  configured  for  chemical  vapor
deposition,  or CVD, plasma enhanced CVD, metal organic CVD and ALD with minimal
changes  to  the  chamber  design.

     Our  global  customer  base  consists of semiconductor manufacturers in the
United  States,  Europe  and  Asia.  Our current customers include semiconductor
manufacturers such as Infineon Technologies, Micron Technology, Inc. and Samsung
Electronics  Company,  Ltd.


    In  July  1998,  we  sold certain assets and transferred certain liabilities
related to the MeV ion implant equipment product line to Varian Associates, Inc.
for  approximately  $24.1 million. The net assets and liabilities we transferred
to  Varian  included  inventory  of  $20.9  million, capital equipment and other
assets of $9.7 million, and warranty, installation and other liabilities of $4.5
million.  In addition, we incurred transaction fees of $0.6 million resulting in
a  loss on sale of $2.6 million. We no longer engage in the ion implant business
and  have  refocused our efforts on thin film deposition. In connection with the
Varian  transaction and the refocusing of our business on thin film products, we
significantly  reduced  our  workforce  at  our  Sunnyvale, California location.

                                       17
<PAGE>

     In  1998,  we  recorded  restructuring  and  other charges of approximately
$7,308,000.  The $7,308,000 is comprised of $2,575,000 loss on sale of assets to
Varian,  $472,000  legal  costs  for  the  dispute with Varian and $4,261,000 of
restructuring  charges.  Restructuring  charges  included  personnel  charges of
$1,746,000  associated  with  our  workforce  reduction, $1,113,000 in leasehold
improvement  write-offs  and $1,402,000 for expenses associated with the closing
of  several  sales  offices  and  branches.



     The  restructuring strategy was to downsize the thin film operation so that
profitability  could  be  achieved  at  lower  revenue  levels,  and  included
maintaining  our  market share in our core tungsten silicide product business to
sustain  us  during  the  1998-1999 recession.  Additionally, we would focus our
resources towards designing and manufacturing thin film products that would meet
the  future  requirements  of  the  semiconductor  industry  and  provide growth
opportunities  going  forward.  The restructuring included a worldwide workforce
reduction  to bring the headcount in line with projected revenue levels, closing
foreign  sales  and service offices where short term business opportunities were
unlikely,  and  writing  off  inventory  related  to discontinued product lines.


     Over  the past few years, we were dependent on one customer, Samsung, for a
majority  of our thin film product revenue. Samsung accounted for 91% of our net
sales  in 2000 and 83.9% in 1999. There is no long-term agreement between us and
Samsung.  In  1999,  we  shipped  our  Lynx2  system  to  a new customer, Micron
Technology,  and  in  the  first  quarter  of  2000, we shipped an ALD system to
Infineon  Technologies,  also  a  new  customer.


     The  Company's  selling arrangements generally involve contractual customer
acceptance  provisions and installation of the product occurs after shipment and
transfer  of  title.  As a result, effective January 1, 2000, to comply with the
provisions  of  Securities and Exchange Commission Staff Accounting Bulletin No.
101,  the  Company deferred the recognition of revenue from such equipment sales
until  installation  is  complete  and  the product is accepted by the customer.
Prior  to  January  1,  2000,  revenue  related  to  systems  had been generally
recognized  upon  shipment.  A provision for the estimated future cost of system
installation, warranty and commissions was recorded when revenue was recognized.
Under  SAB 101, warranty obligations are accrued upon final customer acceptance,
which  coincides  with  recognition of revenue. The cost of inventory shipped to
customers  for  which  we  are  awaiting  customer  acceptance  is  recorded  as
"Inventory  at  customers'  locations".


     Our  business  depends  upon  capital  expenditures  by  semiconductor
manufacturers.  The level of capital expenditures by these manufacturers depends
upon  the current and anticipated market demand for devices which use integrated
circuits.  The  semiconductor industry suffered a significant downturn beginning
in  late  1997.  This  was  a  result of several factors, including the economic
crisis  in  Asia, semiconductor industry over-capacity and reduced profitability
for semiconductor manufacturers resulting from the decreasing prices of personal
computers.  Accordingly,  many  semiconductor  manufacturers delayed planned new
equipment purchases until 1999, which significantly impacted our 1998 sales. The
overall market improved throughout 1999 and 2000, and accordingly we experienced
progressively  higher  thin  film sales in 1999 and 2000 compared with 1998. The
cyclical  nature  of  the  semiconductor  equipment  market continues to present
challenges  to  us  in  terms of our ability to forecast both near and long-term
sales.  As  such,  we cannot assure you that this increase in sales represents a
trend  that  will continue into the future. The sharp downturn that has affected
the  U.S.  economy  in  early  2001  has  meant  a decrease in overall financial
performance  expectations.  We  expect  this  large-scale  economic  downturn to
continue  through  the  first  half  of  2001,  if  not  longer.

     International  net  sales, predominantly to customers based in South Korea,
accounted for 92.4% of total net sales in 2000, 86.5% of total net sales in 1999
and  56.7%  of total net sales in 1998. To date, all sales have been denominated
in  U.S. dollars. We anticipate that international sales, and in particular from
South Korea, will continue to account for a significant portion of our total net
sales.

                                       18
<PAGE>

     The local currency is the functional currency for our foreign operations in
South Korea and Japan. All other currency is dollar denominated. Gains or losses
from  translation  of  foreign  operations  where  the  local currencies are the
functional  currency  are  included  as  a component of shareholders' equity and
comprehensive  income/loss.  Foreign  currency  transaction gains and losses are
recognized  in  the  statement  of  operations.

     In  order  to  support  our  business strategy, we will be required to make
significant  investments  in  research  and development. In addition, we believe
selling,  general  and  administrative  costs  will  increase  as  sales volumes
increase.  We  depend on increases in sales in order to attain profitability. If
our  sales do not increase, our current operating expenses could prevent us from
attaining  profitability  and  harm  our  financial  results.


RESULTS  OF  OPERATIONS

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


<TABLE>
<CAPTION>

                                                                YEAR  ENDED  DECEMBER  31,
                                                                --------------------------

                                                                  2000     1999    1998
                                                                 -------  ------  -------
<S>                                                              <C>       <C>       <C>
Net sales                                                         100.0%  100.0%   100.0%
Costs and expenses:
  Cost of goods sold. . . . . . . . . . . . . . . . . . . . . .    60.0    58.6     91.2
  Research and development. . . . . . . . . . . . . . . . . . .    21.3    18.9     27.5
  Selling, general and administrative . . . . . . . . . . . . .    24.8    28.0     43.5
  Restructuring and Other . . . . . . . . . . . . . . . . . . .       0     1.9     22.5
                                                                 -------  ------  -------
Loss from operations                                               (6.1)   (7.4)   (84.8)
Other income (expense), net . . . . . . . . . . . . . . . . . .     0.2     2.3     (0.3)
                                                                 -------  ------  -------
Loss before provision for income taxes and cumulative effect of
  change in accounting principle. . . . . . . . . . . . . . . .    (5.9)   (5.1)   (85.1)
Provision for income taxes. . . . . . . . . . . . . . . . . . .     1.2     0.6        0
                                                                 -------  ------  -------
Loss before cumulative effect of change in accounting principle    (7.1)   (5.7)   (85.1)
Cumulative effect of change in accounting principle . . . . . .   (16.6)      0        0
                                                                 -------  ------  -------
Net loss. . . . . . . . . . . . . . . . . . . . . . . . . . . .  (23.7)%  (5.7)%  (85.1)%
                                                                 =======  ======  =======
</TABLE>


YEARS  ENDED  DECEMBER  31,  2000  AND  1999

    NET  SALES.  Net sales in 2000 were $40.6 million compared with net sales of
$28.4  million  in  1999, representing an increase of 43%. A total of 12 systems
were accepted by the customer in 2000, and qualified for revenue recognition.  A
total  of  5  systems  that  shipped in 2000 were not signed off and accepted by
customers,  and  this  revenue  was  deferred at December 31, 2000. Export sales
accounted  for  92%  of revenue in 2000 compared with 86% in 1999. Net sales for
2000  of  $40.6  million,  compared  to $28.0 million which reflect the 1999 net
sales  applying  the  change  in  accounting  principle  related  to  revenue
recognition,  represents  an  increase  of  45.2%.

    COST  OF  GOODS SOLD. Costs of goods sold in 2000 was $24.4 million compared
with  $16.6  million  in  1999.  Gross  profit  in  2000  was  $16.3  million,
representing 40% of net sales, compared with $11.7 million or 41.4% of net sales
in  1999.  Costs  of  goods  sold  for  1999 reflecting the change in accounting
principle were $17.9 million and the gross profit was $10.1 million or 36%.  The
gross  margin  %  was lower on higher sales volumes, and was attributed to lower
margins  due  to competitive pricing pressures on our standard tungsten silicide
products, and increased worldwide customer service and manufacturing expenses to
support  our  sales  growth  in 2000, including a new office in Japan. Our gross
profits have historically been affected by variations in average selling prices,
configuration  differences,  changes  in the mix of product sales, unit

                                       19
<PAGE>

shipment  levels,  the level of foreign sales and competitive pricing pressures.

     RESEARCH  AND  DEVELOPMENT.  Research and development expenses in 2000 were
$8.7  million  compared  with  $5.4 million in 1999, representing an increase of
61%.  As a percentage of net sales, research and development expenses were 21.3%
in  2000 and 18.9% in 1999. The increase in research and development expenses is
attributable  to  investments in development programs for ALD productization and
films,  our  3  300mm  system, new tungsten products, and continuous improvement
programs  for  existing products. These programs are essential in our efforts to
broaden  our  customer  base and penetrate new markets in both semiconductor and
non-semiconductor  applications.  We expect research and development expenses to
increase  in  the  future.

   SELLING,  GENERAL  AND  ADMINISTRATIVE.  Selling,  general and administrative
expenses  were  $10.1  million  in  2000  compared  with  $7.9  million in 1999,
representing  an increase of 27%. As a percentage of net sales, selling, general
and  administrative  expenses  were  24.8%  in  2000 and 28.0% in 1999. The $2.2
million  increase in 2000 was due primarily to increased investment in sales and
marketing  to support the 43% percent revenue growth and 66% shipment growth  we
experienced  in  2000,  and  focused  efforts  toward  new  customers and market
segments.

     OTHER  INCOME (EXPENSE), NET. We had other income (net) of $108,000 in 2000
compared  with  other income of $669,000 in 1999. Other income in 2000 consisted
of  interest income and foreign currency exchange gains due to the strengthening
of  the Korean won against the U.S. dollar during the first half of 2000, offset
by  foreign  currency  exchange losses incurred in the fourth quarter.  In 1999,
other  income  included  interest  income  and  foreign currency exchange gains.

     PROVISION  FOR  INCOME  TAXES.  We  had  income  taxes  of $490,000 in 2000
compared  with  $177,000  of  income taxes in 1999.  In both years, income taxes
were  related to income generated from our South Korean subsidiary.  At December
31,  2000, we had federal net operating loss carry-forwards of $80.5 million and
state  net  operating  loss  carry-forwards  of  $6.7  million.

    CUMULATIVE  EFFECT  OF  CHANGE  IN  ACCOUNTING  PRINCIPLE.  We  recorded  a
non-recurring  charge  of $6.77 million for the cumulative effect of a change in
accounting principle due to the adoption of SAB 101.  This amount represents the
gross  profit  on  systems  that  shipped during 1999, but did not receive final
customer  acceptance  during  1999.  Included  in this number were 5 systems and
some  upgrades  which  had  a  total  sales  value  of  $13.5  million.


ACCOUNTING  CHANGE

     In December 2000, the Company changed its accounting method for recognizing
revenue  on  sales  with  an  effective  date  of January 1, 2000. The Company's
selling  arrangements  generally  involve  contractual  customer  acceptance
provisions and installation of the product occurs after shipment and transfer of
title.  As a result, effective January 1, 2000, to comply with the provisions of
Securities  and  Exchange  Commission  Staff  Accounting  Bulletin  No. 101, the
Company  deferred  recognition  of  revenue  from  such  equipment  sales  until
installation  is  complete  and  the  product  is  accepted by the customer. The
Company  previously  recognized  revenue  related  to  systems  upon shipment. A
provision  for  the  estimated  future cost of system installation, warranty and
commissions  was  recorded  when  revenue  was  recognized.  Service  revenue is
recognized  when  service  has  been  completed.

     The cumulative effect in prior years of the change in accounting method was
a  charge  of  $6.77  million  or  $0.36  per  diluted  share.






YEARS  ENDED  DECEMBER  31,  1999  AND  1998

                                       20
<PAGE>

     NET  SALES. Net sales in 1999 were $28.4 million compared with net sales of
$32.4  million in 1998, representing a decrease of 12.6%. The decline in our net
sales  was  primarily  due to the divestiture of the ion implant product line to
Varian,  which  contributed $21.1 million of net sales in 1998 and none in 1999,
offset  by  increased  demand  for  our  thin film products as the semiconductor
equipment  industry emerged from the 1998 and 1997 recession. Our 1999 thin film
product net sales of $28.4 million was an increase of over 150% from 1998 levels
of  thin  film product sales. Export sales accounted for 86% of our net sales in
1999  compared  with  56%  in  1998.


     COST  OF GOODS SOLD. Costs of goods sold in 1999 was $16.6 million compared
with  $29.6 million in 1998, representing a decrease of 43.9%. This decrease was
primarily  due  to lower sales volumes due to the divestiture of the ion implant
product  line  to Varian, and $5.4 million of inventory charges recorded in 1998
associated  with the restructuring of the Company and the divestiture of the ion
implant  product  line  in  1998.  The  decrease  was  offset by $1.6 million of
inventory and warranty reserve reversals recorded in the fourth quarter of 1998.
Gross  profit  in  1999  was  $11.7  million,  representing  41.4% of net sales,
compared with $2.8 million or 8.7% of net sales in 1998.  Our gross profits have
historically  been  affected  by  variations  in  average  selling  prices,
configuration  differences,  changes  in the mix of product sales, unit shipment
levels,  the  level  of  foreign  sales  and  competitive  pricing  pressures.


     RESEARCH  AND  DEVELOPMENT.  Research and development expenses in 1999 were
$5.4  million  compared  with  $8.9  million in 1998, representing a decrease of
39.8%.  As  a  percentage  of  net sales, research and development expenses were
18.9%  in  1999 and 27.5% in 1998. Substantially all of the decrease in research
and development expenses is attributable to expenditures in 1998 associated with
the  ion  implant  product  line. Thin film research and development spending in
1999  remained  relatively  constant  with 1998 levels. Included in research and
development  expense  in  1999  is  a credit of $360,000 from a government Small
Business  Innovative  Research grant for ALD development. We expect research and
development  expenses  to  increase  in  the  future.

     SELLING,  GENERAL  AND  ADMINISTRATIVE. Selling, general and administrative
expenses  were  $7.9  million  in  1999  compared  with  $14.1  million in 1998,
representing a decrease of 43.8%. As a percentage of net sales, selling, general
and  administrative  expenses  were  28.0%  in  1999 and 43.5% in 1998. The $6.2
million  decrease  in  1999  was due primarily to the reduction in our workforce
related  to  the  divestiture  of the ion implant product line to Varian in July
1998  as  well  as  a  $1.4 million write-off in 1998 relating to an ion implant
receivable.


     RESTRUCTURING  AND OTHER. In 1999, we recorded a charge of $543,000 against
a  receivable  from  Varian held in escrow for the final settlement of a dispute
with  Varian  that  arose in connection with the sale of the ion implant product
line  to  Varian.  This  charge  related  to  funds that were held in escrow for
possible claims made under our change of control agreements with key ion implant
employees  who transferred to Varian as part of the Varian transaction. No funds
were  distributed  from  this  escrow  account,  and the final change of control
agreement  expired  in  July  1999.


     OTHER  INCOME  (EXPENSE),  NET.  We  had  other  income of $669,000 in 1999
compared  with  other expense of $86,000 in 1998. Other income in 1999 consisted
of  interest income and foreign currency exchange gains due to the strengthening
of  the  Korean  won  against  the  U.S. dollar. In 1998, other expense included
interest  expense  and foreign currency exchange losses during the first half of
the  year,  partially  offset  by  interest income during the second half of the
year.

     PROVISION  FOR  INCOME  TAXES.  We  had  income  taxes  of $177,000 in 1999
compared  with  immaterial income taxes in 1998. Taxes in 1999 related to income
from  our  South  Korean  subsidiary.


LIQUIDITY  AND  CAPITAL  RESOURCES


     At  December  31,  2000, our cash and cash equivalents were $3.1 million, a
decrease  of $3.6 million from

                                       21
<PAGE>

cash  and  cash  equivalents  of  $6.7  million held as of December 31, 1999. At
December  31,  2000,  our  accounts receivable were $8.5 million, an increase of
$850,000  from  accounts  receivable  of  $7.6  million  at  December  31, 1999.

