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                                  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 September 30, 2003 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 by check mark whether the registrant is an accelerated filer(as defined
in  Rule  12b-2  of  the  Exchange  Act).  Yes  No  X
                                                   ---


As  of  November  3,  2003,  the  issuer  had  32,416,257 shares of common stock
outstanding.


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

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements
<S>                                                                                   <C>

     Condensed Consolidated Statements of Operations for the three months and nine months
     ended September 30, 2003 and September 30, 2002 . . . . . . . . . . . . . . . .   3


     Condensed Consolidated Balance Sheets as of September 30, 2003
     and December 31, 2002 . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   4


     Condensed Consolidated Statements of Cash Flows for the nine months ended
     September 30, 2003 and September 30, 2002 . . . . . . . . . . . . . . . . . . .   5

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

Item 2. Management's Discussion and Analysis
        of Financial Condition and Results of Operations . . . . . . . . . . . . . .  17


Item 3. Quantitative and Qualitative Disclosures About Market Risk . . . . . . . . .  31


Item 4.  Controls and Procedures . . . . . . . . . . . . . . . . . . . . . . . . . .  31




PART II. OTHER INFORMATION


Item 1: Legal Proceedings. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  32

Item 5: Other Information. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  32

Item 6: Exhibits and Reports on Form 8-K . . . . . . . . . . . . . . . . . . . . . .  32


Signatures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  35
</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    NINE MONTHS ENDED
                                                 SEPTEMBER 30,        SEPTEMBER 30,

                                                  2003      2002      2003      2002
                                                --------  --------  --------  --------
<S>                                             <C>       <C>       <C>       <C>

Net sales. . . . . . . . . . . . . . . . . . .  $ 9,107    12,153   $41,541    28,487
Costs and expenses:
     Cost of goods sold. . . . . . . . . . . .    7,049     7,826    29,438    20,463
     Research and development. . . . . . . . .    1,663     2,127     5,758     6,079
     Selling, general and administrative . . .    2,800     3,498     8,842    10,229
                                                -------   -------    ------    -------
Loss from operations . . . . . . . . . . . . .   (2,405)   (1,298)   (2,497)   (8,284)

Interest expense . . . . . . . . . . . . . . .     (411)     (160)   (1,318)     (278)
Other income (expense), net. . . . . . . . . .       35       (46)       84      (215)
                                                -------   -------    ------    -------
Loss before income taxes . . . . . . . . . . .   (2,781)   (1,504)   (3,731)   (8,777)

Provision for income taxes . . . . . . . . . .       56        71        56       159
                                                -------   -------    ------    -------
Net loss . . . . . . . . . . . . . . . . . . .  $(2,837)  $(1,575)  $(3,787)  $(8,936)
                                                =======   =======   =======   ========

Net loss per share.
     Basic . . . . . . . . . . . . . . . . . .  $ (0.09)  $ (0.06)  $ (0.13)  $ (0.34)
     Diluted . . . . . . . . . . . . . . . . .  $ (0.09)  $ (0.06)  $ (0.13)  $ (0.34)


Shares used in per share calculation - basic .   30,628    27,693    29,624    26,572
                                                ========  ========  ========  ========
Shares used in per share calculation - diluted   30,628    27,693    29,624    26,572
                                                ========  ========  ========  ========
</TABLE>


     The accompanying notes are an integral part of these unaudited condensed
                       consolidated financial statements.


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

                                                                        SEPTEMBER 30,    DECEMBER 31,
                                                                            2003             2002
                                                                       --------------   --------------
<S>                                                                    <C>              <C>
ASSETS
Current Assets:
     Cash and cash equivalents. . . . . . . . . . . . . . . . . . . .  $       10,470   $      11,546
     Accounts receivable (net of allowance for doubtful
          accounts of $0 in 2003 and $69 in 2002) . . . . . . . . . .           3,275           7,505
     Inventories. . . . . . . . . . . . . . . . . . . . . . . . . . .           9,005          11,405
     Other current assets . . . . . . . . . . . . . . . . . . . . . .           1,064           1,336
                                                                       --------------   --------------
          Total current assets. . . . . . . . . . . . . . . . . . . .          23,814          31,792
Equipment, furniture and fixtures, net. . . . . . . . . . . . . . . .           9,325           8,661
Other assets, net . . . . . . . . . . . . . . . . . . . . . . . . . .           1,270           1,057
                                                                       --------------   --------------
          Total assets. . . . . . . . . . . . . . . . . . . . . . . .  $       34,409   $      41,510
                                                                       ==============   ==============

