SECURITIES AND EXCHANGE COMMISSION
                               Washington, D.C.  20549


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

                                     FORM 10-QSB




(Mark one)
[x]    Quarterly Report under section 13 or 15(d) of the Securities 
       Exchange Act of 1934

                       For the quarter ended June 30, 1998

[ ]    Transition Report under section 13 or 15(d) of the Securities 
       Exchange Act of 1934

                              Commission File No. 0-27908

                      Semiconductor Laser International Corporation
  ------------------------------------------------------------------------
       (Exact Name of Small Business Issuer as Specified in its Charter)

             Delaware                                      16-1494566
----------------------------------------              -------------------
(State or other Jurisdiction of                         (I.R.S. Employer
Incorporation or Organization)                         Identification No.)

15 Link Drive, Binghamton, New York                          13904
----------------------------------------              -------------------
(Address of principal executive offices)                   (Zip code)

Registrant's telephone number, including area code: (607) 722-3800

     Check whether the issuer (1) 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 a 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    [ ]

     As of July 31, 1998, there were outstanding 10,039,552 shares of the 
issuers common stock, par value $.01 per share.

Transitional Small Business Disclosure Format

               Yes    [ ]                        No    [x]

<PAGE>
                                       1

                         Part I. Financial Information

Item 1. Financial Statements


                   Semiconductor Laser International Corporation

                                   Balance Sheet
<TABLE>
<CAPTION>

                                                   December 31,      June 30,
                                                       1997            1998 
                                                                    (unaudited)
                                                   ------------     ------------
<S>                                               <C>              <C>
Assets
Current assets
  Cash                                            $  1,934,574     $  1,059,549
  Accounts Receivable, net of allowance for
   doubtful accounts of $49,610 and $49,610,             
   respectively                                        201,070          506,572
  Inventory                                            139,201          301,887
  Prepaid expenses and other assets                     70,717            5,358
                                                   ------------     ------------
                  Total current assets               2,345,562        1,873,366

Property, plant and equipment, net                   2,719,816        2,769,783
Intangible assets, net                                     674              337
Deposits and other assets                              591,320          317,544
                                                   ------------     ------------
                  Total assets                    $  5,657,372     $  4,961,030   
                                                   ============     ============

Liabilities and Shareholders' Equity
Current liabilities
  Accounts payable                                $    512,447     $    601,113
  Accrued expenses and other liabilities               161,545           59,507
  Current portion of long-term debt                     36,394           35,196
  Notes payable under line of credit arrangement         -              300,000
                                                   ------------     ------------
                  Total current liabilities            710,386          995,816

Long-term debt                                         798,283          781,437
Accrued royalty payments                               100,000          100,000
                                                   ------------     ------------
                  Total liabilities                  1,608,669        1,877,253
                                                   ------------     ------------
Commitments and contingencies (Note 5)

Shareholders' Equity
Preferred stock, $.01 par value, 5,000,000 shares
  authorized; none issued and outstanding at
  December 31, 1997 and March 31, 1998                   -                -
Common stock, $.01 par value, 20,000,000 shares
 authorized, 8,389,552 issued and outstanding
 at December 31, 1997, and 10,039,552 issued
 and outstanding at June 30, 1998                       83,896          100,396 
Treasury stock                                        (248,241)        (248,241)
Additional paid-in capital                          17,035,225       18,063,070
Accumulated deficit                                (12,822,177)     (14,831,448)
                                                   ------------     ------------
                  Total Shareholders' Equity         4,048,703        3,083,777
                                                   ------------     ------------
                  Total liabilities and 
                    Shareholders' Equity          $  5,657,372     $  4,961,030   
                                                   ============     ============
</TABLE>

                  See accompanying notes to financial statements      

<PAGE>
                                       2

                  Semiconductor Laser International Corporation 

                             Statement of Operations

<TABLE>
<CAPTION>
                                                  Three Months Ended               Six Months Ended
                                                       June 30,                        June 30,
                                                 1997             1998           1997            1998
                                              (unaudited)(1)   (unaudited)    (unaudited)(1)  (unaudited)
                                              -----------      -----------    -----------     -----------
<S>                                           <C>              <C>            <C>             <C>
Net sales                                     $   178,528      $   517,224    $   178,528     $   774,906

