UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 10-Q


[X]  Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange
Act  of  1934

For  the  quarterly  period  ended  March  31,  2002  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  April  30,  2002:  26,407,952
                                                    ----------

================================================================================


<PAGE>
<TABLE>
<CAPTION>
                                      GENUS, INC.
                                      FORM  10-Q
                                        INDEX

<S>                                                                              <C>
PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

Condensed Consolidated Statements of Operations
for the three months ended March 31, 2001 and March 31, 2002. . . . . . . . . .   3

Condensed Consolidated Balance Sheets as of March 31, 2001
and March 31, 2002. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   4

Condensed Consolidated Statements of Cash Flows
for the three months ended March 31, 2001 and March 31, 2002. . . . . . . . . .   5

Notes to Condensed Consolidated Financial Statements. . . . . . . . . . . . . .   6

Item 2. Management's Discussion and Analysis
of Financial Condition and Results of Operations. . . . . . . . . . . . . . . .  11

Item 3. Quantitative and Qualitative Disclosures About Market Risk            .  22


PART II. OTHER INFORMATION

Item 1: Legal Proceedings . . . . . . . . . . . . . . . . . . . . . . . . . . .  23

Item 2: Changes in Securities and Use of Proceeds . . . . . . . . . . . . . . .  23

Item 6: Exhibits and Reports on Form 8-K. . . . . . . . . . . . . . . . . . . .  23


Signatures. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  24
</TABLE>


                                        2
<PAGE>
<TABLE>
<CAPTION>
                         PART I.  FINANCIAL INFORMATION


ITEM  1.  FINANCIAL  STATEMENTS


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


                                                THREE MONTHS ENDED
                                                    MARCH  31,

                                                   2002     2001
                                                 --------  -------
<S>                                              <C>       <C>
Net sales . . . . . . . . . . . . . . . . . . .  $ 9,591   $14,309
Costs and expenses:
     Cost of goods sold . . . . . . . . . . . .    7,467     8,603
     Research and development . . . . . . . . .    2,185     3,004
     Selling, general and administrative. . . .    3,436     2,518
                                                 --------  -------
Income (loss) from operations . . . . . . . . .   (3,497)      184

Other income (expenses), net. . . . . . . . . .     (255)        2
                                                 --------  -------

Loss before income taxes. . . . . . . . . . . .   (3,752)      186

Provision for income taxes. . . . . . . . . . .        -        55
                                                 --------  -------

Net income/(loss) . . . . . . . . . . . . . . .  $(3,752)  $   131
                                                 ========  =======

Net income (loss) per share:
     Basic. . . . . . . . . . . . . . . . . . .  $ (0.15)  $  0.01
     Diluted. . . . . . . . . . . . . . . . . .  $ (0.15)  $  0.01

Shares used in per share calculation - basic. .   25,249    19,379
                                                 ========  =======
Shares used in per share calculation - diluted.   25,249    19,926
                                                 ========  =======

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


                                        3
<PAGE>
<TABLE>
<CAPTION>
                          GENUS, INC. AND SUBSIDIARIES
                CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
                                 (IN THOUSANDS)


                                                         MARCH 31,    DECEMBER 31,
                                                           2002           2001
                                                        -----------  --------------
<S>                                                     <C>          <C>

ASSETS
Current Assets:
   Cash and cash equivalents . . . . . . . . . . . . .  $    9,456   $       3,043
   Accounts receivable (net of allowance for doubtful
      accounts of $69 in 2002 and $69 in 2001) . . . .       3,203           4,262
   Inventories . . . . . . . . . . . . . . . . . . . .       8,675          12,648
   Other current assets. . . . . . . . . . . . . . . .         825           1,221
                                                        -----------  --------------
      Total current assets . . . . . . . . . . . . . .      22,159          21,174
   Equipment, furniture and fixtures, net. . . . . . .      13,953          14,573
   Other assets, net . . . . . . . . . . . . . . . . .         336             155
                                                        -----------  --------------
      Total assets . . . . . . . . . . . . . . . . . .  $   36,448   $      35,902
                                                        ===========  ==============

LIABILITIES
Current Liabilities:
   Short-term bank borrowings. . . . . . . . . . . . .  $    3,848   $       4,481
   Accounts payable. . . . . . . . . . . . . . . . . .       5,609           8,352
   Accrued expenses. . . . . . . . . . . . . . . . . .       2,709           3,553
   Deferred revenue and customer deposits. . . . . . .       6,914           7,388
   Deferred revenue and customer deposits. . . . . . .         536               -
                                                        -----------  --------------
      Total current liabilities. . . . . . . . . . . .      19,616          23,774

      Long-term liabilities. . . . . . . . . . . . . .         436               -
                                                        -----------  --------------
Total liabilities. . . . . . . . . . . . . . . . . . .      20,052          23,774
                                                        -----------  --------------

Contingencies (see note on legal proceeding)


SHAREHOLDERS' EQUITY
Common stock, no par value:
   Authorized 50,000 shares;
      Issued and outstanding 26,321 shares in
      2002 and 22,365 in 2001. . . . . . . . . . . . .     118,724         110,753
   Accumulated deficit . . . . . . . . . . . . . . . .     (99,941)        (96,189)
   Note receivable from shareholder. . . . . . . . . .        (151)           (151)
   Accumulated other comprehensive loss. . . . . . . .      (2,236)         (2,285)
                                                        -----------  --------------
      Total shareholders' equity . . . . . . . . . . .      16,396          12,128
                                                        -----------  --------------
Total liabilities and shareholders' equity . . . . . .  $   36,448   $      35,902
                                                        ===========  ==============

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


                                        4
<PAGE>
<TABLE>
<CAPTION>
                          GENUS, INC. AND SUBSIDIARIES
          CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
                                 (IN THOUSANDS)

