AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MARCH 30, 2000

                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON, DC 20549

                                    FORM 10-K

[X]     Annual report pursuant to Section 13 or 15(d) of the Securities Exchange
Act  of  1934  for  the  fiscal  year  ended  December  31,  1999
                                              -------------------
                                       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
                         (State or other jurisdiction of
                  incorporation or organization)     94-2790804
                       (I.R.S. Employer Identification Number)
                  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 or any amendment to this
Form  10-K.  [  ]

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 24,
2000  in  the over-the-counter market as reported by the Nasdaq National Market,
was  approximately $216,535,975. 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  March  24,  2000,  Registrant  had  18,745,364  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 Report: Proxy Statement for Registrant's 2000 Annual Meeting of
Shareholders  -  Items  10,  11,  12  and  13.

                                     PART I

ITEM  1.

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.

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,
which are 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.

     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  more  complex integrated circuits and the accompanying reductions in
feature size require more advanced and expensive wafer fabrication equipment and
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 vertical  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 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  wafers,  up  from  the 100 millimeter wafers used ten to
fifteen  years  ago.  Currently,  some  integrated circuit makers are commencing
pilot  production  lines  using 300 millimeter wafers. We believe that many more
manufacturers  will  add  300 millimeter production capabilities within the next
two  to  five  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 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  to  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, copper
barrier  seed films and ALD dielectrics such as aluminum oxide. These innovative
thin  films  solve  certain  key  device  and  interconnect  problems  faced  by
semiconductor  manufacturers  as  they  scale their device geometries below 0.15
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

     The  Lynx series offers low cost of ownership by focusing on wafer handling
platform  reliability,  high  throughput deposition processes, advanced software
architecture  and  a  proprietary, production-proven process chamber design. For
example,  in  production  mode  of  tungsten silicide films the Lynx2 system has
proven  itself  reliable  with consistent 90-95% availability. Based on customer
feedback,  we  estimate  that  the  mean  time  between failure of our system is
typically  between  300  to  450 hours. We are committed to achieving these same
levels  of  performance  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. We are
currently  developing  a  system to allow our customers to procure parts online.

MARKETS  AND  APPLICATIONS

     In  1999 we expanded our product line to include new thin film applications
that  allow  us  to  reach  broader  markets  than  previously  addressed by our
products.  Prior  to  such  expansion,  our products only addressed the silicide
metal thin film market, estimated to be approximately $250 million as of the end
of  1999.  Currently,  our products serve silicide metal gate, barrier metal and
dielectric materials. According to VLSI Research, the aggregate market for these
three thin film applications is expected to grow at a 26% compound annual growth
rate  from  approximately  $800  million  in 1999 to approximately $2 billion in
2003. By focusing on broader thin film markets, we believe we are able to reduce
our  dependence on the volatile commodity dynamic random access memory, or DRAM,
market  and  benefit  from  other high-growth and high value-added semiconductor
markets such as microprocessors and advanced logic chips. We believe we are well
positioned  to  take  a leadership role in providing thin film solutions to this
fast-growing  market  that  targets  red  zone  challenges.

     We  focus  on  the  following  three  thin  film  market  segments:

     SILICIDE  AND  METAL  CVD  GATE  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.

     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.

     GATE  AND  CAPACITOR  DIELECTRIC  THIN  FILMS

     Alternative  new  gate and capacitor dielectric thin films such as aluminum
oxide  provide better dielectric characteristics than conventional silicon oxide
dielectrics.  We  intend  to  use  our advanced ALD and CVD process expertise to
target  these  emerging  dielectric  applications.

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 300
millimeter  wafer sizes and is designed for the deposition of the following thin
film  applications:

-     tungsten  silicide-monosilane

-     tungsten  silicide-dichlorosilane

-     tungsten  nitride  (plasma  enhanced  CVD,  RInG)

-     tungsten  nitride  (CVD,  Ca'ts)

-     copper  barrier  seed  (CBS)

-     aluminum  oxide

-     advanced  metal  oxides  (under  development)

-     copper  ultra-thin  barrier  seed  (under  development)

     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. 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 300 millimeter
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 300 millimeter
wafers.

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

-     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. Tungsten nitride
acts  as a superior barrier even when deposited to a thickness of 100 angstroms.
This  film  also  has the potential for broadening our customer base by bringing
our  thin  film  products  into  the application specific integrated circuit and
logic  market,  through local interconnect applications. We believe RInG to be a
superior  barrier  for  copper diffusion relative to titanium nitride and can be
used  as  an  adhesion  layer  for  blanket  tungsten.

-     Ca'ts.  In  November  1998,  we  introduced  a  CVD tungsten nitride film,
Capacitor Electrodes or Ca'ts. This film may offer significant advantages in the
production  of  next  generation  DRAM  devices.  Tungsten  nitride  enables
gigabit-scale  DRAM  device  production  by  serving  as a barrier electrode for
tantalum oxide capacitors. Tungsten nitride, when used as an electrode material,
results  in  lower  leakage  for  tantalum  oxide  capacitors  compared to other
electrode  materials,  such  as  titanium  nitride. Our CVD technique to deposit
tungsten  nitride  uniformly and conformally coats the intricate structures that
are  present  in  advanced  DRAM  capacitors. We believe that Ca'ts gives us the
advantage  of  controlling particles and repeatability to levels consistent with
our  customers'  near-term  production  requirements.

-     CBS.  In  November  1998, we introduced the first all CVD-based integrated
approach  for  copper  barrier  seed,  or  CBS,  for advanced metallization. CBS
enables  efficient scaling of copper metallization to the 0.10 micron generation
and beyond, and is based on a well-established low temperature, highly conformal
plasma  enhanced  CVD  tungsten  nitride  barrier  film.

-     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 intend to make available other advanced ALD dielectrics during
2000.  We  believe  that  our  ALD aluminum oxide 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.

     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 and South Korea. 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.

SALES  AND  MARKETING

     We  sell  and support our systems through direct sales and customer support
organizations  in  the  United  States,  South  Korea  and Japan and through six
independent  sales representatives and distributors in the United States, Europe
and  Asia.  We  distribute  spare  parts  from  depots in Sunnyvale, California,
Austin,  Texas,  The  Netherlands  and  South  Korea.

CUSTOMERS

     Our  current  customers  include Infineon, Micron and Samsung. We rely on a
limited  number  of  customers  for  a substantial portion of our net sales. For
example,  Samsung Electronics and Micron Technology accounted for 84% and 11% of
our  net  sales  in  1999,  respectively. In 1998, Samsung Electronics, Advanced
Micro  Devices  and  Micron Technology accounted for 28%, 15% and 12% of our net
sales,  respectively. In 1998, Samsung Electronics accounted for 68% of our thin
film  net  sales.

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 $14 million as of December 31, 1999
and approximately $0.3 million as of December 31, 1998. In addition, we received
a  new  ALD  technology  system  purchase  order  from  Infineon Technologies in
February  2000  which  is  not  included  in  the 1999 backlog. 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 300 millimeter 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 $5.4 million for 1999, $8.9
million for 1998 and $12.3 million for 1997, representing 18.9%, 27.5% and 14.6%
of  net sales, respectively. Our research and development expenses were lower in
1999  due  to  expenses  associated with the ion implant product line, which was
sold  to  Varian  Associates  in  July  1998.  Research and development expenses
associated  with  our current thin film product line were $5.4 million for 1999,
$5.4 million for 1998 and $5.5 million for 1997, representing 18.9% of thin film
net  sales  in  1999,  47.7%  in  1998  and  20.2%  in  1997.

     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.

     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 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  also  compete  in  the  market  for  CVD  and physical vapor deposition
barrier,  copper  barrier  seed  and  tungsten  barrier  combination  films. Our
principal  competitors in these markets are Applied Materials, Novellus Systems,
Inc., ULVAC Technologies, Inc. and Tokyo Electron. Our principal competitor with
respect  to  our  ALD  systems  is  ASM  International.

     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.

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  effected  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 seven 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.

     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 February 29, 2000, we employed 91 full-time employees. 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 is 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% and 68% of total revenues for 1998 and
1997,  respectively.

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

     MeV  Ion  Implant  Products

     The  Kestrel  Family  of  Ion  Implanters.  Introduced in July 1997, Genus'
fourth-generation  of  implanters, the Kestrel Family, offered high productivity
manufacturing,  low  cost-of-ownership  and  flexibility for MeV, medium current
backup,  chained  implants,  mainstream  retrograde  well  and  advanced  well
applications.

     Kestrel  650  and  750.  The  Kestrel  650  had  been optimized to meet the
requirements  of  established  retrograde well applications that require a lower
price/performance  point.  The  accelerator  design  was the same as that of the
Tandetron  1520  that  was  used  worldwide  for  retrograde  well, research and
development,  as  well  as  production  applications.  The Kestrel 750, the most
recent  addition  to  the  Kestrel  family,  was  best  used  for  advanced well
applications  such  as  triple  wells  and  Genus  developed and patented Buried
Implanted  Layer  for  Lateral  Isolation,  or  BILLI.

     Tandetron  1520  and Genus 1510. Introduced in 1995 and 1992, respectively,
the  Tandetron  1520 and Genus 1510 were our previous generation MeV ion implant
products.  While  we  no longer actively sold these products, we did continue to
provide  service and sell spare parts for these products pursuant to service and
spare  parts  purchase agreements until the sale of assets to Varian Associates,
Inc.

     A representative list of our ion implant customers included: Advanced Micro
Devices,  Atmel  Corp., Fujitsu, Macrotron, Micron Technology, Newport Wafer-Fab
Ltd.,  Philips  Semiconductor,  Samsung  Electronics,  SGS-Thomson,  and Symbios
Logic.  See  "Management's  Discussion  and  Analysis of Financial Condition and
Results  of  Operations-Risk Factors-Reliance on a Small Number of Customers and
Concentration  of  Credit  Risk."

