SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 10-Q

(MARK  ONE)

[X]     QUARTERLY  REPORT  PURSUANT  TO  SECTION  13  OR 15(D) OF THE SECURITIES
EXCHANGE  ACT  OF  1934
FOR  THE  QUARTERLY  PERIOD  ENDED  MARCH  31,  1999  OR

[  ]     TRANSITION  REPORT  PURSUANT  TO  SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE  ACT  OF  1934
FOR  THE  TRANSITION  PERIOD  FROM  ___  TO  ___

COMMISSION  FILE  NUMBER  0-17139

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

                CALIFORNIA                      94-279080
     (State  or  other  jurisdiction  of     (I.R.S.  Employer
     incorporation  or  organization)        Identification  No.)

     1139  KARLSTAD  DRIVE,  SUNNYVALE,  CALIFORNIA     94089
     (Address  of  principal  executive  offices)     (Zip  code)

                                 (408) 747-7120
              (Registrant's telephone number, including area code)

                                 NOT APPLICABLE
    (Former name, former address and former fiscal year, if changed since last
                                     report)

Indicate by check mark whether the registrant (1) has filed all reports required
to  be  filed  by  Sections  13  or 15(d) of the Securities Exchange Act of 1934
during  the  preceding  12  months  (or  for such 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  the  number  of  shares outstanding of each of the issuer's classes of
common  stock,  as  of  the  latest  practicable  date:

Common  shares  outstanding  at  May  7,  1999:           18,113,791
                                                    ----------------

<PAGE>

                         PART I.  FINANCIAL INFORMATION


ITEM  1.  FINANCIAL  STATEMENTS

<TABLE>
<CAPTION>
                            GENUS, INC. AND SUBSIDIARIES
           CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
                                    (UNAUDITED)

                   (AMOUNTS IN THOUSANDS, EXCEPT PER SHARE DATA)

                                                       THREE MONTHS ENDED
                                                            MARCH 31,
                                                     --------------------
                                                        1999       1998
                                                     ----------  --------
<S>                                                  <C>         <C>
Net sales                                            $   5,953   $ 7,238 

Costs and expenses:
  Cost of goods sold                                     3,604     6,941 
  Research and development                               1,203     3,332 
  Selling, general and administrative                    1,865     4,223 
                                                     ----------  --------
    Income (loss) from operations                         (719)   (7,258)

Other, net                                                 108      (156)
                                                     ----------  --------
  Net Income (loss)                                       (611)   (7,414)

Deemed dividends on preferred stock                          0    (1,829)
                                                     ----------  --------

Net income (loss) available to common shareholders   $    (611)  $(9,243)
                                                     ==========  ========

Basic and diluted net loss available to common
shareholders per common share                            (0.03)    (0.54)
                                                     ==========  ========

Shares used in per share calculation                    17,865    17,125 
                                                     ==========  ========

Comprehensive income (loss)                          $    (592)  $(7,225)
                                                     ==========  ========
<FN>
The  accompanying  notes  are  an  integral  part  of  these  financial statements.
</TABLE>

<PAGE>

<TABLE>
<CAPTION>
                                GENUS, INC. AND SUBSIDIARIES
                                 CONSOLIDATED BALANCE SHEETS
                                        (UNAUDITED)

                        (AMOUNTS IN THOUSANDS, EXCEPT PER SHARE DATA)

                                                        MARCH 31, 1999    DECEMBER 31, 1998
                                                       ----------------  -------------------
<S>                                                    <C>                   <C>
ASSETS
Current assets:
  Cash and cash equivalents                            $         7,258       $        8,125 
  Accounts receivable (net of allowance for doubtful
  accounts of $499 in 1999 and $500 in 1998)                     9,470               13,008 
  Inventories                                                    5,199                5,338 
  Other current assets                                             262                  379 
                                                       ----------------      ---------------
    Total current assets                                        22,189               26,850 

  Property and equipment, net                                    4,462                4,659 
  Other assets, net                                                332                  318 
                                                       ----------------      ---------------
    Total assets                                       $        26,983       $       31,827 
                                                       ================      ===============

LIABILITIES
Current liabilities:
  Short-term bank borrowings                           $             0       $        4,000 
  Accounts payable                                               2,821                2,193 
  Accrued expenses                                               3,935                4,794 
  Current portion of long-term debt and
  capital lease obligations                                         52                   64 
                                                       ----------------      ---------------
    Total current liabilities                                    6,808               11,051 

Long-term debt and capital lease obligations,
less current portion                                                41                   50 
                                                       ----------------      ---------------
    Total liabilities                                            6,849               11,101 
                                                       ----------------      ---------------

Redeemable Series B Convertible Preferred
Stock, no par value:
  Authorized 28,000 shares;
  Issued and outstanding, none (1999) and
  16,000 shares (1998), liquidation preference,
  none (1999) and $50 per share (1998)                               0                  773 
                                                       ----------------      ---------------