Cost of sales                                    (484,212)        (784,511)      (484,212)     (1,436,944)
                                              -----------      -----------    -----------     -----------
     Gross margin                                (305,684)        (267,287)      (305,684)       (662,038)

Operating expenses:

Research and development expenses                 372,525            -            881,341           7,273
Sales and marketing expenses                      107,864          176,172        245,542         303,446
General and administrative expenses               605,124          558,218      1,027,241       1,068,524
                                               ----------       ----------    -----------     -----------
         Loss from operations                   1,391,920        1,001,677      2,459,808       2,041,281

Interest income                                    32,790           15,156         76,280          32,010
                                               ----------       ----------    -----------     -----------
         Net loss                               1,359,130          986,521      2,383,528       2,009,271
                                               ==========       ==========    ===========     ===========

Net loss per share                               ($0.39)          ($0.11)        ($0.68)         ($0.23)
                                               ==========       ==========    ===========     ===========

Weighted average shares outstanding             3,500,030        8,788,453      3,491,483       8,590,104
                                               ==========       ==========    ===========     ===========

(1) Reclassified for comparative purposes (see Note 4).


</TABLE>



                  See accompanying notes to financial statements

<PAGE>
                                       3

                  Semiconductor Laser International Corporation

                            Statement of Cash Flows

<TABLE>
<CAPTION>
                                                        Six Months Ended
                                                            June 30,           
                                                      1997            1998     
                                                   (unaudited)     (unaudited)   
                                                   -----------     -----------  
<S>                                                <C>             <C>         
Cash flows from operating activities:
Net loss                                           $(2,383,528)    $(2,009,271)
Adjustments to reconcile net loss to
  net cash used in operating 
  activities:
   Depreciation and amortization                        59,347         101,509       
   Amortization of deferred expenses                    23,294           -              
   Gain on sale of equipment                           (17,364)          -            
Change in assets and liabilities:
   Increase in accounts
     receivable, net                                  (125,024)       (305,502)      
   Increase in inventory                               (10,985)       (162,686)
   Decrease in prepaid expenses
     and other assets                                    -              65,360
   (Increase)decrease in deposits
     and other assets                                 (309,049)        273,776 
   Increase in accounts
     payable                                           271,647          88,666
   Decrease in accrued 
     expenses and other liabilities                    (53,224)       (102,038) 
                                                   -----------     -----------  
Net cash used in operating activities               (2,544,886)     (2,050,186) 
                                                   -----------     -----------   
Cash flows from investing activities:
Purchase of property, plant and 
   equipment                                        (2,818,291)       (151,140)
Sale of equipment                                    2,676,855           -
                                                   -----------     -----------   
Net cash provided from (used for)
   investing activities                               (141,436)       (151,140)  
                                                   -----------     -----------  
Cash flows from financing activities
Proceeds from long-term debt                            31,306         300,000  
Payments on long-term debt                             (15,971)        (18,044) 
Issuance of stock, net of expenses                         493       1,044,345
                                                   -----------     -----------  
Net cash provided by (used for) financing
   activities                                           15,828       1,326,301   
                                                   -----------     -----------  
Net (decrease) increase in cash                     (2,670,494)       (875,025)
Cash at beginning of period                          4,266,168       1,934,574
                                                   -----------     -----------  
Cash at end of period                              $ 1,595,674       1,059,549  
                                                   ===========     ===========                                     
       
</TABLE>


                  See accompanying notes to financial statements

<PAGE>
                                        4

                  Semiconductor Laser International Corporation


                          Notes to Financial Statements
                                  June 30, 1998
                                   (Unaudited)


1. Organization

   Semiconductor Laser International Corporation (the"Company") was
   incorporated in New York State in September 1993 (inception) and,
   subsequently, reincorporated in Delaware in September 1997, to produce high
   power semiconductor diode laser wafers and bars ("HPDLs"), and to market
   these products worldwide.