     Cash  used  in  operating activities totaled $2.3 million in 2000. Cash was
primarily  used  by  the  net  loss of $9.7 million and increased inventories of
$10.4  million  and  accounts receivable of $850,000, offset by non-cash charges
and  increases  in  deferred  revenue  and  accounts  payable.  Accounts payable
increased  primarily due to increased sales volumes, and managing the non-linear
nature  of our shipments and timing of collections from our customers. Inventory
increased  due to material on hand for four systems, two that we had expected to
ship  during  the fourth quarter, and for two other systems which were scheduled
to  ship  early  in  the  first quarter of 2001, and an increase in inventory at
customer  locations  representing  the  cost of systems shipped for which we are
awaiting  customer  acceptance. Accounts receivable increased due to two systems
that  we shipped late in the fourth quarter of 2000 and were not collected until
the  first  quarter  of  2001.  In  1999,  cash provided by operating activities
totaled $4.5 million, and consisted of a decrease in accounts receivable of $5.1
million,  an  increase in accounts payable of $2.0 million, and depreciation and
amortization of $1.8 million. Net cash provided by operating activities was also
affected  by  the  reported  net loss in 1999 of $1.6 million and an increase in
inventories  of  $1.9  million.

     Financing  activities  provided $4 million of cash in 2000.  Net short term
borrowings  were  $2.7  million,  and proceeds from the issuance of common stock
from  our  Employee Stock Purchase and Incentive Stock Option Plans totaled $1.3
million.  In  1999, $3.7 million was used in financing activities, primarily for
the  payment  of  the  short-term borrowings of $4.0 million, offset by $322,000
received  from the issuance of common stock from our Employee Stock Purchase and
Incentive  Stock  Option  Plans.

     We had capital expenditures of $5.1 million during 2000. These expenditures
principally  related  to  the  acquisition  of  machinery  and equipment for our
research  and development and applications laboratories, expansion and upgrading
of  our  Sunnyvale,  California  facility,  and  improvements  to our enterprise
resource  planning  business  system.  We  currently  anticipate that additional
capital  expenditures will be funded through lease financing or from our working
capital.

     Our  primary source of funds at December 31, 2000 consisted of $3.1 million
in  cash  and cash equivalents, and $8.5 million of accounts receivable, most of
which  we  expect  to  collect  or  to  have  been  collected  during  2001.

     In  November  1999,  we entered into a $10 million revolving line of credit
with Venture Bank. Amounts available under the line are based on 80% of eligible
accounts  receivable, and borrowings under the line are secured by all corporate
assets  and  bear  interest  at  prime plus 0.25%. The line of credit expires in
November 2001. The line of credit contains covenants that require us to maintain
a  minimum  quick  ratio  and  a  maximum  debt to tangible net equity ratio. In
addition,  the line of credit requires us to have annual profitability beginning
in  2000  and  a  maximum  quarterly  loss of $1 million with no two consecutive
quarterly  losses.  Additionally, we are prohibited from distributing dividends.
At December 31, 2000, the Company was in default of certain of the covenants and
Venture  Bank  has  granted  the  Company  a  waiver  of the default. The amount
available  to  borrow  at December 31, 2000 was $4.4 million at a rate of 9.75%.
There  was  $2.7  million  outstanding  at  the  end  of  December,  2000.

     On  March 28, 2001, through an arrangement with Cupertino National Bank, we
converted our existing $10 million Venture Bank line of credit to an asset-based
line  of  credit.  Amounts available under the line are based on 80% of eligible
accounts  receivable, and borrowings under the line are secured by all corporate
assets  and  bear  interest  at  9.6%  per  annum and an administrative fee of a
quarter  of  one  percent  on  all  advances.  This  line will not have accounts
receivable  customer  concentration  limitations,  will  allow borrowing against
foreign  receivables,  and  will  have no financial covenants. It will expire in
March,  2002.

     We  believe  that  our existing working capital, as well as the $10 million
Cupertino  National  Bank line of credit, will be sufficient to fund our working
capital  and  capital  expenditures  requirements  for  at least the

                                       22
<PAGE>

next  twelve  months.  Thereafter,  if  cash  generated  from  operations  is
insufficient to satisfy liquidity needs, we might need to raise additional funds
through  a  public  or  private  financing,  strategic  relationship,  or  other
arrangements.  We  cannot assure you that additional funding, if needed, will be
available to us or will be available on terms that we believe are attractive. If
we  fail  to  raise capital when needed, it could harm our business. If we raise
additional  funds  through  the  issuance  of  equity securities, the percentage
ownership  of  our  shareholders  would  be  reduced.

     During  the year ended December 31, 2000, the Company was in the process of
executing  its  business strategy and has plans to eventually achieve profitable
operations.  Management believes that existing cash and available financing will
be  sufficient to meet projected working capital, capital expenditures and other
cash  requirements  for  the  next  twelve months.  Accordingly, these financial
statements  have  been  prepared  on  a  going  concern  basis.



RECENT  ACCOUNTING  PRONOUNCEMENTS

     In June 1998, the Financial Accounting Standards Board ("FASB") issued SFAS
No.  133,  "Accounting  for  Derivatives  and Hedging Activities."  SFAS No. 133
establishes  accounting  and  reporting  standards  for  derivative instruments,
including  certain  derivative  instruments embedded in other contracts, and for
hedging activities.  In July 1999, the FASB issued SFAS No. 137, "Accounting for
Derivative  Instruments and Hedging Activities-Deferral of the Effective Date of
FASB  Statement  No.  133,"  which  deferred  the effective date until the first
fiscal  year  beginning after June 15, 2000.  In June 2000, the FASB issued SFAS
Statement  No.  138,  "Accounting for Certain Derivative Instruments and Certain
Hedging Activities-an Amendment of SFAS 133."  SFAS No. 138 amends certain terms
and  conditions  of SFAS 133.  SFAS 133 requires that all derivative instruments
be  recognized at fair value as either assets or liabilities in the statement of
financial  position.  The  accounting for changes in the fair value (i.e., gains
or  losses) of a derivative instrument depends on whether is has been designated
and  qualifies  as  part  of  a hedging relationship and further, on the type of
hedging  relationship.  We adopted SFAS No. 133, as amended, on January 1, 2001.
The  adoption  of  SFAS  No. 133 did not have a material impact on our financial
statements.

RISK  FACTORS


     The  risks  described  below are not the only ones that we face. Additional
risks  and  uncertainties not presently known to us or that are currently deemed
immaterial  may  also  impair  our  business operations. Our business, operating
results  or  financial  condition could be materially adversely affected by, and
the  trading  price of our common stock could decline due to any of these risks.
You should also refer to the other information included in this Annual Report on
Form  10-K/A and the other information, our financial statements and the related
notes  incorporated  by  reference  into  this  Annual  Report  on  Form 10-K/A.

     This  Annual Report on Form 10-K/A contains forward-looking statements that
involve  risks  and  uncertainties, such as statements of our plans, objectives,
expectations  and  intentions.  Our  actual results could differ materially from
those  anticipated in the forward-looking statements for many reasons, including
the  factors described below and elsewhere in this Annual Report on Form 10-K/A.
You  should  not  place  undue  reliance  on  these  forward-looking statements.

WE  HAVE  EXPERIENCED  LOSSES  OVER THE LAST FEW YEARS AND WE MAY NOT BE ABLE TO
ACHIEVE  OR  SUSTAIN  PROFITABILITY

We  have  experienced losses of $9.6 million, $1.6 million and $29.5 million for
2000,  1999  and  1998,  respectively.

We  may  not  be able to attain or sustain consistent future revenue growth on a
quarterly or annual basis, or achieve and maintain consistent profitability on a
quarterly  or  annual  basis.
                                       23
<PAGE>

SUBSTANTIALLY  ALL  OF OUR NET SALES COME FROM A SMALL NUMBER OF LARGE CUSTOMERS

Historically,  we  have  relied on a small number of customers for a substantial
portion  of  our  net  sales. For example, Samsung Electronics Company, Ltd. and
Micron  Technology,  Inc.  accounted  for  91%  and 5% of our net sales in 2000.
Samsung  Electronics  Company,  Ltd. and Infineon Technologies accounted for 90%
and  6%  of  total  shipments  made  in  2000, which would have been recorded as
revenue under the historical accounting method. In addition, Samsung Electronics
Company,  Ltd., and Infineon Technologies represented 92% of accounts receivable
at  December  31,  2000.  The  semiconductor  manufacturing  industry  generally
consists  of a limited number of larger companies. We consequently expect that a
significant  portion  of  our future product sales will be concentrated within a
limited  number  of  customers.

None  of  our customers has entered into a long-term agreement with us requiring
them  to  purchase  our  products.  In  addition,  sales  to these customers may
decrease  in the future when they complete their current semiconductor equipment
purchasing  requirements.  If  any  of our customers were to encounter financial
difficulties  or  become  unable  to  continue to do business with us at or near
current  levels,  our  business,  results  of operations and financial condition
would  be  materially  harmed.  Customers may delay or cancel orders or may stop
doing  business  with  us  for  a  number  of  reasons  including:

-    customer  departures  from  historical  buying  patterns;
-    general  market  conditions;
-    economic  conditions;  or
-    competitive  conditions  in the semiconductor industry or in the industries
     that  manufacture  products  utilizing  integrated  circuits.


OUR  QUARTERLY  FINANCIAL  RESULTS FLUCTUATE SIGNIFICANTLY AND MAY FALL SHORT OF
ANTICIPATED  LEVELS,  WHICH  COULD  CAUSE  OUR  STOCK  PRICE  TO  DECLINE

Our  net sales and operating results may fluctuate significantly from quarter to
quarter.  For example, in the year 2000, our quarterly revenues ranged from $3.8
million to $15.7 million with the bottom line ranging from a loss of $10 million
to  a  profit  of  $1.6  million.

We  derive  our  revenue primarily from the sale of a relatively small number of
high-priced  systems,  many  of which may be ordered and shipped during the same
quarter.  Our results of operations for a particular quarter could be materially
adversely  affected  if  anticipated orders, for even a small number of systems,
were  not  received  in  time to enable shipment during the quarter, anticipated
shipments  were  delayed  or canceled by one or more customers or shipments were
delayed  due  to manufacturing difficulties.  At our current revenue level, each
sale,  or  failure  to  make  a  sale,  could  have  a  material  effect  on us.

Our  lengthy  sales  cycle, coupled with our customers' competing capital budget
considerations,  make  the  timing  of  customer  orders uneven and difficult to
predict.  Our  backlog  at the beginning of a quarter typically does not 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 us 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
in  shipments  from  new  orders would materially harm our operating results for
that  quarter,  which  could  cause  our  stock  price  to  decline.


WE ARE SUBJECT TO RISKS BEYOND OUR CONTROL OR INFLUENCE AND ARE HIGHLY DEPENDENT
ON  OUR  INTERNATIONAL  SALES,  PARTICULARLY  SALES  IN  ASIAN  COUNTRIES

                                       24
<PAGE>

Export sales accounted for approximately 98%, 86% and 56% of our total net sales
in  2000,  1999  and  1998,  respectively.  Net  sales to our South Korean-based
customers  accounted  for  approximately  92%,  84%  and 30% of total net sales,
respectively.  We  anticipate that international sales, including sales to South
Korea,  will continue to account for a significant portion of our net sales.  As
a  result,  a  significant  portion  of our net sales will be subject to certain
risks,  including:

-    unexpected  changes  in  law  or  regulatory  requirements;
-    exchange  rate  volatility;
-    tariffs  and  other  barriers;
-    political  and  economic  instability;
-    difficulties  in  accounts  receivable  collection;
-    extended  payment  terms;
-    difficulties  in  managing  distributors  or  representatives;
-    difficulties  in  staffing  our  subsidiaries;
-    difficulties  in  managing  foreign  subsidiary  operations;  and
-    potentially  adverse  tax  consequences.

Our foreign sales are primarily denominated in U.S. dollars and we do not engage
in  hedging  transactions.  As  a  result,  our foreign sales are subject to the
risks  associated  with unexpected changes in exchange rates, which could affect
the  price  of  our  products.

In  the  past,  turmoil  in  the  Asian  financial  markets resulted in dramatic
currency  devaluations,  stock  market declines, restriction of available credit
and  general  financial weakness.  For example, prices fell dramatically in 1998
as  some  integrated  circuit  manufacturers  sold  dynamic random access memory
chips,  called  DRAMs,  at  less  than cost in order to generate cash.  The cash
shortfall caused Asian semiconductor companies  to defer or cancel some of their
investments in new production facilities, thereby reducing our anticipated sales
of  our  semiconductor  manufacturing  equipment  in  Asia  in  1998.

Also  during  this  time,  the  value  of the won, the currency of South Korean,
declined  significantly against the U.S. dollar.  As a result, purchases of U.S.
manufactured  products became very costly.  Since most of our sales were made to
South  Korean  customers,  these circumstances adversely impacted our customers'
ability  to  invest  in  new facilities and equipment that reduced our shipments
and  profitability  in  1998.

Wherever currency devaluations occur abroad, our goods become more expensive for
our  customers  in that region.  Difficult economic conditions may limit capital
spending  by  our customers.  These circumstances may also affect the ability of
our  customers to meet their payment obligations, resulting in the cancellations
or  deferrals  of  existing  orders  and  the  limitation  of additional orders.


OUR  SALES  REFLECT  THE  CYCLICALITY OF THE SEMICONDUCTOR INDUSTRY, WHICH COULD
CAUSE  OUR  OPERATING  RESULTS  TO FLUCTUATE SIGNIFICANTLY AND COULD CAUSE US TO
FAIL  TO  ACHIEVE  ANTICIPATED  SALES

Our  business  depends  upon  the  capital  expenditures  of  semiconductor
manufacturers, which in turn depend on the current and anticipated market demand
for integrated circuits and products utilizing integrated circuits.  Although we
are marketing our ALD technology to non-semiconductor markets such as markets in
magnetic  thin  film  heads, flat panel displays, microelectromechanical systems
and  inkjet  printers,  we are still very dependent on the semiconductor market.
The  semiconductor  industry is cyclical and experiences periodic downturns both
of  which  reduce  the  semiconductor  industry's  demand  for  semiconductor
manufacturing  capital  equipment.

Semiconductor  industry  downturns  have  significantly  decreased our revenues,
operating  margins  and  results of operations in the past.  During the industry
downturn  in  1998, several of our customers delayed or cancelled investments in
new  manufacturing  facilities  and  equipment due to declining DRAM prices, the

                                       25
<PAGE>

Asian  economic  downturn,  and  general  softening of the semiconductor market.
This  caused our sales in 1998 to be significantly lower than in the prior three
years.  There  is  a  risk  that  our  revenues  and  operating  results will be
materially  harmed  by  any  future  downturn  in  the  semiconductor  industry.


OUR  FUTURE  GROWTH  IS  DEPENDENT  ON  ACCEPTANCE  OF NEW THIN FILMS AND MARKET
ACCEPTANCE  OF  OUR  SYSTEMS  RELATING  TO  THOSE  THIN  FILMS

We  believe that our future growth will depend in large part upon the acceptance
of  our  new thin films and processes, especially ALD. As a result, we expect to
continue  to  invest in research and development in these new thin films and the
systems  that  use  these  films. There can be no assurance that the market will
accept  our  new  products  or that we will be able to develop and introduce new
products  or  enhancements  to  our  existing products and processes in a timely
manner to satisfy customer needs or achieve market acceptance. The failure to do
so  could  harm  our  business,  financial  condition and results of operations.

We  must  manage  product  transitions  successfully,  as  introductions  of new
products could harm sales of existing products.  We derive our revenue primarily
from  the  sale of equipment used to chemically deposit tungsten silicide in the
manufacture of memory chips.  We estimate that the life cycle for these tungsten
silicide  CVD  systems  is  three-to-five  years.  There  is  a risk that future
technologies, processes or product developments may render our product offerings
obsolete  and  we  may  not  be  able  to  develop and introduce new products or
enhancements  to  our  existing  products  in  a  timely  manner.


WE MAY NOT BE ABLE TO CONTINUE TO SUCCESSFULLY COMPETE IN THE HIGHLY COMPETITIVE
SEMICONDUCTOR  INDUSTRY  AGAINST  COMPETITORS  WITH  GREATER  RESOURCES

The  semiconductor  manufacturing  capital  equipment  industry  is  highly
competitive.  We  face substantial competition throughout the world.  We believe
that  to  remain competitive, we will require significant financial resources in
order  to develop new products, offer a broader range of products, establish and
maintain  customer  service  centers  and  invest  in  research and development.

Many  of  our  existing  and  potential  competitors  have substantially greater
financial  resources,  more  extensive  engineering,  manufacturing,  marketing,
customer  service  capabilities  and  greater  name  recognition.  We expect our
competitors  to  continue to improve the design and performance of their current
products and processes and to introduce new products and processes with improved
price  and  performance  characteristics.