RECENT  DEVELOPMENTS

     In  February  2000, we received a purchase order from a new customer for an
ALD  system,  which  will  ship  during  the  first  quarter  of  2000.

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. Approximately 40,000 square feet is currently
being  sub-leased  to  third parties. This lease expires in October 2002, with a
current annual rental expense of approximately $772,000. We also lease sales and
support  offices  in Seoul, South Korea. 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.

ITEM  3.  LEGAL  PROCEEDINGS

     We recently settled an arbitration with Varian Associates, Inc. relating to
the  sale  of  our ion implant product line to Varian in July 1998. The original
dispute  involved  the  rights  to  one  ion  implant  product  sale and related
inventory. The dispute was settled prior to arbitration in January 2000. As part
of the final settlement, Varian received the ion implant product and we recorded
a  non-recurring charge of $543,000 relating to a write-off of a receivable from
Varian.

     We  have  been  named  as  a  defendant  in a claim 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. We believe we are not at fault in this matter, and we intend
to  defend  this  claim  vigorously.  While  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.

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  high  and  low last sales prices for 1999 and 1998 set forth
below  are  as reported by the NASDAQ National Market System. At March 24, 2000,
we  had  403  registered  shareholders  as  reported  by ChaseMellon Shareholder
Services.

<TABLE>
<CAPTION>

                       1999             1998
                ---------------  -----------------
                  HIGH    LOW      HIGH      LOW
                ------  -------  --------  -------
<S>             <C>      <C>       <C>      <C>
First Quarter.  $2-7/16  $ 1-5/32  $3-3/16  $    2
Second Quarter    3-3/8     1-1/4   2-7/16       1
Third Quarter.    3-3/4    2-9/32   1-7/16     3/4
Fourth Quarter   5-7/16   1-31/32   1-17/32  11/16
</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.

ITEM  6.  SELECTED  FINANCIAL  DATA

                      SELECTED CONSOLIDATED FINANCIAL DATA

     The  following  selected  consolidated  financial  data  should  be read in
conjunction  with  our  consolidated  financial statements and related notes and
"Management's  Discussion  and  Analysis  of  Financial Condition and Results of
Operations."  The  selected  consolidated  statement  of  operations  data  and
consolidated  balance  sheet data for each of the five years in the period ended
December  31,  1999  are  derived  from  our  consolidated  financial statements
included  elsewhere  in  this Annual Report on Form 10-K. The historical results
are  not  necessarily indicative of results to be expected in any future period.

<TABLE>
<CAPTION>

                                                                       YEARS ENDED DECEMBER 31,
                                                        -----------------------------------------------------
                                                           1999      1998(1)     1997       1996       1995
                                                        ----------  ---------  ---------  ---------  --------
                                                                  (IN THOUSANDS, EXCEPT SHARE DATA)
<S>                                                     <C>         <C>        <C>        <C>        <C>
CONSOLIDATED STATEMENT OF OPERATIONS DATA:
Net sales. . . . . . . . . . . . . . . . . . . . . . .  $  28,360   $ 32,431   $ 84,286   $ 82,509   $100,350
Costs and expenses:
  Costs of goods sold. . . . . . . . . . . . . . . . .     16,628     24,201     54,762     55,537     61,111
  Research and development . . . . . . . . . . . . . .      5,368      8,921     12,327     14,639     12,259
  Selling, general and administrative. . . . . . . . .      7,931     14,115     20,326     17,901     19,004
  Restructuring and other(2)(3). . . . . . . . . . . .        543     12,707          0      5,890          0
                                                        ----------  ---------  ---------  ---------  --------
Income (loss) from operations. . . . . . . . . . . . .     (2,109)   (27,513)    (3,129)   (11,458)     7,976
Other income (expense), net. . . . . . . . . . . . . .        669        (86)    (1,363)        53        327
                                                        ----------  ---------  ---------  ---------  --------
Income (loss) before provision for income taxes. . . .     (1,440)   (27,599)    (4,492)   (11,405)     8,303
Provision for (benefit from) income taxes. . . . . . .        177          1     14,844     (2,200)    10,979
                                                        ----------  ---------  ---------  ---------  --------
Net income (loss). . . . . . . . . . . . . . . . . . .     (1,617)   (27,600)   (19,336)    (9,205)    19,282
Deemed dividends on preferred stock. . . . . . . . . .          0     (1,903)         0          0          0
                                                        ----------  ---------  ---------  ---------  --------
Net income (loss) attributable to common
  shareholders . . . . . . . . . . . . . . . . . . . .  $  (1,617)  $(29,503)  $(19,336)  $ (9,205)  $ 16,063
                                                        ==========  =========  =========  =========  ========
Net income (loss) per share:
  Basic. . . . . . . . . . . . . . . . . . . . . . . .      (0.09)     (1.71)     (1.15)     (0.56)      1.26
Diluted. . . . . . . . . . . . . . . . . . . . . . . .      (0.09)     (1.71)     (1.15)     (0.56)      1.20
Shares used in computing net income (loss) per share:
  Basic. . . . . . . . . . . . . . . . . . . . . . . .     18,134     17,248     16,860     16,423     15,334
  Diluted. . . . . . . . . . . . . . . . . . . . . . .     18,134     17,248     16,860     16,423     16,063
</TABLE>

<TABLE>
<CAPTION>

                                                                      DECEMBER 31,
                                                  -------------------------------------------------
                                                      1999        1998     1997     1996     1995
                                                  -------------  -------  -------  -------  -------
                                                                    (IN THOUSANDS)
<S>                                               <C>            <C>      <C>      <C>      <C>
CONSOLIDATED BALANCE SHEET DATA:
Cash and cash equivalents. . . . . . . . . . . .  $       6,739  $ 8,125  $ 8,700  $11,827  $12,630
Working capital. . . . . . . . . . . . . . . . .         14,151   15,799   30,774   39,290   50,061
Total assets . . . . . . . . . . . . . . . . . .         27,744   31,827   76,738   89,132   95,247
Long-term debt and capital lease obligations . .              0       50      971    1,260    1,034
Redeemable Series B convertible preferred stock.              0      773        0        0        0
Total shareholders' equity . . . . . . . . . . .  $      19,378  $19,953  $48,357  $68,251  $75,361
<FN>

(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.
</TABLE>

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 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. In addition to historical
information,  the discussion in this Annual Report on Form 10-K 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.

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  $18.9  million, capital equipment and other
assets  of  $9.7  million,  and  warranty  and  installation liabilities of $3.6
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.

     In  1998,  we  recorded  a  restructuring and other charge of approximately
$12.7  million  which included personnel changes of $1.7 million associated with
our  workforce reduction, $5.4 million in inventory write-downs, $1.1 million in
leasehold  improvement write-offs, $1.4 million for expenses associated with the
closing  of several sales offices, transaction losses as a result of the sale of
the  ion implant product line to Varian, $1.0 million for legal, accounting, and
banking  fees  associated  with  the Varian transaction and $2.0 million for ion
implant  inventory  related  to  the  dispute with Varian in connection with the
Varian  transaction.

     In  1999,  substantially  all  of  our sales were derived from Lynx2 system
shipments for the tungsten silicide process application. We shipped two new Lynx
products  in  1999  which  accounted  for  11%  of  total  net sales in 1999. We
anticipate a greater percentage of our revenue to be generated from new products
in  2000  and  beyond,  because  we  believe  that industry demand for these new
technologies  will  continue  to  increase.

     Over  the past few years, we were dependent on one customer, Samsung, for a
majority  of  our  thin film product revenue. Samsung accounted for 83.9% of our
net  sales in 1999 and 68.0% in 1998. 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, received a purchase order for an
ALD  system  from  Infineon  Technologies,  also  a  new  customer.

     Revenue  related  to  systems  has been generally recognized upon shipment.
Occasionally,  revenue  has been recognized on certain transactions where, prior
to  shipment  and  upon  completion  of  customer  source inspection and factory
acceptance  of  the  system,  risk of loss and title to the system passes to the
customer.  A  provision  for  the  estimated future cost of system installation,
warranty  and  commissions  is recorded when revenue is recognized. See " Recent
Accounting  Pronouncements"  and  "Risk  Factors Our quarterly financial results
fluctuate  significantly  and  may fall short of anticipated levels, which could
cause  our  stock  price  to  decline."

     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 accordingly we experienced higher
thin  film  sales  in  1999  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.

     International  net  sales, predominantly to customers based in South Korea,
accounted for 86.5% of total net sales in 1999, 56.7% of total net sales in 1998
and  74% of total net sales in 1997. 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.

     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. 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 income data for the periods indicated:

<TABLE>
<CAPTION>

                                                         YEAR ENDED DECEMBER 31,
                                                      ---------------------------
                                                         1999      1998     1997
                                                      ---------  -------  -------
<S>                                                   <C>        <C>      <C>
Net sales                                                100.0%   100.0%   100.0%
Costs and expenses:
  Cost of goods sold . . . . . . . . . . . . . . . .      58.6     74.6     65.0
  Research and development . . . . . . . . . . . . .      18.9     27.5     14.6
  Selling, general and administrative. . . . . . . .      28.0     43.5     24.1
  Restructuring and Other. . . . . . . . . . . . . .       1.9     39.2        0
                                                      ---------  -------  -------
Loss from operations. . . . . . . . . . . . . . . .       (7.4)   (84.8)    (3.7)
Other income (expense), net. . . . . . . . . . . . .       2.3     (0.3)    (1.6)
                                                      ---------  -------  -------
Loss before provision for income taxes. . . . . . .       (5.1)   (85.1)    (5.3)
Provision for income taxes . . . . . . . . . . . . .       0.6        0     17.6
                                                      ---------  -------  -------
Net loss. . . . . . . . . . . . . . . . . . . . . .      (5.7)%  (85.1)%  (22.9)%
                                                      =========  =======  =======
</TABLE>

YEARS  ENDED  DECEMBER  31,  1999  AND  1998

     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 250% 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  $24.2 million in 1998, representing a decrease of 31.3%. This decrease was
primarily  due  to lower sales volume. Lower sales volumes were primarily due to
the  divestiture  of  the  ion  implant product line to Varian. 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 $8.2 million or 25.4% 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 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.  At  December 31, 1999, we had federal net
operating  loss  carry  forwards  of  $78.6 million and state net operating loss
carry  forwards  of  $24.7  million.