LIABILITIES
Current Liabilities:
     Short-term bank borrowings . . . . . . . . . . . . . . . . . . .  $        1,969   $       7,813
     Accounts payable . . . . . . . . . . . . . . . . . . . . . . . .           3,186           6,498
     Accrued expenses . . . . . . . . . . . . . . . . . . . . . . . .           3,857           3,064
     Deferred revenue . . . . . . . . . . . . . . . . . . . . . . . .           2,576           2,713
     Customer advances. . . . . . . . . . . . . . . . . . . . . . . .           1,728           1,809
     Loan payable, current portion. . . . . . . . . . . . . . . . . .             266             245
                                                                       --------------   --------------
          Total current liabilities . . . . . . . . . . . . . . . . .          13,582          22,142

Convertible notes . . . . . . . . . . . . . . . . . . . . . . . . . .           5,647           5,301
Loan payable. . . . . . . . . . . . . . . . . . . . . . . . . . . . .              47             270
                                                                       --------------   --------------

          Total liabilities . . . . . . . . . . . . . . . . . . . . .          19,276          27,713
                                                                       --------------   --------------

Contingencies (see note)

SHAREHOLDERS' EQUITY
Common stock, no par value:
     Authorized 100,000 shares on September 30, 2003; and
     50,000 shares on December 31, 2002;
          Issued and outstanding 32,201 shares at September 30, 2003
          and 28,621 shares at December 31, 2002. . . . . . . . . . .         128,862         123,890
     Accumulated deficit. . . . . . . . . . . . . . . . . . . . . . .        (111,596)       (107,809)
     Note receivable from shareholder . . . . . . . . . . . . . . . .            (151)           (151)
     Accumulated other comprehensive loss . . . . . . . . . . . . . .          (1,982)         (2,133)
                                                                       --------------   --------------
          Total shareholders' equity. . . . . . . . . . . . . . . . .          15,133          13,797
                                                                       --------------   --------------
          Total liabilities and shareholders' equity. . . . . . . . .  $       34,409   $      41,510
                                                                       ==============   ==============
</TABLE>


     The accompanying notes are an integral part of these unaudited condensed
                       consolidated financial statements.


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


                                                                     Nine Months Ended
                                                                       September 30,
                                                                      2003       2002
                                                                    ---------  ---------
<S>                                                                 <C>        <C>
Cash flows from operating activities:
     Net loss. . . . . . . . . . . . . . . . . . . . . . . . . . .  $ (3,787)    (8,936)
     Adjustments to reconcile net loss to net cash
       used in operating activities:
          Depreciation . . . . . . . . . . . . . . . . . . . . . .     2,371      2,816
          Write-down for excess and obsolete inventories . . . . .       431        901
          Provision for doubtful accounts. . . . . . . . . . . . .        40          -
          Amortization of deferred finance costs . . . . . . . . .       712        115
          Fixed assets written-off . . . . . . . . . . . . . . . .       140          -
          Changes in assets and liabilities:
               Accounts receivable . . . . . . . . . . . . . . . .     4,190     (1,675)
               Inventories . . . . . . . . . . . . . . . . . . . .     1,758      3,610
               Other assets. . . . . . . . . . . . . . . . . . . .      (757)        67
               Accounts payable. . . . . . . . . . . . . . . . . .    (3,312)    (3,132)
               Accrued expenses and customer advances. . . . . . .       712         87
               Deferred revenue. . . . . . . . . . . . . . . . . .      (137)    (4,450)
                                                                    ---------  ---------
               Net cash provided by (used) in operating activities     2,361    (10,597)
                                                                    ---------  ---------

Cash flows from investing activities:
     Acquisition of equipment, furniture and fixtures. . . . . . .    (2,364)      (402)
                                                                    ---------  ---------
               Net cash used in investing activities . . . . . . .    (2,364)      (402)
                                                                    ---------  ---------
Cash flows from financing activities:
     Proceeds from issuance of common stock. . . . . . . . . . . .     4,822      9,591
     Proceeds from issuance of convertible notes and warrants,
          net  of cash issuance costs of $814. . . . . . . . . . .         -      6,986
     Proceeds from short-term bank borrowings. . . . . . . . . . .    25,856          -
     Payments for short-term bank borrowings . . . . . . . . . . .   (31,700)      (242)
     Proceeds from loan payable. . . . . . . . . . . . . . . . . .         -      1,200
     Payments on loan payable. . . . . . . . . . . . . . . . . . .      (202)      (567)
                                                                    ---------  ---------
               Net cash provided by financing activities . . . . .    (1,224)    16,968
                                                                    ---------  ---------