                                                            THREE MONTHS ENDED
                                                                 MARCH 31,

                                                              2002      2001
                                                            --------  --------
<S>                                                         <C>       <C>
Cash flows from operating activities:
  Net income (loss). . . . . . . . . . . . . . . . . . . .  $(3,752)  $   131
  Adjustments to reconcile net income (loss) to net cash
    from operating activities:
    Depreciation . . . . . . . . . . . . . . . . . . . . .      895       534
    Stock-based compensation . . . . . . . . . . . . . . .        -        36
    Changes in assets and liabilities:
      Accounts receivable. . . . . . . . . . . . . . . . .    1,059     3,445
      Inventories. . . . . . . . . . . . . . . . . . . . .    3,973     2,706
      Other assets . . . . . . . . . . . . . . . . . . . .      215        (8)
      Accounts payable . . . . . . . . . . . . . . . . . .   (2,743)      732
      Accrued expenses . . . . . . . . . . . . . . . . . .     (844)     (284)
      Deferred revenue and customer deposits . . . . . . .     (474)   (3,889)
                                                            --------  --------
      Net cash provided by (used in) operating activities.   (1,671)    3,403
                                                            --------  --------

Cash flows from investing activities:
  Acquisition of equipment, furniture and fixtures . . . .     (275)   (3,606)
                                                            --------  --------
      Net cash used in investing activities. . . . . . . .     (275)   (3,606)
                                                            --------  --------
Cash flows from financing activities:
  Proceeds from issuance of common stock . . . . . . . . .    7,971       123
  Proceeds (payments) from short-term bank borrowings. . .     (633)       70
  Proceeds from debt . . . . . . . . . . . . . . . . . . .    1,200         -
  Payments for debt. . . . . . . . . . . . . . . . . . . .     (228)        -
                                                            --------  --------
      Net cash provided by financing activities. . . . . .    8,310       193
                                                            --------  --------

Effect of exchange rate changes on cash. . . . . . . . . .       49       (34)
                                                            --------  --------

Net increase (decrease) in cash and cash equivalents . . .    6,413       (44)
Cash and cash equivalents, beginning of period . . . . . .    3,043     3,136
                                                            --------  --------
Cash and cash equivalents, end of period . . . . . . . . .  $ 9,456   $ 3,092
                                                            ========  ========
Supplemental cash flow information
  Cash paid during the period for:
  Interest . . . . . . . . . . . . . . . . . . . . . . . .  $    70   $    60
  Income taxes . . . . . . . . . . . . . . . . . . . . . .  $     -   $   273

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


                                        5
<PAGE>
                          GENUS, INC. AND SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                           MARCH 31, 2002 (UNAUDITED)

BASIS  OF  PRESENTATION

     The  accompanying  condensed  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 condensed
consolidated  financial  statements  and notes thereto included in the Company's
2001  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.

LIQUIDITY

     During  the  quarter ended March 31, 2002, the Company is in the process of
executing  its  business strategy and has plans to eventually achieve profitable
operations.  Management believes that existing cash and available financing will
be  sufficient to meet projected working capital, capital expenditures and other
cash  requirements  for  the  next  twelve months.  Accordingly, these financial
statements  have  been  prepared  on  a  going  concern  basis.

NET  INCOME  (LOSS)  PER  SHARE

     Basic net income (loss) per share is computed by dividing net 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  net  income  (loss) available to common shareholders 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 (in thousands, except per share data):

                                      THREE MONTHS ENDED
                                           MARCH 31,
                                        2002     2001
                                      --------  -------

Basic:
Net income (loss). . . . . . . . . .  $(3,752)  $   131
                                      ========  =======
  Weighted average common shares
    outstanding. . . . . . . . . . .   25,249    19,379
                                      ========  =======
  Basic net income (loss) per share.  $ (0.15)  $  0.01
                                      ========  =======


                                        6
<PAGE>
                          GENUS, INC. AND SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                           MARCH 31, 2002 (UNAUDITED)

                                      THREE MONTHS ENDED
                                          MARCH  31,

                                        2002     2001
                                      --------  -------

Diluted:
  Net income (loss). . . . . . . . .  $(3,752)  $   131
  Weighted average common shares
    outstanding. . . . . . . . . . .   25,249    19,379
  Effect of dilutive stock options .        -       544
  Effect of dilutive warrants. . . .        -         3
                                      --------  -------
                                       25,249    19,926
                                      ========  =======

Diluted net income (loss) per share.  $ (0.15)  $  0.01
                                      ========  =======

     Stock  options  and warrants to purchase approximately 5,678,959 shares of
common  stock were outstanding during the three months ended March 31, 2002, but
were  not  included in the computation of diluted net loss per share because the
Company  had  a  net  loss  for  the  three  months  ended  March  31,  2002.

     Stock  options  to purchase approximately 1,826,867 shares of common stock
were  excluded  from  the  computation  of  diluted net income per share for the
quarter ended March 31, 2001, because the exercise price of the options exceeded
the  average fair market value of the stock for the three months ended March 31,
2001.

SHORT-TERM  BANK  BORROWINGS

     In  July  2001,  our  100%  owned  subsidiary  in  Japan, Genus Japan Inc.,
negotiated a financing arrangement, secured by customer receivables, with Aozora
Bank,  Ltd.  in Tokyo. The interest rate for borrowings under this agreement was
6.5%.  As  of March 31, 2002, there was $1.5 million outstanding under this line
of  credit. The agreement expired on April 30, 2002, and all amounts outstanding
at  that  time  were  repaid.

     In  December  2001,  the  Company replaced the $10.0 million line of credit
with  Venture bank with a $10.0 million line of credit from Silicon Valley bank.
The  Silicon  Valley bank agreement includes a domestic revolving line of credit
of  $7.5  million,  secured  against domestic eligible receivables and a foreign
line  of  credit of $7.5 million, financed by EXIM bank, secured against foreign
eligible  receivables  and  inventory. The initial term of the loan is 12 months
ending December 20, 2002. Total availability under both lines at any given point
in  time  is  limited  to $10.0 million.  The interest rate for borrowings under
both  the domestic and foreign lines is prime plus 1.75% per annum calculated on
the  basis  of  a 360-day year.  The loan agreement is collateralized by a first
priority  perfected security interest in the Company's assets and has a covenant
requiring  the Company to maintain a minimum tangible net worth of $12.0 million
plus  50% of consideration for subsequent equity issuances and 50% of net income
of future quarters. The minimum tangible net worth requirement is reduced by any
losses  in  a  subsequent  quarter,  but  will not be reduced to less than $12.0
million.