YEARS  ENDED  DECEMBER  31,  1998  AND  1997

     NET  SALES. Net sales in 1998 were $32.4 million compared with net sales of
$84.3  million  in  1997,  representing  a decrease of 61.5%. The decline in our
sales was primarily due to the divestiture of the ion implant product line which
contributed  $21.1  million  of net sales in 1998 compared with $57.1 million in
1997,  the  continued  recession in the semiconductor equipment industry and the
adverse  effect on our sales volumes caused by the lack of capital investment by
semiconductor  manufacturers  due  to  DRAM  production  overcapacity.

     COST  OF  GOODS SOLD. Cost of goods sold in 1998 was $24.2 million compared
with  $55.8 million in 1997, representing a decrease of 55.8%. This decrease was
primarily  due  to  depressed  sales  volumes  in  the  first half of 1998. This
decrease  was offset by $1.6 million of inventory and warranty reserve reversals
recorded  in  the fourth quarter of 1998. Gross profit in 1998 was $8.2 million,
representing  25.4%  of  net  sales, compared with $29.5 million or 35.0% of net
sales  in  1997.

     RESEARCH  AND  DEVELOPMENT.  Research and development expenses in 1998 were
$8.9  million  compared  with  $12.3 million in 1997, representing a decrease of
27.6%.  As  a  percentage  of  net sales, research and development expenses were
27.5%  in  1998  and  14.6%  in  1997. This decrease in research and development
expenses  was  primarily due to the divestiture of the ion implant product line.
Thin  film  research  and  development spending of $5.4 million in 1998 remained
relatively  constant  with  1997  levels.

     SELLING,  GENERAL  AND  ADMINISTRATIVE. Selling, general and administrative
expenses  were  $14.1  million  in  1998  compared  with  $20.3 million in 1997,
representing a decrease of 30.6%. As a percentage of net sales, selling, general
and  administrative  expenses were 43.5% in 1998 and 24.1% in 1997. Our selling,
general  and administrative expenses decreased in 1998 compared with 1997 due to
the  divestiture  of  the ion implant product line and the reorganization of our
business  following  this  divestiture.  Included  in  selling,  general  and
administrative  expenses  in 1998 was a $1.4 million write-off of an ion implant
receivable.

     RESTRUCTURING  AND  OTHER.  We  recorded restructuring and other charges of
approximately  $12.7  million  in  1998 which included personnel charges of $1.7
million  associated  with  our  workforce  reduction,  $5.4 million in inventory
write-downs,  $1.1 million in leasehold improvement write-offs, $1.4 million for
expenses  associated  with  the  closing  of  several sales offices, transaction
losses as a result of the sale of the ion implant product line, $1.0 million for
legal,  accounting  and  banking fees associated with this sale and $2.0 million
for  ion  implant  inventory  related  to  the  dispute  with  Varian.

     OTHER  INCOME  (EXPENSE),  NET.  We  had  other expense of $86,000 in 1998,
compared  with  other  expense  of $1.4 million in 1997. We had foreign currency
exchange  losses  and interest expenses during the first half of 1998 which were
partially  offset  by  currency  exchange  gains  and interest income during the
second half of the year. In 1997, other expenses consisted primarily of currency
exchange  losses  of  $1.1 million in the fourth quarter due to the weakening of
the  Japanese  yen  and  Korean  won  against  the  U.S.  dollar.

     PROVISION  FOR  INCOME  TAXES. In 1998, we had an immaterial tax provision.
During  the fourth quarter of 1997, we determined that, based upon the weight of
available  evidence,  it is more likely than not that the net deferred tax asset
at  December  31,  1997  would  not  be realized and, therefore, provided a full
valuation  allowance  against  the  net  deferred  tax  asset resulting in a tax
provision  of  $14.8  million  for  1997.

LIQUIDITY  AND  CAPITAL  RESOURCES

     At  December  31,  1999, our cash and cash equivalents were $6.7 million, a
decrease  of $1.4 million from cash and cash equivalents of $8.1 million held as
of  December  31,  1998.  At December 31, 1999, our accounts receivable was $7.6
million, a decrease of $5.4 million from accounts receivable of $13.0 million at
December  31,  1998. Several systems shipped with extended payment terms in 1998
and  remained  in  accounts receivable at December 31, 1998. Accounts receivable
related  to  these  systems  were  collected  in  1999.

     Cash  provided  by  operating  activities totaled $4.5 million in 1999, 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. Accounts receivable decreased due to the collection in 1999 of accounts
receivable  related  to  systems  shipped  with  extended payment terms in 1998.
Accounts  payable  increased  due  to the timing of payments during the last two
weeks  of  December.  Inventories  increased  because we purchased and held more
inventory  to increase our production options. Most of this material is expected
to  be consumed during the first half of 2000. Operating activities in 1998 used
cash of $18.8 million, primarily due to a $27.6 million net loss, a $2.5 million
increase  in  inventories,  a  $11.7  million  decrease  in accounts payable and
accrued  expenses,  partially  offset  by  a  $4.8  million decrease in accounts
receivable,  and  non-cash charges for restructuring activities and depreciation
and  amortization  of  $15.2  million.

     Financing  activities  of  $3.7  million  in  1999  included 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. Financing activities in 1998 used cash of $4.3 million, primarily
due  to  net  repayments  of  short-term  bank  borrowings.

     We  incurred  capital  expenditures  of  $2.0  million  during  1999. 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 the addition of a new
enterprise  resource  planning  business  system.  We  currently anticipate that
additional  capital expenditures will be funded through existing working capital
or  lease  financing.

     Our  primary source of funds at December 31, 1999 consisted of $6.7 million
in  cash  and cash equivalents, and $7.6 million of accounts receivable, most of
which  we  expect  to collect or to have been collected during the first half of
2000.

     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.
We were in default of certain of the covenants and Venture Bank has granted us a
waiver  of  the default. The amount available to borrow at December 31, 1999 was
$1.5  million  at  a rate of 8.75%. We expect to be in default of certain of the
covenants  at the end of the first quarter of 2000, and Venture Bank has granted
us  a  waiver  of  the  default. We have no borrowings under the line of credit.

     We  believe  that  our existing working capital, as well as the $10 million
Venture  Bank  line  of credit, will be sufficient to satisfy our cash needs for
the  next  12  months.  There  can  be no assurance that any required additional
funding,  if  needed,  will  be available on terms attractive to us, which could
have  a material adverse affect on our business, financial condition and results
of  operations. Any additional equity financing may be dilutive to shareholders,
and  debt  financing,  if  available,  may  involve  restrictive  covenants.

YEAR  2000  READINESS  DISCLOSURE

     We have designed our products to be year 2000 compliant, and as a result we
have not experienced significant year 2000 problems related to our products. The
majority  of  the  computer  software  and  hardware that we use in our internal
operations  did  not require replacement or modification as a result of the year
2000 issue. We did, however, implement a new enterprise resource planning system
to address year 2000 issues. We believe that our significant vendors and service
providers  are  year  2000 compliant and have not, to date, been made aware that
any  of  our significant vendors or service providers have experienced year 2000
disruptions in their systems. Our estimated expenses on year 2000 issues through
December  31,  1999 were approximately $800,000, of which approximately $500,000
was  used  to  purchase  and  implement the enterprise resource planning system.
Accordingly,  we  do  not anticipate incurring material expenses or experiencing
any  material  operational  disruptions  as  a result of any year 2000 problems.

RECENT  ACCOUNTING  PRONOUNCEMENTS

     In  June 1998, the Financial Accounting Standards Board issued Statement of
Financial  Accounting  Standards No. 133, "Accounting for Derivative Instruments
and  Hedging  Activities"  (SFAS  133),  SFAS  133  established  a new model for
accounting  for derivative instruments and hedging activities. In July 1999, the
Financial  Accounting  Standards  Boards  issued  SFAS  No. 137, "Accounting for
Derivative  Instruments and Hedging Activities Deferral of the Effective Date of
FASB Statement No. 133" (SFAS 133). SFAS 137 deferred the effective date of SFAS
133  until  the  first quarter beginning after June 15, 2000. The impact of SFAS
133  on  the  consolidated  financial  statements  has  not yet been determined.

     In  December  1999,  the SEC staff issued Staff Accounting Bulletin ("SAB")
No.  101,  "Revenue  Recognition." The SEC staff addresses several issues in SAB
No.  101,  including  the  timing  for  recognizing revenue derived from selling
arrangements  that  involve  contractual  customer  acceptance  provisions  and
installation  of  the  product  occurs after shipment and transfer of title. Our
existing  revenue  recognition  policy  is  to recognize revenue at the time the
customer  takes title to the product, generally at the time of shipment, because
we  have,  in  the past, routinely met our installation obligations and obtained
customer  acceptance.  Applying  the  requirements of SAB No. 101 to our present
selling  arrangements  for  the  sale  of semiconductor production equipment may
require  a  change  in  our  accounting  policy  for revenue recognition and the
deferral  of  the  recognition  of  revenue  from  such  equipment  sales  until
installation  is  complete  and  accepted  by the customer. The effect of such a
change,  if  any,  must  be  recognized  as  a  cumulative effect of a change in
accounting  no  later  than  the  quarter  ending  June 30, 2000. We believe the
effects  on liquidity, cash flow and financial position will not be material. At
the  current  time,  it  is not possible to determine the effect this change may
have  on  our  results of operations. However, should the Company be required to
record a cumulative effect of a change in accounting, it will result in a charge
to  results  of  operations.  We  are  also considering potential changes to our
standard  contracts for equipment sales that could mitigate the potential impact
of  SAB  No.  101  on  a  going  forward  basis.