Effect of exchange rate changes on cash. . . . . . . . . . . . . .       151        124
                                                                    ---------  ---------

Net increase(decrease) in cash and cash equivalents. . . . . . . .    (1,076)     6,093
Cash and cash equivalents, beginning of period . . . . . . . . . .    11,546      3,043
                                                                    ---------  ---------
Cash and cash equivalents, end of period . . . . . . . . . . . . .  $ 10,470   $  9,136
                                                                    =========  =========
Supplemental cash flow information
     Cash paid during the period for:
     Interest. . . . . . . . . . . . . . . . . . . . . . . . . . .  $    639   $    198
     Income taxes. . . . . . . . . . . . . . . . . . . . . . . . .  $    308   $      7
     Non-cash investing and financing activities:
     Warrants issued in connection with convertible notes. . . . .  $      -   $     54
     Transfer of inventory to fixed assets . . . . . . . . . . . .  $    143   $      -
     Transfer of other assets to fixed assets. . . . . . . . . . .  $    600   $      -
     Conversion of convertible notes to common stock . . . . . . .  $    150   $      -
</TABLE>


    The accompanying notes are an integral part of these unaudited condensed
                       consolidated financial statements.


                                        5
        Notes to Condensed Consolidated Financial Statements (Unaudited)
<PAGE>
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
2002  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

          The  Company  has  an  accumulated deficit of $111.6 million and a net
loss  of  $3.8  million  during  the  nine months ended September 30, 2003.  The
Company  is  in  the process of executing its business strategy and has plans to
eventually  achieve  profitable  operations  on  an  ongoing  basis.  Management
believes  that  existing  cash,  cash  generated  by  operations,  and available
financing  will  be  sufficient  to  meet  projected  working  capital,  capital
expenditure  and other cash requirements for the next twelve months.  Management
cannot  provide  assurances  that  its  cash  and  its  future  cash  flows from
operations alone will be sufficient to meet operating requirements and allow the
Company  to  service debt and repay any underlying indebtedness at maturity.  If
the  Company does not achieve anticipated cash flows, we may not be able to meet
planned  product release schedules and forecast sales objectives.  In such event
the  Company  will  require  additional  financing  to fund on-going and planned
operations  and  may  need to implement expense reduction measures. In the event
the  Company  needs additional financing, there is no assurance that funds would
be  available  to  the  Company  or,  if  available,  under  terms that would be
acceptable  to  the  Company.


Net Loss Per Share

     Basic  net  loss  per  share  is  computed  by  dividing net loss to common
shareholders by the weighted average number of common shares outstanding for the
period.  Diluted  net  loss per share is computed by dividing net loss 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
loss per share is as follows (in thousands, except per share data):

<TABLE>
<CAPTION>
                                             Three Months Ended    Nine Months Ended
                                                September 30,        September 30,
                                                2003      2002      2003      2002
                                              --------  --------  --------  --------
<S>                                           <C>       <C>       <C>       <C>
Basic and Diluted
Net loss . . . . . . . . . . . . . . . . . .  $(2,837)  $(1,575)  $(3,787)  $(8,936)
                                              ========  ========  ========  ========
  Weighted average common shares outstanding   30,628    27,693    29,624    26,572
                                              ========  ========  ========  ========
  Basic and diluted net loss per share . . .  $ (0.09)  $(0.06 )  $ (0.13)  $ (0.34)
                                              ========  ========  ========  ========
</TABLE>

     Stock  options,  warrants  and  convertible  debt to purchase approximately
8,710,000  shares  of common stock were outstanding as of September 30, 2003 but
were  not  included in the computation of diluted net earnings per share because
their  effect  would  be  anti-dilutive.


                                        6
        Notes to Condensed Consolidated Financial Statements (Unaudited)
<PAGE>
     Stock  options  and warrants to purchase approximately 12,675,000 shares of
common stock were outstanding as of September 30, 2002, but were not included in
the  computation  of  diluted  net  loss per share because their effect would be
anti-dilutive.