   The Company's primary activities since incorporation as a development stage
   enterprise had been research and development, business and financial
   planning, raising capital and constructing and equipping its manufacturing
   facility.  The Company had previously relied on facilities provided through
   the Wright Cooperative Research and Development Agreement (CRDA) with the
   U.S. Air Force for the development and quality control testing of its HPDLs
   The CRDA expired in 1996 and was not renewed.  The Company has since
   completed the construction of its manufacturing facility in Binghamton, New
   York, where it is conducting all activities.

   Effective April 1, 1997, the Company ceased operating as a development stage
   enterprise as it began commercial production of its products.

2. Financial Resources and Liquidity

   The Company has incurred net losses from inception (September 21, 1993) and
   has an accumulated deficit at June 30, 1998 of $14,831,448.  Such losses
   have resulted primarily from the Company's activities as a development stage
   enterprise and have been financed primarily from proceeds from the Company's
   initial public offering and private equity financing.  The Company expects
   that its cash and working capital requirements will continue to be
   significant as its operations expand.  The Company expects that such cash
   and working capital requirements will be satisfied through a combination of
   revenue growth and additional private equity financing.  In this regard, the
   Company, on June 8,1998, completed a private equity financing in the
   amount of $1,237,500 and intends to use the net proceeds of approximately
   $1,044,000 for working capital requirements.  In the event that further
   revenue growth is not attained and/or the additional private equity
   financing is not obtained, the Company has the ability and intends to
   undertake actions to reduce operating expenses.


<PAGE>
                                       5

3. Basis of Presentation

   The accompanying unaudited financial statements have been prepared by the
   Company.  Certain information and footnote disclosures normally included in
   financial statements prepared in conformity with generally accepted
   accounting principles have been condensed or omitted.  In the opinion of the
   Company's management, the disclosures made are adequate to make the
   information presented not misleading, and the financial statements contain
   all adjustments necessary to present fairly the financial position as of
   June 30, 1998 and the results of operations and cash flows for the six
   months ended June 30, 1998 and 1997.  The results of operations for the
   six months ended June 30, 1998 are not necessarily indicative of the
   results to be expected for the full year.

4. Summary of Significant Accounting Policies

   Use of estimates

   The preparation of financial statements in conformity with generally
   accepted accounting principles requires management to make estimates and
   assumptions that affect the reported amount of assets and liabilities and
   disclosure of contingent assets and liabilities as of the date of the
   financial statements and the reported amounts of revenue and expenses during
   the period.  Actual results could differ from those estimates.

   Reclassification 

   Certain costs previously reported in 1997 as general and administrative
   costs have been reclassified to cost of sales and research and development
   costs in order to conform with the current period classification.  This
   reclassification had no effect on previously reported net income or earnings
   per share.

   Inventory

   Inventory is valued at the lower of cost or market.  Cost is determined by
   the first in, first out (FIFO) method.

   Depreciation and amortization

   Property , plant and equipment are recorded at cost and depreciated over the
   assets' estimated useful lives ranging from three to twenty years.
   Depreciation is computed using the straight-line method for financial
   reporting and the modified accelerated cost recovery system for income tax
   purposes.  Expenditures for major renewals and betterments that extend the
   useful lives of property, plant and equipment are capitalized.  Expenditures
   for maintenance and repairs are charged to expense as incurred.

   Intangible assets are amortized using the straight-line method over five
   years.

   Impairment of long-lived assets

   Assessments of the recoverability of long-lived assets are conducted when
   events or circumstances occur that indicate that the carrying value of the
   asset may not be recoverable.  The measurement of impairment is based on the
   ability to recover such carrying value from the future undiscounted cash
   flows of related operations.

<PAGE>
                                       6

   Revenue recognition

   Revenue recognition is based on the terms of the underlying sales agreements
   (purchase orders or contracts).  Revenues for fixed price milestone
   contracts is recognized upon the completion and billing of the milestone.
   Customers entering into long-term contracts with the Company include the
   U. S. Government.

   Research and development

   Research and development costs are expensed as incurred.  Included in
   research and development costs are the cost of prototypes which amounted
   to $881,341 for the six-month period ended June 30, 1997.  No such costs
   were incurred for the six-month period ended June 30, 1998.