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  and  the other information, our financial statements and the related
notes  incorporated  by  reference  into  this  Annual  Report  on  Form  10-K.

     This  Annual  Report  on Form 10-K 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.
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  $1.6  million,  $29.5 million, and $19.3
million  for  1999, 1998 and 1997, 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. As
a  result,  our  business  could  be  materially  harmed.

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 of 84% and 11% of our net sales in
1999  respectively.  In  addition, Samsung Electronics Company, Ltd., and Micron
Technology,  Inc.  represented  92% of accounts receivable at December 31, 1999.
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 adversely affected. 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.  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.  In  addition, 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 and
adversely  affect  our operating results for that quarter, which could cause our
stock  price  to  decline.

     In December 1999, the SEC issued Staff Accounting Bulletin No. 101. SAB 101
summarizes  certain  of  the  SEC  staff's  views in applying generally accepted
accounting  principles  to revenue recognition in financial statements. Prior to
SAB 101, we generally recognized revenue upon shipment of a system. Applying the
requirements  of SAB 101 to the present selling arrangements we use for the sale
of  semiconductor  production  equipment  may require a change in our accounting
policy  for  revenue recognition and deferral of the recognition of revenue from
such  equipment  sales  until  installation  is  complete  and  accepted  by the
customer.  The  effect  of  such  a  change,  if  any,  must  be recognized as a
cumulative  effect  of  a  change in accounting no later than the quarter ending
June  30,  2000.  Although SAB 101 applies to every company within our industry,
there is a risk that our stock price may be materially and adversely impacted by
SAB  101  if we are required to transition from recognizing revenue at shipment,
to  customer  acceptance  of  a  system.

     Since  it is possible that there may be a shift in revenue recognition from
the  time of shipment to the time of acceptance by the customer, certain revenue
that  we  would  have  recognized  in the first and second quarters of 2000 upon
shipment  of  products may not be recognized until the products are accepted. We
cannot  assure  you  as to the timing of such acceptances. Any material delay in
receipt  of  acceptances  may  have  a material adverse effect on our results of
operations.

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

     Export  sales accounted for approximately 86%, 56% and 74% of our total net
sales  in 1999, 1998 and 1997, respectively. Net sales to our South Korean-based
customer  accounted  for  approximately 84%, 30% and 50%, respectively, of total
net  sales  during  the  same  periods.  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
effect  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 DRAMs at less than cost in order to
generate  cash.  Currency  devaluations  make  dollar-denominated goods, such as
ours,  more  expensive  for  international  customers.  In  addition,  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. As a result of any or all these factors,
our  business,  financial  condition and results of operations may be materially
harmed.

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.  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. 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. 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
have  a material adverse effect on our business, financial condition and results
of  operations.

     In  addition,  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 our tungsten silicide CVD systems. We
estimate  that the life cycle for these 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  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 competition increases and we are not able to
respond  effectively.

WE  MAY  NOT ACHIEVE ANTICIPATED REVENUE GROWTH IF WE ARE NOT SELECTED AS VENDOR
OF  CHOICE  FOR  NEW  OR  EXPANDED FABRICATION FACILITIES AND IF OUR SYSTEMS AND
PRODUCTS  DO  NOT  ACHIEVE  BROADER  MARKET  ACCEPTANCE

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

     Once  a  semiconductor  manufacturer  selects a particular vendor's capital
equipment,  the  manufacturer  generally relies for a significant period of time
upon  equipment  from  this  vendor  of  choice for the specific production line
application. In addition, the semiconductor manufacturer frequently will attempt
to  consolidate  its  other capital equipment requirements with the same vendor.
Accordingly,  we  may  face  narrow windows of opportunity to be selected as the
"vendor  of  choice"  by  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  materially  adversely  affected.

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 or 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.

WE ARE DEPENDENT ON OUR INTELLECTUAL PROPERTY AND RISK LOSS OF A VALUABLE ASSET,
REDUCED  MARKET  SHARE AND LITIGATION EXPENSE 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  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.

     From  time  to  time,  we have received notices from third parties alleging
infringement  of  such parties' patent rights by our products. In such cases, it
is our policy to defend against the 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.

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.

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. 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  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 business, financial
condition  and  results  of  operations.

WE  DEPEND  UPON  SIX  DISTRIBUTORSHIPS  FOR  THE  SALE  OF OUR PRODUCTS AND ANY
DISRUPTION  IN  THESE  RELATIONSHIPS  WOULD  ADVERSELY  EFFECT  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 have an adverse
effect  on  our  business,  financial  condition  and  results  of  operations.

WE  ARE  ESTABLISHING A DIRECT SALES ORGANIZATION IN JAPAN WHICH COULD RESULT IN
LOST  SALES  OR  INCREASED  RISKS  TO  OUR  BUSINESS  IN  JAPAN

     As  part  of  our original strategy for penetrating the Japanese market, we
established  a distribution relationship with Innotech Corp. In 1998, we shifted
our  strategy  in  Japan  to  a  direct  sales  model.  We  have  terminated our
distribution  relationship  with  Innotech  and  are establishing our own direct
sales  force  in  Japan.  Although  we  intend to continue to invest significant
resources  in Japan, including the hiring of additional personnel to support our
direct sales effort, we may not be able to maintain or increase our sales to the
Japanese  semiconductor  industry.  We  may  miss  sales  opportunities  or lose
competitive  sales as we transition to this direct sales model, and our existing
Japanese  customers  and  potential  customers  may be unwilling to purchase our
systems  from  us  directly.

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.

YEAR  2000  COMPLICATIONS MAY DISRUPT OUR OPERATIONS BECAUSE, WHILE OUR UPGRADED
INTERNAL  SYSTEMS  ARE OPERATIONAL AND THE COST OF UPGRADES WAS NOT MATERIAL, WE
RELY  ON  EXTERNAL  SYSTEMS  THAT  MAY  NOT BE ADEQUATELY UPGRADED FOR YEAR 2000

     The  date  fields coded in many software products and computer systems need
to  be able to distinguish 21st century dates from 20th century dates, including
leap  year  calculations. The failure to be able to accurately distinguish these
dates  is  commonly  known  as  the  year  2000  problem.  While  we have yet to
experience  year  2000  problems,  the  computer software programs and operating
systems  used  in  our  internal  operations,  including  our financial, product
development, order management and manufacturing systems, could experience errors
or  interruptions  due  to  the  year  2000  problem. For example, a significant
failure  of  our  computer  integrated  manufacturing systems, which monitor and
control  factory  equipment,  could disrupt manufacturing operations and cause a
delay  in  completion and shipping of products. In addition, it is possible that
our  suppliers'  and  service  providers' failure to adequately address the year
2000  problem  could have an adverse effect on their operations, which, in turn,
could  have  an  adverse  impact  on  us.

FORWARD-LOOKING  STATEMENTS

     Some  of  the  information  in  this  Annual Report on Form 10-K 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.

     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,
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 change over time as our business practices evolve and could
seriously  harm  our  financial  results. All of our international sales, except
spare  parts  and  service  sales  made  by  our  subsidiary in South Korea, are
currently denominated in U.S. dollars. All spare parts and service sales made by
the South Korean subsidiary are won denominated. 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.

ITEM  8.  FINANCIAL  STATEMENTS  AND  SUPPLEMENTARY  DATA

                        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 of
cash  flows, present fairly, in all material respects, the financial position of
Genus,  Inc. and its subsidiaries at December 31, 1999 and 1998, and the results
of  their  operations  and  their  cash flows for each of the three years in the
period  ended  December  31,  1999,  in  conformity  with  accounting principles
generally  accepted  in  the  United  States. 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, 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  the  opinion  expressed  above.


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

San  Jose,  California
February  9,  2000

<TABLE>
<CAPTION>

                                GENUS, INC. AND SUBSIDIARIES
                                 CONSOLIDATED BALANCE SHEETS
                              (IN THOUSANDS, EXCEPT SHARE DATA)


                                                                     DECEMBER 31,
                                                                ---------------------
                                                                   1999       1998
                                                                ----------  ---------
<S>                                                             <C>         <C>
ASSETS
Current Assets:
  Cash and cash equivalents. . . . . . . . . . . . . . . . . .  $   6,739   $  8,125
  Accounts receivable (net of allowance for doubtful accounts
    of $241 in 1999 and $500 in 1998). . . . . . . . . . . . .      7,629     13,008
  Inventories. . . . . . . . . . . . . . . . . . . . . . . . .      7,266      5,338
  Other current assets . . . . . . . . . . . . . . . . . . . .        883        379
                                                                ----------  ---------
    Total current assets . . . . . . . . . . . . . . . . . . .     22,517     26,850
  Property and equipment, net. . . . . . . . . . . . . . . . .      4,894      4,659
  Other assets, net. . . . . . . . . . . . . . . . . . . . . .        333        318
                                                                ----------  ---------
                                                                $  27,744   $ 31,827
                                                                ==========  =========