SHAREHOLDERS' EQUITY
Common stock, no par value:
  Authorized 50,000,000 shares;
  Issued and outstanding 18,113,791 shares at
  March 31, 1999 and 17,361,162 shares at
  December 31, 1998                                            100,622               99,849 
Accumulated deficit                                            (78,866)             (78,255)
Accumulated other comprehensive loss                            (1,622)              (1,641)
                                                       ----------------      ---------------
  Total shareholders' equity                                    20,134               19,953 
                                                       ----------------      ---------------
    Total liabilities, redeemable preferred stock,
    and shareholders' equity                           $        26,983       $       31,827 
                                                       ================      ===============
<FN>
The  accompanying  notes  are  an  integral  part  of  these  financial  statements.
</TABLE>

<PAGE>

<TABLE>
<CAPTION>
                           GENUS, INC. AND SUBSIDIARIES
                       CONSOLIDATED STATEMENTS OF CASH FLOWS
                                    (UNAUDITED)

                   (AMOUNTS IN THOUSANDS, EXCEPT PER SHARE DATA)

                                                                THREE MONTHS ENDED
                                                                    MARCH  31,
                                                                ------------------
                                                                  1999      1998
                                                                --------  --------
<S>                                                             <C>       <C>
Cash flows from operating activities:
  Net income (loss)                                             $  (611)  $(7,414)
  Adjustments to reconcile net income (loss)
  to net cash from operating activities:
    Depreciation and amortization                                   371     1,261 
    Provision for doubtful accounts                                  (1)        6 
    Changes in assets and liabilities:
      Accounts receivable                                         3,538     7,663 
      Inventories                                                   139    (5,340)
      Accounts payable                                              628       879 
      Accrued expenses                                             (859)   (1,540)
      Other, net                                                    103      (237)
                                                                --------  --------
        Net cash used in operating activities                     3,308    (4,722)
                                                                --------  --------

Cash flows from investing activities:
  Acquisition of property and equipment                            (174)     (373)
                                                                --------  --------
    Net cash used in investing activities                          (174)     (373)
                                                                --------  --------

Cash flows from financing activities:
  Proceeds from issuance of common stock                              0        16 
  Proceeds from issuance of preferred stock and warrants, net         0     4,815 
  Payments of short-term bank borrowings                         (4,000)   (4,400)
  Payments of long-term debt                                        (21)     (413)
                                                                --------  --------
    Net cash provided by financing activities                    (4,021)       18 
                                                                --------  --------

Effect of exchange rate changes on cash                              20        60 
                                                                --------  --------

Net decrease in cash and cash equivalents                          (867)   (5,017)
Cash and cash equivalents, beginning of period                    8,125     8,700 
                                                                --------  --------
Cash and cash equivalents, end of period                        $ 7,258   $ 3,683 
                                                                ========  ========
<FN>
The  accompanying  notes  are  an  integral  part  of  these financial statements.
</TABLE>

<PAGE>

                          GENUS, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           MARCH 31, 1999 (UNAUDITED)

Basis  of  Presentation

The  accompanying  consolidated  financial  statements  have  been  prepared  in
accordance  with  SEC  requirements  for  interim  financial  statements.  These
financial  statements  should  be  read  in  conjunction  with  the consolidated
financial  statements  and  notes  thereto included in the Company's 1998 Annual
Report  on  Form  10-K.

The  information  furnished  reflects all adjustments (consisting only of normal
recurring  adjustments)  which  are, in the opinion of management, necessary for
the  fair  statement of financial position, results of operations and cash flows
for  the  interim  periods.  The  results  of operations for the interim periods
presented  are not necessarily indicative of results to be expected for the full
year.

Net  Income  (Loss)  Per  Share

Basic  net  income  (loss)  per  share  is  computed  by  dividing income (loss)
available to common shareholders by the weighted average number of common shares
outstanding  for  the period. Diluted net income (loss) per share is computed by
dividing  income  (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).

A  reconciliation  of  the  numerator  and  denominator of basic and diluted net
income  (loss)  per  share  is  as  follows:

<TABLE>
<CAPTION>
          (AMOUNTS  IN  THOUSANDS,  EXCEPT  PER  SHARE  DATA)

                                                         THREE MONTHS ENDED
                                                             MARCH  31,
                                                         ------------------
                                                           1999      1998
                                                         --------  --------
<S>                                                      <C>       <C>
Numerator-basic:
  Net income (loss)                                      $  (611)  $(7,414)
  Deemed dividends on preferred stock                          0    (1,829)
                                                         --------  --------
    Net income (loss) available to common shareholders   $  (611)  $(9,243)
                                                         ========  ========

Denominator-basic:
  Weighted average common shares outstanding              17,865    17,125 
                                                         ========  ========

Basic net income (loss) per share                        $ (0.03)  $ (0.54)
                                                         ========  ========

Numerator-diluted:
  Net income (loss)                                      $  (611)  $(7,414)
  Deemed dividends on preferred stock                          0    (1,829)
                                                         --------  --------
    Net income (loss) available to common shareholders   $  (611)  $(9,243)
                                                         ========  ========

Denominator-diluted:
  Weighted average common shares outstanding              17,865    17,125 
  Effect of dilutive securities: stock options                 0         0 
                                                         --------  --------
                                                          17,865    17,125 
                                                         ========  ========

Diluted net income (loss) per share                      $ (0.03)  $ (0.54)
                                                         ========  ========
</TABLE>

<PAGE>

                          GENUS, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           MARCH 31, 1999 (UNAUDITED)

Stock  options  to  purchase approximately 2,284,690 shares of common stock were
outstanding  during  the three months ended March 31, 1999 but were not included
in  the computation of diluted loss per share because the Company has a net loss
for  the  three  months  ended  March  31,  1999.