   Income taxes

   The Company follows the asset and liability method for deferred income
   taxes.  This method provides that deferred tax assets and liabilities are
   recorded using currently enacted tax rates applied to the differences
   between the tax bases of assets and liabilities and their carrying values
   for financial statement purposes.  A valuation allowance is recorded when it
   is more likely than not that deferred tax assets will not be realized.

   Net loss per share

   In December 1997, the Company adopted the provisions of Statement of
   Financial Accounting Standards No. 128, Earnings per Share ("FAS 128")
   which requires the presentation of basic and diluted earnings per share in
   a Company's financial statements for reporting periods subsequent to
   December 15, 1997.  As required by SEC Staff Accounting Bulletin No. 98,
   previously reported per share information contained in the accompanying
   consolidated financial statements has been restated to give effect to the
   adoption of FAS 128.  There was no impact as a result of this retroactive
   adoption of FAS 128.

   Net loss per share is computed using the weighted average number of common
   shares outstanding.

   As of June 30, 1998, the Company had outstanding warrants and options to
   purchase 2,946,334 and 141,305 shares of common stock, respectively, which
   are not included in the calculation of earnings per share for the six
   months ended June 30, 1998, and would not be included in such calculation
   due to the anti-dilutive nature of these instruments.

<PAGE>
                                       7

5. Commitment, Contingencies and Other Matters

   Operating Leases

   In October 1996, the Company entered into a master equipment lease 
   agreement with FINOVA Technology Finance, Inc. ("FINOVA").  The agreement
   provides for the sale and leaseback by the Company of up to $3,850,000 of
   equipment, furnishings and fixtures.  As part of the consideration for
   the agreement, the Company issued a warrant certificate for 58,334
   warrants, entitling FINOVA to purchase a corresponding number of shares
   of the Company's Common Stock at $5.00 per share.  The warrants, which were
   valued at $167,710 at the time of issuance, are currently exercisable and
   are being amortized over the term of the lease.

   Rent expense under non-cancellable operating leases, including the FINOVA
   leases, was $262,662 for the six months ended June 30, 1998.

   Future minimum payments under non-cancellable operating leases, including 
   the FINOVA lease agreement, at June 30, 1998, are as follows:

<TABLE>
<CAPTION>

                                 Year ending
                                 December 31,      Commitment
                                -------------     -------------
<S>                                 <C>            <C>
                                    1998           $  525,000
                                    1999            1,051,000
                                    2000            1,051,000
                                    2001              263,000
                                                  -------------
                                                   $2,890,000
                                                  =============

</TABLE>

   Litigation

   The Company settled all outstanding issues in December 1997 involving
   Theodore Konopelski, a former director, employee and officer that the
   Company terminated for cause. Mr. Konopelski had disputed such termination.
   The settlement required a cash payment, which amount was not material to the
   financial position or results of operations of the Company.

   The Company is currently engaged in litigation with a former employee who
   the Company sought action against relative to a breach of confidentiality
   and defamation of character.  The former employee has responded with a
   counter claim alleging defamation of character and is seeking $500,000 in
   damages.  The litigation is presently in the discovery stage.  The Company
   believes the counter claim is without merit and is vigorously defending such
   action. The Company believes that the ultimate outcome of such action will
   not have a material impact on the financial condition or results of
   operations of the Company.

<PAGE>
                                       8

   The Company settled all outstanding issues in connection with litigation with
   an individual who alleged that he never received approximately 40,000 shares
   of Common Stock he allegedly purchased from the Company. The settlement
   required a cash payment, which amount was not material to the financial
   position or results of operations of the Company.

   Financing

   On June 8, 1998, The Company completed a private placement of 1,650,000
   shares of Common Stock at an aggregate purchase price of $1,237,500.  After
   deduction of Placement Agent's commissions and expenses of $193,125, the net
   proceeds to the Company was approximately $1,044,375.  As a condition of the
   private placement, the Company, on July 31,1998, filed with the Securities
   and Exchange Commission ("SEC") for the registration of the securities
   underlying the private placement.  The registration is currently pending
   with the SEC.