     On  March  27, 2002, we amended our line of credit with Silicon Valley Bank
to  increase the funds available under both lines of credit to $15.0 million, to
extend  the  initial  term of the loan to 15 months ending March 19, 2003 and to
reset  the  covenant  to  $12.0  million  plus  50%  of consideration for equity
issuances  subsequent  to  March 8, 2002.  As of March 31, 2002, there were $2.3
million  outstanding  under  this  credit  facility.


                                        7
<PAGE>
                          GENUS, INC. AND SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                           MARCH 31, 2002 (UNAUDITED)

     On  January  4,  2002,  the Company received gross proceeds of $1.2 million
under  a  secured  loan  with  CitiCapital, a division of Citigroup. The loan is
payable  over  36  months, accrues interest of 8.75% per annum and is secured by
two  systems  in  our  demonstration  lab.  As of March 31, 2002, the short-term
portion  of  this  loan  was  $536,000  and  the long-term portion was $436,000.

INVENTORIES

     Inventories comprise the following (in thousands):

                                   MARCH 31,   DECEMBER 31,
                                      2002         2001
                                   ----------  -------------

Raw materials and purchased parts  $    4,206  $       4,446
Work in process . . . . . . . . .         475          2,499
Finished goods. . . . . . . . . .         530            630
Inventory at customers' locations       3,464          5,073
                                   ----------  -------------
                                   $    8,675  $      12,648
                                   ==========  =============

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

ACCRUED  EXPENSES

     Accrued expenses comprise the following (in thousands):

                                         MARCH 31,   DECEMBER 31,
                                            2002         2001
                                         ----------  -------------

System warranty . . . . . . . . . . . .  $      968  $         803
Accrued commissions and incentives. . .          46            330
Accrued compensation and related items.         683            723
Federal, state and foreign income taxes         443            444
Other . . . . . . . . . . . . . . . . .         569          1,253
                                         ----------  -------------
                                         $    2,709  $       3,553
                                         ==========  =============

COMMON  STOCK

     On  January  25,  2002,  the  Company  sold 3,871,330 shares of our common
stock,  and  warrants  to  purchase up to 580,696 of additional shares of common
stock,  for  aggregate  proceeds  of  approximately  $7.8 million.  The warrants
issued  to the purchasers in the private placement are exercisable for $3.23 per
share  and  the  warrants  have  a  five-year  term.

      As a result of the January 25, 2002 transaction, the Company adjusted the
warrants issued to certain investors in May 2001 (the "2001 Warrants") to comply
with the anti-dilution component of the 2001 Warrants.  The adjustment increased
the total number of shares underlying the 2001 Warrants from 1,270,891 shares to
2,031,094  shares.  In  addition,  the  exercise  price of the 2001 Warrants was
reduced  from  $3.50  to  $2.19  per  share.


                                        8
<PAGE>
                          GENUS, INC. AND SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                           MARCH 31, 2002 (UNAUDITED)

LEGAL  PROCEEDINGS

     On  June  6,  2001, ASM America, Inc. ("ASMA") filed a patent infringement
action  against  Genus, Inc. ASMA's complaint alleges that Genus is directly and
indirectly  infringing  U.S.  Patent  No. 5,916,365 (the "365 Patent"), entitled
"Sequential  Chemical Vapor Deposition," and U.S. Patent No. 6,015,590 (the "590
Patent")  entitled  "Method  For Growing Thin Films," which ASM claims to own or
exclusively  license.  The Complaint seeks monetary and injunctive relief. Genus
served  its  Answer  to  ASMA's  complaint on August 1, 2001.  Also on August 1,
2001, Genus counterclaimed against ASMA and ASM International, N.V. ("ASMI") for
(1)  infringement  of  U.S.  Patent  No.  5,294,568  (the "568 Patent") entitled
"Method  of  Selective  Etching Native Oxide"; (2) declaratory judgment that the
'365  and  '590  Patents are invalid, unenforceable, and not infringed by Genus;
and  (3) antitrust violations. An initial Case Management Conference was held on
October  16,  2001.  On  January 9, 2002, the Court issued an order granting ASM
leave  to  amend  its complaint to add Dr. Sherman as a party and to add a claim
that  Genus  is directly and indirectly infringing U.S. Patent No 4,798,165 (the
"165 Patent") entitled "Apparatus for Chemical Vapor Deposition Using an Axially
Symmetric  Gas Flow", which ASM claims to own. The court also severed and stayed
discovery  and  trail  of  Genus'  antitrust claims until after the trial of the
patent  claims.  On  February  4, 2002, Genus served its Amended Answer to ASM's
amended  complaint  and counterclaimed against ASM for declaratory judgment that
the '165 Patent is invalid, unenforceable, and not infringed by Genus. The Claim
Construction  Hearings  regarding  these claims are set for June 17, 2002 ( '590
and  '365  Patents),  June 24, 2002 ( '568 Patent), and September 26, 2002 ('165
Patent).

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

RELATED  PARTY  TRANSACTIONS

     Mario  Rosati,  a  board member of the Company, is also a partner of Wilson
Sonsini  Goodrich  and  Rosati,  the general counsel of the Company.  During the
first  quarters  of  2001  and  2002,  the  Company  paid  $21,000 and $108,000,
respectively,  to  Wilson  Sonsini  Goodrich and Rosati.  At March 31, 2002, the
Company  owed  approximately  $784,000  to  Wilson Sonsini Goodrich and Rosati.