If our competitors enter into strategic relationships with leading semiconductor
manufacturers  covering thin film products similar to those sold by us, it would
materially  adversely  affect  our  ability  to  sell  our  products  to  such
manufacturers.  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  our  resources  do not allow us to respond
effectively  to  such  competitive  forces.


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

                                       26
<PAGE>

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.  To  do  otherwise  creates  risk  for the manufacturer because the
manufacture  of  a  semiconductor  requires many process steps and a fabrication
facility will contain many different types of machines that must work cohesively
to  produce  products  that meet the customers' specifications.  If any piece of
equipment  fails  to  perform  as expected, the customer could incur significant
costs related to defective products, production line downtime, or low production
yields.

Since  most  new  fabrication  facilities  are  similar  to  existing  ones,
semiconductor  manufacturers  tend to continue using equipment that has a proven
track  record.  Based  on  our  experience with major customers like Samsung, we
have  observed  that  once  a  particular  piece of equipment is selected from a
vendor,  the  customer  is very likely to continue purchasing that same piece of
equipment  from the vendor for similar applications in the future.  Our customer
list,  though limited, has expanded in recent months.  Yet our broadening market
share  remains  at  risk  to  choices  made  by  customers  that  continue to be
influenced  by  pre-existing  installed  bases  by  competing  vendors.

A  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
potential  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 not able 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 harmed.


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 manufacturing capacity.  That decision typically involves a significant
capital  commitment  by our customers.  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  our systems meet its qualification criteria, we have experienced in the
past  and  expect  to experience in the future delays in finalizing system sales
while  the  customer  evaluates  and  receives  approval for the purchase of our
systems  and  constructs  a  new  facility  or  expands  an  existing  facility.

Due  to  these  factors, our systems typically have a lengthy sales cycle during
which  we  may expend substantial funds and management effort.  The time between
our  first  contact  with  a  customer  and the customer placing its first order
typically  lasts  from  nine  to  twelve  months and is often even longer.  This
lengthy  sales  cycle makes it difficult to accurately forecast future sales and
may  cause  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.


OUR  INTELLECTUAL  PROPERTY  IS  IMPORTANT  TO US AND WE RISK LOSS OF A VALUABLE
ASSET,  REDUCED  MARKET  SHARE  AND  LITIGATION EXPENSES IF WE CANNOT ADEQUATELY
PROTECT  IT.

Our  success  depends  in  part  on our proprietary technology.  There can be no
assurance  that  we  will  be able to protect our technology or that competitors
will not be able to develop similar technology independently.  We currently have
a  number  of  United States and foreign patents and patent applications.  There
can  be  no

                                       27
<PAGE>

assurance  that  any patents issued to us will not be challenged, invalidated or
circumvented  or  that  the  rights  granted  thereunder  will  provide  us with
competitive  advantages.


IF  WE  ARE  FOUND  TO  INFRINGE  THE  PATENTS OR INTELLECTUAL PROPERTY OF OTHER
PARTIES,  OUR  ABILITY  TO  GROW  OUR  BUSINESS  MAY  BE  SEVERELY  LIMITED.

From  time  to  time,  we  may  receive  notices  from  third  parties  alleging
infringement  of  patents  or intellectual property rights.  It is our policy to
respect all parties' legitimate intellectual property rights, and we will defend
against such claims or negotiate licenses on commercially reasonable terms where
appropriate.  However,  no  assurance  can  be  given  that  we  will be able to
negotiate  necessary  licenses  on  commercially reasonable terms, or at all, or
that any litigation resulting from such claims would not have a material adverse
effect  on  our  business  and  financial  results.

On  June  6,  2001, ASM America, Inc. ("ASMA") filed suit against us in the U.S.
District Court for the Northern District of California asserting that our Atomic
Layer Deposition ("ALD") reactor products infringe certain claims of U.S. Patent
Nos.  6,015,590 and 5,916,365. The complaint sought unspecified monetary damages
and  equitable  relief.

We  intend  to defend our position vigorously.  The outcome of any litigation is
uncertain,  however, and we may not prevail.  Should we be found to infringe any
of  the  patents  asserted,  in  addition  to potential monetary damages and any
injunctive relief granted, we would need either to obtain a license from ASMA to
commercialize  our products or redesign our products so they do not infringe any
of  these  patents.  If  we  were  unable  to  obtain  a  license  or  adopt  a
non-infringing  product  design, we may not be able to proceed with development,
manufacture and sale of some of our products.  In this case our business may not
develop  as  planned,  and  our  results  could  materially  suffer.


WE  ARE  DEPENDENT  UPON  KEY  PERSONNEL  WHO ARE EMPLOYED AT WILL, WHO WOULD BE
DIFFICULT  TO  REPLACE  AND  WHOSE  LOSS  WOULD IMPEDE OUR DEVELOPMENT AND SALES

We  are  highly  dependent  on  key  personnel to manage our business, and their
knowledge  of  business,  management  skills  and  technical  expertise would be
difficult to replace.  Our success depends upon the efforts and abilities of Dr.
William  W.R.  Elder,  our  chairman  and chief executive officer, Dr. Thomas E.
Seidel,  our  chief  technology  officer, and other key managerial and technical
employees  who  would  be  difficult  to  replace.  The loss of Dr. Elder or Dr.
Seidel  or  other  key employees could limit or delay our ability to develop new
products and adapt existing products to our customers' evolving requirements and
would  also result in lost sales and diversion of management resources.  None of
our  executive  officers  are  bound  by a written employment agreement, and the
relationships  with  our  officers  are  at  will.

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  depends  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, particularly
in  the  San  Francisco Bay Area where we are based.  If we are unable to retain
our  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  customers,  or  fail  to meet delivery commitments or
experience  deterioration  in service levels or decreased customer satisfaction.

                                       28
<PAGE>


OUR FAILURE TO COMPLY WITH ENVIRONMENTAL REGULATIONS COULD RESULT IN SUBSTANTIAL
LIABILITY  TO  US

We  are  subject  to  a  variety  of  federal,  state  and local laws, rules and
regulations  relating  to  the  protection of health and the environment.  These
include  laws,  rules  and  regulations  governing  the use, storage, discharge,
release,  treatment  and  disposal  of  hazardous  chemicals  during  and  after
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, property damage, personal injury and fines or
suspension  or  cessation  of  our  operations.

We use the following regulated gases at our manufacturing facility in Sunnyvale:
tungsten  hexafluoride,  dichlorosilane  silicide, silane and nitrogen.  We also
use  regulated liquids such as hydrofluoric acid and sulfuric acid.  The city of
Sunnyvale,  California,  imposes  high  environmental  standards  to  businesses
operating  within the city.  Genus has met the city's stringent requirements and
has  received  an  operating  license from Sunnyvale.  Presently, our compliance
record  indicates  that  our  methods and practices successfully meet standards.
Moving  forward,  if  we fail to continuously maintain high standards to prevent
the leakage of any toxins from our facilities into the environment, 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.


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  THE  MANUFACTURE  AND  SALE OF OUR PRODUCTS

Certain  of  the  components  and  sub-assemblies  included  in our products are
obtained  from a single supplier or a limited group of suppliers.  Disruption or
termination of these sources could have an adverse effect on our operations.  We
believe that alternative sources could be obtained and qualified to supply these
products,  if  necessary.  Nevertheless, a prolonged inability to obtain certain
components  could  have  a  material  adverse  effect  on our operating results.


WE  DEPEND  UPON  SIX  INDEPENDENT  SALES  REPRESENTATIVES  FOR  THE SALE OF OUR
PRODUCTS  AND  ANY  DISRUPTION  IN THESE RELATIONSHIPS WOULD ADVERSELY AFFECT US

We  currently  sell  and support our thin film products through direct sales and
customer  support  organizations  in the U.S., Europe, South Korea and Japan and
through  six  independent  sales  representatives  and distributors in the U.S.,
Europe,  South  Korea, Taiwan, China and Malaysia.  We do not have any long-term
contracts  with  our  sales representatives and distributors.  Any disruption or
termination  of  our  existing distributor relationships could negatively impact
sales  and  revenue.


WE  ESTABLISHED  A  DIRECT SALES ORGANIZATION IN JAPAN AND WE MAY NOT SUCCEED IN
EFFECTIVELY  PENETRATING  THE  JAPANESE  MARKETPLACE

We  terminated our relationship with our distributor, Innotech Corp. in Japan in
1998.  In  2000,  we  invested  significant resources in Japan by establishing a
direct  sales  organization,  Genus-Japan,  Inc.  Although we continue to invest
significant  resources in our Japan office and have received orders from two new
Japanese  customers  in 2001, we may not be able to attract new customers in the
Japanese  semiconductor industry, and as a result, we may fail to yield a profit
or  return  on  our  investment  in  Japan.

                                       29
<PAGE>

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

Our common stock has experienced substantial price volatility, particularly as a
result  of  quarter-to-quarter  variations  in  our,  our  competitors  or  our
customers'  actual  or  anticipated  financial  results,  our competitors or our
customers'  announcements  of  technological  innovations,  revenue  recognition
policies,  changes in earnings estimates by securities analysts and other events
or  factors.  Also,  the  stock  market has experienced extreme price and volume
fluctuations  which have affected the market price of many technology companies,
in  particular, and which have often been unrelated to the operating performance
of  these  companies.  These  broad  market  fluctuations,  as  well  as general
economic  and  political  conditions  in  the United States and the countries in
which we do business, may adversely effect 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 the company's stock price.
This  type of litigation, if filed against us, could result in substantial costs
and  divert  our  management's  attention  and  resources.


BUSINESS  INTERRUPTIONS  COULD  ADVERSELY  AFFECT  OUR  BUSINESS

Our  operations  are vulnerable to interruption by fire, earthquake, power loss,
telecommunications  failure  and  other  events  beyond our control.  A disaster
could severely damage our ability to deliver our products to our customers.  Our
products  depend  on our ability to maintain and protect our operating equipment
and  computer  systems,  which  is  primarily  located  in or near our principal
headquarters in Sunnyvale, California.  Sunnyvale exists near a known earthquake
fault  zone.  Although  our  facilities  are  designed to be fault tolerant, the
systems  are  susceptible  to damage from fire, floods, earthquakes, power loss,
telecommunications failures, and similar events.  Further, our facilities in the
State  of  California  are  currently  subject  to  electrical  blackouts  as  a
consequence  of  a  shortage  of available electrical power.  In the event these
blackouts continue or increase in severity, they could disrupt the operations of
our  affected  facilities.  Although  we  maintain  general  business  insurance
against  fires,  floods and some general business interruptions, there can be no
assurance  that  the amount of coverage will be adequate in any particular case.



FORWARD-LOOKING  STATEMENTS


     Some  of  the  information  in this Annual Report on Form 10-K/A and in the
documents  that  are  incorporated  by  reference,  including  the risk factors,
contains  forward-looking statements that involve risks and uncertainties. These
statements  relate to future events or our future financial performance. In many
cases, you can identify forward-looking statements by terminology such as "may,"
"will,"  "should,"  "expects,"  "plans," "anticipates," "believes," "estimates,"
"predicts," "potential," or "continue," or the negative of these terms and other
comparable  terminology.  These  statements  are  only  predictions.  Our actual
results  could differ materially from those anticipated in these forward-looking
statements  as  a result of a number of factors, including the risks faced by us
described  above  and  elsewhere  in  this  Annual  Report  on  Form  10-K/A.

     We  believe  it  is  important  to  communicate  our  expectations  to  our
shareholders. However, there may be events in the future that we are not able to
predict  accurately  or  over  which we have no control. The risk factors listed
above,  as well as any cautionary language in this Annual Report on Form 10-K/A,
provide  examples  of  risks, uncertainties and events that may cause our actual
results  to  differ  materially  from  the  expectations  we  describe  in  our
forward-looking  statements.


ITEM  7A.  QUANTITATIVE  AND  QUALITATIVE  DISCLOSURES  ABOUT  MARKET  RISK


     We  face  exposure to adverse movements in foreign currency exchange rates.
These  exposures may
                                       30
<PAGE>
change  over  time as our business practices evolve and could seriously harm our
financial  results. All of our international sales, except upgrades, spare parts
and  service  sales  made  by  our  subsidiary  in  South  Korea,  are currently
denominated  in  U.S. dollars. Sales made by the South Korean subsidiary for the
year  ended  December 31, 2000 amounted to won 10.405 million, or $9.126 million
and sales for the year ended December 31, 1999 amounted to won 6.130 million, or
$5.245.  An  increase  in  the  value  of  the  U.S.  dollar relative to foreign
currencies  could  make  our  products more expensive and, therefore, reduce the
demand  for  our  products.  Reduced  demand  for  our products could materially
adversely  affect  our  business, results of operations and financial condition.


     At  any time, fluctuations in interest rates could affect interest earnings
on  our cash, cash equivalents or increase any interest expense owed on the line
of  credit  facility. We believe that the effect, if any, of reasonably possible
near  term  changes  in  interest  rates  on  our financial position, results of
operations  and  cash  flows  would  not be material. Currently, we do not hedge
these  interest  rates  exposures.


                                       31
<PAGE>

ITEM  8.  CONSOLIDATED  FINANCIAL  STATEMENTS  AND  SUPPLEMENTARY  DATA

     The  consolidated financial statements, together with the report thereon of
PricewaterhouseCoopers  LLP,  independent  accountants, dated February 12, 2001,
except  as to the second paragraph of Note 6, which is as of March 28, 2001, are
included  in  a  separate  section  of  this  Report.

SUPPLEMENTARY  DATA:  SELECTED  CONSOLIDATED  QUARTERLY  DATA

     The following table presents our consolidated statements of operations data
for  each  of  the eight quarters in the period ended December 31, 2000.  In our
opinion,  this  information  has been presented on the same basis as the audited
consolidated financial statements included in a separate section of this report,
and  all necessary adjustments, consisting only of normal recurring adjustments,
have  been  included  in  the  amounts  below  to  present  fairly the unaudited
quarterly  results  when  read  in  conjunction  with  the  audited consolidated
financial  statements  and related notes.  The operating results for any quarter
should  not  be  relied  upon as necessarily indicated of results for any future
period.  We  expect  our  quarterly  operating  results  to  fluctuate in future
periods  due  to  a  variety  of reasons, including those discussed in "Business
Risks."

<TABLE>
<CAPTION>


                                                                                FIRST QTR    SECOND QTR    THIRD QTR    FOURTH QTR
                                                                              ------------  ------------  -----------  ------------
                                                                                         (IN THOUSANDS, EXCEPT SHARE DATA)
<S>                                                                                 <C>            <C>           <C>          <C>
2000
Sales
  As originally reported . . . . . . . . . . . . . .                        $    12,277   $    12,356   $   14,165   $     8,388
  Effect of revenue recognition change . . . . . . .                             (8,451)       (5,770)         378         7,295
                                                                                ----------  ------------  -----------  ------------
  As restated for first three quarters and
    as reported for fourth quarter . . . . . . . . .                              3,826         6,586       14,543        15,683
                                                                                ----------  ------------  -----------  ------------
Gross profit
  As originally reported . . . . . . . . . . . . . .                              5,465         5,450        6,043         2,515
  Effect of revenue recognition change . . . . . . .                             (4,483)       (3,039)         456         3,846
                                                                                 ---------  ------------  -----------  ------------
  As restated for first three quarters and
      as reported for fourth quarter . . . . . . . .                                982         2,411        6,499         6,361
                                                                                 ---------  ------------  -----------  ------------
Cumulative effect of change in
        accounting principle . . . . . . . . . . . .                             (6,770)           --           --            --
                                                                                 -------  ------------  -----------  ------------
Net income (loss)
  As originally reported . . . . . . . . . . . . . .                                971           955        1,190        (2,830)
  Effect of revenue recognition change . . . . . . .                            (11,308)       (3,014)         456         3,929
                                                                                --------  ------------  -----------  ------------
  As restated for first three quarters and
      as reported for fourth quarter . . . . . . . .                       $    (10,337)  $    (2,059)  $    1,646   $     1,099
                                                                                ========  ============  ===========  ============

Basic income per share: Income before
     cumulative effect of accounting change
  As originally reported . . . . . . . . . . . . . .                        $      0.05   $      0.05   $     0.06   $     (0.15)
  Effect of revenue recognition change . . . . . . .                              (0.24)        (0.16)        0.03          0.21
                                                                                -----------  ------------  -----------  ------------
  As restated for first three quarters and
          as reported for fourth quarter . . . . . .                              (0.19)        (0.11)        0.09          0.06
                                                                                ---------  ------------  -----------  ------------
Cumulative effect of change
in accounting principle. . . . . . . . . . . . . . .                              (0.36)           --           --            --
                                                                                -------  ------------  -----------  ------------

Net income
  As originally reported . . . . . . . . . . . . . .                               0.05          0.05         0.06         (0.15)
  Effect of revenue recognition change . . . . . . .                              (0.60)        (0.16)        0.03          0.21
                                                                                 --------  ------------  -----------  ------------
  As restated for first three quarters and
          as reported for fourth quarter . . . . . .                        $     (0.55)  $     (0.11)  $     0.09   $      0.06
                                                                                 =======  ============  ===========  ============