Stock  Compensation. The Company accounts for stock-based compensation using the
intrinsic  value  method prescribed in Accounting Principles Board Opinion (APB)
No.  25,  "Accounting  for  Stock  Issued to Employees" and Financial Accounting
Standards  Board  Interpretation  No.  44  "Accounting  for Certain Transactions
Involving  Stock  Compensation."  Generally,  the  Company's  policy is to grant
options with an exercise price equal to the quoted market price of the Company's
stock  on  the  date  of  the  grant. Accordingly, no compensation cost has been
recognized  in  the  Company's  statements  of operations. Pro forma information
regarding  net  loss  and  net  loss  per  share  as  if  the  Company  recorded
compensation  expense  based  on  the fair value of stock-based awards have been
presented in accordance with Statement of Financial Accounting Standards No.148,
"Accounting  for Stock-Based Compensation - Transition and Disclosure" and is as
follows  for  the  three  and  nine months ended September 30, 2003 and 2002 (in
thousands,  except  per  share  data):

<TABLE>
<CAPTION>
                                                               Three Months Ended    Nine Months Ended
                                                                  September 30,        September 30,
                                                                 2003      2002      2003      2002
                                                               --------  --------  --------  ---------
<S>                                                            <C>       <C>       <C>       <C>
Net loss, as reported . . . . . . . . . . . . . . . . . . . .  $(2,837)  $(1,575)  $(3,787)  $ (8,936)
Add: Stock -based employee compensation recorded. . . . . . .        -         -         -          -
Deduct: Total stock-based employee compensation
          expense, determined using a fair value based method
          for all awards, net of related tax effects. . . . .    ( 331)     (449)   (1,445)    (1,517)
                                                               --------  --------  --------  ---------

Pro forma net loss attributable to common
     shareholders . . . . . . . . . . . . . . . . . . . . . .  $(3,168)  $(2,024)  $(5,232)  $(10,453)
                                                               ========  ========  ========  =========

Earnings per share

  Basic - as reported . . . . . . . . . . . . . . . . . . . .  $ (0.09)  $ (0.06)  $ (0.13)  $  (0.34)
                                                               ========  ========  ========  =========

  Basic - pro forma . . . . . . . . . . . . . . . . . . . . .  $ (0.10)  $ (0.07)  $ (0.18)  $  (0.39)
                                                               ========  ========  ========  =========

  Diluted - as reported . . . . . . . . . . . . . . . . . . .  $ (0.09)  $ (0.06)  $ (0.13)  $  (0.34)
                                                               ========  ========  ========  =========

  Diluted - as pro forma. . . . . . . . . . . . . . . . . . .  $ (0.10)  $ (0.07)  $ (0.18)  $  (0.39)
                                                               ========  ========  ========  =========
</TABLE>


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

     The  fair  value  of  options  was estimated at the date of grant using the
Black-Scholes  option-pricing  model  with  the  following  weighted  average
assumptions  for  the  three and nine months ended September 30, 2003, and 2002:


                                        7
        Notes to Condensed Consolidated Financial Statements (Unaudited)
<PAGE>
<TABLE>
<CAPTION>
                                            Three Months Ended       Nine Months Ended
                                               September 30,           September 30,

                                              2003        2002        2003        2002
                                           ----------  ----------  ----------  ----------
<S>                                        <C>         <C>         <C>         <C>
Weighted average risk free interest rates       1.93%       2.03%       2.08%       3.53%
Weighted average expected life              3.0 years   3.0 years   3.0 years   3.0 years
Weighted average expected volatility            93%        123%         98%        104%
Expected dividend yield                          0%          0%          0%          0%
</TABLE>


     The  weighted  average  fair  value  of options granted in the three months
ended  September  30,  2003  and  2002  was  $2.38  and $1.13, respectively. The
weighted  average  fair  value  of  options  granted  in  the  nine months ended
September  30,  2003  and  2002  was  $1.86  and  $1.95,  respectively.


     The  fair  value  of  the  employees'  stock purchase rights under the 1989
Employee  Stock  Purchase  Plan  was  estimated  using  the  Black-Scholes
option-pricing  model  with  the following assumptions for the nine months ended
September  30,  2003  and  2002:

<TABLE>
<CAPTION>
                                              Nine Months Ended
                                                September 30,
                                              2003        2002
                                           ----------  ----------
<S>                                        <C>         <C>
Weighted average risk free interest rates       1.03%       1.44%
Weighted average expected life              0.5 years   0.5 years
Weighted average expected volatility            74%         89%
Expected dividend yield                          0%          0%
</TABLE>


     The  weighted  average  fair  value of those purchase rights granted in the
nine months ended September 30, 2003 and 2002 was $0.80 and $0.86, respectively.