   Notes Payable

   The Company has a line of credit secured by accounts receivable and
   inventory in the amount of $1,000,000.  This line of credit bears interest
   at the rate of prime plus 1.5% (prime being 8.5% at June 30, 1998) on the
   outstanding balance.  At June 30, 1998, $300,000 was outstanding on this
   line of credit on which the Company is required to pay interest only.
   Principal repayments are required to the extent that the borrowing base
   falls below the level outstanding.  The Line matures March 31, 1999.

<PAGE>
                                       9

Item 2.  Managements Discussion and Analysis or Plan of Operation         

Certain statements in this Report under the caption "Management's
Discussion and Analysis and Plan of Operation" and elsewhere constitute or may
constitute "forward-looking statements" within the meaning of the Private
Securities Litigation Reform Act of 1995 (the "Litigation Reform Act"),
including, without limitation, statements regarding future cash requirements.
The Company desires to avail itself of certain "safe harbor" provisions of the
Litigation Reform Act and is therefore including this special note to enable
the Company to do so. Such forward-looking statements involve known and unknown
risks, uncertainties and other factors which may cause the actual results,
performance or achievements of the Company, or industry results, to be
materially different from any future results, performance, or achievements
expressed or implied by such forward-looking statements. Such factors include,
among others, the following: inability to obtain additional financing on
acceptable terms, manufacturing delays due to equipment or technical problems,
delays in product development; failure to receive or delays in receiving
regulatory approval; lack of enforceability of patents and proprietary rights;
general economic and business conditions; industry capacity; industry trends;
demographic changes; competition; material costs and availability; the loss of
any significant customers; changes in business strategy or development plans;
quality of management; availability, terms and deployment of capital;
business abilities and judgment of personnel; availability of qualified
personnel; changes in, or the failure to comply with, government
regulations; and other factors referenced in this report.

Overview

During 1997, the Company began the commercialization of many of its
proposed products.  Since its inception in 1993, the Company had been
engaged primarily in research and development, business and financial
planning, recruitment of key management and technical personnel, raising
capital to fund operations and the development of its HPDL product
prototypes.  The Company has since completed the construction and equipping of
the first phase of its manufacturing facility and has begun the
commercialization of its products and the generation of sales revenues.  The
Company is focused on increasing sales in order to fully utilize its production
capacity. Increasing sales levels and higher utilization of production capacity
are critical to the Company's financial success.  Financial resources and
liquidity during this period of growth are of utmost importance and concern to
the Company.  The Company has a sales order backlog of approximately $2,600,000
as of August 1, 1998 with requested customer delivery dates principally through
the end of 1998.  The Company has the production capacity to ship a substantial
portion of this backlog in 1998.  The Company also continues to secure
licensing agreements for the production, marketing and sale of technologically
improved products which complement their existing product line.  In connection
therewith, the Company continues to advance under the structured program
provided as part of the exclusive licensing agreement with Northwestern
University. The Company had previously been granted the right to produce,
market and sell aluminum free HPDLs worldwide. Laboratory research has
demonstrated vast improvements in lifetime with devices produced using this
technology. The Company believes the aluminum free technology will give the
Company both a significant technological advantage over the competition as well
as a significantly broader market base within which the Company can sell its
products. It is believed that it will take six to nine months to commercialize
and market this technology, although no assurance can be provided that the
Company can achieve these goals.  Coherent, Inc., a competitor of the Company,
has advised the Company and Northwestern University that it believes that the
patent rights under the Northwestern License do not cover the manufacture of
aluminum free products other than by MOCVD.  Alternatively, Coherent, Inc.
claims that its products do not infringe on the Northwestern patents.  The
Company intends to enforce its rights under the Northwestern License.