Stock  options  to  purchase approximately 2,462,988 shares of common stock were
outstanding  during  the three months ended March 31, 1998 but were not included
in  the computation of diluted loss per share because the Company has a net loss
for  the  three  months  ended  March  31,  1998.

The  outstanding  warrants  of  400,000  shares of common stock were outstanding
during  the  three  months  ended  March  31,  1999 but were not included in the
computation of diluted loss per share because the Company has a net loss for the
three  months  ended  March  31,  1999.

<TABLE>
<CAPTION>
Statement  of  Cash  Flow  Information

                                                  (AMOUNTS  IN  THOUSANDS)

                                                        THREE MONTHS ENDED
                                                             MARCH  31,
                                                        ------------------
                                                          1999       1998 
                                                        -------    -------
<S>                                                       <C>      <C>
Supplemental Cash Flow Information:

  Cash paid during the period for:
    Interest                                              $   2    $    82
    Income taxes                                              0          1

  Non-cash financing activities:
    Deemed dividends on preferred stock related
       to beneficial conversion feature                   $   0    $ 1,792
    Net assets held for sale                                  0     30,500
    Conversion of 16,000 shares of convertible preferred
       stock to 640,000 shares of common stock              773          0
</TABLE>

Line  of  Credit

The  Company  secured  an  Accounts Receivable Purchase Agreement with a bank on
September  30,  1998.  This  agreement  allows  the  Company  to  sell qualified
receivables to the bank for a transaction fee of .1875%, and pay interest at the
rate  of  1% per month on the average outstanding balance. The bank will advance
80%  of  the  qualified  receivables  ($4,000,000 maximum outstanding at any one
time). This agreement expires September 30, 1999. At March 31, 1999, the Company
had no outstanding borrowings under the Accounts Receivable Purchase Agreement.

<PAGE>

                          GENUS, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           MARCH 31, 1999 (UNAUDITED)

<TABLE>
<CAPTION>
INVENTORIES
Inventories  comprise  the  following:     (AMOUNTS  IN  THOUSANDS)

                                           MARCH 31,   DECEMBER 31,
                                             1999         1998
                                          ----------  -------------
<S>                                       <C>         <C>
Raw materials and parts                   $    4,316  $       4,796
Work in process                                  584            244
Finished goods                                   299            298
                                          ----------  -------------
                                          $    5,199  $       5,338
                                          ==========  =============
</TABLE>

<TABLE>
<CAPTION>
ACCRUED  EXPENSES
Accrued  expenses  comprise  the  following:     (AMOUNTS  IN  THOUSANDS)

                                                 MARCH 31,   DECEMBER 31,
                                                    1999         1998
                                                ----------  -------------
<S>                                             <C>         <C>
System installation and warranty                $      684  $         583
Accrued commissions and incentives                     209            538
Accrued payroll and related items                      575            536
Restructuring reserves                                 733          1,240
Income taxes                                           456            456
Other                                                1,278          1,441
                                                ----------  -------------
                                                $    3,935  $       4,794
                                                ==========  =============
</TABLE>

In  1998,  the  Company  recorded  a  special  charge  of approximately $12,707.
Included  in this special charge are personnel charges of $1,746 associated with
the Company's reduction in workforce as well as $5,400 in inventory write-downs,
and  $1,113  in  leasehold  improvement  write-offs.  In  addition,  this charge
included  $1,402  for  expenses  associated  with  the  closing of several sales
offices  and  transaction  losses  as  a  result  of the sale of the ion implant
products to Varian Associates, Inc. ("Varian") and $1,053 for legal, accounting,
and  banking  fees associated with the Varian transaction.  Finally, the special
charge  included a $1,993 write-off of ion implant inventory that is currently a
matter of dispute with Varian in connection with the Asset Sale. The Company and
Varian  are  in  the  process  of  resolving  the dispute through arbitration to
determine  whether  the Company or Varian has rights to the one ion implant sale
and related inventory. If  and  when  the  Company  prevails in the arbitration,
any  adjustments  to the Company's financial statements as a result of this gain
contingency  will  be  made in the quarter in which the decision is rendered and
the collection from the end customer of the amount in question is probable.  The
Company is not conceding any rights to the disputed sale.

During  the  first  quarter  of  1999, $507 of transaction costs associated with
investment  banker  fees  were  charged  against  the  restructuring  reserve.