LIABILITIES AND REDEEMABLE PREFERRED STOCK
Current Liabilities:
  Short-term bank borrowings . . . . . . . . . . . . . . . . .  $       0   $  4,000
  Accounts payable . . . . . . . . . . . . . . . . . . . . . .      4,146      2,193
  Accrued expenses . . . . . . . . . . . . . . . . . . . . . .      4,168      4,794
  Current portion of capital lease obligations . . . . . . . .         52         64
                                                                ----------  ---------
    Total current liabilities. . . . . . . . . . . . . . . . .      8,366     11,051
Capital lease obligations, less current portion. . . . . . . .          0         50
                                                                ----------  ---------
    Total liabilities. . . . . . . . . . . . . . . . . . . . .      8,366     11,101
                                                                ----------  ---------
Commitments and contingencies (Note 7)
Manditorily redeemable convertible preferred stock . . . . . .          0        773
                                                                ----------  ---------

SHAREHOLDERS' EQUITY
Preferred stock, no par value:
  Authorized 1,982,000 shares;
    Issued and outstanding, none . . . . . . . . . . . . . . .          0          0
Common stock, no par value:
  Authorized 50,000,000 shares;
    Issued and outstanding, 18,469,000 shares in 1999 and
    17,473,000 shares in 1998. . . . . . . . . . . . . . . . .    101,042     99,849
  Accumulated deficit. . . . . . . . . . . . . . . . . . . . .    (79,872)   (78,255)
  Accumulated other comprehensive loss . . . . . . . . . . . .     (1,792)    (1,641)
                                                                ----------  ---------
    Total shareholders' equity . . . . . . . . . . . . . . . .     19,378     19,953
                                                                ----------  ---------
                                                                $  27,744   $ 31,827
                                                                ==========  =========
<FN>

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

<TABLE>
<CAPTION>

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


                                                                  YEARS ENDED DECEMBER 31,
                                                             --------------------------------
                                                                1999        1998       1997
                                                             ----------  ---------  ---------
<S>                                                          <C>         <C>        <C>
Net sales . . . . . . . . . . . . . . . . . . . . . . . . .  $  28,360   $ 32,431   $ 84,286
Costs and expenses:
  Cost of goods sold. . . . . . . . . . . . . . . . . . . .     16,628     24,201     54,762
  Research and development. . . . . . . . . . . . . . . . .      5,368      8,921     12,327
  Selling, general and administrative . . . . . . . . . . .      7,930     14,115     20,326
  Restructuring and other . . . . . . . . . . . . . . . . .        543     12,707          0
                                                             ----------  ---------  ---------
    Loss from operations. . . . . . . . . . . . . . . . . .     (2,109)   (27,513)    (3,129)
Other income (expense), net . . . . . . . . . . . . . . . .        669        (86)    (1,363)
                                                             ----------  ---------  ---------
Loss before provision for income taxes. . . . . . . . . . .     (1,440)   (27,599)    (4,492)
Provision for income taxes. . . . . . . . . . . . . . . . .        177          1     14,844
                                                             ----------  ---------  ---------
Net loss. . . . . . . . . . . . . . . . . . . . . . . . . .     (1,617)   (27,600)   (19,336)
Deemed dividends on preferred stock . . . . . . . . . . . .          0     (1,903)         0
                                                             ----------  ---------  ---------
Net loss attributable to common shareholders. . . . . . . .  $  (1,617)  $(29,503)  $(19,336)
                                                             ==========  =========  =========
Basic and diluted net loss per share. . . . . . . . . . . .  $   (0.09)  $  (1.71)  $  (1.15)
                                                             ==========  =========  =========
Shares used to compute basic and diluted net loss per share     18,134     17,248     16,860
                                                             ==========  =========  =========
<FN>

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

<TABLE>
<CAPTION>

                                                GENUS, INC. AND SUBSIDIARIES
                                  CONSOLIDATED  STATEMENTS  OF  SHAREHOLDERS'  EQUITY
                                                       (IN THOUSANDS)


                                                                                                    ACCUM. OTHER
                                             PREFERRED         COMMON STOCK           ACCUMULATED  COMPREHENSIVE
                                                        --------------------------
                                               STOCK        SHARES        AMOUNT         DEFICIT        LOSS      TOTAL
                                            ----------  ------------  ------------  ---------------  --------  ---------
<S>                                         <C>         <C>           <C>           <C>              <C>       <C>
Balances, January 1, 1997. . . . . . . . .  $       0         16,726  $     97,915  $      (29,527)  $  (137)  $ 68,251
  Issuance of shares of common
    stock under stock option plan. . . . .          0            124           364               0         0        364
  Issuance of shares of common stock
    under employee stock purchase
    plan                                            0            273           870               0         0        870
  Net loss . . . . . . . . . . . . . . . .          0              0             0         (19,336)        0
  Translation adjustments. . . . . . . . .          0              0             0               0    (1,792)
  Comprehensive loss . . . . . . . . . . .          0              0             0               0         0    (21,128)
                                            ----------  ------------  ------------  ---------------  --------  ---------
Balances, December 31, 1997. . . . . . . .          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
                                            ==========  ============  ============  ===============  ========  =========
<FN>

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

<TABLE>
<CAPTION>

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


                                                                                   YEARS ENDED DECEMBER 31,
                                                                            ------------------------------------
                                                                                 1999          1998       1997
                                                                            --------------  ---------  ---------
<S>                                                                         <C>             <C>        <C>
Cash flows from operating activities:
  Net loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  $      (1,617)  $(27,600)  $(19,336)
  Adjustments to reconcile net loss to net cash from operating activities:
    Depreciation and amortization. . . . . . . . . . . . . . . . . . . . .          1,805      2,480      5,073
    Provision for doubtful accounts. . . . . . . . . . . . . . . . . . . .           (259)     1,670      2,930
    Deferred taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . .              0          0     14,844
    Restructuring and other. . . . . . . . . . . . . . . . . . . . . . . .            543     12,707          0
    Issuance of options and warrants to non-employees. . . . . . . . . . .             98          0          0
    Changes in assets and liabilities:
      Accounts receivable. . . . . . . . . . . . . . . . . . . . . . . . .          5,095      4,781     (7,181)
      Inventories. . . . . . . . . . . . . . . . . . . . . . . . . . . . .         (1,928)    (2,461)    (2,998)
      Other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . .           (519)       650       (391)
      Accounts payable . . . . . . . . . . . . . . . . . . . . . . . . . .          1,953     (6,530)     3,419
      Accrued expenses . . . . . . . . . . . . . . . . . . . . . . . . . .           (626)    (5,153)      (543)
      Other, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . .              0        626        527
                                                                            --------------  ---------  ---------
      Net cash provided by (used in) operating activities. . . . . . . . .          4,545    (18,830)    (3,656)
                                                                            --------------  ---------  ---------
Cash flows from investing activities:
  Acquisition of property and equipment. . . . . . . . . . . . . . . . . .         (2,040)      (919)    (3,835)
  Sale of MeV ion implant products . . . . . . . . . . . . . . . . . . . .              0     23,151          0
                                                                            --------------  ---------  ---------
      Net cash provided by (used in) investing activities. . . . . . . . .         (2,040)    22,232     (3,835)
                                                                            --------------  ---------  ---------
Cash flows from financing activities:
  Proceeds from issuance of common stock . . . . . . . . . . . . . . . . .            322        191      1,234
  Proceeds from issuance of preferred stock and warrants . . . . . . . . .              0      4,815          0
  Redemption of preferred stock. . . . . . . . . . . . . . . . . . . . . .              0     (5,325)         0
  Proceeds from short-term bank borrowings . . . . . . . . . . . . . . . .              0      4,000     50,290
  Payments of short-term bank borrowings . . . . . . . . . . . . . . . . .         (4,000)    (7,200)   (45,590)
  Payments of long-term debt and capital leases. . . . . . . . . . . . . .            (62)      (761)      (939)
                                                                            --------------  ---------  ---------
      Net cash provided by (used in) financing activities. . . . . . . . .         (3,740)    (4,280)     4,995
                                                                            --------------  ---------  ---------
Effect of exchange rate changes on cash                                              (151)       303       (631)
                                                                            --------------  ---------  ---------
Net decrease in cash and cash equivalents                                          (1,386)      (575)    (3,127)
Cash and cash equivalents, beginning of year                                        8,125      8,700     11,827
                                                                            --------------  ---------  ---------
Cash and cash equivalents, end of year                                      $       6,739   $  8,125   $  8,700
                                                                            ==============  =========  =========
SUPPLEMENTAL CASH FLOW INFORMATION
Cash paid for interest                                                      $           4   $    186   $    445
Cash paid for income taxes                                                              0          6         94
Non-cash investing and financing activities:
  Purchase of property and equipment under capital leases . . . . . . . .               0          0        515
  Deemed dividends on preferred stock. . . . . . . . . . . . . . . . . . .              0      1,903          0
  Conversion of Series A preferred stock to common stock . . . . . . . . .              0        124          0
  Conversion of Series B preferred stock to common stock . . . . . . . . .            773          0          0
<FN>

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

                          GENUS, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED 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.

     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 and accounts payable approximate estimated fair
value  because  of  the  short maturity of those financial instruments. Based on
rates  currently  available  to  the  Company  for  debt  with similar terms and
remaining  maturities,  the  carrying amounts of debt approximate estimated fair
values.

     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 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  71%  of  accounts receivable at December 31, 1999. South
Korean and Japanese headquartered customers accounted for an aggregate of 61% of
accounts  receivable at December 31, 1998. The Company has written off bad debts
of  none,  $2,267,000  and  $2,083,000  in  1999,  1998  and 1997, 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.  Property  and  equipment  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.

     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.  Revenue  related  to systems is generally recognized
upon  shipment.  Occasionally,  revenue  is  recognized  on certain transactions
where,  prior  to shipment and upon completion of customer source inspection and
factory acceptance of the system, risk of loss and title to the system passes to
the  customer. A provision for the estimated future cost of system installation,
warranty and commissions is recorded when revenue is 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
expected  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.

     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." 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. 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  includes  net income and foreign currency translation adjustments and is
displayed  in  the  statement  of  shareholders'  equity.