Revenue  Recognition.

     The Company derives revenue from the sale and installation of semiconductor
manufacturing  systems and from engineering services and the sale of spare parts
to  support  such  systems.


                                        8
        Notes to Condensed Consolidated Financial Statements (Unaudited)
<PAGE>
Equipment selling arrangements generally involve contractual customer acceptance
provisions and installation of the product occurs after shipment and transfer of
title.  Effective January 1, 2000, at which time the Company had not established
verifiable  objective  evidence  of the fair value of installation services, the
Company  commenced  deferring  recognition  of revenue from such equipment sales
until  installation was complete and the product was accepted by the customer to
comply  with  the  provisions  of  Securities  and  Exchange  Commission  Staff
Accounting  Bulletin  No.  101.  In  the  third  quarter  of  2002,  the Company
established  verifiable  objective  evidence  of  fair  value  of  installation
services,  one  of  the  requirements  for  Genus  to  recognize  revenue  for
multiple-element  arrangements  prior  to  completion  of installation services.
Accordingly,  under  SAB  101,  if  Genus  has  met  defined customer acceptance
experience  levels  with  both  the customer and the specific type of equipment,
then  the  Company  recognizes  equipment  revenue upon shipment and transfer of
title.  A  portion  of  revenue  associated  with  undelivered  elements such as
installation  and  on-site  support  related  tasks  is  recognized  when  the
installation  is  completed and the customer accepts the product and for on-site
support  as  the  support  service is provided.  For products that have not been
demonstrated  to meet product specifications for the customer prior to shipment,
revenue is recognized when installation is complete and the customer accepts the
product.  Revenues  can  fluctuate  significantly  as  a result of the timing of
customer  acceptances.  At September 30, 2003 and December 31, 2002, the Company
had  deferred  revenue  of  $2.6  million  and  $2.7  million,  respectively.

     Revenues  from  sale of spare parts are generally recognized upon shipment.
Revenues  from engineering services are recognized as the services are completed
over  the  duration  of  the  contract.


Borrowings

    On  December  20,  2001 and as amended on March 26, 2002 and March 20, 2003,
the  Company maintains line of credit facilities for a maximum of $15.0 million,
based  on  eligible  receivables  and inventory. The interest rate is prime plus
1.75%  per  annum  and  the  facility  expires  on  June  29, 2004.  The loan 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  (calculated  as  the  excess  of total assets over total liabilities
adjusted  to  exclude intangible assets and balances receivable from officers or
affiliates  and  to  exclude  the  convertible  notes)  of $15.0 million.  As of
September  30,  2003,  there  was  $2.0  million  outstanding  under this credit
facility,  the  maximum  amount  available  to  the  Company.

    On  January  4,  2002,  the  Company received gross proceeds of $1.2 million
under a secured loan, which is payable over 36 months, accrues interest of 8.75%
per  annum  and  is  secured  by two systems in the Company's demonstration lab.
There  was  $313,000  outstanding  at  September  30,  2003.



CONVERTIBLE  NOTES  AND  WARRANTS

     On August 15, 2002, the Company raised $7.0 million, net of issuance costs,
by  issuing $7.8 million unsecured 7% convertible notes and warrants to purchase
2,761,000  shares  of  common  stock.

-     The  convertible  notes  are  convertible  into common stock at a price of
      $1.42 per share and $525,000 of the notes were subsequently converted into
      370,000  shares  of common stock. In addition, a $300,000 convertible note
      was  issued and was subsequently converted into common stock at a price of
      $1.25  per  share.  All convertible notes accrue interest at 7% per annum,
      payable  semi-annually  each February 15 and August 15, in cash or, at the
      election  of  the  Company, in registered stock. The remaining convertible
      notes  are  redeemable three years after issuance or may be converted into
      4,912,000  shares  of  common  stock  prior  to the redemption date at the
      election  of  the investors.