At  March  31,  1999, the following cash components of the special charge remain
unpaid:  $300  in  payroll costs associated with the reduction in force, $220 in
foreign  subsidiary  closing  costs,  and $213 in transaction costs. The Company
expects  these  amounts  to  be  paid  by  the end of the third quarter of 1999.

<PAGE>

                          GENUS, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           MARCH 31, 1999 (UNAUDITED)

ISSUANCE  OF  PREFERRED  STOCK  AND  WARRANTS

Private  Placement  of  Convertible  Preferred  Stock

In  February  1999,  the  16,000  shares  of  outstanding  Series  B Convertible
Preferred Stock ("Series B Stock") was completely converted to 640,000 shares of
common  stock.

Warrants

In  connection  with  the  issuance  of the Series A Convertible Preferred Stock
("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.

<PAGE>

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

Statements in this report which express "belief", anticipation" or "expectation"
as  well  as  other statements which are not historical fact are forward-looking
statements  within  the meaning of Section 27A of the Securities Act of 1933 and
Section  21E  of  the  Securities  Exchange  Act  of 1934. These forward-looking
statements  are  subject  to  certain  risks  and uncertainties that could cause
actual  results  to  differ  materially  from  historical results or anticipated
results,  including  those  set forth under "Risk Factors" in this "Management's
Discussion  and  Analysis  of Financial Condition and Results of Operations" and
elsewhere  in  or  incorporated  by  reference  into  this report. The following
discussion should be read in conjunction with the Company's Financial Statements
and  Notes  thereto  included  in  this  report.

Results  of  Operations

Net  sales for the quarter ended March 31, 1999 were $6 million, an 18% decrease
compared  to net sales of $7.2 million for the corresponding period in 1998 when
Genus  was  a  two-product  line  company,  and an increase of 17% over the $5.1
million  recorded  in the fourth quarter of 1998. The Company recognized revenue
on  two systems from one customer in the first quarter of 1999 compared with one
system  in  the  first  quarter of 1998 and two systems in the fourth quarter of
1998.

Gross margin for the quarter ended March 31, 1999 was 39% compared to 4% for the
same  period in 1998. In 1998, the Company was structured to support much higher
revenue  levels than were achieved. This resulted in a severe underabsorption of
fixed  operations  and  service  overhead expenses. During the second quarter of
1998,  the  Company  implemented  cost  reduction  measures  which significantly
decreased  these  fixed overhead expenses. The Company believes that the current
organization  is  more  properly sized to achieve reasonable gross margins going
forward,  assuming  revenue  targets  are  met.  Variable  manufacturing  costs
including  materials,  warranty and installation were in line with the prior two
quarters.  In  the fourth quarter of 1998, the Company's gross margin, exclusive
of  the  inventory  and  warranty reserve reversals, was 36%. This was primarily
related  to  the  shipment  of an older generation system, which carries a lower
selling  price  and  gross  margin  than  the  current  generation  systems.

For  the  first  quarter of 1999, research and development expenses ("R&D") were
$1.2  million,  or 20% of sales, a decrease of $2.1 million compared to the $3.3
million  reported  in  the  first  quarter  of 1998. This decrease was partially
attributed  to  R&D  costs of $1.7 million for the ion implant product line. R&D
expenses  for the fourth quarter of 1998 were $1.1 million, or 22% of sales. The
Company  expects  spending  levels  to remain in the 17-20% range for 1999 as it
continues  to  invest  in  bringing  innovative  technology  to the marketplace.

Selling,  General and Administrative expenses ("SG&A") were $1.9 million for the
first quarter of 1999, or 31% of sales, a decrease of $2.3 million from the $4.2
million  of  SG&A  for  the  first  quarter of 1998. The reduction was primarily
related  to  costs  associated  with the ion implant product line. SG&A has been
relatively flat over the past three quarters, in the $1.8 to $1.9 million range.
The  Company  expects  these  costs  to  remain fairly constant throughout 1999.

For  the  first  quarter  of  1999, other income was $108,000, compared to other
expense of $156,000 in the first quarter of 1998. Other income in 1999 consisted
mainly  of  interest income and currency exchange gains, while other expense for
1998  included  interest  expenses associated with capital leases and short-term
borrowings,  and  foreign  exchange  losses.

The  net  loss  for the quarter ended March 31, 1999 was $611,000. This compares
with  net  loss  of  $7.4  million  for  the  first  quarter  of  1998.

<PAGE>

Liquidity  and  Capital  Resources

During  the  three  months  ended  March  31,  1999, the Company's cash and cash
equivalents  decreased  to  $7.3  million at March 31, 1999 from $8.1 million at
year-end. The decrease is due to the repayment of the short-term borrowing of $4
million  offset  by  a  decrease  in  accounts  receivable.  Accounts receivable
declined  from  $13  million at year-end to $9.5 million at March 31, 1999. This
was  primarily due to the collection of outstanding receivables on three systems
totaling  $7.5  million.  Receivables  related to another three systems totaling
$6.5  million  are  expected  to  be collected in the second quarter of 1999. In
addition,  the remaining Series B Convertible Preferred Stock ("Series B Stock")
valued  at  $773,000  at December 31, 1998 was completely converted into 640,000
shares  of  common  stock.