Diluted income per share: Income before
     cumulative effect of accounting change
  As originally reported . . . . . . . . . . . . . .                        $     0.05   $      0.05   $     0.06   $     (0.15)
  Effect of revenue recognition change                                            (0.24)        (0.16)       0.02          0.20
                                                                                 ------  ------------  -----------  ------------
  As restated for first three quarters and
          as reported for fourth quarter . . . . . .                              (0.19)        (0.11)        0.08          0.05
                                                                                 ------  ------------  -----------  ------------
 Cumulative effect of change in
     accounting principle. . . . . . . . . . . . . .                              (0.36)           --           --            --
                                                                                -------  ------------  -----------  ------------

 Net income (loss)
  As originally reported . . . . . . . . . . . . . .                               0.05          0.05         0.06         (0.15)
  Effect of revenue recognition change                                            (0.60)        (0.16)        0.02          0.20
                                                                                 ------  ------------  -----------  ------------
 As restated for first three quarters and
      as reported for fourth quarter . . . . . . . .                         $    (0.55)  $     (0.11)  $     0.08   $      0.05
                                                                                 ========  ============  ===========  ============


1999
Sales. . . . . . . . . . . . . . . . . . . . . . . .                          $   5,953   $     7,966   $    8,818   $     5,623
Gross profit . . . . . . . . . . . . . . . . . . . .                              2,349         3,471        3,797         2,115
Net income (loss). . . . . . . . . . . . . . . . . .                               (611)          179          313        (1,498)
Basic net income (loss) per share. . . . . . . . . .                              (0.03)         0.01         0.02         (0.08)
Diluted net income (loss) per share. . . . . . . . .                          $   (0.03)  $      0.01   $     0.02   $     (0.08)

Pro forma amounts for 1999 assuming the change in
accounting principle related to revenue recognition
was applied retroactively:
  Sales. . . . . . . . . . . . . . . . . . . . . . .                          $   6,240   $     6,346   $    8,706   $     6,700
  Gross profit . . . . . . . . . . . . . . . . . . .                              2,646         2,214        2,938         2,320
  Net income (loss). . . . . . . . . . . . . . . . .                               (314)       (1,078)        (546)       (1,294)
  Basic net income (loss) per share. . . . . . . . .                              (0.02)        (0.06)       (0.03)        (0.07)
  Diluted net income (loss) per share. . . . . . . .                          $   (0.02)  $     (0.06)  $    (0.03)  $     (0.07)
</TABLE>


                                       32
<PAGE>
ITEM  9.  CHANGES  IN  AND  DISAGREEMENTS  WITH  ACCOUNTANTS  ON  ACCOUNTING AND
FINANCIAL  DISCLOSURE

None.


                                       33
<PAGE>
                                    PART III





ITEM  10.  DIRECTORS  AND  EXECUTIVE  OFFICERS  OF  THE  REGISTRANT

     As  of  December  31,  2000,  the  directors  and executive officers of the
Company,  who  are  elected  by  and  serve  at  the  discretion of the Board of
Directors,  are  as  follows:

<TABLE>
<CAPTION>


   NAME                   AGE           POSITION
--------------------------------------------------------------------
<S>                      <C>   <C>                                                 <C>
William W.R. Elder. . .    62  Chairman of the Board, President and Chief Executive Officer
Thomas E. Seidel, Ph.D.    65  Executive Vice President, Chief Technical Officer
Kenneth Schwanda. . . .    42  Vice President, Finance, Chief Financial Officer
Robert A. Wilson. . . .    38  Executive Vice President, Worldwide Sales
Mario M. Rosati . . . .    54  Secretary and Director
Todd S. Myhre . . . . .    56  Director
G. Frederick Forsyth. .    56  Director
George D. Wells . . . .    65  Director
Robert J. Richardson. .    54  Director
</TABLE>

     Except  as  set  forth  below,  all  of  the  executive  officers have been
associated  with  us in their present or other capacities for more than the past
five years. Officers are elected annually by the Board of Directors and serve at
the  discretion  of  the  Board.  There  are  no  family relationships among our
executive  officers.

     WILLIAM W.R. ELDER was a founder of Genus and is our Chairman of the Board,
President  and our Chief Executive Officer. From October 1996 to April 1998, Dr.
Elder  served  only as Chairman of the Board. From April 1990 to September 1996,
Dr.  Elder  was  Chairman of the Board, President and Chief Executive Officer of
the  Company.  From  November  1981 to April 1990, Dr. Elder was President and a
director  of  the  Company.

     THOMAS  E.  SEIDEL  has  served  as  our Executive Vice President and Chief
Technical Officer since January 1996. From July 1988 to January 1996, Dr. Seidel
was  associated  with  SEMATECH, a semiconductor-industry consortium, in various
senior management positions, most recently as Chief Technologist and Director of
Strategic  Technology.

     KENNETH  SCHWANDA  has  served  as  our Vice President of Finance and Chief
Financial  Officer  since  February  1999.  Mr.  Schwanda  joined the Company in
December  1992  and  has  held  various  financial  management  positions,  most
currently  as  Vice  President  of  Finance. Mr. Schwanda began his professional
career  in 1979 at Harris Corporation, a global communications company, where he
held  accounting  and  finance  positions.

     ROBERT  A. WILSON has served as our Vice President of Worldwide Sales since
January  1999.  Mr.  Wilson is also a director of Genus Japan. Mr. Wilson joined
the Company in January 1987 and has held several product and technical marketing
positions  with  the  Company  until  his  transition  to  sales  in  1992.

MARIO  M.  ROSATI  has  served as our Secretary since May 1996 and as a director
since  our  inception in November 1981. He has been a member, since 1971, of the
law  firm  Wilson  Sonsini  Goodrich & Rosati, Professional Corporation, general
counsel  to  the  Company. Mr. Rosati is also a director of Aehr Test Systems, a
manufacturer of computer hardware testing systems, MyPoints.com, Inc., a web and
email-based  direct  marketing  company,  Sanmina  Corporation,  an  electronics
contract  manufacturer,  Symyx  Technologies,  Inc.,  a  combinatorial materials
science  company,  The  Management  Network Group, Inc., a management consulting
firm  focused  on  the  telecommunications  industry,  and  Vivus,  a  specialty
pharmaceutical  company, all publicly-held companies. He is also a director of a
number  of  privately-held  companies.

                                       34
<PAGE>

     TODD  S. MYHRE has served as a director since January 1994. Since September
1999,  he  served  as  Interim  Chief  Executive  Officer and a Board member for
Ybrain.com,  an  e-commerce  company focused on the college student market. From
April  1998 to August 1999 and from September 1995 to January 1996, he served as
President,  Chief  Executive  Officer,  and  a  Board  member  of  GameTech
International, an electronic gaming manufacturer. From February 1996 to February
1998,  Mr.  Myhre was an international business consultant. From January 1993 to
August  1993,  from August 1993 to December 1993 and from January 1994 to August
1995,  Mr.  Myhre  served  as  Vice President and Chief Financial Officer of the
Company,  as  Executive  Vice  President  and  Chief  Operating  Officer  and as
President  and  a  Director  of  the  Company.

     G.  FREDERICK  FORSYTH  has served as a director since February 1996. Since
May  2000,  Mr.  Forsyth has served as President and CEO of NewRoads, Inc.  From
March 1999 to May 2000, Mr. Forsyth served as President, Systems Engineering and
Services  of Solectron Corp.  From August 1997 to March 1999, Mr. Forsyth served
as  President,  Professional Products Division of Iomega, Inc. From June 1989 to
February  1997, Mr. Forsyth was associated with Apple Computer, Inc., a personal
computer  manufacturer, in various senior management positions, most recently as
Senior  Vice  President  and  General  Manager,  Macintosh  Product  Group.

     GEORGE  D.  WELLS has served as a director since March 2000. From July 1992
to  October  1996,  Mr. Wells served as President and Chief Executive Officer of
Exar Corporation. From April 1985 to July 1992, he served as President and Chief
Operating  Officer of L.S.I. Logic Corporation and became Vice Chairman in March
1992.  From  May 1983 to April 1985, Mr. Wells was President and Chief Executive
Officer  of  Intersil,  Inc.,  a  subsidiary  of  General  Electric  Company.

     ROBERT  J.  RICHARDSON  has  served  as  a director since March 2000. Since
January  2000, Mr. Richardson has been a semiconductor industry consultant. From
November  1997  to  January  2000,  Mr.  Richardson  served  as  Chairman, Chief
Executive  Officer  and  President  of  Unitrode  Corporation. From June 1992 to
November  1997,  he  served  in  various positions at Silicon Valley Group, Inc.
including  President  Lithography Systems, President Track Systems Division, and
Corporate  Vice-President  New  Business Development and Marketing. From October
1988  to June 1992, Mr. Richardson was President and General Manager, Santa Cruz
Division  at  Plantronics,  Inc.

ITEM  11.  EXECUTIVE  COMPENSATION

     The  information  required by this Item is incorporated by reference to the
Company's  Proxy  Statement.

ITEM  12.  SECURITY  OWNERSHIP  OF  CERTAIN  BENEFICIAL  OWNERS  AND  MANAGEMENT

     The  information  required by this Item is incorporated by reference to the
Company's  Proxy  Statement.


ITEM  13.  CERTAIN  RELATIONSHIPS  AND  RELATED  TRANSACTIONS

     The  information  required by this Item is incorporated by reference to the
Company's  Proxy  Statement.

                                       35
<PAGE>

                                     PART IV

ITEM  14.  EXHIBITS,  FINANCIAL  STATEMENT  SCHEDULE  AND  REPORTS  ON  FORM 8-K

(a)     The  following  documents  are  filed  as  a  part  of  this  Report:

1.   Financial  Statements.

     Report  of  Independent  Accountants

     Consolidated Balance Sheets-December 31, 2000 and 1999

     Consolidated Statements of Operations-Years Ended December 31, 2000, 1999
     and  1998

     Consolidated Statements of Shareholders' Equity and comprehensive income
     (loss)-Years Ended December 31, 2000, 1999 and 1998

     Consolidated Statements of Cash Flows-Years Ended December 31, 2000, 1999
     and 1998

     Notes to Consolidated Financial Statements


2.   Financial  Statement  Schedule.

     Schedule II "Valuation and Qualifying Accounts"


3.   Exhibits.  The  Exhibits  listed  on  the  accompanying  Index  to Exhibits
     immediately  following  the  financial statement schedule are filed as part
     of,  or  incorporated  by  reference  into,  this  Report.

     Reports on Form 8-K. No reports on Form 8-K were filed by the Company
     during the fourth quarter ended December 31, 2000.


                                       36
<PAGE>

                        REPORT OF INDEPENDENT ACCOUNTANTS


To  the  Board  of  Directors  and  Shareholders  of
Genus,  Inc.:

     In  our  opinion,  the  accompanying  consolidated  balance  sheets and the
related  consolidated  statements  of  operations,  of  shareholders' equity and
comprehensive  income  (loss)  and of cash flows present fairly, in all material
respects, the financial position of Genus, Inc. and its subsidiaries at December
31,  2000 and 1999, and the results of their operations and their cash flows for
each  of  the  three  years in the period ended December 31, 2000, in conformity
with  accounting  principles generally accepted in the United States of America.
These  financial  statements are the responsibility of the Company's management;
our  responsibility is to express an opinion on these financial statements based
on  our  audits.  We conducted our audits of these statements in accordance with
auditing  standards  generally  accepted  in the United States of America, which
require  that we plan and perform the audit to obtain reasonable assurance about
whether  the  financial  statements  are free of material misstatement. An audit
includes  examining,  on  a  test  basis,  evidence  supporting  the amounts and
disclosures  in  the  financial  statements, assessing the accounting principles
used  and  significant  estimates made by management, and evaluating the overall
financial  statement  presentation.  We  believe  that  our  audits  provide  a
reasonable  basis  for  our  opinion.

As  discussed  in  Note  2  to  the consolidated financial statements, effective
January 1, 2000, the Company changed its method of recognizing revenue to comply
with  Securities  and  Exchange  Commission  Staff  Accounting Bulletin No. 101.

/s/  PRICEWATERHOUSECOOPERS  LLP
--------------------------------
PricewaterhouseCoopers  LLP

San  Jose,  California
February  12,  2001, except as to the second paragraph of Note 6, which is as of
March  28,  2001

                                      F-1
<PAGE>


                          GENUS, INC. AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS
                        (IN THOUSANDS, EXCEPT SHARE DATA)
<TABLE>
<CAPTION>
                                                                                           DECEMBER  31,
                                                                                           -------------

                                                                                          2000       1999
                                                                                        ---------  ---------
<S>                                                                                       <C>            <C>
ASSETS
Current Assets:
  Cash and cash equivalents. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  $  3,136   $  6,739
  Accounts receivable (net of allowance for doubtful accounts
    of $363 in 2000 and $551 in 1999). . . . . . . . . . . . . . . . . . . . . . . . .     8,479      7,629
  Inventories. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    21,849      7,266
  Other current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .       675        883
                                                                                        ---------  ---------
    Total current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    34,139     22,517
  Equipment, furniture and fixtures, net . . . . . . . . . . . . . . . . . . . . . . .    10,207      4,894
  Other assets, net. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .       189        333
                                                                                        ---------  ---------
    Total assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  $ 44,535   $ 27,744
                                                                                        =========  =========

LIABILITIES
Current Liabilities:
  Short-term bank borrowings . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  $  2,719   $      0
  Accounts payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .     8,647      4,146
  Accrued expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .     3,315      3,748
  Deferred revenue and customer deposits . . . . . . . . . . . . . . . . . . . . . . .    18,562        420
  Current portion of capital lease obligations . . . . . . . . . . . . . . . . . . . .         0         52
                                                                                        ---------  ---------
    Total liabilities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    33,243      8,366
                                                                                        ---------  ---------

Commitments and contingencies (Note 7)

SHAREHOLDERS' EQUITY
Preferred stock, no par value:
  Authorized 2,032,000 shares;
    Issued and outstanding, none . . . . . . . . . . . . . . . . . . . . . . . . . . .         0          0
Common stock, no par value:
  Authorized 50,000,000 shares;
    Issued and outstanding, 19,319,000 shares in 2000 and
    18,469,000 shares in 1999. . . . . . . . . . . . . . . . . . . . . . . . . . . . .   102,837    101,042
  Accumulated deficit. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   (89,523)   (79,872)
  Accumulated other comprehensive loss . . . . . . . . . . . . . . . . . . . . . . . .    (2,022)    (1,792)
                                                                                        ---------  ---------
    Total shareholders' equity . . . . . . . . . . . . . . . . . . . . . . . . . . . .    11,292     19,378
                                                                                        ---------  ---------
    Total liabilities and shareholders' equity . . . . . . . . . . . . . . . . . . . .  $ 44,535   $ 27,744
                                                                                        =========  =========

The accompanying notes are an integral part of the consolidated financial statements.
</TABLE>

                                      F-2
<PAGE>

                          GENUS, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                      (IN THOUSANDS, EXCEPT PER SHARE DATA)

<TABLE>
<CAPTION>


                                                       YEARS  ENDED  DECEMBER  31,
                                                       ---------------------------
                                                       2000      1999      1998
                                                     --------  --------  ---------
<S>                                                  <C>       <C>       <C>
Net sales . . . . . . . . . . . . . . . . . . . . .  $40,638   $28,360   $ 32,431
Costs and expenses:
  Cost of goods sold. . . . . . . . . . . . . . . .   24,385    16,628     29,600
  Research and development. . . . . . . . . . . . .    8,659     5,368      8,921
  Selling, general and administrative . . . . . . .   10,093     7,930     14,115
  Restructuring and other . . . . . . . . . . . . .        0       543      7,308
                                                     --------  --------  ---------
    Loss from operations. . . . . . . . . . . . . .   (2,499)   (2,109)   (27,513)
Other income (expense), net . . . . . . . . . . . .      108       669        (86)
                                                     --------  --------  ---------
Loss before provision for income taxes and
  cumulative effect of change in
  accounting principle. . . . . . . . . . . . . . .   (2,391)   (1,440)   (27,599)
Provision for income taxes. . . . . . . . . . . . .      490       177          1
                                                     --------  --------  ---------
Loss before cumulative effect of change in
  accounting principle. . . . . . . . . . . . . . .   (2,881)   (1,617)   (27,600)
Cumulative effect of change in accounting principle   (6,770)        0          0
                                                     --------  --------  ---------
Net loss. . . . . . . . . . . . . . . . . . . . . .   (9,651)   (1,617)   (27,600)
Deemed dividends on preferred stock . . . . . . . .        0         0     (1,903)
                                                     --------  --------  ---------
Net loss attributable to common shareholders. . . .  $(9,651)  $(1,617)  $(29,503)
                                                     ========  ========  =========
Per share data:
Basic and diluted loss per share
  before cumulative effect. . . . . . . . . . . . .  $ (0.15)  $ (0.09)  $  (1.71)
Cumulative effect of change in accounting principle    (0.36)       --         --
                                                     --------  --------  ---------
Basic and diluted net loss per share. . . . . . . .  $ (0.51)  $ (0.09)  $  (1.71)
                                                     ========  ========  =========
Shares used to compute basic and diluted
  net loss per share. . . . . . . . . . . . . . . .   18,937    18,134     17,248
                                                     ========  ========  =========
</TABLE>

Unaudited  Pro  forma  amounts  of  the retroactive application of the change in
accounting  principle  under  SAB  101:


<TABLE>
<CAPTION>
<S>                                                         <C>       <C>       <C>
Net sales . . . . .                                  $ 40,638   $27,992   $ 33,599
Net loss. . . . . .                                    (2,881)   (3,232)   (25,963)
Net loss per share:
  Basic . . . . .                                 .  $  (0.15)  $ (0.18)  $  (1.51)
  Diluted . . . .                                    $  (0.15)  $ (0.18)  $  (1.51)
</TABLE>

The  accompanying  notes  are  an  integral  part  of the consolidated financial
statements.