                                        9
<PAGE>
                          GENUS, INC. AND SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                           MARCH 31, 2002 (UNAUDITED)

COMPREHENSIVE  INCOME  (LOSS)

     The  following  are  the  components  of  comprehensive  income (loss) (in
thousands):

                                              THREE MONTHS ENDED
                                                   MARCH 31,

                                             2002          2001
                                          -----------  ------------

Net income (loss). . . . . . . . . . . .  $   (3,752)  $       131
Foreign currency translation adjustment.          49           (34)
                                          -----------  ------------
  Comprehensive income (loss)             $   (3,703)  $        97
                                          ===========  ============

     The  components  of  accumulated other comprehensive loss is as follows (in
thousands):

                                    MARCH 31    DECEMBER 31
                                      2002         2001
                                   ----------  -------------

Cumulative translation adjustment  $  (2,236)  $     (2,285)
                                   ==========  =============

RECENT  ACCOUNTING  PRONOUNCEMENTS

     In  August  2001,  the Financial Accounting Standard Board, or FASB, issued
Statement  of  Financial Accounting Standards, or SFAS, No. 143, "Accounting for
Asset  Retirement  Obligations." SFAS No. 143 addresses financial accounting and
reporting  for obligations associated with the retirement of tangible long-lived
assets  and the associated asset retirement costs. This statement applies to all
entities.  It  applies  to  legal  obligations associated with the retirement of
long-lived  assets  that  result from the acquisition, construction, development
and  (or)  the  normal  operation  of  long-lived  assets,  except  for  certain
obligations  of  leases.  As  used  in  this Statement, a legal obligation is an
obligation  that  a  party  is  required to settle as a result of an existing or
enacted  law,  stature,  ordinance  or  written  or  oral  contract  or by legal
construction  of  a  contract  under  the  doctrine  of promissory estoppel. The
statement  is  effective  for  financial  statements  issued  for  fiscal  years
beginning  after June 15, 2002. We do not expect the adoption of SFAS No. 143 to
have  a  material  effect  on  our  results  of  operations.


                                       10
<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. Net sales for three months ended March 31, 2002 of $9.6 million
represented  a  decrease  of 33% when compared to net sales of $14.3 million for
the  same  quarter  of 2001, but increased 69% sequentially from $5.7 million in
the  fourth  quarter  of 2001.  One 300 mm CVD system, one 300 mm ALD system and
one 200 mm CVD system were accepted in the first quarter of 2002.  First quarter
of 2001 revenues consisted of two 200 mm CVD systems and a significant number of
upgrades  that  were  accepted  by the customer.  In the fourth quarter of 2001,
only  one  300  mm  CVD  system  and  an  upgrade were accepted by the customer.

     COST  OF  GOODS  SOLD.  Cost of goods sold for three months ended March 31,
2002  was  $7.5  million,  compared to $8.6 million for the same period in 2001.
Cost of goods was $5.0 million in the fourth quarter of 2002.  Gross profit as a
percentage  of revenues was 22 % in the first quarter of 2002 compared to 40% in
the same period of 2001.  Gross profit as a percentage of revenue was 12% in the
fourth quarter of 2001.  The lower gross profit percentages in the first quarter
of  2002  and  fourth  quarter  of 2001 were a direct result of lower production
volumes  and  product  mix that resulted in unfavorable manufacturing absorption
compared  to  the  first quarter of 2001.  First quarter 2002 cost of sales also
included  $368,000  of  additional  inventory  reserves.

     RESEARCH  AND  DEVELOPMENT. Research and development (R&D) expenses for the
quarter  ended  March  31,  2002 was $2.2 million, or 23% of net sales, compared
with $3.0 million or 21% of net sales for the same period in 2001.  Research and
development  expenses  for  the  fourth quarter of 2001 were $3.3 million.  As a
percent of net sales, research and development expenses were 23%, 21% and 58% in
the  first  quarter  of  2002, first quarter of 2001 and fourth quarter of 2001,
respectively.  The dollar decrease in the first quarter of 2002 when compared to
2001  was  due to less usage of outside consultants. The higher dollar amount in
the  fourth  quarter  of  2001  was  due to the reconfiguration of demonstration
equipment.  In  2001, we added significant capacity in our demonstration lab and
are  now  able  to  turnaround  customer  requests  for  demos in 15 to 30 days.

     SELLING,  GENERAL  AND  ADMINISTRATIVE. Selling, general and administrative
(SG&A)  expenses were $3.4 million in the first quarter of 2002 compared to $2.5
million  in  the first quarter of 2001 and $2.4 million in the fourth quarter of
2002.  As  a  percent of net sales, selling, general and administrative expenses
were  36%,  18% and 42 % in the first quarter of 2002, first quarter of 2001 and
fourth  quarter  of  2001,  respectively.  The  increase in selling, general and
administrative  expenses in the first quarter of 2002 when compared to the first
quarter  of  2001  was due to the delay in receiving a government research grant
($400,000),  and  delay  in  subleasing  extra  factory  space  ($144,000).


                                       11
<PAGE>
     OTHER  INCOME (EXPENSE), NET.  Other expenses for the first quarter of 2002
and  fourth  quarter of 2001 were $255,000 and $209,000, respectively, primarily
reflecting  interest  charges on bank loans, compared to other income of $2,000,
reflecting  interest  income  from  cash deposits, in the first quarter of 2001.

     PROVISION  FOR  INCOME  TAXES.  We  did not record any provision for income
taxes for the three months ended March 31, 2002 as we recorded losses in the U.S
and  Japan  and  have  minimum  income  in  South  Korea.  We provide for a full
valuation  allowance  against  the tax benefit associated with these losses.  In
the  three  months  ended  March  31,  2001,  we recorded income tax expenses of
$55,000  related  to  profits  generated  in  our  South  Korean  subsidiary.


LIQUIDITY  AND  CAPITAL  RESOURCES

     At  March  31,  2002,  our  cash and cash equivalents were $9.5 million, an
increase  of $6.4 million over cash and cash equivalents of $3.0 million held as
of  December 31, 2001.  Accounts receivable was $3.2 million, a decrease of $1.1
million  from  $4.3 million as of December 31, 2001. The decrease relates to the
collection of a receivable from a customer of our Japan subsidiary. Cash used by
operating  activities  totaled $1.7 million for the three months ended March 31,
2002,  and  consisted  primarily  of  net  loss of $3.8 million and decreases in
accounts  payables of $2.7 million, partially offset by depreciation of $895,000
and  reductions  in  working  capital, primarily receivables of $1.1 million and
inventories  of  $4.0  million.  Inventory  reductions were primarily related to
improved  supply  chain  management  and decreases in inventory held at customer
sites  from  $5.1  million  to  $3.5  million.

     Financing  activities  provided  cash  of $8.3 million for the three months
ended  March  31, 2002.  In January 2002, we received approximately $7.8 million
of  proceeds  from a sale of common stock and warrants to purchase common stock.

     We  made  capital expenditures of $275,000 for the three months ended March
31, 2002. These expenditures were primarily related to the continuing program of
upgrading existing equipment in our development and applications laboratories to
meet  our  most  advanced system capabilities and specifications, especially for
our  ALD  processes.  This  has  improved  our  product  and  film  development
capabilities,  and  increased  our customer demonstration capabilities, which is
critical  in  the  sales  process.