The  Company  believes that its existing working capital and cash generated from
operations  will  be  sufficient  to  satisfy  its cash needs through the end of
fiscal  1999. Currently, cash not required for operating purposes is invested in
short-term  money  market  funds.  There  can  be no assurance that any required
additional  funding,  if  needed,  will  be available on terms attractive to the
Company,  which  could have a material adverse effect on the Company's 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.

Risk  Factors

Certain sections of Management's Discussion and Analysis contain forward-looking
statements  within  the meaning of Section 27A of the Securities Act of 1933, as
amended,  and  Section  21E  of the Securities Exchange Act of 1934, as amended.
Actual  results  could  differ  materially  from  those  projected  in  the
forward-looking  statements  as  a  result  of  the  factors  set forth above in
Management's  Discussion  and  Analysis  and  this  Risk  Factors  section.  The
discussion  of  these  factors  is  incorporated  by  this  reference as if said
discussion  was  fully  set  forth  in  Management's  Discussion  and  Analysis.

Historical  Performance.  The  Company  has experienced losses of $29.5 million,
$19.3  million, and $9.2 million for the years ended December 31, 1998, 1997 and
1996,  respectively. In addition, the Company experienced a net loss of $611,000
in  the  first  quarter of 1999. As a result of the Company's volatile sales and
operating  results  in  recent years, there can be no assurance that the Company
will  be  able  to  attain  or  sustain  consistent  future  revenue growth on a
quarterly  or  annual  basis,  or  that  the  Company  will be able to attain or
maintain  consistent  profitability  on  a  quarterly  or  annual  basis.

Reliance  on  International Sales. Export sales accounted for approximately 56%,
74%  and  84%  of  total  net  sales  in  the  years  ended 1998, 1997 and 1996,
respectively.  In  addition,  net  sales to South Korean customers accounted for
approximately 34%, 50% and 59%, respectively, of total net sales during the same
periods. During the first quarter of 1999, export sales to South Korea accounted
for  approximately 98% of total net sales. The Company anticipates that sales to
one  customer in Korea will continue to account for a significant portion of net
sales. As a result, a significant portion of the Company's sales will be subject
to  certain  risks,  including  unexpected  changes  in regulatory requirements,
tariffs  and other barriers, political and economic instability, difficulties in
accounts  receivable  collection,  difficulties  in  managing  distributors  or
representatives,  difficulties  in  staffing  and  managing  foreign  subsidiary
operations  and  potentially  adverse  tax  consequences. Although the Company's
foreign  system  sales are primarily denominated in U.S. dollars and the Company
does not engage in hedging transactions, the Company's foreign sales are subject
to  the  risks associated with unexpected changes in exchange rates, which could
have  the  effect of making the Company's products more or less expensive. There
can  be  no assurance that any of these factors will not have a material adverse
effect on the Company's business, financial condition and results of operations.

<PAGE>

Further,  the  Company  has  a  wholly  owned  South Korean subsidiary providing
service  and  support  to  the  installed base of customers and whose functional
currency  is  the won. There can be no assurance that the Company will not incur
currency  losses  or  gains  in  future  quarters  as  the  currency fluctuates.

A  substantial portion of the Company's sales are in Asia. Recent turmoil in the
Asian  financial  markets  has resulted in dramatic currency devaluations, stock
market declines, restriction of available credit and general financial weakness.
In  addition,  DRAM prices have fallen dramatically and may continue to do so as
some  Asian  IC manufacturers may be selling DRAMs at less than cost in order to
raise  cash. These developments may affect the Company in several ways. Currency
devaluation  may  make  dollar-denominated  goods,  such  as the Company's, more
expensive  for  Asian  clients.  Asian manufacturers may limit capital spending.
Furthermore,  the  uncertainty  of  the  DRAM  market  may  cause  manufacturers
everywhere  to delay capital spending plans. These circumstances may also affect
the ability of Company customers to meet their payment obligations, resulting in
the  cancellations  or  deferrals  of  existing  orders  and  the  limitation of
additional orders. Such developments could have a material adverse effect on the
Company's  business,  financial  condition  and  results  of  operations.

Reliance  on  a  Small  Number  of  Customers  and Concentration of Credit Risk.
Historically,  the  Company  has  relied  on a limited number of customers for a
substantial  portion  of  its  net  sales.  In  1998,  three  customers, Samsung
Electronics  Company,  Ltd.,  M/A Com and SGS Thomson, accounted for 68%, 8% and
5%,  respectively,  of  the  Company's  thin  films  net sales. During the first
quarter  of 1999, one customer accounted for 91% of the Company's thin films net
sales.  Additionally,  one  customer  accounted  for an aggregate of 90% of thin
films  accounts  receivable  at  December  31,  1998.  Because the semiconductor
manufacturing  industry  is concentrated in a limited number of generally larger
companies,  the Company expects that a significant portion of its future product
sales  will  be concentrated within a limited number of customers. None of these
customers  has  entered  into a long-term agreement requiring it to purchase the
Company's  products.  Furthermore,  sales  to  certain  of  these  customers may
decrease in the future when those customers complete their current semiconductor
equipment  purchasing  requirements  for new or expanded fabrication facilities.
The loss of a significant customer or any reduction in orders from a significant
customer,  including  reductions  due  to customer departures from recent buying
patterns,  market,  economic  or  competitive  conditions  in  the semiconductor
industry  or  in  the  industries that manufacture products utilizing ICs, could
have  a  material  adverse effect on the Company's business, financial condition
and  results  of  operations.