     Recent  Account  Pronouncements.  In  June  1998,  the Financial Accounting
Standards  Boards  issued  Statement  of Financial Accounting Standards No. 133,
"Accounting  for Derivative Instruments and Hedging Activities" (SFAS 133), SFAS
133  established  a  new  model  for  accounting  for  derivative  and  hedging
activities.  In July 1999, the Financial Accounting Standards Boards issued SFAS
No.  137, "Accounting for Derivative Instruments and Hedging Activities-Deferral
of  the  Effective Date of FASB Statement No. 133" (SFAS 133). SFAS 137 deferred
the  effective date of SFAS 133 until the first quarter beginning after June 15,
2000.  The impact of SFAS 133 on the Company's consolidated financial statements
has  not  yet  been  determined.

     In  December  1999,  the SEC staff issued Staff Accounting Bulletin ("SAB")
No.  101,  "Revenue  Recognition." The SEC staff addresses several issues in SAB
No.  101,  including  the  timing  for  recognizing revenue derived from selling
arrangements  that  involve  contractual  customer  acceptance  provisions  and
installation  of  the  product  occurs after shipment and transfer of title. The
Company's  existing  revenue  recognition  policy is to recognize revenue at the
time the customer takes title to the product, generally at the time of shipment,
because  the Company has routinely met its installation obligations and obtained
customer  acceptance.  Applying  the  requirements of SAB No. 101 to the present
selling  arrangements  used  by  the  Company  for  the  sale  of  semiconductor
production equipment may require a change in the Company's accounting policy for
revenue  recognition  and  the  deferral of the recognition of revenue from such
equipment sales until installation is complete and accepted by the customer. The
effect  of such a change, if any, must be recognized as a cumulative effect of a
change  in  accounting no later than the Company's quarter ending June 30, 2000.

NOTE  2.  INVENTORIES

     Inventories  comprise  the  following  (in  thousands):

<TABLE>
<CAPTION>

                                        DECEMBER 31,
                                     -----------------
                                        1999     1998
                                     ---------  ------
<S>                                  <C>        <C>
  Raw materials and purchased parts  $   5,439  $4,796
  Work in process . . . . . . . . .      1,055     244
  Finished goods. . . . . . . . . .        772     298
                                     ---------  ------
                                     $   7,266  $5,338
                                     =========  ======
</TABLE>

NOTE  3.  PROPERTY  AND  EQUIPMENT

     Property  and  equipment  are stated at cost and comprise the following (in
thousands):

<TABLE>
<CAPTION>

                                                                   DECEMBER 31,
                                                               ---------------------
                                                                  1999       1998
                                                               ----------  ---------
<S>                                                            <C>         <C>
  Equipment (useful life is 3 years). . . . . . . . . . . . .  $   8,048   $  7,227
  Demonstration equipment (useful life ranges from 3-5 years)     14,658     14,345
  Furniture and fixtures (useful life is 3 years) . . . . . .      1,021      1,015
  Leasehold improvements (useful life ranges from 4-10 years)      3,056      3,003
                                                               ----------  ---------
                                                                  26,783     25,590
  Less accumulated depreciation and amortization. . . . . . .    (23,048)   (21,243)
                                                               ----------  ---------
                                                                   3,735      4,347
  Construction in process . . . . . . . . . . . . . . . . . .      1,159        312
                                                               ----------  ---------
                                                               $   4,894   $  4,659
                                                               ==========  =========
</TABLE>

     Equipment  includes  $0  and  $584,000  of  assets  under capital leases at
December  31,  1999  and  1998,  respectively. Accumulated amortization on these
assets  is  $0  and  $584,000  at  December  31,  1999  and  1998, respectively.

NOTE  4.  ACCRUED  EXPENSES

     Accrued  expenses  comprise  the  following  (in  thousands):

<TABLE>
<CAPTION>

                                              DECEMBER 31,
                                           -----------------
                                              1999     1998
                                           ---------  ------
<S>                                        <C>        <C>
  System installation and warranty. . . .  $     817  $  583
  Accrued commissions and incentives. . .        364     538
  Accrued compensation and related items.        872     536
  Restructuring accruals. . . . . . . . .          0   1,240
  Federal, state and foreign income taxes        622     456
  Customer deposits . . . . . . . . . . .        420       0
  Other . . . . . . . . . . . . . . . . .      1,493   1,441
                                           ---------  ------
                                           $   4,168  $4,794
                                           =========  ======
</TABLE>

NOTE  5.  LINE  OF  CREDIT

     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, 1999, 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, 1999 was
$1.5  million  at  a rate of 8.75%. We expect to be in default of certain of the
covenants  at the end of the first quarter of 2000, and Venture Bank has granted
us  a  waiver  of  the  default.

NOTE  6.  CAPITAL  LEASE  OBLIGATIONS

     The  Company's  outstanding obligations under capital leases as of December
31,  1999  and  1998  were $52,000 and $114,000, respectively. These leases have
terms  of  five years and were for test equipment for the Company's applications
lab.

NOTE  7.  COMMITMENTS  AND  CONTINGENCIES

     The  Company  leases certain of its facilities and various office equipment
under  operating  leases  expiring  through 2002. The Company is responsible for
property  taxes, insurance and maintenance under the facility leases. Certain of
these leases contain renewal options. The Company subleases approximately 40,000
square feet of its facility to two other companies. One company began subleasing
in  April  1998  and  the  other  company  began  subleasing  in  December 1998.

     At  December  31, 1999, 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>
2000 . . . .  $           772  $            891
2001 . . . .              772               625
2002 . . . .              611               495
              ---------------  ----------------
                         2,155  $         2,011
              ================  ===============
</TABLE>

     Rent  expense  was  $713,000, $1,315,000 and $2,215,000 for the years ended
December  31,  1999,  1998  and  1997,  respectively. Sublease rental income was
$820,000,  $146,000  and  none  for  the years ended December 31, 1999, 1998 and
1997,  respectively.

Legal  Proceedings

     The  Company  has  been  named  as  a  defendant  in  a  claim involving an
automobile  accident  by a former employee of the Company, which resulted in the
death  of  an  individual.  General,  punitive,  and exemplary damages are being
sought  by  the  plaintiffs.  The  Company  believes  it is not at fault in this
matter,  and  has appointed legal council to defend the claim. While 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 the financial
position  or  results  of  operations  of  the  Company.

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
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

     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 are exercisable at any time until February 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.

     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.  Based  on  the Black-Scholes model, the fair market value of the
warrants  at  the  date  of  the  grant  was $53,000, which will be 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,
                                                 -----------------------------------
                                                      1999         1998       1997
                                                 -------------  ---------  ---------
<S>                                              <C>            <C>        <C>
  Numerator-Basic and diluted:
    Net loss. . . . . . . . . . . . . . . . . .  $     (1,617)  $(27,600)  $(19,336)
    Deemed dividends on preferred stock . . . .             0     (1,903)         0
                                                 -------------  ---------  ---------
      Net loss available to common shareholders  $     (1,617)  $(29,503)  $(19,336)
                                                 =============  =========  =========
  Denominator-Basic and diluted:
    Weighted average common stock outstanding .        18,134     17,248     16,860
                                                 =============  =========  =========
  Basic net loss per share. . . . . . . . . . .  $      (0.09)  $  (1.71)  $  (1.15)
                                                 =============  =========  =========
</TABLE>

     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 2,328,190 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 options to purchase 1,868,156 shares of common stock were outstanding
in  1997,  but  were  not  included in the computation of diluted loss per share
because  the  Company  has  a  net  loss  for  1997.

Stock  Option  Plan

     The  Company  has adopted the 1991 Incentive Stock Option Plan (the "Plan")
under  which  the  Board of Directors may grant incentive and nonstatutory stock
options.  The  Plan  expires ten years after adoption and 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,
1999,  the  Company  had  reserved 4,003,006 shares of common stock for issuance
under the Plan, which included 500,000 shares added to the plan in 1999. A total
of  441,638 shares remained available for future grants at December 31, 1999. At
December  31,  1997,  789,670  options  were  exercisable  at a weighted average
exercise  price of $6.50. 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.

Employee  Stock  Purchase  Plan

     The  Company  has  reserved a total of 2,350,000 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 1999. 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,  1999,  2,168,794  shares  have been issued under the plan. At
December  31,  1999,  shares available for purchase under this plan was 181,206.

Common  Stock  Purchase  Rights

     In  July 1990, the Company distributed a dividend to shareholders comprised
of  a  right  to  purchase  one  share  of  common  stock  (a  "Right") for each
outstanding  share of common stock of the Company they hold. These rights do not
become  exercisable  or  transferable  apart  from  the  common  stock until the
Distribution  Date  which  is  either  the tenth day after a person or group (a)
acquires  beneficial  ownership  of 20% or more of the Company's common stock or
(b) announces a tender or exchange offer, the consummation of which would result
in  ownership by a person or group of 30% or more of the Company's common stock.
After the Distribution Date, each Right will entitle the holder to purchase from
the  Company  one  share  of  common  stock  at  a  price  of  $28.00 per share.

     If  the  Company  is  acquired  in  a  merger or other business combination
transaction,  or  if 50% or more of its consolidated assets or earnings power is
sold,  each Right will entitle the holder to purchase at the exercise price that
number  of shares of the acquiring company having a then current market value of
two  times the exercise price of the Right. In the event that the Company is the
surviving  corporation  in  a  merger  and  the  Company's  common stock remains
outstanding,  or  in  the  event  that  an  acquiring  party  engages in certain
self-dealing  transactions,  each  Right  not  owned by the acquiring party will
entitle  the  holder  to purchase at the exercise price that number of shares of
the  Company's  common stock having a then current market value of two times the
exercise  price  of the Right. The Rights are redeemable at the Company's option
for  $.01  per  Right  prior  to  becoming  exercisable,  may  be amended at the
Company's  option  on  or  prior  to the Distribution Date and expire on July 3,
2000.