     Our  primary source of funds at March 31, 2002 consisted of $9.5 million in
cash  and  cash equivalents, $3.2 million of accounts receivable, and our credit
facilities  with  Silicon  Valley  Bank.

     A summary of our contractual obligations as of March 31, 2002 is as follows
(in  thousands):

<TABLE>
<CAPTION>
                                            Less than                           After
                       Total     Revolving    1 year     1-3 years  4-5 years  5 years
                     ----------  ---------  ----------  ----------  ---------  -------
<S>                  <C>         <C>        <C>         <C>         <C>        <C>

Silicon Valley Bank  $    3,848  $   3,848  $        -  $        -  $       -  $     -
Citicapital                 972        N/A         536         436          -        -
Operating Leases         18,838        N/A       1,159       3,257      3,317   11,105
                     ----------  ---------  ----------  ----------  ---------  -------
                     $   23,658  $   3,848  $    1,695  $    3,693  $   3,317  $11,105
                     ==========  =========  ==========  ==========  =========  =======
</TABLE>


                                       12
<PAGE>
     We  are  actively marketing our existing and new products, which we believe
will  ultimately  lead  to  profitable  operations.  However,  there  can  be no
assurance  the  currently  available  funds  will  meet  the  company's  cash
requirements  in  the  future,  or, that any required additional funding will be
available  on terms attractive to us, which could have a material adverse affect
on  our  business, financial condition and results of operations. Any additional
equity  financing  may  be  dilutive  to  shareholders,  and any additional debt
financing,  if  available,  may  involve  restrictive  covenants.

RELATED  PARTY  TRANSACTIONS

     Mario  Rosati,  a  board member of the Company, is also a partner of Wilson
Sonsini  Goodrich  and  Rosati,  the general counsel of the Company.  During the
first  quarters  of  2001  and  2002,  the  Company  paid  $21,000 and $108,000,
respectively,  to  Wilson  Sonsini  Goodrich and Rosati.  At March 31, 2002, the
Company  owed  approximately  $784,000  to  Wilson  Sonsini Goodrich and Rosati.

RECENT  ACCOUNTING  PRONOUNCEMENTS

     In  August  2001,  the Financial Accounting Standard Board, or FASB, issued
Statement  of  Financial  Accounting Standards, or SFAS, No No. 143, "Accounting
for  Asset  Retirement Obligations." SFAS No. 143 addresses financial accounting
and  reporting  for  obligations  associated  with  the  retirement  of tangible
long-lived  assets  and  the  associated  asset retirement costs. This statement
applies  to  all  entities.  It applies to legal obligations associated with the
retirement  of long-lived assets that result from the acquisition, construction,
development  and  (or)  the  normal  operation  of long-lived assets, except for
certain  obligations of leases. As used in this Statement, a legal obligation is
an  obligation  that a party is required to settle as a result of an existing or
enacted  law,  stature,  ordinance  or  written  or  oral  contract  or by legal
construction  of  a  contract  under  the  doctrine  of promissory estoppel. The
statement  is  effective  for  financial  statements  issued  for  fiscal  years
beginning  after June 15, 2002. We do not expect the adoption of SFAS No. 143 to
have  a  material  effect  on  our  results  of  operations.


RISK  FACTORS

     Certain  section  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 and 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.

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

     We  have  experienced losses of $6.7 million, $9.6 million and $1.6 million
for  2001,  2000  and  1999, respectively.   These numbers have been restated to
reflect  the retroactive application of the change in accounting principle under
SAB  101.

     We may not be able to attain or sustain consistent future revenue growth on
an  annual  basis, or achieve and maintain consistent profitability on an annual
basis.


                                       13
<PAGE>
SUBSTANTIALLY  ALL  OF OUR NET SALES COME FROM A SMALL NUMBER OF LARGE CUSTOMERS

     Historically,  we  have  relied  on  a  small  number  of  customers  for a
substantial  portion  of  our  net  revenues.  For  example,  in  2001  Samsung
Electronics  Company,  Ltd.,  Read-Rite  Corporation,  NEC,  Infineon  and  SCS
accounted  for  73%, 7%, 6%, 6% and 5% of revenues, respectively.   In the first
three  months of 2002, Samsung Electronics accounted for 70% of our net revenues
and  Selete  accounted  for  27%  of  our  net  revenues.

     The  semiconductor  manufacturing  industry generally consists of a limited
number  of  larger companies. Consequently, we expect that a significant portion
of  our  future  product sales will continue to be concentrated within a limited
number  of  customers,  even  though  we  are  making  progress  in reducing the
concentration  of  our reliance on customers through our strategy of product and
customer  diversification.

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

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

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

     Export  sales accounted for approximately 93%, 98% and 86% of our total net
sales  in  2001,  2000  and 1999, respectively. We anticipate that international
sales,  including  sales  to  South  Korea,  will  continue  to  account  for  a
significant  portion of our net sales. As a result, a significant portion of our
net  sales  will  be  subject  to  risks,  including:

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

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


                                       14
<PAGE>
     Wherever  currency  devaluations  occur  abroad,  our  goods  become  more
expensive  for  our  customers in that region. Difficult economic conditions may
limit capital spending by our customers. These circumstances may also affect the
ability  of  our  customers  to meet their payment obligations, resulting in the
cancellations  or  deferrals of existing orders and the limitation of additional
orders.

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

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

     Semiconductor industry downturns have significantly decreased our revenues,
operating  margins  and  results  of operations in the past. During the industry
downturn  in  1998, several of our customers delayed or cancelled investments in
new  manufacturing  facilities  and  equipment due to declining DRAM prices, the
Asian economic downturn, and general softening of the semiconductor market. This
caused  our  sales  in  1998  to  be significantly lower than in the prior three
years.

     After  the  dramatic  industry boom for semiconductor equipment that peaked
early  in  the  year 2000, another cyclical downturn is presently occurring. The
sharp  and  severe  industry  downturn in 2001 was the largest in the industry's
history. Almost all previous downturns have been solely due to pricing declines.
The  2001  downturn  in  the  industry  marked  a  corresponding decline in unit
production. Genus recently reported a loss for our 2001 financial results. There
is  a  risk  that our revenues and operating results will continue to be further
impacted  by  the  continued  downturn  in the semiconductor industry and global
economy.