The  Company  is  dependent  on  a  small  number of customers. Accordingly, the
Company  is subject to concentration of credit risk. If a major customer were to
encounter  financial difficulties and become unable to meet its obligations, the
Company  would  be  adversely  impacted.

Cyclical  Nature  of  the Semiconductor Industry. The Company's business depends
upon  the  capital  expenditures  of  semiconductor manufacturers, which in turn
depend  on  the  current  and  anticipated  market  demand  for ICs and products
utilizing  ICs.  The semiconductor industry is cyclical and experiences periodic
downturns,  which  have an adverse effect on the semiconductor industry's demand
for  semiconductor  manufacturing  capital  equipment.  Semiconductor  industry
downturns  have adversely affected the Company's revenues, operating margins and
results of operations. There can be no assurance that the Company's revenues and
operating  results  will not continue to be materially and adversely affected by
future  downturns  in  the  semiconductor  industry.  In  addition, the need for
continued  investment  in  R&D,  substantial  capital equipment requirements and
extensive  ongoing  worldwide customer service and support capability limits the
Company's  ability  to  reduce expenses. Accordingly, there is no assurance that
the  Company  will  be  able  to  attain  profitability  in  the  future.

<PAGE>

Fluctuations in Quarterly Operating Results. The Company's revenue and operating
results may fluctuate significantly from quarter to quarter. The Company derives
its  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. The
Company's  results  of  operations  for  a particular quarter could be 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. The Company's revenue and operating results may
also  fluctuate due to the mix of products sold and the channel of distribution.

Competition.  The  semiconductor  manufacturing  capital  equipment  industry is
highly  competitive.  Genus  faces substantial competition throughout the world.
The  Company  believes  that  to remain competitive, it will require significant
financial  resources  in order to offer a broader range of products, to maintain
customer service and support centers worldwide and invest in product and process
R&D. Many of the Company's existing and potential competitors have substantially
greater  financial  resources,  more  extensive  engineering,  manufacturing,
marketing and customer service and support capabilities, as well as greater name
recognition than the Company. The Company expects its 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 the Company's competitors enter into strategic relationships
with  leading semiconductor manufacturers covering thin film products similar to
those  sold  by  the Company, it would materially adversely effect the Company's
ability  to  sell its products to these manufacturers. There can be no assurance
that  the  Company will continue to compete successfully in the United States or
worldwide.  The  Company  faces  direct competition in Chemical Vapor Deposition
("CVD")  tungsten  silicide  ("WSiX")  from  Applied  Materials,  Inc. and Tokyo
Electron,  Ltd.  There  can be no assurance that these or other competitors will
not  succeed  in  developing new technologies, offering products at lower prices
than  those  of  the  Company  or  obtaining market acceptance for products more
rapidly  than  the  Company.

Dependence  on  New Products and Processes. The Company believes that its future
performance  will  depend  in  part  upon its ability to continue to enhance its
existing  products and their process capabilities and to develop and manufacture
new  products  with  improved  process  capabilities.  As  a result, the Company
expects  to  continue  to  invest  in  R&D. The Company also must manage product
transitions  successfully,  as  introductions  of  new  products could adversely
effect  sales  of  existing  products. There can be no assurance that the market
will  accept  the  Company's  new  products  or that the Company will be able to
develop  and introduce new products or enhancements to its 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 the
Company's  business, financial condition and results of operations. Furthermore,
if  the  Company  is  not successful in the development of advanced processes or
equipment  for  manufacturers  with  whom it has formed strategic alliances, its
ability to sell its products to those manufacturers would be adversely affected.

Product  Concentration;  Rapid Technological Change. Semiconductor manufacturing
equipment  and  processes are subject to rapid technological change. The Company
derives its revenue primarily from the sale of its WSiX CVD systems. The Company
estimates  that  the  life  cycle  for  these systems is generally three-to-five
years.  The  Company believes that its future prospects will depend in part upon
its  ability  to  continue  to  enhance  its existing products and their process
capabilities  and  to develop and manufacture new products with improved process
capabilities.  As  a result, the Company expects to continue to make significant
investments  in  R&D.  The  Company  also  must  manage  product  transitions
successfully,  as  introductions of new products could adversely effect sales of
existing products. There can be no assurance that future technologies, processes
or product developments will not render the Company's product offerings obsolete
or  that  the  Company  will  be  able  to develop and introduce new products or
enhancements  to its existing and future processes in a timely manner to satisfy
customer  needs  or  achieve  market  acceptance.  The  failure  to  do so could
adversely  effect  the  Company's  business,  financial condition and results of
operations.  Furthermore, if the Company is not successful in the development of
advanced  processes  or  equipment for manufacturers with whom it currently does
business,  its  ability  to  sell  its  products to those manufacturers would be
adversely  affected.