                                        9
        Notes to Condensed Consolidated Financial Statements (Unaudited)
<PAGE>
-     The  warrants  were exercisable for 2,641,000 shares of common stock at an
      exercise  price  of $1.42 per share and for 120,000 shares of common stock
      at  an  exercise  price of $1.25 per share. Warrants for 600,000 shares of
      common  stock were previously exercised. In August 2003, all the remaining
      warrants  under  this arrangement  were  exercised  and the Company issued
      2,161,000  shares  of  common  stock  in  exchange for cash proceeds of $3
      million.

     The  Company  classified  the warrants as equity and allocated a portion of
the proceeds from the convertible notes to the warrants, using the relative fair
value  method  in  accordance with APB No. 14. " Accounting for Convertible Debt
and Debt Issued with Stock Purchase Warrants". The allocation of proceeds to the
warrants  reduced  the carrying value of the convertible notes. As a result, the
fair  value  of  the common stock issuable upon conversion of the notes exceeded
the  carrying  value  of  the  convertible  notes,  resulting  in  a  beneficial
conversion  feature.  The value of the beneficial conversion feature is accreted
over the stated term of the convertible notes in accordance with EITF No. 98-5 "
Accounting  for  Convertible  Securities  with Beneficial Conversion Features or
Contingently  Adjustable  Conversion  Ratios"  and  EITF No. 00-27, "Application
Issue  No.  98-5  to  Certain  Convertible  Instruments".

     The  net  cash  proceeds  from  the  issuance  of the convertible notes and
warrants  were  recorded  as  follows  (in  thousands):

<TABLE>
<CAPTION>
<S>                                                     <C>
          Convertible note                              $5,560
          Detachable warrants                            1,312
          Beneficial conversion feature                    928
                                                        -------
          Proceeds from convertible notes and warrants   7,800
          Other asset, issuance costs                     (814)
                                                        -------
          Net proceeds                                  $6,986
                                                        =======
</TABLE>

     The  $2.2  million  difference  between  the $5.6 million original carrying
value  of  the  notes and the $7.8 million face value of the notes, representing
the  value  of  the  warrant  and  the  beneficial conversion feature,  has been
recorded  as equity and is accreted as interest expense over the three year term
of  the  convertible  notes,  using  the  effective  interest  rate  method.

     The Company incurred issuance costs of approximately $868,000, representing
cash  of  $814,000  and  warrant  with  a fair value of $54,000. The warrants to
purchase  79,000  shares of common stock at $1.42 per share was subsequently net
exercised  for  38,631  shares  of  common  stock.

      Issuance  costs  are  included  with  other  assets  and  are amortized as
interest expense over the stated term of the convertible notes.

     The  carrying  value of the convertible note and deferred issuance costs at
September  30,  2003  is  calculated  as  follows  (in  thousands):


                                        10
        Notes to Condensed Consolidated Financial Statements (Unaudited)
<PAGE>
<TABLE>
<CAPTION>
                                       Convertible    Other Asset,
                                          Note       Issuance Costs
                                      -------------  ---------------
<S>                                   <C>            <C>
Balance at issuance, August 15, 2002  $      5,560            ($868)
Conversions                                   (675)               -
Accretion and amortization                     416              104
                                      -------------  ---------------
Balance at December 31, 2002                 5,301             (764)
Conversions                                   (150)               -
Accretion and amortization                     496              216
                                      -------------  ---------------
Balance at September 30, 2003         $      5,647            ($548)
                                      =============  ===============
</TABLE>


     The  Company  recorded  interest costs related to the convertible notes and
warrants  of  $350,000  and  $1.1 million during the three and nine months ended
September  30,  2003.  Interest  cost  includes  coupon interest of $122,000 and
$371,000  during  the  three  and  nine  months  ended  September  30,  2003.

     In  the  event  of a change of control of the Company, the note holders may
elect  to receive repayment of the notes at a premium of 10% over the face value
of  the  notes.


Inventories

     Inventories comprise the following (in thousands):

<TABLE>
<CAPTION>
                                   September 30,   December 31,
                                        2003           2002
                                   --------------  -------------
<S>                                <C>             <C>

Raw materials and purchased parts  $        4,503  $       4,493
Work in process                             2,114          3,417
Finished goods                                498            175
Inventory at customers' locations           1,890          3,320
                                   --------------  -------------
                                   $        9,005  $      11,405
                                   ==============  =============
</TABLE>


     Inventory  at customers' locations represent the cost of systems shipped to
customers for which we have not recognized revenue and for which we are awaiting
customer  acceptance.