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

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

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


                                       15
<PAGE>
WE MAY NOT BE ABLE TO CONTINUE TO SUCCESSFULLY COMPETE IN THE HIGHLY COMPETITIVE
SEMICONDUCTOR  INDUSTRY  AGAINST  COMPETITORS  WITH  GREATER  RESOURCES

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

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

     If  our  competitors  enter  into  strategic  relationships  with  leading
semiconductor manufacturers covering thin film products similar to those sold by
us,  it  would  materially  adversely affect our ability to sell our products to
such  manufacturers.  In addition, to expand our sales we must often replace the
systems  of our competitors or sell new systems to customers of our competitors.
Our competitors may develop new or enhanced competitive products that will offer
price  or performance features that are superior to our systems. Our competitors
may  also  be  able  to respond more quickly to new or emerging technologies and
changes  in  customer  requirements,  or  to  devote  greater  resources  to the
development,  promotion  and  sale of their product lines. We may not be able to
maintain  or  expand  our  sales  if  our  resources  do not allow us to respond
effectively  to  such  competitive  forces.

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

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

     Once  a  semiconductor  manufacturer  selects a particular vendor's capital
equipment,  the  manufacturer  generally relies for a significant period of time
upon  equipment  from  this  vendor  of  choice for the specific production line
application.  To  do  otherwise  creates  risk  for the manufacturer because the
manufacture  of  a  semiconductor  requires many process steps and a fabrication
facility will contain many different types of machines that must work cohesively
to  produce  products  that  meet the customers' specifications. If any piece of
equipment  fails  to  perform  as expected, the customer could incur significant
costs related to defective products, production line downtime, or low production
yields.

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


                                       16
<PAGE>
     A  semiconductor  manufacturer  frequently  will attempt to consolidate its
other  capital  equipment requirements with the same vendor. Accordingly, we may
face  narrow  windows of opportunity to be selected as the "vendor of choice" by
potential  new  customers.  It  may  be difficult for us to sell to a particular
customer  for  a  significant  period  of  time  once  that  customer  selects a
competitor's  product,  and  we  may  not  be  successful  in  obtaining broader
acceptance  of our systems and technology. If we are not able to achieve broader
market  acceptance  of  our systems and technology, we may be unable to grow our
business  and  our  operating  results  and  financial condition will be harmed.

OUR  LENGTHY  SALES  CYCLE INCREASES OUR COSTS AND REDUCES THE PREDICTABILITY OF
OUR  REVENUE

     Sales  of our systems depend upon the decision of a prospective customer to
increase  manufacturing capacity. That decision typically involves a significant
capital  commitment  by  our customers. Accordingly, the purchase of our systems
typically  involves  time-consuming  internal  procedures  associated  with  the
evaluation,  testing,  implementation  and introduction of new technologies into
our  customers'  manufacturing  facilities.  For  many  potential  customers, an
evaluation  as  to  whether  new semiconductor manufacturing equipment is needed
typically  occurs  infrequently.  Following  an evaluation by the customer as to
whether  our systems meet its qualification criteria, we have experienced in the
past  and  expect  to experience in the future delays in finalizing system sales
while  the  customer  evaluates  and  receives  approval for the purchase of our
systems  and  constructs  a  new  facility  or  expands  an  existing  facility.

     Due  to  these  factors,  our  systems typically have a lengthy sales cycle
during  which  we  may  expend substantial funds and management effort. The time
between  our  first  contact  with a customer and the customer placing its first
order  typically  lasts  from  nine  to  twelve months and is often longer. This
lengthy  sales  cycle makes it difficult to accurately forecast future sales and
may  cause  our  quarterly and annual revenue and operating results to fluctuate
significantly  from  period  to  period.  If anticipated sales from a particular
customer  are  not  realized  in  a  particular period due to this lengthy sales
cycle,  our  operating  results  may  be  adversely  affected  for  that period.

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

     Our  success depends in part on our proprietary technology. There can be no
assurance  that  we  will  be able to protect our technology or that competitors
will  not be able to develop similar technology independently. We currently have
a number of United States and foreign patents and patent applications. On August
1,  2001,  we  filed a counterclaim against ASM International N.V., charging ASM
with  infringing  Genus'  U.S.  Patent  5,294,568, entitled "Method of Selective
Etching Native Oxide," and with committing antitrust violations designed to harm
the  atomic  layer  deposition  market.

     There  can  be  no  assurance  that  any  patents  issued to us will not be
challenged,  invalidated  or circumvented or that the rights granted there under
will  provide  us  with  competitive  advantages.

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

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


                                       17
<PAGE>
     On  June  6,  2001,  ASM America, Inc. ("ASMA") filed a patent infringement
action  against  Genus, Inc. ASMA's complaint alleges that Genus is directly and
indirectly  infringing  U.S.  Patent  No. 5,916,365 (the "365 Patent"), entitled
"Sequential  Chemical Vapor Deposition," and U.S. Patent No. 6,015,590 (the "590
Patent")  entitled  "Method  For Growing Thin Films," which ASM claims to own or
exclusively  license.  The Complaint seeks monetary and injunctive relief. Genus
served  its  Answer  to  ASMA's  complaint on August 1, 2001.  Also on August 1,
2001, Genus counterclaimed against ASMA and ASM International, N.V. ("ASMI") for
(1)  infringement  of  U.S.  Patent  No.  5,294,568  (the "568 Patent") entitled
"Method  of  Selective  Etching Native Oxide"; (2) declaratory judgment that the
'365  and  '590  Patents are invalid, unenforceable, and not infringed by Genus;
and  (3) antitrust violations. An initial Case Management Conference was held on
October  16,  2001.  On  January 9, 2002, the Court issued an order granting ASM
leave  to  amend  its complaint to add Dr. Sherman as a party and to add a claim
that  Genus  is directly and indirectly infringing U.S. Patent No 4,798,165 (the
"165 Patent") entitled "Apparatus for Chemical Vapor Deposition Using an Axially
Symmetric  Gas Flow", which ASM claims to own. The court also severed and stayed
discovery  and  trail  of  Genus'  antitrust claims until after the trial of the
patent  claims.  On  February  4, 2002, Genus served its Amended Answer to ASM's
amended  complaint  and counterclaimed against ASM for declaratory judgment that
the '165 Patent is invalid, unenforceable, and not infringed by Genus. The Claim
Construction  Hearings  regarding  these claims are set for June 17, 2002 ( '590
and  '365  Patents),  June 24, 2002 ( '568 Patent), and September 26, 2002 ('165
Patent).