<PAGE>                                     
                                       10

The manufacture of semiconductor lasers such as those sold by the Company is
a highly complex and precise process, requiring production in a highly
controlled and clean environment with the utilization of materials free of
defects and contamination.  These factors have a significant impact on
production yields and product reliability which in turn affect operating
results and future customer acceptance.  The Company as well as other
semiconductor laser manufacturers have, from time to time, experienced
technical production problems which have resulted in adverse financial
consequences.  The Company believes it has taken the appropriate steps in its
development to address such problems, although no assurance can be given that
the Company's systems, procedures, procurement efforts and production process
are such that these problems will not be experienced in the future.  

Since the onset of full commercial production, the Company, on occasion, has
been unable to manufacture certain products in quantities sufficient to meet
the demands of its existing customer base and that of new customers based upon
equipment and/or other technical problems arising at various points during the
production process.  While at this time the Company is not experiencing any
significant technical manufacturing problems, there can be no assurance that
technical manufacturing problems could not arise in the future.  The recent
growth in the Company's product demand and the expansion in the scope of its
operations has placed considerable strain on Company management, financial,
manufacturing and other resources and has required the Company to continually
improve a variety of operating, financial and other systems.  There can be no
assurance that any existing or new systems, procedures or controls will be
adequate to support the Company's operations or that its systems, procedures
and controls will be designed, implemented or improved in a cost effective
and timely manner.  Lack of financial resources to implement, improve and
expand such systems, procedures and controls in an efficient manner and at a
pace consistent with the Company's business could have a material adverse
impact on the Company's business and results of operations.
                                   
Results of Operations

Effective April 1, 1997, the Company was no longer considered to be a
Development Stage Enterprise.  During the period in which the Company was
considered a Development Stage Enterprise, sales of prototype units and the
cost associated therewith were offset against research and development
expenses.

Three months ended June 30, 1998, compared to three months ended June 30, 1997.

Sales were $517,224 for the three months ended June 30, 1998 as compared to
$178,528 for the same period in the prior year.  The increase in sales is the
result of increased demand for the Company's products and the improvement in
the Company's production process which facilitated increased shipments of
product.  Also, the increase is a result of being in full production during the
three months ended June 30, 1998 vs. being in a transition from development
stage to commercial production during the three months ended June 30,1997.

Cost of sales for the three months ended June 30,1998 increased approximately
$300,000 as a result of an increase in raw materials attributable to increased
product sales, increases in depreciation expense charged to cost of sales as a
result of the purchase of additional manufacturing equipment and increased
levels of production labor to support the growth in sales.  Negative gross
margin decreased as the Company increased its production levels whereby a
greater level of fixed overheads are being covered by sales.

Research and development expenses for the three months ended June 30, 1998
decreased approximately $372,000 as compared to the three months ended
June 30, 1997 as a result of the Company moving from the development stage to
full commercial production during the second quarter of 1997. Certain
production costs reflected as research and development for the three months
ended June 30, 1997 in accordance with development stage accounting practices
are now reflected as cost of sales in accordance with accounting practices
followed by commercially operating entities. Previous levels of research and
development expenses were associated primarily with the Company being in the
development stage wherein all costs associated with the development of the
production process along with the cost and revenues associated with prototype
units were charged to research and development.

Sales and Marketing expenses increased approximately $69,000 for the three
months ended June 30, 1998 as compared to the same period in 1997 primarily
the result of increased marketing activity, including media advertisement,
trade show participation and the in-house development of marketing brochures
and catalogues.

General and administrative expenses decreased approximately $47,000 for the
Three months ended June 30, 1998 as compared to the same period in the prior
year primarily as a result of decreases in payroll costs associated with fewer
employees performing general and administrative functions, decreases in
professional fees, primarily legal, as a result of decreased litigation
activities and a decrease in employee recruiting costs.  These decreases were
offset by increases in liability insurance premiums, increases in interest
expense due to higher levels of debt outstanding primarily occasioned by the
need for additional working capital, increases in repair and maintenance
expenses due to increased business activity, and increased utility costs
occasioned by not only rate increases but also usage volume increases
associated with increased business activity.

Interest income decreased for the three months ended June 30, 1998 as compared
to the three months ended June 30, 1997, as a result of lower cash balances
available for investment.

Six months ended June 30, 1998, as compared to the six months ended
June 30, 1997.