<PAGE>

Dependence  on  Patents and Proprietary Rights. The Company's success depends in
part  on  its  proprietary technology. While the Company attempts to protect its
proprietary  technology through patents, copyrights and trade secret protection,
it  believes  that  the success of the Company will depend on more technological
expertise,  continuing  the  development  of new systems, market penetration and
growth  of  its  installed base and the ability to provide comprehensive support
and  service  to  customers.  There can be no assurance that the Company will be
able  to  protect its technology or that competitors will not be able to develop
similar  technology  independently. The Company currently has a number of United
States  and  foreign  patents and patent applications. There can be no assurance
that  any  patents  issued to the Company will not be challenged, invalidated or
circumvented  or  that  the  rights  granted thereunder will provide competitive
advantages  to  the  Company.

From  time-to-time, the Company has received notices from third parties alleging
infringement  of  such parties' patent rights by the Company's products. In such
cases, it is the policy of the Company to defend against the claims or negotiate
licenses on commercially reasonable terms where considered appropriate. However,
no  assurance  can be given that the Company 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 the
Company's  business  and  financial  results.

Dependence  on  Key  Suppliers.  Certain  of  the  components and sub-assemblies
included  in  the  Company's  products  are obtained from a single supplier or a
limited  group  of  suppliers.  Disruption or termination of these sources could
have  a  temporary  adverse  effect  on  the  Company's  operations. The Company
believes  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 the Company's
business,  financial  condition  and  results  of  operations.

Dependence on Independent Distributors. The Company currently sells and supports
its  thin  film products through direct sales and customer support organizations
in  the  U.S.,  Western  Europe  and  South  Korea  and through seven exclusive,
independent  sales  representatives and distributors in the U.S., Europe, Japan,
South Korea, Taiwan, China and Malaysia. The Company does not have any long-term
contracts  with its sales representatives and distributors. Although the Company
believes  that alternative sources of distribution are available, the disruption
or  termination of its existing distributor relationships could have a temporary
adverse  effect  on  the  Company's business, financial condition and results of
operations.

Volatility  of  Stock  Price.  The  Company's  common  stock  has  experienced
substantial  price  volatility,  particularly  as a result of quarter-to-quarter
variations  in  the actual or anticipated financial results of, or announcements
by,  the  Company,  its  competitors  or  its  customers,  announcements  of
technological  innovations  or  new  products by the Company or its competitors,
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 the
Company  does  business,  may adversely effect the market price of the Company's
Common  Stock.  In  addition,  the  occurrence of any of the events described in
these  "Risk Factors" could have a material adverse effect on such market price.

Readiness  for  Year  2000. Many existing computer systems and applications, and
other control devices, use only two digits to identify a year in the date field,
without  considering  the  impact  of  the upcoming change in the century. These
computer  systems and applications could fail or create erroneous results unless
corrected  so  that  they can process data related to the year 2000. The Company
relies  on its systems, applications and devices in operating and monitoring all
major  aspects  of  its  business,  including financial systems (such as general
ledger, accounts payable and payroll modules), customer service, infrastructure,
embedded  computer  chips,  networks  and  telecommunications  equipment and end
products.  The  Company  also relies on external systems of business enterprises
such  as  customers,  suppliers,  creditors,  financial  organizations,  and  of
governments  both  domestically  and globally, directly for accurate exchange of
data  and  indirectly.

<PAGE>

The  Company  is  currently  completing  the  planning process for its Year 2000
readiness  project,  although  many  mission  critical  issues have already been
addressed. The director of operations and facilities chairs the project team and
it  includes  project  managers  from  the  finance,  information  technology,
facilities, engineering, and customer support organizations. The team is meeting
weekly,  and  has  conducted  a  thorough analysis to identify systems that will
possibly  be  impacted  by  the  Year  2000  problem.  These  systems  have been
classified  into  four  major  segments:  facilities,  mission critical business
operations systems, non-mission critical business operations systems and general
office  equipment.  The  project  team has assigned one of its members to be the
project  manager for each segment, and each of these segment project managers is
in  the  process  of  identifying  an  implementation  manager  for  each system
identified  as part of their segment. Each implementation manager is responsible
for  developing  a  detailed  plan  that  includes  an  assessment  of Year 2000
compliance,  followed  by  phases  to  define  a  contingency  plan,  evaluate
alternatives, select a solution, design and implement the solution and, finally,
to  test  and  verify compliance. Some of the critical systems already addressed
are  discussed  in  the  following  paragraphs.