                                      F-3
<PAGE>

                          GENUS, INC. AND SUBSIDIARIES
                 CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
                         AND COMPREHENSIVE INCOME (LOSS)
                                 (in thousands)
<TABLE>
<CAPTION>
                                                                            ACCUM.
                                                                            OTHER
                                  PREFERRED    COMMON STOCK    ACCUMULATED  COMPREH.
                                     STOCK    SHARES   AMOUNT    DEFICIT     LOSS      TOTAL
                                    --------  ------  --------  ---------  --------  ---------
<S>                                 <C>       <C>     <C>       <C>        <C>       <C>
Balances, January 1, 1998. . . . .  $     0   17,123  $ 99,149  $(48,863)  $(1,929)  $ 48,357
  Issuance of 100 shares of
    Series A convertible
    preferred stock and
    warrants to purchase
    shares of common stock . . . .    6,222        0       385    (1,792)        0      4,815
  Conversion of 2 shares of
    Series A convertible
    preferred stock to
    common stock . . . . . . . . .     (124)     107       124         0         0          0
  Redemption of 70 shares of
    Series A convertible
    preferred stock. . . . . . . .   (4,725)       0         0         0         0     (4,725)
  Exchange of 28 shares of
    Series A convertible
    preferred stock for 28
    shares of Series B
    manditorily redeemable
    convertible preferred stock. .   (1,373)       0         0         0         0     (1,373)
  Issuance of shares of common
    stock under stock option
    plan . . . . . . . . . . . . .        0        5        14         0         0         14
  Issuance of shares of common
    stock under employee stock
    purchase plan. . . . . . . . .        0      238       177         0         0        177
  Net loss . . . . . . . . . . . .        0        0         0   (27,600)        0
  Translation adjustments. . . . .        0        0         0         0       288
  Comprehensive loss . . . . . . .        0        0         0         0         0    (27,312)
                                    --------  ------  --------  ---------  --------  ---------
Balances, December 31, 1998. . . .        0   17,473    99,849   (78,255)   (1,641)    19,953
  Conversion of 16 shares of
    Series B convertible preferred
    stock to 640 shares of
    common stock . . . . . . . . .        0      640       773         0         0        773
  Issuance of shares of common
    stock under stock option
    plan . . . . . . . . . . . . .        0       50       102         0         0        102
  Issuance of shares of common
    stock under employee stock
    purchase plan. . . . . . . . .        0      306       220         0         0        220
  Issuance of warrants to Venture
    Bank to purchase 25 shares of
    common stock . . . . . . . . .        0        0        53         0         0         53
  Amortization of deferred stock
    compensation . . . . . . . . .        0        0        45         0         0         45
  Net loss . . . . . . . . . . . .        0        0         0    (1,617)        0
  Translation adjustments. . . . .        0        0         0         0      (151)
  Comprehensive loss . . . . . . .        0        0         0         0         0     (1,768)
                                    --------  ------  --------  ---------  --------  ---------
Balances, December 31, 1999. . . .        0   18,469   101,042   (79,872)   (1,792)    19,378
  Issuance of shares of common
    Stock under stock option
    plan . . . . . . . . . . . . .        0      490     1,023         0         0      1,023
  Issuance of shares of common
stock from warrants and
    options. . . . . . . . . . . .        0       72         0         0         0          0
  Issuance of shares of common
    stock under employee stock
    purchase plan. . . . . . . . .        0      288       282         0         0        282
  Stock-based compensation . . . .        0        0       490         0         0        490
  Net loss . . . . . . . . . . . .        0        0         0    (9,651)        0
  Translation adjustments. . . . .        0        0         0         0      (230)
  Comprehensive loss . . . . . . .        0        0         0         0         0     (9,881)
                                    --------  ------  --------  ---------  --------  ---------
Balances, December 31, 2000. . . .  $     0   19,319  $102,837  $(89,523)  $(2,022)  $ 11,292
                                    ========  ======  ========  =========  ========  =========
</TABLE>
     The accompanying notes are an integral part of the consolidated financial
                                   statements.


                                      F-4
<PAGE>

                          GENUS, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (IN THOUSANDS)


<TABLE>
<CAPTION>


                                                                               YEARS  ENDED  DECEMBER  31,
                                                                               ---------------------------

                                                                              2000       1999      1998
                                                                            ---------  --------  ---------
<S>                                                                         <C>        <C>       <C>
Cash flows from operating activities:
  Net loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  $ (9,651)  $(1,617)  $(27,600)
  Adjustments to reconcile net loss to net cash from operating activities:
    Cumulative effect of change in accounting principle. . . . . . . . . .     6,770         0          0
    Depreciation . . . . . . . . . . . . . . . . . . . . . . . . . . . . .     1,740     1,805      2,480
    Provision for doubtful accounts. . . . . . . . . . . . . . . . . . . .      (188)       51      1,670
    Restructuring and other. . . . . . . . . . . . . . . . . . . . . . . .         0       543      7,308
    Stock-based compensation . . . . . . . . . . . . . . . . . . . . . . .       490        98          0
    Changes in assets and liabilities:
      Accounts receivable. . . . . . . . . . . . . . . . . . . . . . . . .      (662)    4,785      4,781
      Inventories. . . . . . . . . . . . . . . . . . . . . . . . . . . . .   (10,414)   (1,928)    (2,938)
      Other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . .       352      (519)       650
      Accounts payable . . . . . . . . . . . . . . . . . . . . . . . . . .     4,501     1,953     (6,530)
      Accrued expenses . . . . . . . . . . . . . . . . . . . . . . . . . .       111      (626)    (5,153)
      Deferred revenue . . . . . . . . . . . . . . . . . . . . . . . . . .     4,659         0          0
      Other, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . .         0         0        626
                                                                            ---------  --------  ---------
      Net cash provided by (used in) operating activities. . . . . . . . .    (2,292)    4,545    (18,830)
                                                                            ---------  --------  ---------
Cash flows from investing activities:
  Acquisition of equipment, furniture and fixtures . . . . . . . . . . . .    (5,053)   (2,040)      (919)
  Sale of MeV ion implant products . . . . . . . . . . . . . . . . . . . .         0         0     23,151
                                                                            ---------  --------  ---------
      Net cash provided by (used in) investing activities. . . . . . . . .    (5,053)   (2,040)    22,232
                                                                            ---------  --------  ---------
Cash flows from financing activities:
  Proceeds from issuance of common stock . . . . . . . . . . . . . . . . .     1,305       322        191
  Proceeds from issuance of preferred stock and warrants . . . . . . . . .         0         0      4,815
  Redemption of preferred stock. . . . . . . . . . . . . . . . . . . . . .         0         0     (5,325)
  Proceeds from short-term bank borrowings . . . . . . . . . . . . . . . .     6,719         0      4,000
  Payments of short-term bank borrowings . . . . . . . . . . . . . . . . .    (4,000)   (4,000)    (7,200)
  Payments of long-term debt and capital leases. . . . . . . . . . . . . .       (52)      (62)      (761)
                                                                            ---------  --------  ---------
      Net cash provided by (used in) financing activities. . . . . . . . .     3,972    (3,740)    (4,280)
                                                                            ---------  --------  ---------
Effect of exchange rate changes on cash                                         (230)     (151)       303
                                                                            ---------  --------  ---------
Net decrease in cash and cash equivalents                                     (3,603)   (1,386)      (575)
Cash and cash equivalents, beginning of year                                   6,739     8,125      8,700
                                                                            ---------  --------  ---------
Cash and cash equivalents, end of year                                      $  3,136   $ 6,739   $  8,125
                                                                            =========  ========  =========
Supplemental Cash Flow Information
Cash paid for interest                                                      $     76   $     4   $    186
Cash paid for income taxes                                                       177         0          6
Non-cash investing and financing activities:
  Deemed dividends on preferred stock. . . . . . . . . . . . . . . . . . .         0         0      1,903
  Conversion of Series A preferred stock to common stock . . . . . . . . .         0         0        124
  Conversion of Series B preferred stock to common stock . . . . . . . . .         0       773          0
</TABLE>


     The accompanying notes are an integral part of the consolidated financial
                                   statements.


                                      F-5
<PAGE>

                          GENUS, INC. AND SUBSIDIARIES
                          NOTES TO FINANCIAL STATEMENTS

NOTE  1.  ORGANIZATION  AND  SUMMARY  OF  SIGNIFICANT  ACCOUNTING  POLICIES

     Nature  of  Operations.  Genus,  Inc.  (the  "Company") was incorporated in
California  in  1982.  The  Company  designs,  manufactures  and markets capital
equipment and deposition processes for advanced semiconductor manufacturing. The
Company's  products  are  marketed  worldwide  either  directly  to end-users or
through  exclusive  sales  representative  arrangements.  In  January  1996, the
Company  opened a subsidiary in South Korea to provide sales and service support
to Korean customers. The Company's customers include semiconductor manufacturers
located  throughout  the  United States, Europe and in the Pacific Rim including
Japan,  South  Korea  and  Taiwan.  The  following is a summary of the Company's
significant  accounting  policies.

     Basis  of  Presentation.  The consolidated financial statements include the
accounts  of  Genus, Inc. and its wholly owned subsidiaries after elimination of
significant intercompany accounts and transactions. The preparation of financial
statements  in conformity with generally accepted accounting principles requires
management to make estimates and assumptions that affect the reported amounts of
assets  and  liabilities  and disclosure of contingent assets and liabilities at
the  date  of  the financial statements and the reported amounts of revenues and
expenses  during  the  reporting  period. Actual results could differ from those
estimates.

     Liquidity.  During the year ended December 31, 2000, the Company was in the
process  of  executing its business strategy and has plans to eventually achieve
profitable  operations.  Management  believes  that  existing cash and available
financing  will  be  sufficient  to  meet  projected  working  capital,  capital
expenditures  and  other  cash  requirements  for  the  next  twelve  months.
Accordingly,  these  financial  statements have been prepared on a going concern
basis.

     Cash  and  Cash  Equivalents.  The  Company  considers  all  highly  liquid
investments  with  a  maturity of three months or less when purchased to be cash
equivalents.  Cash  equivalents  consist  primarily  of  money  market  funds.

     Fair  Value of Financial Instruments. The carrying amounts of cash and cash
equivalents,  accounts  receivable,  short  term  bank  borrowings  and accounts
payable  approximate estimated fair value because of the short maturity of those
financial  instruments.

     Concentration  of  Credit  Risk.  Financial  instruments  which potentially
subject  the  Company  to  concentrations of credit risk, consist principally of
cash  and  cash  equivalents  and trade receivables. The Company places cash not
required  for  current  disbursement in money market funds in the United States.
The  Company  does  not  require  collateral from its customers and maintains an
allowance  for  credit  losses.

     Two  customers  accounted for an aggregate of 91% of accounts receivable at
December  31, 2000.  Two customers accounted for an aggregate of 92% of accounts
receivable  at  December 31, 1999. Three customers accounted for an aggregate of
78%  of  accounts  receivable  at  December 31, 1998. South Korean headquartered
customers  accounted  for  an aggregate of 85% and 71% of accounts receivable at
December  31, 2000 and 1999, respectively. The Company has written off bad debts
of  none,  none,  and  $2,267,000  in  2000,  1999,  and  1998,  respectively.

     Inventories.  Inventories  are stated at the lower of cost or market, using
standard  costs  that  approximate  actual  costs, under the first-in, first-out
method.

     Long-Lived Assets. Equipment, furniture and fixtures are stated at cost and
depreciated  using  the  straight-line method over their estimated useful lives,
which  range from three to ten years. Leasehold improvements are amortized using
the  straight-line  method  over  their  estimated useful lives or the remaining
lease  term,  whichever  is  less.

                                      F-6
<PAGE>

     Whenever  events  or  changes  in  circumstances indicate that the carrying
amounts of long-lived assets related to those assets may not be recoverable, the
Company  estimates  the  future  cash  flows,  undiscounted and without interest
charges,  expected  to  result  from  the use of those assets and their eventual
disposition.  If  the  sum  of  the  future cash flows is less than the carrying
amounts  of those assets, the Company recognizes an impairment loss based on the
excess  of  the  carrying  amounts  over  the  fair  values  of  the  assets.


Revenue  Recognition.  The  Company's  selling  arrangements  generally  involve
contractual  customer  acceptance  provisions  and  installation  of the product
occurs  after  shipment and transfer of title. As a result, effective January 1,
2000,  to comply with the provisions of Securities and Exchange Commission Staff
Accounting Bulletin No. 101, the Company defers recognition of revenue from such
equipment  sales  until  installation is complete and the product is accepted by
the  customer.  Under  SAB  101,  warranty  obligations  are  accrued upon final
customer  acceptance  which  coincides  with  recognition  of  revenue. Prior to
January  1,  2000,  revenue  related  to  systems  was generally recognized upon
shipment.  A  provision  for  the  estimated future cost of system installation,
warranty  and  commissions  was  recorded  when  revenue was recognized. Service
revenue  is  recognized  when  service  has  been  completed.


     Income  Taxes.  The  Company  accounts for income taxes using a method that
requires  deferred  tax assets to be computed annually on an asset and liability
method and adjusted when new tax laws or rates are enacted. Valuation allowances
are established when necessary to reduce deferred tax assets to the amounts more
likely than not  to be realized. Income tax expense (benefit) is the tax payable
(refundable)  for the period plus or minus the change in deferred tax assets and
liabilities  during  the  period.

     Foreign  Currency.  The  Company  has foreign sales and service operations.
With  respect  to  all foreign subsidiaries excluding South Korea and Japan, the
functional  currency  is  the U.S. dollar, and transaction and translation gains
and losses are included in results of operations. The functional currency of the
Company's South Korean subsidiary is the won, and the functional currency of the
Company's  Japanese  subsidiary  is the yen. The translation from the applicable
foreign  currency  to U.S. dollars is performed for balance sheet accounts using
current  exchange  rates in effect at the balance sheet date and for revenue and
expense  accounts  using  the  weighted average exchange rate during the period.
Adjustments resulting from such translation are reflected as other comprehensive
income/loss.

     Net  Loss  Per Share. Basic net loss per share is computed by dividing loss
available to common shareholders by the weighted average number of common shares
outstanding  for  the period. Diluted net loss per share is computed by dividing
loss  available  to  common  shareholders,  adjusted  for  convertible preferred
dividends and after-tax interest expense on convertible debt, if any, by the sum
of the weighted average number of common shares outstanding and potential common
shares  (when  dilutive).

     Stock Compensation. The Company accounts for stock-based compensation using
the  intrinsic  value  method  prescribed in Accounting Principles Board Opinion
(APB)  No.  25,  "Accounting  for  Stock  Issued  to  Employees"  and  Financial
Accounting  Standards  Board  Interpretation  No.  44  "Accounting  for  Certain
Transactions  Involving Stock Compensation."  Generally, the Company's policy is
to  grant options with an exercise price equal to the quoted market price of the
Company's  stock on the date of the grant. Accordingly, no compensation cost has
been  recognized in the Company's statements of operations. The Company provides
additional  pro  forma  disclosures  as  required  under  Statement of Financial
Accounting  Standards  No.  123  (SFAS  123),  "Accounting  for  Stock-Based
Compensation."

     Comprehensive  Income/loss.  In  1998,  the  Company  adopted SFAS No. 130,
"Reporting  Comprehensive  Income."  SFAS  No.  130  establishes  standards  for
disclosure  and  financial  statement  display for reporting total comprehensive
income and its individual components. Comprehensive income, as defined, includes
all  changes  in  equity  during  a period from non-owner sources. The Company's
comprehensive  income/loss  includes  net  income/loss  and  foreign  currency
translation  adjustments  and  is  displayed  in  the statement of shareholders'
equity  and  comprehensive  income/loss.