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

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

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

     Because  of  competition  for additional qualified personnel, we may not be
able to recruit or retain necessary personnel, which could impede development or
sales  of  our products. Our growth depends on our ability to attract and retain
qualified,  experienced  employees.  There  is  substantial  competition  for
experienced  engineering, technical, financial, sales and marketing personnel in
our  industry.  In  particular, we must attract and retain highly skilled design
and  process  engineers. Competition for such personnel is intense, particularly
in the San Francisco Bay Area where we are based. If we are unable to retain our
existing key personnel, or attract and retain additional qualified personnel, we
may  from  time  to time experience inadequate levels of staffing to develop and
market  our  products  and  perform services for our customers. As a result, our
growth  could  be  limited due to our lack of capacity to develop and market our
products  to  customers,  or  fail  to  meet  delivery commitments or experience
deterioration  in  service  levels  or  decreased  customer  satisfaction.


                                       18
<PAGE>
OUR FAILURE TO COMPLY WITH ENVIRONMENTAL REGULATIONS COULD RESULT IN SUBSTANTIAL
LIABILITY  TO  US

     We  are  subject  to  a variety of federal, state and local laws, rules and
regulations  relating  to  the  protection  of health and the environment. These
include  laws,  rules  and  regulations  governing  the use, storage, discharge,
release,  treatment  and  disposal  of  hazardous  chemicals  during  and  after
manufacturing,  research and development and sales demonstrations. If we fail to
comply  with  present  or future regulations, we could be subject to substantial
liability  for  clean  up efforts, property damage, personal injury and fines or
suspension  or  cessation  of  our  operations.

     We  use  the  following  regulated  gases  at our manufacturing facility in
Sunnyvale:  tungsten hexafluoride, dichlorosilane silicide, silane and nitrogen.
We  also  use regulated liquids such as hydrofluoric acid and sulfuric acid. The
city  of  Sunnyvale,  California,  imposes  high  environmental  standards  to
businesses  operating  within  the  city.  Genus  has  met  the city's stringent
requirements  and  has  received an operating license from Sunnyvale. Presently,
our compliance record indicates that our methods and practices successfully meet
standards. Moving forward, if we fail to continuously maintain high standards to
prevent  the  leakage  of  any  toxins from our facilities into the environment,
restrictions  on  our  ability  to  expand  or  continue  to operate our present
locations  could  be  imposed  upon us or we could be required to acquire costly
remediation  equipment  or  incur  other  significant  expenses.

WE  DEPEND  UPON  A  LIMITED  NUMBER  OF  SUPPLIERS  FOR  MANY  COMPONENTS  AND
SUBASSEMBLIES,  AND SUPPLY SHORTAGES OR THE LOSS OF THESE SUPPLIERS COULD RESULT
IN  INCREASED  COST  OR  DELAYS  IN  THE  MANUFACTURE  AND  SALE OF OUR PRODUCTS

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

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

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

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

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


                                       19
<PAGE>
THE  PRICE  OF  OUR  COMMON STOCK HAS FLUCTUATED IN THE PAST AND MAY CONTINUE TO
FLUCTUATE  SIGNIFICANTLY IN THE FUTURE, WHICH MAY LEAD TO LOSSES BY INVESTORS OR
TO  SECURITIES  LITIGATION

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

BUSINESS  INTERRUPTIONS  COULD  ADVERSELY  AFFECT  OUR  BUSINESS

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

WE  ARE  OBLIGATED  TO  ISSUE  SHARES OF OUR STOCK UNDER OUTSTANDING OPTIONS AND
WARRANTS  AND  SUCH  ISSUANCE  MAY  DILUTE YOUR PERCENTAGE OWNERSHIP IN GENUS OR
CAUSE  OUR  STOCK  PRICE  TO  DROP

     As  of  April 30, 2002, we have a total of 6,283,666 shares of common stock
underlying  warrants  and  outstanding  employee  stock  options.  Of  the stock
options,  2,027,205  shares  are  exercisable  as  of April 30, 2002. All of the
shares  underlying  the  warrants  are currently exercisable. Some warrants have
terms  providing  for  an  adjustment  of  the  number  of shares underlying the
warrants  in  the  event  that  we  issue  new  shares at a price lower than the
exercise  price of the warrants, where we make a distribution of common stock to
our  shareholders  or  effect  a  reclassification.

     If  all  of the shares underlying the exercisable options and warrants were
exercised  and  sold in the public market, the value of your current holdings in
Genus  may decline as a result of dilution to your percentage ownership in Genus
or as a result of a reduction in the per share value of our stock resulting from
the  increase  in  the  number  of Genus shares available on the market, if such
availability  were  to  exceed  the  demand  for  our  stock.

WE  HAVE  IMPLEMENTED  ANTI-TAKEOVER  MEASURES  THAT MAY RESULT IN DILUTING YOUR
PERCENTAGE  OWNERSHIP  OF  GENUS  STOCK


                                       20
<PAGE>
     Pursuant  to a preferred stock rights agreement, our board of directors has
declared  a  dividend  of  one right for each share of our common stock that was
outstanding  as  of October 13, 2000. The rights trade with the certificates for
the common stock until a person or group acquires beneficial ownership of 15% or
m ore of our common stock. After such an event, we will mail rights certificates
to  our  shareholders  and  the  rights  will become transferable apart from the
common  stock.  At that time, each right, other than rights owned by an acquirer
or its affiliates, will entitle the holder to acquire, for the exercise price, a
number of shares of common stock having a then-current market value of twice the
exercise  price.

     In  the  event  that  circumstances  trigger  the  transferability  and
exercisability  of  rights granted in our preferred stock rights agreement, your
current holdings in Genus may decline as a result of dilution to your percentage
ownership  in  Genus or as a result of a reduction in the per share value of our
stock resulting from the increase in the number of outstanding shares available.