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  Plan  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, 1997 .        2,090   $ 1.75  to $8.63  $   13,751   $ 6.58
  Granted. . . . . . . . .          537    3.88  to   6.94       2,707     5.04
  Exercised. . . . . . . .         (124)   1.75  to   6.13        (364)    2.94
  Terminated . . . . . . .         (652)   2.25  to   8.63      (4,473)    6.86
                            ------------  ----------------  -----------  ------
Balance, December 31, 1997        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
                            ============  ================  ===========  ======
</TABLE>

     Options  outstanding  and currently exercisable by exercise price under the
option  plan  at  December  31,  1999  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>
  0.88 - $1.25.        707,700              3.72      $     0.90       266,370      $     0.93
  1.31 -  1.91.        660,395              3.41            1.63       201,749            1.63
  2.03 -  3.03.        855,874              2.56            2.84       618,956            2.99
  3.09 -  4.34.        400,000              4.44            3.14        26,667            3.09
  8.00 -  8.00.         15,250              1.33            8.00        15,250            8.00
  -------------  ---------------  ----------------  --------------  ------------  ------------
  0.88 - $8.00.      2,639,219              3.36      $     2.11     1,128,992      $     2.34
  =============  ===============  ================  ==============  ============  ============
</TABLE>

Stock  Compensation

     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  1999,  1998  and  1997:

<TABLE>
<CAPTION>

                               1999        1998        1997
                            ----------  ----------  ----------
<S>                         <C>         <C>         <C>
  Risk free interest rates      5.620%      5.335%      6.220%
  Expected life. . . . . .  3.3 years   3.3 years   3.5 years
  Expected volatility. . .     221.48%       61.4%       77.7%
  Expected dividend yield.          0%          0%          0%
</TABLE>

     The  weighted  average fair value of options granted in 1999, 1998 and 1997
was  $2.76,  $1.60,  and  $2.92,  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  1999,  1998  and  1997.

<TABLE>
<CAPTION>

                               1999        1998        1997
                            ----------  ----------  ----------
<S>                         <C>         <C>         <C>
  Risk free interest rates       4.95%      5.415%      5.630%
  Expected life. . . . . .   0.5 years   0.5 years   0.5 years
  Expected volatility. . .     221.48%       61.4%       77.7%
  Expected dividend yield.          0%          0%          0%
</TABLE>

     The  weighted  average fair value of those purchase rights granted in 1999,
1998  and  1997  was  $1.31,  $0.48  and  $1.80,  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>

                                                    1999      1998       1997
                                                  --------  ---------  ---------
<S>                                               <C>       <C>        <C>
  Pro forma net loss available to common
    shareholders . . . . . . . . . . . . . . . .  $(2,781)  $(32,380)  $(21,537)
  Pro forma net loss per share-basic and diluted  $ (0.15)  $  (1.88)  $  (1.28)
</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.

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  1999,  1998  and 1997, the Company
contributed  $30,000, $62,000 and $92,000, respectively, in contributions 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,
                    -----------------------------
                        1999       1998     1997
                    -----------  ------  --------
<S>                 <C>          <C>     <C>
  Interest income.  $      336   $  77   $   156
  Interest expense          (4)   (186)     (445)
  Foreign exchange         330     301    (1,107)
  Other, net . . .           7    (278)       33
                    -----------  ------  --------
                    $      669   $ (86)  $(1,363)
                    ===========  ======  ========
</TABLE>

NOTE  11.  INCOME  TAXES

     Income tax expense for the years ended December 31, 1999, 1998 and 1997 was
$177,000,  $1,000,  and  $14,844,000,  respectively.

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

<TABLE>
<CAPTION>

                                        1999      1998       1997
                                      --------  ---------  ---------
<S>                                   <C>       <C>        <C>
  Domestic loss before taxes . . . .  $(2,408)  $(23,629)  $(18,215)
  Foreign income (loss) before taxes      791       (771)    (1,121)
                                      --------  ---------  ---------
  Loss before taxes. . . . . . . . .  $(1,617)  $(27,600)  $(19,336)
                                      ========  =========  =========
</TABLE>

     In  1997,  the  income  tax  expense  consisted  of deferred federal tax of
$14,004,000  and deferred state tax of $840,000. In 1998, the income tax expense
consisted  of  current  state  tax.  In  1999, the income tax expense was due to
current  foreign  taxes.

     The  Company's  effective  tax  rate for the years ended December 31, 1999,
1998  and  1997  differs  from  the  U.S.  federal  statutory income tax rate as
follows:

<TABLE>
<CAPTION>

                                        1999   1998    1997
                                        -----  -----  ------
<S>                                     <C>    <C>    <C>
  Federal income tax at statutory rate    35%    35%     35%
  Change in valuation allowance. . . .     0      0    (372)
  Foreign income taxes . . . . . . . .   (18)     0       0
  Other. . . . . . . . . . . . . . . .     0      0       7
  Net operating loss not benefited . .   (29)   (35)      0
                                        -----  -----  ------
                                        (12)%     0%  (330)%
                                        =====  =====  ======
</TABLE>

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

<TABLE>
<CAPTION>

                                                         1999       1998
                                                       ---------  ---------
<S>                                                    <C>        <C>
  Deferred tax assets (liabilities):
    Net operating loss carryforwards. . . . . . . . .  $ 27,635   $ 26,079
    Tax credit carryforwards. . . . . . . . . . . . .     1,999      1,950
    Inventory, accounts receivable and other reserves     1,455      2,100
    Non-deductible accrued expenses and reserves. . .       422      1,100
    Depreciation and amortization . . . . . . . . . .     1,411      1,411
    Valuation allowance . . . . . . . . . . . . . . .   (32,923)   (32,640)
                                                       ---------  ---------
  Net deferred tax assets . . . . . . . . . . . . . .  $      0   $      0
                                                       =========  =========
</TABLE>

     The  deferred  tax assets valuation allowance at December 31, 1999 and 1998
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
carryback  capacity  to realize these assets. Based on this absence of objective
evidence,  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,  1999,  the  Company  had  the  following  income  tax
carryforwards  available  (in  thousands):

<TABLE>
<CAPTION>

                                     TAX REPORTING   EXPIRATION DATES
                                     --------------  ----------------
<S>                                  <C>             <C>
  U.S. regular tax operating losses  $       78,585         2006-2019
  U.S. business tax credits . . . .  $        1,914         2003-2011
  State net operating losses. . . .  $       24,724         2000-2004
</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 carryforwards 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 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%, 35% and
32%  of the Company's net sales for 1999, 1998 and 1997, respectively. Net sales
from  MeV  ion  implant  products  and services accounted for 65% and 68% of the
Company's  net  sales  in  1998  and  1997,  respectively.

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, 1999,
1998  and  1997  were  as  follows  (in  thousands):

<TABLE>
<CAPTION>

                  1999     1998     1997
                 -------  -------  -------
<S>              <C>      <C>      <C>
  United States  $ 3,830  $14,318  $21,914
  South Korea .   23,819    9,602   42,143
  Japan . . . .      216    4,566   17,700
  Rest of world      495    3,945    2,529
                 -------  -------  -------
                 $28,360  $32,431  $84,286
                 =======  =======  =======
</TABLE>

     The  Company did not hold any material long-lived assets in countries other
than  the  United  States  at  December  31,  1998  or  1997.

Major  Customers

     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%  of net sales, respectively. In 1998,
Samsung  Electronics  Company, Ltd. accounted for 68% of the Company's thin film
net  sales  and three customers, Advanced Micro Devices, Micron Technology, Inc.
and  Atmel Corp. accounted for 21%, 18% and 14% of the Company's ion implant net
sales,  respectively.  In  1997,  Samsung Electronics Company, Ltd. and Innotech
Corporation  accounted  for  47%  and  17%  of  net  sales,  respectively.

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 $18.9 million, capital equipment and
other  assets of $9.7 million, and warranty and installation liabilities of $3.6
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.

NOTE  14.  RESTRUCTURING  AND  OTHER

     In  1998,  the  Company  recorded  restructuring  and  other  charges  of
$12,707,000  related to the Varian transaction and the restructuring of the thin
film operation. Actual costs recorded against this restructuring accrual were as
follows  (in  thousands):

<TABLE>
<CAPTION>

                                                                                    CLOSING        LEGAL
                                                                                  OFFICES AND    ACCOUNTING
                                            PERSONNEL   INVENTORY    LEASEHOLD    TRANSACTION   AND BANKING
                                             CHARGES    WRITEDOWNS  IMPROVEMENTS    LOSSES         FEES
                                             (CASH)     (NON-CASH)   (NON-CASH)   (NON-CASH)      (CASH)       TOTAL
                                           -----------  ----------  ------------  -----------  ------------  ---------
<S>                                        <C>          <C>         <C>           <C>          <C>           <C>
Restructuring and other accrual . . . . .  $    1,746   $   7,393   $     1,113   $    1,402   $     1,053   $ 12,707
Amounts incurred in 1998. . . . . . . . .      (1,446)     (7,393)       (1,113)      (1,182)         (333)   (11,467)
                                           -----------  ----------  ------------  -----------  ------------  ---------
Balance at December 31, 1998. . . . . . .         300           0             0          220           720      1,240
Amounts incurred in 1999. . . . . . . . .        (136)          0             0          (77)       (1,027)    (1,240)
(Release of reserves) additional reserves        (164)          0             0         (143)          307          0
                                           -----------  ----------  ------------  -----------  ------------  ---------
                                           $        0   $       0   $         0   $        0   $         0   $      0
                                           ===========  ==========  ============  ===========  ============  =========
</TABLE>

     In  1999,  the  Company  recorded  an additional charge of $543,000 for the
final  settlement  of  a  dispute  with Varian that arose in connection with the
Varian  transaction.  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.