End  Products.  The  control  systems  for  each  of  the Company's products are
computer  driven.  Thorough testing of these products was completed during 1998.
Testing addressed not only the Company designed elements of the system, but also
the  embedded  controls  in  manufactured  components  integrated  into  the end
products.  Each  product  requires a software upgrade, and the oldest systems in
the  product  line  require  a  control system computer replacement as well. The
Company  is charging a nominal amount for these upgrades on the older generation
systems,  while  upgrades  for  the  current  Lynx2  products are supplied at no
charge.  The  design  and  testing  of  each of these product upgrades have been
completed,  and  the  upgrades  have  been  shipped and installed at some of the
Company's customer's sites worldwide. The Company has contacted and offered this
upgrade  to all of its customers, but some customers have decided not to upgrade
their  systems.

Enterprise Resources Program. During 1997, the Company started implementation of
a  new  business  system.  One  criterion  for  the  selection of the enterprise
software  was  compliance  with  Year  2000 issues. The system was installed and
implemented  at  the  Company's  Newburyport, MA facility in September 1997, but
implementation  at  the Sunnyvale, CA headquarters was postponed during 1998 due
to  the  Asset  Sale.  The system hardware and software was recently returned to
Sunnyvale,  and  cutover from the existing system to the new system is scheduled
for  August  1,  1999.  Year 2000 compliance on the new system was tested on the
system while it was installed in Newburyport. The system is considered to be the
most  critical  internal  Company  resource at risk to the Year 2000 problem, so
timely  implementation  is  essential.

Supplier Readiness. Each implementation manager is responsible for assessing the
readiness  of  the suppliers who support their system to ensure there will be no
lapses  in  service  that  may  interrupt  operations.  This  is  in addition to
addressing  readiness  of  the  hardware and software products provided by these
suppliers.  Suppliers  of  inventory material for the Company's products will be
surveyed  during  the  second quarter of 1999. This is one of the projects under
the  mission  critical  business  operations  systems  segment. Readiness of the
supplier's  products has already been established under the end product project,
but  disruption  of the supply pipeline due to supplier business readiness still
needs  to  be  addressed.  Preliminary  discussions  with  some of the Company's
critical  suppliers  indicate that most are ahead of the Company in establishing
their  own  readiness.

<PAGE>

The  Company's  estimated  expenses  incurred  through  December  31,  1998  are
$300,000. The 1999 projected costs are $115,000. The single largest risk element
is  the  business  system,  and  implementation  of the new system is adequately
budgeted  in 1999. The Company believes that costs to fix the Company's products
have  already been fully incurred. Several capital investments have already been
made  in  1999  to replace aging equipment, and Year 2000 compliant systems were
purchased  in  all  cases.  This  includes  new network and electronic mail file
servers.  The  Company's  voicemail  system  is  not  Year  2000  compliant, and
replacement  is  already  budgeted  as  a  1999 capital improvement. There are a
number  of  hardware and software systems, both mission critical and non-mission
critical,  which may require upgrades at the Company's expense over the next few
quarters,  but  preliminary  estimates  indicate  these  expenses  will  not  be
material.  There  can be no assurance that the Company's current estimated costs
associated  with  the  Year  2000  issue,  or  the consequences of incomplete or
untimely  resolution  of  the  Year 2000 issue, will not have a material adverse
effect  on  the result of operations or financial position of the Company in any
given  year.

The  Company  has not yet identified any specific contingency plans in the event
that  projects  are not completed in time or if planned fixes fail to operate as
expected.  Each  implementation  project  manager  is responsible for completing
contingency  plans  for  assigned  projects  as  part  of  the planning process.

At  this  time, the Company does not plan to use any outside agencies to provide
independent  verification  of  readiness,  although  individual  implementation
project managers may decide to include independent verification as part of their
project  plans.  The  independent  verification requirement will be based on the
risk  associated  with  failure  of  the  particular  project/system.

<PAGE>

                           PART II.  OTHER INFORMATION


ITEM  6.  EXHIBITS  AND  REPORTS  ON  FORM  8-K

(a)  Exhibits

The  Exhibits  listed  on the accompanying "Index to Exhibits" are filed as part
hereof,  or  incorporated  by  reference  into,  the  report.

(b)  Report  on  Form  8-K

The  Company  filed  a  Current  Report  on  Form 8-K dated February 19, 1999 to
disclose  the  Company's financial results for the fourth quarter and year ended
December  31,  1998.

<PAGE>

                                   GENUS, INC.
                                   SIGNATURES

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






Date:  May  14,  1999                  GENUS,  INC.




                                                /s/  William  W.R.  Elder
                                       ----------------------------------------
                                            William  W.R.  Elder, President,
                                          Chief Executive Officer and Chairman




                                                /s/  Kenneth  Schwanda
                                       ----------------------------------------
                                                    Kenneth Schwanda
                                                Chief Financial Officer
                                          (Principal  Financial  and  Principal
                                                   Accounting  Officer)

<PAGE>

                                   GENUS, INC.
                                INDEX TO EXHIBITS

EXHIBIT  NO.       DESCRIPTION
------------       -----------
     27.1          Financial  Data  Schedule

<PAGE>