Sales for the six months ended June 30, 1998 increased approximately $600,000
over the same period in the prior year as a result of the Company being in full
production for all six months in 1998 vs. being in the development stage during
the first three months of 1997.  At such time, prototype sales were credited to
research and development expenses.  The increase in sales is also attributable
to increased recognition of the Company's products in the market place, the
culmination of marketing efforts during 1997.

Cost of sales for the six months ended June 30, 1998, increased approximately
$953,000 over the six months ended June 30, 1997, as a result of the costs
associated with increased sales and an increase in the absolute costs charged
to cost of sales during the period.  During the same period in the prior year,
the Company was in the development stage and certain costs were recognized as
research and development expense as opposed to cost of sales.

Research and development costs decreased approximately $874,000 primarily as a
result of recognition of manufacturing costs as cost of sales for the full six
months ended June 30, 1998 vs. recognition of such costs as research and
development during the period in 1997 when the Company was in the development
stage. During the six months ended June 30, 1998, the Company has
incurred minimal amounts of research and development costs as a result of an
emphasis on the production of existing product lines.

Sales and marketing expense increased approximately $60,000 for the six months
ended June 30, 1998 as compared to the six months ended June 30, 1997 primarily
as a result of increased costs associated with participation in trade shows and
a write-off of previously deferred expenses associated with a canceled
contract which was entered into in 1997 to provide services through November
1998.

General and administrative expenses increased approximately $40,000 for the six
months ended June 30, 1998 as compared to the same period in the prior year
primarily as a result of increases in liability insurance premiums, increases
in interest expense due to higher levels of debt outstanding, increases in
repairs and maintenance expenses due to increases in business activity,
increases in utility costs and increases in payroll and payroll related costs.
These increases were offset by decreases in professional fees, primarily legal
associated with litigation and patent activities and decreases in employee
recruiting and relocation costs.

Interest income decreased as a result of lower cash balances available for
investment.


Liquidity and Capital Resources

The Company's cash and cash equivalents at June 30, 1998 were $1,059,449 as
compared to $1,934,574 at December 31, 1997, a net decrease of $875,125 for
the six months ended June 30, 1998.  The decrease is the result of
$2,050,106 used in operating activities, $151,140 used in investing activities
and $1,326,301 provided by financing activities.

The Company has available $700,000 of a secured line of credit in the amount of
$1,000,000 for purposes of providing working capital, if necessary.  The line
bears interest at prime plus 1.5% on the used portion and matures March 31,
1999.

<PAGE>
                                       12

To date, the Company has experienced significant losses, which losses are
continuing. The Company believes that on an earnings basis it can achieve
break even on monthly sales of approximately $550,000.  The Company believes it
will begin to achieve this level of sales at some point prior to the end of
1998.  There is no assurance that this projection will be met or that profits
will be achieved and/or positive cash flow will be achieved.  Until such time,
working capital must be obtained from equity financings and or borrowings or
the Company must undertake actions to reduce operating expenses. 

<PAGE>
                                       13


                          PART II. - OTHER INFORMATION

Item 1. Legal Proceedings.

     The Company is involved in litigation described in Note 5 in the 
     financial statements.  This litigation does not involve more than
     10% of the Company's assets


Item 2. Changes in Securities and Use of Proceeds.

     None


Item 3. Defaults Upon Senior Securities.

     None


Item 4. Submission of Matters to a Vote of Security Holders.

     None


Item 5. Other Information.

     None


Item 6. Exhibits and Reports on Form 8-K.

         (a)   Exhibits.

               No. 27   Financial Data Schedule

         (b)   Reports on Form 8-K.
               
                     None

<PAGE>
                                         14

                                 SIGNATURES

Pursuant to the requirements of the Securities and Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the 
undersigned thereto duly authorized.


                    Semiconductor Laser International Corporation
                    ---------------------------------------------
                                     (Registrant)



Date: August 10, 1998                By:/s/ Geoffrey T Burnham
                                        ----------------------------
                                        Geoffrey T. Burnham
                                        Chairman, President and 
                                          Chief Executive Officer
                                          (principal executive officer
                                           and principal financial and
                                           accounting officer)