     RECLASSIFICATIONS.  Certain  reclassifications  have been made to the prior
year  financial  statements  to  conform  to  current  year's presentation. Such
reclassifications  had no effect on the previously reported loss from operations
or  retained  earnings.


                                      F-7
<PAGE>

     RECENT  ACCOUNTING  PRONOUNCEMENTS.  In June 1998, the Financial Accounting
Standards  Boards  ("FASB")  issued  SFAS  No.  133,  "Accounting for Derivative
Instruments  and  Hedging  Activities."  SFAS  133  establishes  accounting  and
reporting  standards  for  derivative  instruments, including certain derivative
instruments  embedded  in  other contracts, and for hedging activities.  In July
1999,  the  FASB issued SFAS No. 137, "Accounting for Derivative Instruments and
Hedging  Activities-Deferral  of  the  Effective Date of FASB Statement No. 133"
which  deferred  the  effective date until the first fiscal year beginning after
June  15,  2000.  In  June  2000,  the  FASB  issued  SFAS  Statement  No.  138,
"Accounting  for Certain Derivative Instruments and Certain Hedging Activities -
an Amendment of SFAS 133."   SFAS No. 138 amends certain terms and conditions of
SFAS  133.  SFAS  133  requires that all derivative instruments be recognized at
fair  value  as  either  assets or liabilities in the statement of the financial
position.  The  accounting for changes in the fair value (i.e., gains or losses)
of  a  derivative  instrument  depends  on  whether  it  has been designated and
qualifies  as part of a hedging relationship and further, on the type of hedging
relationship.  We  adopted  SFAS  No.  133, as amended, on January 1, 2001.  The
adoption  of  SFAS  No.  133  did  not  have  a material impact on the Company's
consolidated  financial  statements.

 NOTE  2.  ACCOUNTING  CHANGE  -  REVENUE  RECOGNITION

In  December  2000,  the  Company  changed its accounting method for recognizing
revenue  on  sales  with  an  effective  date of January 1, 2000.  The Company's
selling  arrangements  generally  involve  contractual  customer  acceptance
provisions and installation of the product occurs after shipment and transfer of
title.  As a result, effective January 1, 2000, to comply with the provisions of
Securities  and  Exchange  Commission  Staff  Accounting  Bulletin  No. 101, the
Company  defers  recognition  of  revenue  from  such  equipment  sales  until
installation  is  complete  and  the  product  is accepted by the customer.  The
Company  previously  recognized  revenue  related  to  systems upon shipment.  A
provision  for  the  estimated  future cost of system installation, warranty and
commissions  was  recorded  when  revenue  was  recognized.

The  cumulative  effect  on prior years of the change in accounting method was a
charge  of  $6.77  million  or  $0.36  per  basic  and  diluted  share.


NOTE  3.  INVENTORIES

     Inventories  comprise  the  following  (in  thousands):


<TABLE>
<CAPTION>


                                      DECEMBER  31,
                                     ---------------
                                      2000     1999
                                     -------  ------
<S>                                  <C>      <C>
  Raw materials and purchased parts  $ 6,081  $5,439
  Work in process . . . . . . . . .    5,624   1,055
  Finished goods. . . . . . . . . .      647     772
  Inventory at customers' locations    9,497       0
                                     -------  ------
                                     $21,849  $7,266
                                     =======  ======
</TABLE>

Inventory  at  customers'  locations  represent  the  cost of systems shipped to
customers  for  which  we  are  awaiting  customer  acceptance.



                                      F-8
<PAGE>


NOTE  4.  EQUIPMENT,  FURNITURE  AND  FIXTURES

     Equipment,  furniture  and  fixtures  are  stated  at cost and comprise the
following  (in  thousands):


<TABLE>
<CAPTION>

                                                                    DECEMBER  31,
                                                                 ------------------
                                                                 2000       1999
                                                               ---------  ---------
<S>                                                            <C>        <C>
  Equipment (useful life of 3 years). . . . . . . . . . . . .  $  8,698   $  8,048
  Demonstration equipment (useful life ranges from 3-5 years)    18,089     14,658
  Furniture and fixtures (useful life of 3 years) . . . . . .     1,029      1,021
  Leasehold improvements (useful life ranges from 4-10 years)     3,694      3,056
                                                               ---------  ---------
                                                                 31,510     26,783
  Less accumulated depreciation and amortization. . . . . . .   (24,740)   (23,048)
                                                               ---------  ---------
                                                                  6,770      3,735
  Construction in process . . . . . . . . . . . . . . . . . .     3,437      1,159
                                                               ---------  ---------
                                                               $ 10,207   $  4,894
                                                               =========  =========
</TABLE>



NOTE  5.  ACCRUED  EXPENSES

     Accrued  expenses  comprise  the  following  (in  thousands):

<TABLE>
<CAPTION>

                                            DECEMBER  31,
                                            -------------
                                            2000    1999
                                           ------  ------
<S>                                        <C>     <C>
  System installation and warranty. . . .  $  757  $  817
  Accrued commissions and incentives. . .     242     364
  Accrued compensation and related items.     615     872
  Federal, state and foreign income taxes     828     622
  Other . . . . . . . . . . . . . . . . .     873   1,073
                                           ------  ------
                                           $3,315  $3,748
                                           ======  ======
</TABLE>

NOTE  6.  SHORT-TERM  BANK  BORROWING

     In  November 1999, the Company entered into a $10 million revolving line of
credit  with  Venture Bank. Amounts available under the line are based on 80% of
eligible  accounts  receivable,  and  borrowings  under  the  line of credit are
secured  by all corporate assets and bear interest at prime plus 0.25%. The line
of  credit  expires in November 2001. The line of credit contains covenants that
require  the  Company  to  maintain  a minimum quick ratio and a maximum debt to
tangible  net  equity  ratio. In addition, the line requires the Company to have
annual  profitability  beginning  in  2000  and  a  maximum quarterly loss of $1
million  with  no two consecutive quarterly losses. Additionally, the Company is
prohibited from distributing dividends. At December 31, 2000, the Company was in
default  of  certain of the covenants and Venture Bank has granted the Company a
waiver  of  the default. The amount available to borrow at December 31, 2000 was
$4.4  million at a rate of 9.75%. There was $2.7 million outstanding at December
31,  2000.

     On  March 28,  2001, the Company converted its existing $10 million Venture
Bank  line  of  credit to an asset-based line of credit. Amounts available under
the  line are based on 80% of eligible accounts receivable, and borrowings under
the line are secured by all corporate assets and bear interest at 9.6% per annum
and an administrative fee of a quarter of one percent on all advances. This line
will not have accounts receivable customer concentration limitations, will allow
borrowing  against foreign receivables, and will have no financial covenants. It
will  expire  in  March,  2002.


NOTE  7.  COMMITMENTS  AND  CONTINGENCIES

                                      F-9
<PAGE>

     The  Company  leases certain of its facilities and various office equipment
under  operating  leases  expiring  through  2002.  The Sunnyvale facility lease
expires in October, 2002, but we have an option to renew the lease for five more
years  at  95% of current market prices. The Company is responsible for property
taxes,  insurance  and  maintenance  under the facility leases. Certain of these
leases contain renewal options. In 2000 we subleased approximately 38,000 square
feet  to a third parties. In December, 2000, one of the parties terminated their
sublease,  and  we  reclaimed  11,000  square feet of office space. We currently
sublease  approximately 27,000 square feet to a third party. We also lease sales
and  support  offices  in  Seoul,  South  Korea,  Tokyo,  Japan.

     At  December  31, 2000, minimum lease payments required and sublease income
under  these  operating  leases  are  as  follows  (in  thousands):

<TABLE>
<CAPTION>



        LEASE PAYMENTS   SUBLEASE INCOME
        ---------------  ----------------
<S>               <C>                 <C>
2001 .         $   815            $   625
2002 .             643                468
            ---------------      --------
               $  1,458          $  1,093
                 ======           ========
</TABLE>


     Rent  expense  was  $806,000,  $713,000 and $1,315,000 for the years ended
December  31,  2000,  1999  and  1998,  respectively. Sublease rental income was
$1,104,000,  $820,000  and  $146,000 for the years ended December 31, 2000, 1999
and  1998,  respectively.

Legal  Proceedings

     In  July  1999, the Company was named as a co-defendant in a claim filed at
the  Superior  Court  of  the state of California for the county of Santa Clara,
involving  an  automobile  accident  by  a former employee which resulted in the
death  of an individual. Significant general, punitive and exemplary damages are
being  sought  by the plaintiffs. Recently, a demand was placed by the plaintiff
that is within the Company's insurance policy limits. While the Company believes
it  is  not  at  fault  in this matter, the Company has instructed its insurance
carrier  to pay the demand in an effort to avoid the costs associated with going
to  trial.  Although  the  outcome of this matter is not presently determinable,
management  does not believe that resolution of this matter will have a material
adverse  effect  on  its  financial  position  or  results  of  operations.


NOTE  8.  SHAREHOLDERS'  EQUITY

Private  Placement  of  Convertible  Preferred  Stock

     In  February  1998, the Company issued an aggregate of 100,000 shares of 6%
Series  A  Convertible  Preferred  Stock  (the "Series A Stock") and warrants to
purchase  an  aggregate  of up to 400,000 shares of its common stock, all for an
aggregate  purchase  price  of $5,000,000 in cash. In 1998, the Company recorded
deemed  dividends  on preferred stock of approximately $1,903,000 reflecting the
beneficial  conversion  feature,  which  is  the difference between the proceeds
allocated  to  the  Series  A  Stock  and  the  fair value of the Series A Stock
(assuming  immediate  conversion)  upon  issuance,  and  the  accrual  of the 6%
dividends  thereon.

     In June 1998, 2,000 shares of the Series A Stock were converted into common
stock  of  the  Company. In July 1998, the Company redeemed 70,000 shares of the
outstanding  Series  A  Stock for $4,725,000 in cash (the "Redemption"), and the
remaining  28,000  shares  of Series A Stock were exchanged for 28,000 shares of
Redeemable  Series  B  Convertible Preferred Stock (the "Series B Stock") by the
existing  holders  of  the  Series  A Stock (the "Exchange"). The Redemption and
Exchange  were  accounted  for by comparing the fair value of the Series B Stock
and  the  $4,725,000  in  cash  with  the  carrying amount of the Series A Stock

                                      F-10
<PAGE>

redeemed  and  with  the fair value of the Series A Stock converted (pursuant to
the  original  conversion  terms  of  the Series A Stock); there was no material
difference  between these amounts. In November 1998, the Company redeemed 12,000
shares  of the Series B Stock for approximately $600,000 in cash. As of December
31,  1998,  there were 16,000 shares of Series B Stock outstanding, all of which
were  converted  into  640,000 shares of common stock of the Company in February
1999.


Warrants  and  Options

     In  connection  with the issuance of the Series A Stock, the Company issued
warrants  for 400,000 shares of the Company's common stock to the holders of the
Series  A  Stock.  The  warrants were exercisable at any time until February 11,
2001  for  300,000  shares of common stock at a price of $3.67 per share and for
100,000  shares  at a price of $4.50 per share.  The warrants for 300,000 shares
at $3.67 per share expired unexercised on February 11, 2001.  During May 2000, a
grantee  elected  to  exercise  its  warrants  to  purchase  100,000 shares.  As
provided  in  the  warrant  agreement,  the grantee received a reduced number of
shares  in  exchange  for  the  aggregate  exercise  price due, resulting in the
issuance  by  the  Company  of  55,000  shares.

     In  connection  with a private placement in April 1995, the Company granted
options  for  118,000  shares of the Company's common stock to the investors. On
April  25,  2000, the grantees elected to exercise their options to purchase all
118,000  shares.  As  provided in the option agreements, the grantees received a
reduced  number  of  shares  in  exchange  for the aggregate exercise price due,
resulting  in  the  issuance  by  the  Company  of  17,000  shares.

     In  connection  with  the $10 million revolving line of credit, the Company
issued  to  Venture  Bank  warrants  to  purchase 25,000 shares of the Company's
common  stock  at  a price of $2.39 per share. Based on the Black-Scholes option
pricing  model,  the  fair market value of the warrants at the date of the grant
was $53,000, which is being amortized to interest expense over the two-year life
of  the  line.

Net  Loss  Per  Share

     A reconciliation of the numerator and denominator of basic and diluted loss
per  share  is  as  follows  (in  thousands,  except  per  share  data):

<TABLE>
<CAPTION>


                                                    YEAR  ENDED  DECEMBER  31,
                                                    --------------------------
                                                   2000      1999      1998
                                                 --------  --------  ---------
<S>                                              <C>       <C>       <C>
Income available to common shareholders
before cumulative effect of change in
accounting principle:
  Numerator-Basic and diluted:
    Net loss. . . . . . . . . . . . . . . . . .  $(2,881)  $(1,617)  $(27,600)
  Deemed dividends on preferred stock . . . . .        0         0     (1,903)
                                                 --------  --------  ---------
      Net loss available to common shareholders  $(2,881)  $(1,617)  $(29,503)
                                                 ========  ========  =========
  Denominator-Basic and diluted:
    Weighted average common stock outstanding .   18,937    18,134     17,248
                                                 ========  ========  =========
  Basic net loss per share. . . . . . . . . . .  $ (0.15)  $ (0.09)  $  (1.71)
                                                 ========  ========  =========

Net income available to common shareholders:
  Numerator-Basic and diluted:
    Net loss. . . . . . . . . . . . . . . . . .  $(9,651)  $(1,617)  $(27,600)
  Deemed dividends on preferred stock . . . . .        0         0     (1,903)
                                                 --------  --------  ---------
      Net loss available to common shareholders  $(9,651)  $(1,617)  $(29,503)
                                                 ========  ========  =========
  Denominator-Basic and diluted:
    Weighted average common stock outstanding .   18,937    18,134     17,248
                                                 ========  ========  =========
  Basic net loss per share. . . . . . . . . . .  $ (0.51)  $ (0.09)  $  (1.71)
                                                 ========  ========  =========
</TABLE>

                                      F-11
<PAGE>


     Stock options to purchase 2,972,386 shares of common stock were outstanding
in  2000,  but  were  not  included in the computation of diluted loss per share
because  the  Company  has  a  net  loss  for 2000. Warrants for the purchase of
325,000  shares  of common stock were outstanding at December 31, 2000, but were
not  included  in  the computation of diluted loss per share because the Company
has  a  net  loss  for  2000.

     Stock options to purchase 2,639,219 shares of common stock were outstanding
in  1999,  but  were  not  included in the computation of diluted loss per share
because  the  Company  has  a  net  loss  for 1999. Warrants for the purchase of
425,000  shares  of common stock were outstanding at December 31, 1999, but were
not  included  in  the computation of diluted loss per share because the Company
has  a  net  loss  for  1999.

     Stock options to purchase 2,301,190 shares of common stock were outstanding
in  1998,  but  were  not  included in the computation of diluted loss per share
because  the Company has a net loss for 1998. A total of 16,000 shares of Series
B Convertible Preferred Stock and warrants for the purchase of 400,000 shares of
common stock were outstanding at December 31, 1998, but were not included in the
computation  of  diluted  loss  per share because the Company has a net loss for
1998.

Stock  Option  Plan

     In  March of 2000, the Company adopted the 2000 Incentive Stock Option Plan
to replace the 1991 Incentive Stock Option Plan. The 1991 Incentive Stock Option
Plan  was  scheduled  to  expire ten years after its adoption in 1991. Under the
2000 Incentive Stock Option Plan, the Board of Directors can grant incentive and
nonstatutory  stock  options.  The  Board  of  Directors  has  the  authority to
determine  to  whom  options will be granted, the number of shares, the term and
exercise price. The options are exercisable at times and increments as specified
by  the  Board  of  Directors,  and  generally vest over a three-year period and
expire  five years from the date of grant. At December 31, 2000, the Company had
reserved  4,803,006 shares of common stock for issuance under the 2000 Incentive
Stock  Option  Plan,  which included 800,000 shares added to the plan in 2000. A
total  of  418,049  shares  remained available for future grants at December 31,
2000.  At  December  31,  1998,  573,484  options were exercisable at a weighted
average  exercise  price of $3.094. At December 31, 1999, 1,128,992 options were
exercisable at a weighted average exercise price of $2.34. At December 31, 2000,
1,285,017  options  were  exercisable  at  a  weighted average exercise price of
$2.31.

Employee  Stock  Purchase  Plan

     The  Company  has  reserved a total of 2,650,000 shares of common stock for
issuance under a qualified stock purchase plan, which provides substantially all
Company employees with the right to acquire shares of the Company's common stock
through  payroll  deductions.  This  total includes an additional 300,000 shares
added  to  the plan in 2000. Under the plan, the Company's employees, subject to
certain  restrictions,  may purchase shares of common stock at the lesser of 85%
of fair market value at either the beginning of each two-year offering period or
the  end  of each six-month purchase period within the two-year offering period.
At  December  31,  2000,  2,456,765  shares  have been issued under the plan. At
December  31,  2000, shares available for purchase under this plan were 193,235.