Accrued  Expenses

     Accrued expenses comprise the following (in thousands):

<TABLE>
<CAPTION>
                                                     September 30,   December 31,
                                                          2003           2002
                                                     --------------  -------------
<S>                                                  <C>             <C>

System warranty                                      $        1,586  $         970
Accrued compensation, commissions and related items             861            509
Federal , state and foreign taxes                               388            751
Accrued legal expenses                                           22            129
Accrued rent                                                    312            162
Other                                                           688            543
                                                     --------------  -------------
                                                     $        3,857  $       3,064
                                                     ==============  =============
</TABLE>


                                        11
        Notes to Condensed Consolidated Financial Statements (Unaudited)
<PAGE>
     The  Company  generally  provides  one-year  labor  and  two-year  material
warranty on its products. Warranty expenses are accrued at the time that revenue
is  recognized  from  the  sale  of  products. At present, based upon historical
experience, the Company accrues material warranty equal to 2% and 5% of shipment
value  for its 200mm and 300mm  products, respectively, and labor warranty equal
to $20,000 per system for both its 200mm and 300mm products. At the end of every
quarter,  the  Company reviews its actual spending on warranty and reassesses if
its  accrual  is adequate to cover warranty expenses on the systems in the field
which  are  still  under  warranty. Differences between the required accrual and
recorded  accrual  are charged or credited to warranty expense for the period.


      Changes  in  the  warranty  accrual during the three and nine months ended
September  30,  2003  were  as  follows  (in  thousands):

<TABLE>
<CAPTION>
                                                                       Three Months Ended
                                                                       September 30, 2003
                                                                      --------------------
<S>                                                                   <C>
Balance, June 30, 2003                                                $             1,564
Accrual for warranty liability for revenues recognized in the period                  545
Settlements made                                                                     (523)
                                                                      --------------------
Balance, September 30, 2003                                           $             1,586
                                                                      --------------------
</TABLE>


<TABLE>
<CAPTION>
                                                                       Nine Months Ended
                                                                       September 30, 2003
                                                                      --------------------
<S>                                                                   <C>
Balance, December 31, 2002                                            $               970
Accrual for warranty liability for revenues recognized in the period                1,611
Settlements made                                                                     (995)
                                                                      --------------------
Balance, September 30, 2003                                           $             1,586
                                                                      --------------------
</TABLE>


                                        12
        Notes to Condensed Consolidated Financial Statements (Unaudited)
<PAGE>
Common  Stock  and  Warrants

     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 aggregate proceeds of
approximately $7.9 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  of  September  30,  2003,  all  these  warrants  were exercisable and
outstanding.

     In August 2002, the Company completed a $7.8 million financing in a private
placement  of  subordinated  notes  convertible  into  common stock and warrants
convertible  into  or  exercisable  for  common stock.  Refer to the Convertible
Notes  and  Warrants  footnote  for  further  information.


Related  Party  Transactions

     Mario M. Rosati, a Director of the Company is also a member of the law firm
of  Wilson Sonsini Goodrich & Rosati, the general counsel of the Company. During
the nine months ended September 30, 2003 and 2002, the Company paid $412,000 and
$1,455,000  respectively,  to Wilson Sonsini Goodrich & Rosati. At September 30,
2003,  the  Company  owed  approximately  $44,000  to  Wilson Sonsini Goodrich &
Rosati.


Comprehensive  Loss

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

<TABLE>
<CAPTION>
                                                        Three Months Ended    Nine Months Ended
                                                          September 30,         September 30,
                                                         2003      2002       2003      2002
<S>                                                     <C>       <C>       <C>       <C>
Net loss . . . . . . . . . . . . . . . . . . . . . . .  $(2,837)  $(1,575)  $(3,787)  $(8,936)
Change in foreign currency translation adjustment. . .      128       (57)      151       124
                                                        -------   -------   --------  --------
     Comprehensive loss. . . . . . . . . . . . . . . .  $(2,709)  $(1,632)  $(3,636)  $(8,812)
                                                        =======   =======   =======   ========
</TABLE>


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

<TABLE>
<CAPTION>
                                    September 30    December 31
                                        2003           2002
                                   --------------  -------------
<S>                                <C>             <C>
Cumulative translation adjustment  $      (1,982)  $     (2,133)
                                   =============   =============
</TABLE>