ITEM  9.  CHANGES  IN  AND  DISAGREEMENTS  WITH  ACCOUNTANTS  ON  ACCOUNTING AND
FINANCIAL  DISCLOSURE

     None.


                                    PART III

     Certain information required by Part III is omitted from this Annual Report
on  Form  10-K  in  that  the  Registrant will file a definitive proxy statement
within 120 days after the end of the fiscal year covered by this Report pursuant
to  Regulation  14A  relating  to  the  Registrant's  2000  Annual  Meeting  of
Shareholders  (the  "Proxy  Statement")  to be held on May 31, 2000, and certain
information  included  therein  is  incorporated  herein  by  reference.

ITEM  10.  DIRECTORS  AND  EXECUTIVE  OFFICERS  OF  THE  REGISTRANT

     The directors and executive officers of the Company, who are elected by and
serve  at  the discretion of the Board of Directors, and their ages at March 30,
2000,  are  as  follows:

<TABLE>
<CAPTION>

         NAME             AGE                          POSITION
-----------------------  ----  ------------------------------------------------------------
<S>                      <C>   <C>
William W.R. Elder. . .    61  Chairman of the Board, President and Chief Executive Officer
Thomas E. Seidel, Ph.D.    64  Executive Vice President, Chief Technical Officer
Kenneth Schwanda. . . .    42  Vice President, Finance, Chief Financial Officer
Jeff Farrell. . . . . .    52  Vice President, Engineering
Robert A. Wilson. . . .    37  Vice President, Worldwide Sales
Mario M. Rosati . . . .    53  Secretary and Director
Todd S. Myhre . . . . .    54  Director
G. Frederick Forsyth. .    56  Director
George D. Wells . . . .    64  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.

     JEFF  FARRELL  has  served as our Vice President of Engineering since March
1996. From August 1979 to March 1996, Mr. Farrell was employed by Advanced Micro
Devices,  a  semiconductor  manufacturer.

     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. Mr. Rosati is also a director of
Aehr Test Systems, a manufacturer of semiconductor test equipment; CATS Software
Inc.,  a  supplier  of  client/server  software  products  for  financial  risk
management;  Meridian  Data,  Inc., a developer of compact disc-read only memory
and  compact  disc-recordable systems and related software for both networks and
personal  computers;  Ross Systems, Inc., a supplier of enterprise-wide business
systems  and related services to companies installing open systems/client server
software  products;  and  Sanmina  Corporation,  an  electronics manufacturer of
multilayered  printed  circuit  boards, backplane assemblies, subassemblies, and
printed  circuit  board  assemblies.  Mr.  Rosati  is a member of Wilson Sonsini
Goodrich  &  Rosati,  P.C.,  general  counsel  to  the  Company.

     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  eCommerce  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
March  1999,  Mr.  Forsyth  has  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.


                                     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,  1999  and  1998

       Consolidated  Statements  of  Operations-Years Ended December 31,   1999,
       1998  and  1997

       Consolidated  Statements of Shareholders' Equity-Years Ended December 31,
       1999,  1998  and  1997

       Consolidated Statements of Cash Flows-Years Ended December 31, 1999, 1998
       and  1997

       Notes  to  Consolidated  Financial  Statements

2.     Financial  Statement  Schedule.  Financial  statement schedules have been
       omitted  because  they  are  not  applicable  or  are not required or the
       information  required  to  be  set  forth  therein  is  included  in  the
       Consolidated  Financial  Statements  or  Notes  thereto.

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,  1999.


                                   GENUS, INC.
                           ANNUAL REPORT ON FORM 10-K
                          YEAR ENDED DECEMBER 31, 1999

                                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 S.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     International  Distributor  Agreement,  dated  November  23,  1987,
         between  General  Ionex  Corporation  and  Innotech  Corporation  (1)
10.6     Distributor/Representative  Agreement,  dated  August  1,  1984,
         between  Registrant  and  Aju Exim (formerly Spirox Holding Co./You One
         Co.  Ltd.)  (1)
10.7     Exclusive  Sales  and  Service  Representative  Agreement,  dated
         October  1,  1989,  between  Registrant  and  AVBA Engineering Ltd. (3)
10.8     Exclusive  Sales  and  Service  Representative  Agreement,  dated as of
         April  1,  1990,  between  Registrant  and  Indosale  PVT  Ltd.  (3)
10.9     License  Agreement,  dated  November  23,  1987, between Registrant and
         Eaton  Corporation  (1)
10.10    Exclusive  Sales  and  Service  Representative  Agreement, dated May 1,
         1989,  between  Registrant  and  Spirox  Taiwan,  Ltd.  (2)
10.11    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)
10.12    Asset  Purchase  Agreement,  dated May  28,  1992,  by  and between the
         Registrant  and  Advantage  Production  Technology,  Inc.  (7)
10.13    License  and  Distribution  Agreement,  dated  September  8,  1992,
         between  the  Registrant  and  Sumitomo  Mutual  Industries,  Ltd.  (8)
10.14    Lease  Agreement,  dated  October  1995, for Registrant's facilities at
         Lot 62,  Four  Stanley  Tucker  Drive,  Newburyport,  Massachusetts (9)
10.15    International  Distributor  Agreement,  dated  July  18,  1997, between
         Registrant  and  Macrotron  Systems  GmbH  (12)
10.16    Credit  Agreement,  dated  August  18,  1997,  between  Registrant  and
         Sumitomo  Bank  of  California  (12)
10.17    Settlement  Agreement  and  Mutual  Release,  dated  April  20,  1998,
         between  Registrant  and  James  T.  Healy  (16)
10.18    Form  of  Change  of  Control  Severance  Agreement  (16)
10.19    Settlement  Agreement  and  Mutual Release, dated January 1998, between
         the  Registrant  and  John  Aldeborgh  (18)
10.20    Settlement  Agreement  and  Mutual Release, dated May 1998, between the
         Registrant  and  Mary  Bobel  (18)
10.21    Settlement  Agreement  and  Mutual Release, dated May 1998, between the
         Registrant  and  Fred  Heslet
21.1     Subsidiaries  of  Registrant
23.1     Consent  of  Independent  Accountants
27.1     Financial  Data  Schedule

(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.

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  30th  day  of  March  2000.

                                    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.

<TABLE>
<CAPTION>

  NAME                                  TITLE                     DATE
-------------------------  --------------------------------  --------------
<S>                        <C>                               <C>
  /s/William W.R. Elder .  Chairman of the Board, President  March 30, 2000
-------------------------
  William W.R. Elder. . .  and Chief Executive Officer

  /s/Kenneth Schwanda . .  Vice President, Finance           March 30, 2000
-------------------------
  Kenneth Schwanda. . . .  Chief Financial Officer

  /s/G. Frederick Forsyth  Director                          March 30, 2000
-------------------------
  G. Frederick Forsyth

  /s/Todd S. Myhre. . . .  Director                          March 30, 2000
-------------------------
  Todd S. Myhre

  /s/Mario M. Rosati. . .  Director                          March 30, 2000
-------------------------
  Mario M. Rosati

  /s/George D. Wells. . .  Director                          March 30, 2000
-------------------------
  George D. Wells

  /s/Robert J. Richardson  Director                          March 30, 2000
-------------------------
  Robert J. Richardson
</TABLE>


                                  EXHIBIT 23.1

                       CONSENT OF INDEPENDENT ACCOUNTANTS





     We  hereby  consent  to  the incorporation by reference in the Registration
Statements  on  Form S-8 (No. 33-28394, 33-38657, 33-56192, 333-29999, 333-70815
and  333-84837)  and Form S-3 (No. 333-48021) of Genus, Inc. of our report dated
February  9,  2000  relating  to the financial statements, which appears in this
Form  10-K.


/s/  PRICEWATERHOUSECOOPERS  LLP
PricewaterhouseCoopers  LLP

San  Jose,  California
MARCH  30,  2000

[ARTICLE]     5
[CIK]     0000837913
[NAME]     GENUS, INC.
[MULTIPLIER]     1000
[CURRENCY]     USD
<TABLE>
<CAPTION>
<S>                                     <C>
[PERIOD-TYPE]                           YEAR
[FISCAL-YEAR-END]                       DEC-31-1999
[PERIOD-START]                          JAN-01-1999
[PERIOD-END]                            DEC-31-1999
[EXCHANGE-RATE]                         1
[CASH]                                        6739
[SECURITIES]                                     0
[RECEIVABLES]                                 7870
[ALLOWANCES]                                  (241)
[INVENTORY]                                   7266
[CURRENT-ASSETS]                             22517
[PP&E]                                       27942
[DEPRECIATION]                              (23408)
[TOTAL-ASSETS]                               27744
[CURRENT-LIABILITIES]                         8366
[BONDS]                                          0
[PREFERRED-MANDATORY]                            0
[PREFERRED]                                      0
[COMMON]                                    101042
[OTHER-SE]                                  (81664)
[TOTAL-LIABILITY-AND-EQUITY]                 27744
[SALES]                                      28360
[TOTAL-REVENUES]                             28360
[CGS]                                        16628
[TOTAL-COSTS]                                30469
[OTHER-EXPENSES]                                 0
[LOSS-PROVISION]                                 0
[INTEREST-EXPENSE]                               0
[INCOME-PRETAX]                              (1440)
[INCOME-TAX]                                   177
[INCOME-CONTINUING]                          (1617)
[DISCONTINUED]                                   0
[EXTRAORDINARY]                                  0
[CHANGES]                                        0
[NET-INCOME]                                 (1617)
[EPS-BASIC]                                 (.09)
[EPS-DILUTED]                                 (.09)
</TABLE>