Share  Purchase  Rights  Plan

     On  September 7, 2000, the Company's Board of Directors declared a dividend
pursuant  to a newly adopted Share Purchase Rights Plan which replaced a similar
earlier  plan  that  had  expired  on July 3, 2000.  The intended

                                      F-12
<PAGE>

purpose  of  the  Rights Plan is to protect shareholders' rights and to maximize
share  value  in  the  event of an unfriendly takeover attempt. As of the record
date  of October 13, 2000, each share of common stock of Genus, Inc. outstanding
was  granted  one right under the new plan. Each right is exercisable only under
certain  circumstances and upon the occurrence of certain events and permits the
holder  to  purchase  from  the Company one one-thousandth (0.001) of a share of
Series  C  Participating  Preferred  Stock at an initial exercise price of forty
dollars  ($40.00)  per  one  one-thousandth share. The 50,000 shares of Series C
preferred  stock  authorized in connection with the Rights Plan will be used for
the exercise of any preferred share purchase rights in the event that any person
or  group (the Acquiring Person) acquires beneficial ownership of 15% or more of
the  outstanding  common  stock. In such event, the shareholders (other than the
Acquiring  Person)  would  receive  common  stock of the Company having a market
value  of twice the exercise price. Subject to certain restrictions, the Company
may  redeem the rights issued under the Rights Plan for $0.001 per right and may
amend  the  Rights  Plan  without the consent of rights holders. The rights will
expire  on  October  13,  2010,  unless  redeemed  by  the  Company.

Option  Repricing

     On  January  28,  1998  the  Board  of  Directors  offered  employees  the
opportunity  to  reprice  outstanding  stock options as of February 9, 1998. The
repriced  options,  both vested and unvested, were precluded from exercise for a
period of one year from the repricing date. Approximately 1,544,750 options with
original exercise prices ranging from $3.88 to $8.63 were repriced at $3.03, the
fair  market  value  as  of  February  9,  1998.

     Activity  under the 1991 and 2000 Incentive Stock Option Plans is set forth
in  the  table  below:

<TABLE>
<CAPTION>

                                                                         WEIGHTED
                              OPTIONS                                     AVERAGE
                            OUTSTANDING                        TOTAL     EXERCISE
                            (IN 000'S)   PRICE PER SHARE     (IN 000'S)    PRICE
                            ----------  ------------------  -----------  ------
<S>                         <C>         <C>                 <C>          <C>
Balance, January 1, 1998 .      1,851   $ 2.25 to  $  8.63   $  11,621   $ 6.28
  Granted. . . . . . . . .      3,764    0.88  to     3.21       8,500     2.26
  Exercised. . . . . . . .         (5)   2.87  to     2.87         (14)    2.87
  Terminated . . . . . . .     (3,309)   1.63  to     8.63     (15,600)    4.71
                            ----------  ------------------  -----------  ------
Balance, December 31, 1998      2,301    0.88  to     8.00       4,507     1.96
  Granted. . . . . . . . .        532    1.87  to     4.34       1,384     2.88
  Exercised. . . . . . . .        (50)   0.88  to     3.03        (102)    2.05
  Terminated . . . . . . .       (144)   0.88  to     4.00        (226)    1.57
                            ----------  ------------------  -----------  ------
Balance, December 31, 1999      2,639    0.88  to     8.00       5,563     2.11
  Granted. . . . . . . . .      1,052     2.25  to   15.75       8,795     8.36
  Exercised. . . . . . . .       (490)   0.88  to     3.22      (1,023)    2.09
  Terminated . . . . . . .       (229)    0.88  to   15.75        (602)    2.63
                            ----------  ------------------  -----------  ------
Balance, December 31, 2000      2,972   $ 0.88 to  $ 15.75  $   12,733   $ 4.28
                            ==========  ==================  ===========  ======
</TABLE>
     Options  outstanding  and currently exercisable by exercise price under the
option  plan  at  December  31,  2000  are  as  follows:


<TABLE>
<CAPTION>

                                        OPTIONS OUTSTANDING                              OPTIONS EXERCISABLE
                    --------------------------------------------------------------       ----------------------
                                                  WEIGHTED AVG.
  RANGE OF                     NUMBER               REMAINING          WEIGHTED AVG.    NUMBER     WEIGHTED AVG.
 EXERCISE PRICES             OUTSTANDING         CONTRACTUAL LIFE     EXERCISE PRICE  OUTSTANDING   EXERCISE PRICE
 -------------------    -------------------    -----------------    --------------    ------------  --------------
<S>                 <C>                  <C>                  <C>                <C>             <C>           <C>
0.8750 - $0.8750.               555,366                 2.72          $  0.8750         368,703  $     0.8750
1.2500 - 1.3130. .               95,462                 2.65             1.2588          54,802        1.2569
1.6250 - 1.6250. .              308,823                 2.37             1.6250         172,512        1.6250
1.8750 - 2.6250. .              169,833                 3.28             2.3035          63,171        2.3114
3.0310 - 3.0310. .              454,402                 1.21             3.0310         454,402        3.0310
3.0940 - 3.0940. .              320,000                 3.56             3.0940         106,675        3.0940
3.2190 - 5.2812. .               83,500                 3.77             3.8300          29,001        3.6004
5.3440 - 5.3440. .              340,000                 4.61             5.3440               0        0.0000
5.6250 - 8.8750. .              395,000                 4.11             7.9019          28,251        7.6493
10.0000 - 15.7500.              250,000                 4.21            14.4330           7,500       15.7500
------------------  -------------------  -------------------  -----------------  --------------  ------------

0.8750 - $15.7500            2,972,386                 3.13          $  4.2837       1,285,017    $      2.31
==================  ===================  ===================  =================  ==============  ============
</TABLE>

                                      F-13
<PAGE>

Pro  Forma  Disclosures

     Pro forma information regarding net income (loss) and net income (loss) per
share  is  presented  in  accordance  with  Statement  of  Financial  Accounting
Standards No. 123, "Accounting for Stock-Based Compensation" ("SFAS 123"), which
requires  that  the information be disclosed as if the Company had accounted for
its  employee  stock-based  compensation  plans  under  the  fair  value  method
prescribed  by  SFAS  123.

     The  fair value of these options was estimated at the date of grant using a
Black-Scholes  option  pricing  model  with  the  following  weighted  average
assumptions  for  2000,  1999  and  1998:


<TABLE>
<CAPTION>

                                 2000        1999        1998
                            ----------  ----------  ----------
<S>                         <C>         <C>         <C>
  Risk free interest rates       5.17%       5.62%       5.34%
  Expected life. . . . . .     3.3 years    3.3 years    3.3 years
  Expected volatility. . .       222.25%     221.48%       61.4%
  Expected dividend yield.          0%          0%          0%
</TABLE>

     The  weighted  average fair value of options granted in 2000, 1999 and 1998
was  $8.09,  $2.76,  and  $1.60,  respectively.

     Under the 1989 Employee Stock Purchase Plan, the Company does not recognize
compensation  cost  related to employee purchase rights under the Stock Purchase
Plan.  To  comply  with  the  pro  forma  reporting  requirements  of  SFAS 123,
compensation  cost  is  estimated  for the fair value of the employees' purchase
rights  using  the  Black-Scholes model with the following assumptions for those
rights  granted  in  2000,  1999  and  1998.


<TABLE>
<CAPTION>

                                2000        1999        1998
                            ----------  ----------  ----------
<S>                              <C>         <C>         <C>
  Risk free interest rates       5.17%       4.95%       5.42%
  Expected life. . .    . . .  0.5 years   0.5 years   0.5 years
  Expected volatility. . .     222.25%     221.48%       61.4%
  Expected dividend yield.          0%          0%          0%
</TABLE>

     The  weighted  average fair value of those purchase rights granted in 2000,
1999  and  1998  was  $4.66,  $1.31  and  $0.48,  respectively.

     Had compensation cost for the Company's stock-based compensation plans been
determined  based  on  the  fair value at the grant dates for awards under those
plans  consistent  with the method of SFAS 123, the Company's net loss and basic
and  diluted  net loss per share would have been the pro forma amounts indicated
below  (in  thousands,  except  per  share  data):

<TABLE>
<CAPTION>


                                                    2000       1999      1998
                                                  ---------  --------  ---------
<S>                                                 <C>        <C>       <C>
  Pro forma net loss available to common
    shareholders . . . . . . . . . . . . . . . .  $(12,578)  $(2,781)  $(32,380)
  Pro forma net loss per share-basic and diluted  $  (0.66)  $ (0.15)  $  (1.88)
</TABLE>

     The  above  pro  forma effects on net loss may not be representative of the
effects  on  future results as options granted typically vest over several years
and  additional  option  grants  are  expected  to  be  made  in  future  years.

                                      F-14
<PAGE>

Stock  Compensation


     In  1998  and  1999,  the Company granted options to outside consultants to
purchase  23,000  and 5,000 shares of common stock, respectively.  These options
have  exercise prices between $0.875 and $3.03 per share.  The options vest over
three  years  and expire between February 2001 and March 2002. The work is to be
conducted  over  a  3  year  period  coinciding with the vesting of the options.
Unvested  options  are to be forfeited if the consultants cease performing their
work.  The  Company  accounts  for  consultants  options in accordance with EITF
96-18,  "Accounting  for  Equity  Instruments  That  Are  Issued  to  Other Than
Employees for Acquiring, or in Conjunction with Selling, Goods or Services."  In
accordance  with  this  standard,  changes  in the estimated fair value of these
options  will be recognized as compensation expense in the period of the change.
The Company recorded none, $45,000 and $218,000 as compensation expense relating
to  these  options  in  1998,  1999  and  2000,  respectively.

  In  addition,  the  Company  recorded  $272,000  of stock compensation in 2000
resulting from a shortfall in shares approved for the ESPP.  The calculation and
recording  of  expense  was  made in accordance with EITF 97-12, "Accounting for
Increased  Share  Authorizations  in  an IRS Section 423 Employee Stock Purchase
Plan  under  APB  Opinion  No.  25."



NOTE  9.  EMPLOYEE  BENEFIT  PLAN

     During  1988, the Company adopted the Genus, Inc. 401(k) Plan (the "Benefit
Plan") to provide retirement and incidental benefits for eligible employees. The
Benefit  Plan  provides  for Company contributions as determined by the Board of
Directors  that  may  not  exceed  6%  of the annual aggregate salaries of those
employees  eligible  for  participation.  In  2000,  1999  and 1998, the Company
contributed  $142,002,  $30,000  and $62,000, respectively, to the Benefit Plan.

NOTE  10.  OTHER  INCOME  (EXPENSE),  NET

     Other  income  (expense),  net,  comprises  the  following  (in thousands):

<TABLE>
<CAPTION>
                 YEAR  ENDED  DECEMBER  31,
                  --------------------------
                     2000    1999    1998
                    ------  ------  ------
<S>                 <C>     <C>     <C>
  Interest income.  $ 252   $ 336   $  77
  Interest expense   (118)     (4)   (186)
  Foreign exchange    (58)    330     301
  Other, net . . .     32       7    (278)
                    ------  ------  ------
                    $ 108   $ 669   $ (86)
                    ======  ======  ======
</TABLE>

NOTE  11.  INCOME  TAXES

     Income tax expense for the years ended December 31, 2000, 1999 and 1998 was
$490,000,  $177,000  and  $1,000  respectively.

     The  components  of  income  (loss) before income taxes were as follows (in
thousands):


<TABLE>
<CAPTION>

                                                          2000      1999      1998
                                                        --------  --------  ---------
<S>                                                     <C>       <C>       <C>
  Domestic loss before taxes . . . . . . . . . . . . .  $(3,829)  $(2,231)  $(26,829)
  Foreign income (loss) before taxes . . . . . . . . .    1,438       791       (770)
                                                        --------  --------  ---------
  Loss before taxes and cumulative effect of change in
accounting principle . . . . . . . . . . . . . . . . .  $(2,391)  $(1,440)  $(27,599)
                                                        ========  ========  =========
</TABLE>

                                      F-15
<PAGE>


     In 1998, the income tax expense consisted of current state tax. In 1999 and
2000,  the  income  tax  expense  was  due  to  current  foreign  taxes.

     The  Company's  effective  tax  rate for the years ended December 31, 2000,
1999  and  1998  differs  from  the  U.S.  federal  statutory income tax rate as
follows:


<TABLE>
<CAPTION>


                                        2000   1999   1998
                                        -----  -----  -----
<S>                                     <C>    <C>    <C>
  Federal income tax at statutory rate    35%    35%    35%
  Foreign income taxes . . . . . . . .   (20)   (18)     0
  Net operating loss not benefited . .   (35)   (29)   (35)
                                        -----  -----  -----
                                        (20)%  (12)%   (0)%
                                        =====  =====  =====
</TABLE>

     The  components  of  the  net deferred tax asset comprise the following (in
thousands):

<TABLE>
<CAPTION>

                                                         2000       1999
                                                       ---------  ---------
<S>                                                    <C>        <C>
  Deferred tax assets (liabilities):
    Net operating loss carry-forwards . . . . . . . .  $ 28,682   $ 27,635
    Tax credit carry-forwards . . . . . . . . . . . .     1,161      1,999
    Inventory, accounts receivable and other reserves     1,556      1,455
    Non-deductible accrued expenses and reserves. . .       855        422
    Depreciation and amortization . . . . . . . . . .     2,182      1,411
    Deferred income . . . . . . . . . . . . . . . . .    (3,610)         0
    Valuation allowance . . . . . . . . . . . . . . .   (30,826)   (32,923)
                                                       ---------  ---------
  Net deferred tax assets . . . . . . . . . . . . . .  $      0   $      0
                                                       =========  =========
</TABLE>


     The  deferred  tax assets valuation allowance at December 31, 2000 and 1999
is  attributable  to  federal and state deferred tax assets. Management believes
that sufficient uncertainty exists with regard to the realizability of these tax
assets  such that a full valuation allowance is necessary. These factors include
the  lack  of  a  significant  history  of  consistent  profits  and the lack of
carry-back  capacity to realize these assets. Based on these factors, management
is  unable  to  assert  that  it  is  more likely than not that the Company will
generate  sufficient  taxable  income  to realize the Company's net deferred tax
assets.

     At  December  31,  2000,  the  Company  had  the  following  income  tax
carry-forwards  available  (in  thousands):

<TABLE>
<CAPTION>


                                     TAX REPORTING   EXPIRATION DATES
                                     --------------  ----------------
<S>                                  <C>             <C>
  U.S. regular tax operating losses  $       80,509         2005-2020
  U.S. business tax credits . . . .  $        1,610         2002-2020
  State net operating losses. . . .  $        6,730         2001-2005
</TABLE>
     Utilization  of  the  net operating losses and credits may be subject to an
annual  limitation  due  to  the  ownership  change  limitations provided by the
Internal  Revenue  Code  and similar state provisions. The annual limitation may
result in the expiration of net operating loss carry-forwards and credits before
utilization.

NOTE  12.  SEGMENT  INFORMATION

     Effective  for 1998, the Company adopted the Financial Accounting Standards
Board's  Statement  of  Financial  Accounting  Standards  No.  131 ("SFAS 131"),
"Disclosures  about  Segments  of  an  Enterprise  and  Related  Information."
Management  of  the  Company  has  identified  its  operating  segments based on
differences in products and services. The Company's operations have consisted of
thin  film  and  MeV  ion  implant  product  lines. The Company sold its MeV ion
implant  product line to Varian in July 1998. The Company has aggregated

                                      F-16
<PAGE>

its two product lines for financial reporting purposes because its product lines
have  similar  long-term  economic  characteristics and because the products and
services,  production  processes,  types  of  customers, and the methods used to
distribute  the  products  and  provide  the  services  of the product lines are
similar.  All  reportable  segment  information  is  equal  to  the  financial
information  reported  in  the  Company's  consolidated financial statements and
notes  thereto.

     Currently,  the  Company  operates  in one industry segment. The Company is
engaged  in  the  design,  manufacture, marketing and servicing of advanced thin
film  deposition  systems  used  in  the  semiconductor  manufacturing industry.

     Net  sales  from  thin film products and services accounted for 100%, 100%,
and  35%  of  the Company's net sales for 2000, 1999 and 1998, respectively. Net
sales  from  MeV  ion  implant  products  and  services accounted for 65% of the
Company's  net  sales  in  1998.

Export  Sales

     For  reporting purposes, export sales are determined by the location of the
parent  company  of the Company's customer, regardless of where the delivery was
made  by  the  Company.

     Net  sales  by  geographical  region for the years ended December 31, 2000,
1999,  and  1998  were  as  follows  (in  thousands):

<TABLE>
<CAPTION>



                  2000     1999     1998
                 -------  -------  -------
<S>              <C>      <C>      <C>
  United States  $ 3,095  $ 3,830  $14,318
  South Korea .   37,123   23,819    9,602
  Japan . . . .      149      216    4,566
  Rest of world      271      495    3,945
                 -------  -------  -------
                 $40,638  $28,360  $32,431
                 =======  =======  =======
</TABLE>


     The  Company did not hold any material long-lived assets in countries other
than  the  United  States  at  December  31,  2000  or  1999.