FORWARD-LOOKING  STATEMENTS

     We  make  forward-looking statements in this 10-Q report that may not prove
to  be  accurate.

     This 10-Q report contains or incorporates 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  regarding,  among other items, our business
strategy,  growth  strategy  and anticipated trends in our business. We may make
additional  written  or  oral  forward-looking  statements  from time to time in
filings  with  the  Securities and Exchange Commission or otherwise. When we use
the  words "believe," "expect," "anticipate," "project" and similar expressions,
this  should  alert  you  that  this  is  a  forward-looking  statement.

     We  base  these  forward-looking  statements  on our expectations. They are
subject  to  a  number  of  risks  and  uncertainties  that cannot be predicted,
quantified  or  controlled.  Future  events  and  actual  results  could  differ
materially  from  those  set  forth  in,  contemplated  by,  or  underlying  the
forward-looking  statements.

     Statements  in  this  10-Q  report, and in documents incorporated into this
10-Q  report,  including  those  set  forth  above  in  "Risk Factors," describe
factors,  among  others, that could contribute to or cause these differences. In
light  of  these  risks  and  uncertainties,  there can be no assurance that the
forward-looking information contained in this 10-Q report will in fact transpire
or  prove  to  be  accurate.  All  subsequent  written  and oral forward-looking
statements  attributable  to  us  or  persons acting on our behalf are expressly
qualified  in  their  entirety  by  this  section.

     Statements  in this report, and in documents incorporated into this report,
including  those  set  forth  above  in  "Risk Factors," describe factors, among
others,  that could contribute to or cause these differences.  In light of these
risks  and  uncertainties,  there  can  be no assurance that the forward-looking
information  contained  in  this  report  will  in fact transpire or prove to be
accurate.  All  subsequent  written  and  oral  forward-looking  statements
attributable  to  us  or persons acting on our behalf are expressly qualified in
their  entirety  by  this  section.


                                       21
<PAGE>
ITEM  3.  QUANTITATIVE  AND  QUALITATIVE  DISCLOSURES  ABOUT  MARKET  RISK

     We  face  exposure to adverse movements in foreign currency exchange rates.
These  exposures may change over time as our business practices evolve and could
seriously  harm  our  financial  results. All of our international sales, except
spare  parts  and  service  sales  made  by  our  subsidiary in South Korea, are
currently denominated in U.S. dollars. All spare parts and service sales made by
the South Korean subsidiary are WON denominated. An increase in the value of the
U.S.  dollar  relative  to  foreign  currencies  could  make  our  products more
expensive and, therefore, reduce the demand for our products. Reduced demand for
our  products  could  materially  adversely  affect  our  business,  results  of
operations  and  financial  condition.

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


                                       22
<PAGE>
PART  II.  OTHER  INFORMATION


ITEM  1.  LEGAL  PROCEEDINGS

     On  June  6,  2001,  ASM America, Inc. ("ASMA") filed a patent infringement
action  against  Genus, Inc. ASMA's complaint alleges that Genus is directly and
indirectly  infringing  U.S.  Patent  No. 5,916,365 (the "365 Patent"), entitled
"Sequential  Chemical Vapor Deposition," and U.S. Patent No. 6,015,590 (the "590
Patent")  entitled  "Method  For Growing Thin Films," which ASM claims to own or
exclusively  license.  The Complaint seeks monetary and injunctive relief. Genus
served  its  Answer  to  ASMA's  complaint on August 1, 2001.  Also on August 1,
2001, Genus counterclaimed against ASMA and ASM International, N.V. ("ASMI") for
(1)  infringement  of  U.S.  Patent  No.  5,294,568  (the "568 Patent") entitled
"Method  of  Selective  Etching Native Oxide"; (2) declaratory judgment that the
'365  and  '590  Patents are invalid, unenforceable, and not infringed by Genus;
and  (3) antitrust violations. An initial Case Management Conference was held on
October  16,  2001.  On  January 9, 2002, the Court issued an order granting ASM
leave  to  amend  its complaint to add Dr. Sherman as a party and to add a claim
that  Genus  is directly and indirectly infringing U.S. Patent No 4,798,165 (the
"165 Patent") entitled "Apparatus for Chemical Vapor Deposition Using an Axially
Symmetric  Gas Flow", which ASM claims to own. The court also severed and stayed
discovery  and  trail  of  Genus'  antitrust claims until after the trial of the
patent  claims.  On  February  4, 2002, Genus served its Amended Answer to ASM's
amended  complaint  and counterclaimed against ASM for declaratory judgment that
the '165 Patent is invalid, unenforceable, and not infringed by Genus. The Claim
Construction  Hearings  regarding  these claims are set for June 17, 2002 ( '590
and  '365  Patents),  June 24, 2002 ( '568 Patent), and September 26, 2002 ('165
Patent).

ITEM  2.  CHANGES  IN  SECURITIES  AND  USE  OF  PROCEEDS

     On January 25, 2002, the Company sold 3,871,330 shares of common stock, and
warrants  to  purchase  580,696  shares  of  common stock, for gross proceeds of
approximately  $8.7  million  or  net  aggregate  proceeds  of  $7.8  million.

     As  a  result of the January 25, 2002 transaction, the Company adjusted the
warrants issued to certain investors in May 2001 (the "2001 Warrants") to comply
with the anti-dilution component of the 2001 Warrants.  The adjustment increased
the total number of shares underlying the 2001 Warrants from 1,270,891 shares to
2,031,094  shares.  In  addition,  the  exercise  price of the 2001 Warrants was
reduced  from  $3.50  to  $2.19  per  share.

ITEM  6.  EXHIBITS  AND  REPORTS  ON  FORM  8-K

(a)     Exhibits

None.

(b)     Report  on  Form  8-K

The  company  filed  a  Current  Report  on  Forms  8-K,  on  January  28, 2002.


                                       23
<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,  2002     GENUS,  INC.



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



     /s/  Shum  Mukherjee
     -------------------------------------------
     Shum  Mukherjee
     Chief  Financial  Officer
     (Principal  Financial  and  Principal
     Accounting  Officer)


                                       24
<PAGE>