Major  Customers

     In  2000,  Samsung  Electronics  Company,  Ltd.  and Micron Technology, Inc
accounted  for  91%  and  5%  of  net  sales,  respectively.  In  1999,  Samsung
Electronics  Company,  Ltd. and Micron Technology, Inc accounted for 84% and 11%
of  net  sales,  respectively.  In  1998,  three  customers, Samsung Electronics
Company, Ltd.,  Advanced Micro Devices and Micron Technology, Inc. accounted for
28%,  15%  and  12%,  respectively,  of  net  sales.

NOTE  13.  SALE  OF  ION  IMPLANT  PRODUCT  LINE


     In  July  1998,  the  Company sold selected assets and transferred selected
liabilities  related  to  the  MeV  ion implant equipment product line to Varian
Associates, Inc. for approximately $24.1 million. The net assets and liabilities
transferred to Varian included inventory of $20.9 million, capital equipment and
other  assets  of $9.7 million, and warranty, installation and other liabilities
of  $  4.5  million.  In addition, the Company incurred transaction fees of $0.6
million  resulting  in a loss on sale of $2.6 million. As a result of the Varian
transaction,  the  Company no longer engages in the ion implant business and has
refocused its efforts on thin film deposition. The Company used a portion of the
net  proceeds  for  repayment  for  certain  outstanding  indebtedness  and  the
redemption  of  70,000  shares of Series A Convertible Preferred Stock, with the
remaining  proceeds  to  be  used  for  working  capital  and  general corporate
purposes,  including  investment  in  research  and  development  of  thin  film
products.  In  connection  with the Varian transaction and the refocusing of the
Company's  business on thin film products, the Company significantly reduced the
workforce  at  its  Sunnyvale,  California  location.


                                      F-17
<PAGE>

NOTE  14.  RESTRUCTURING  AND  OTHER


     In  1998,  the  Company  recorded  restructuring  and  other  charges  of
$7,308,000.  The $7,308,000 is comprised of $2,575,000 loss on sale of assets to
Varian,  $472,000  legal  costs  for  the  dispute with Varian and $4,261,000 of
restructuring  charges. The restructuring strategy was to downsize the thin film
operation  so  that profitability could be achieved at lower revenue levels, and
included  maintaining  our  market  share  in our core tungsten silicide product
business  to  sustain  us during the 1998-1999 recession. Additionally, we would
focus  our resources towards designing and manufacturing thin film products that
would  meet  the  future  requirements of the semiconductor industry and provide
growth  opportunities  going  forward.  The  restructuring  included a worldwide
workforce  reduction  to  bring  the  headcount  in  line with projected revenue
levels,  closing  foreign  sales  and  service offices where short term business
opportunities  were  unlikely, and writing off inventory related to discontinued
product  lines. Actual costs recorded against this restructuring accrual were as
follows  (in  thousands):





<TABLE>
<CAPTION>

                                                               CLOSING
                                                             OFFICES AND
                                                               RELATED
                                PERSONNEL      LEASEHOLD       LOSSES
                                 CHARGES      IMPROVEMENTS    (CASH AND
                                 (CASH)        (NON-CASH)     NON-CASH)    TOTAL
                              -------------  --------------  -----------  --------
<S>                           <C>            <C>             <C>          <C>
Restructuring accrual. . . .  $      1,746   $       1,113   $    1,402   $ 4,261
Amounts incurred in 1998 . .        (1,446)         (1,113)      (1,182)   (3,741)
                              -------------  --------------  -----------  --------
Balance at December 31, 1998           300               0          220       520
Amounts incurred in 1999 . .          (136)              0          (77)     (213)
Release of reserves. . . . .          (164)              0         (143)     (307)
                              -------------  --------------  -----------  --------
Balance at December 31, 1999  $          0   $           0   $        0   $     0
                              =============  ==============  ===========  ========
</TABLE>




     Personnel  charges  relate  to  severance  costs  paid  and accrued for 102
employees  to  be  terminated  as  a  result of the restructuring decision. This
affected  26  employees in the thin film product line and corporate departments,
45 employees in the Ion Implant product line, 6 employees in Japan, 15 employees
in  Korea  and  10  employees  in Europe. The agreement with Varian provided for
funds  to  be  held  in  escrow for severance liabilities to employees that were
transferred  to Varian. In 1998, the Company reserved $300,000 for the estimated
costs  of  such  payments  and  during 1999, $136,000 was paid and the remaining
reserve  was  released.

     Costs incurred in association with closing offices are primarily related to
the  costs  of  honoring  prior  lease and other commitments of  $179,000, value
added  tax  benefits  not  recoverable  from tax authorities upon the closure of
certain  European branches of $800,000 as well as other incidental costs such as
legal  fees and  abandonment of assets amounting to $280,000 directly related to
the  closure  of  branches.

     In  1999,  the Company recorded an additional charge of $543,000 by writing
off  the  balance  previously recorded as a receivable from Varian for the final
settlement of a dispute with Varian. This charge related to funds that were held
in  escrow  for  possible  claims  made  under  the  Company's change of control
agreements  with  key ion implant employees who transferred to Varian as part of
the  Varian transaction. No funds were distributed from this escrow account, and
the  final  change  of  control  agreement  expired  in  July  1999.



     There  was  no  restructuring  reserve  remaining  as of December 31, 1999.

                                      F-18
<PAGE>


ITEM  14  (A)  2.  FINANCIAL  STATEMENT  SCHEDULE


       REPORT OF INDEPENDENT ACCOUNTANTS ON FINANCIAL STATEMENT SCHEDULES

To  the  Board  of  Directors
Of  Genus,  Inc.:

Our  audits  of  the consolidated financial statements referred to in our report
dated  February  12, 2001, except as to the second paragraph of Note 6, which is
as  of  March  28,  2001, appearing  in  this  Annual Report on Form 10-K/A also
included an audit of the financial statement schedule listed in Item 14(a)(2) of
this  Form  10-K/A.  In  our opinion, this financial statement schedule presents
fairly, in all material respects, the information set forth therein when read in
conjunction  with  the  related  consolidated  financial  statements.



/s/  PRICEWATERHOUSECOOPERS  LLP
--------------------------------
PricewaterhouseCoopers  LLP

San  Jose,  California
February  12,  2001


                                      F-19
<PAGE>



Genus,  Inc.
Schedule  II  "Valuation  and  Qualifying  Accounts"


--------------------------------------------------------------------------------
Description           Balance at     Additions     Deductions     Balanace at
                      Beginning of   Charged to     Charged to     end of period
                       Period         costs/exp      Other
--------------------------------------------------------------------------------
1998
Allowance for doubtful
 accounts
                        $1,097           $  1,670       $ 2,267          $ 500

1999
Allowance for doubtful
accounts
                        $  500           $  308         $  257           $  551

2000
Allowance for doubtful
accounts
                        $  551                          $  188           $  363
--------------------------------------------------------------------------------



                                      F-20
<PAGE>


                                   GENUS, INC.

                           ANNUAL REPORT ON FORM 10-K/A

                          YEAR ENDED DECEMBER 31, 2000

                                INDEX TO EXHIBITS

          EXHIBIT
           NO.                DESCRIPTION
            ---               -----------
          2.1  Asset  Purchase  Agreement,  dated April 15, 1998, by and between
               Varian  Associates, Inc. and Registrant and exhibits thereto (15)
          3.1  Amended  and  Restated Articles of Incorporation of Registrant as
               filed June  6,  1997  (11)
          3.2  By-laws  of  Registrant,  as  amended  (13)
          4.1  Common  Shares  Rights  Agreement,  dated  as  of April 27, 1990,
               between  Registrant  and Bank of America, N.T. and .A., as Rights
               Agent  (4)
          4.2  Convertible Preferred Stock Purchase Agreement, dated February 2,
               1998,  among  the  Registrant  and  the  Investors  (14)
          4.3  Registration  Rights Agreement, dated February 2, 1998, among the
               Registrant  and  the  Investors  (14)
          4.4  Certificate  of  Determination  of  Rights,  Preferences  and
               Privileges  of  Series  A  Convertible  Preferred  Stock  (14)
          4.5  Certificate  of  Determination  of  Rights,  Preferences  and
               Privileges  of  Series  B  Convertible  Preferred  Stock  (17)
          4.6  Redemption and Exchange Agreement, dated July 16, 1998, among the
               Registrant  and  the  Investors  (17)
          10.1 Lease,  dated  December 6, 1985, for Registrant's facilities at 4
               Mulliken  Way,  Newburyport,  Massachusetts,  and  amendment  and
               extension  of  lease,  dated  March  17,  1987  (1)
          10.2 Assignment  of  Lease,  dated  April  1986,  for  Registrant's
               facilities  at  Unit 11A, Melbourn Science Park, Melbourn, Hertz,
               England  (1)
          10.3 Registrant's  1989  Employee  Stock Purchase Plan, as amended (5)
          10.4 Registrant's  1991  Incentive  Stock Option Plan, as amended (10)

          10.5 Registrant's  2000  Stock  Plan (19)

          10.7 Distributor/Representative  Agreement,  dated  August  1,  1984,
               between  Registrant and Aju Exim (formerly Spirox Holding Co./You
               One  Co.  Ltd.)  (1)
          10.8 Exclusive  Sales  and  Service  Representative  Agreement,  dated
               October 1, 1989, between Registrant and AVBA Engineering Ltd. (3)
          10.9 Exclusive Sales and Service Representative Agreement, dated as of
               April  1,  1990,  between  Registrant  and  Indosale PVT Ltd. (3)
          10.10  License  Agreement, dated November 23, 1987, between Registrant
               and  Eaton  Corporation  (1)
          10.11  Exclusive Sales and Service Representative Agreement, dated May
               1,  1989,  between  Registrant  and  Spirox  Taiwan,  Ltd.  (2)
          10.12  Lease,  dated April 7, 1992, between Registrant and The John A.
               and  Susan  R.  Sobrato 1979 Revocable Trust for property at 1139
               Karlstad  Drive,  Sunnyvale,  California  (6)
          10.13 Asset Purchase Agreement, dated May 28, 1992, by and between the
               Registrant  and  Advantage  Production  Technology,  Inc.  (7)
          10.14  License  and  Distribution  Agreement, dated September 8, 1992,
               between  the  Registrant and Sumitomo Mutual Industries, Ltd. (8)
          10.15 Lease Agreement, dated October 1995, for Registrant's facilities
               at  Lot 62, Four Stanley Tucker Drive, Newburyport, Massachusetts
               (9)
          10.16  International  Distributor  Agreement,  dated  July  18,  1997,
               between  Registrant  and  Macrotron  Systems  GmbH  (12)
          10.17  Credit Agreement, dated August 18, 1997, between Registrant and
               Sumitomo  Bank  of  California  (12)
          10.18  Settlement  Agreement and Mutual Release, dated April 20, 1998,
               between  Registrant  and  James  T.  Healy  (16)
          10.19  Form  of  Change  of  Control  Severance  Agreement  (16)
          10.20  Settlement  Agreement  and  Mutual Release, dated January 1998,
               between  the  Registrant  and  John  Aldeborgh  (18)

                                      F-21
<PAGE>
          10.21 Settlement Agreement and Mutual Release, dated May 1998, between
               the  Registrant  and  Mary  Bobel  (18)

          10.22  Factoring  Agreement,  dated  March  28,  2001,  between  the
               Registrant  and  Cupertino  National  Bank

          21.1 Subsidiaries  of  Registrant
          23.1 Consent  of  Independent  Accountants
--------------------------------------------------------------------------------

          (1)  Incorporated  by reference to the exhibit filed with Registrant's
               Registration  Statement  on  Form S-1 (No. 33-23861) filed August
               18,  1988,  and  amended  on September 21, 1988, October 5, 1988,
               November 3, 1988, November 10, 1988, and December 15, 1988, which
               Registration  Statement  became  effective  November  10,  1988.
          (2)  Incorporated  by  reference  to  the  exhibit  filed  with  the
               Registrant's  Registration  Statement  on Form S-1 (No. 33-28755)
               filed  on  May  17,  1989,  and  amended  May  24,  1989,  which
               Registration  Statement  became  effective  May  24,  1989.
          (3)  Incorporated  by  reference  to  the  exhibit  filed  with  the
               Registrant's  Annual  Report  on  Form  10-K  for  the year ended
               December  31,  1989.
          (4)  Incorporated  by  reference  to  the  exhibit  filed  with  the
               Registrant's  Quarterly Report on Form 10-Q for the quarter ended
               September  30,  1990.
          (5)  Incorporated  by  reference  to  the  exhibit  filed  with  the
               Registrant's  Annual  Report  on  Form  10-K  for  the year ended
               December  31,  1990.
          (6)  Incorporated  by  reference  to  the  exhibit  filed  with  the
               Registrant's  Quarterly Report on Form 10-Q for the quarter ended
               June  30,  1992.
          (7)  Incorporated  by  reference  to  the  exhibit  filed  with  the
               Registrant's  Report  on  Form  8-K  dated  June  12,  1992.
          (8)  Incorporated  by  reference  to  the  exhibit  filed  with  the
               Registrant's  Annual  Report  on
               Form  10-K for the year ended December 21, 1992.
          (9)  Incorporated  by  reference  to  the  exhibit  filed  with  the
               Registrant's  Annual  Report  on  Form  10-K  for  the year ended
               December  31,  1995.
          (10) Incorporated  by  reference  to  the  exhibit  filed  with  the
               Registrant's  Quarterly Report on Form 10-Q for the quarter ended
               March  31,  1997.
          (11) Incorporated  by  reference  to  the  exhibit  filed  with  the
               Registrant's  Quarterly Report on Form 10-Q for the quarter ended
               June  30,  1997.
          (12) Incorporated  by  reference  to  the  exhibit  filed  with  the
               Registrant's  Quarterly Report on Form 10-Q for the quarter ended
               September  30,  1997.
          (13) Incorporated  by  reference  to  the  exhibit  filed  with  the
               Registrant's  Quarterly Report on Form 10-Q for the quarter ended
               September  30,  1998.
          (14) Incorporated  by  reference  to  the  exhibit  filed  with  the
               Registrant's  Current Report on Form 8-K dated February 12, 1998.
          (15) Incorporated  by  reference  to  the  exhibit  filed  with  the
               Registrant's  Current  Report  on  Form 8-K dated April 15, 1998.
          (16) Incorporated  by  reference  to  the  exhibit  filed  with  the
               Registrant's  Annual  Report  on  Form  10-K/A for the year ended
               December  31,  1997.
          (17) Incorporated  by  reference  to  the  exhibit  filed  with  the
               Registrant's  Current  Report  on  Form  8-K dated July 29, 1998.
          (18) Incorporated  by  reference  to  the  exhibit  filed  with  the
               Registrant's  Quarterly  Report  on  Form  10-Q/A for the quarter
               ended  June  30,  1998.

          (19) Incorporated  by  reference  to  the  exhibit  filed  with  the
               Registrant's  Annual  Report  on  Form  10-K  for  the year ended
               December  31,  2000.



                                      F-22
<PAGE>

                                   SIGNATURES


     Pursuant  to  the  requirements  of  Section  13 or 15(d) 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,  in the City of
Sunnyvale,  State  of  California,  on  the  19th  day  of  July  2001.

                                                GENUS,  INC.


                                                 By:     /s/Kenneth  Schwanda
                                                         --------------------
                                                      Kenneth  Schwanda
                                                      Vice  President,  Finance
                                                      Chief  Financial  Officer


     Pursuant  to  the requirements of the Securities Exchange Act of 1934, this
Report  has  been  signed  below  by  the  following  persons  on  behalf of the
Registrant  and  in  the  capacities  and  on  the  dates  indicated.

     NAME                          TITLE                         DATE
       ----                        -----                        ----

     /s/William  W.R.  Elder     Chairman of the Board, President   July 19,
     -----------------------     and  Chief  Executive  Officer      2001
     William  W.R.  Elder

     /s/Kenneth  Schwanda        Vice President, Finance     July 19, 2001
     --------------------
     Kenneth  Schwanda           Chief  Financial  Officer

     /s/G.  Frederick  Forsyth   Director                    July 19,  2001
     -------------------------
     G.  Frederick  Forsyth

     /s/Todd  S.  Myhre          Director                    July 19,  2001
     ------------------
     Todd  S.  Myhre

     /s/Mario  M.  Rosati        Director                    July 19,  2001
     --------------------
     Mario  M.  Rosati

     /s/George  D.  Wells        Director                    July 19,  2001
     --------------------
     George  D.  Wells

     /s/Robert  J.  Richardson   Director                    July 19,  2001
     -------------------------
     Robert  J.  Richardson