                                        13
        Notes to Condensed Consolidated Financial Statements (Unaudited)
<PAGE>
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 ASMA 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 ASMA 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 ASMA 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 ASMA's
amended  complaint and counterclaimed against ASMA for declaratory judgment that
the '165 Patent is invalid, unenforceable, and not infringed by Genus. On August
15,  2002, the Court issued a claim construction order regarding the '590, '365,
and  598'  Patents.  A  claim construction hearing regarding the '165 Patent was
held  on  September  26,  2002, and the Court issued a claim construction ruling
regarding  this  patent  on November 13, 2002. On September 23, 2002 Genus filed
motions  for  summary  judgment  on  noninfringement regarding the '590 and '365
Patents.  On  November  20, 2002, the Court granted the Genus motion for summary
judgment  on  noninfringement of the '365 Patent. On January 10, 2003, the Court
granted  Genus'  motion  for  summary  judgment  on  the  '590  Patent.

     On  April 11, 2003, Genus settled its lawsuit with ASMI (the "Settlement").
Under  the  terms of the Settlement, Genus gained a royalty-free license to each
of  the  patents  ASMI asserted in the litigation, including both ALD patents as
well  as  Patent  '165. By specific agreement of the parties, these licenses are
applicable  to  Genus'  successors and affiliates. Genus has likewise obtained a
covenant  from  ASMI  that  it  will  not  sue  Genus for patent infringement or
antitrust  violations  for  the  next  five  years.

     In  return,  Genus  has  granted  ASMI  and its successors and affiliates a
royalty-free  license  to  the  patent  Genus asserted in the litigation, Patent
'568,  and  has  agreed  to dismiss its antitrust claims against ASMI. Genus has
also  agreed not to sue ASMI for patent infringement or antitrust violations for
the  next  five  years.

     No  payments  have  been made by either Genus or ASMI in exchange for these
licenses  and  the  covenant  not  to  sue.  However,  under  the  terms  of the
Settlement,  ASMI  has  the  right  to  pursue an appeal of the District Court's
judgments of non-infringement regarding the ALD patents. The agreement specifies
that  if the Federal Circuit vacates either of the existing judgments related to
the  ALD  patents  based on a change in the District Court's claim construction,
Genus  will pay ASMI $1 million for the royalty-free licenses to the ALD patents
it  has  been  granted  under  the  agreement.


                                       14
        Notes to Condensed Consolidated Financial Statements (Unaudited)
<PAGE>
Recent  Accounting  Pronouncements


     In  November  2002,  the  Emerging Issues Task Force reached a consensus on
Issue  00-21(EITF  00-21), Multiple-Deliverable Revenue Arrangements. EITF 00-21
addresses  how  to  account  for  arrangements  that may involve the delivery or
performance  of  multiple  products,  services  and/or rights to use assets. The
consensus  mandates  how to identify whether goods or services or both which are
to  be  delivered  separately in a bundled sales arrangement should be accounted
for separately because they are "separate units of accounting." The guidance can
affect  the  timing of revenue recognition for such arrangements, even though it
does not change rules governing the timing or patterns of revenue recognition of
individual  items  accounted  for  separately.  The  final  consensus  will  be
applicable to agreements entered into in fiscal periods beginning after June 15,
2003,  with  early adoption permitted. Additionally, companies will be permitted
to  apply  the consensus guidance to all existing arrangements as the cumulative
effect  of  a  change  in  accounting  principle  in  accordance with Accounting
Principles  Board  Opinion  No. 20, Accounting Changes. The Company adopted EITF
00-21  during  the  third quarter of 2003 and the adoption did not result in any
material  impact on our financial position, cash flows or results of operations.

     In  May  2003,  the  EITF  reached a consensus on Issue 03-05 (EITF 03-05),
Applicability  of  AICPA Statement of Position 97-2 to Non-Software Deliverables
in  an Arrangement Containing More-Than-Incidental Software. EITF 03-05 provides
guidance  on  whether  non-software  deliverables  included in arrangements that
contain more-than-incidental software are included within the scope of SOP 97-2.
This issue does not address the allocation of the overall arrangement fee to the
software  and  the non-software elements of the arrangement. This issue does not
address  the  determination  of whether the software is more than incidental but
assumes  that  an  arrangement includes software that is more than incidental to
the products or services as a whole. The provisions of EITF 03-05 applies to new
revenue  arrangements  entered into after the beginning of an entity's reporting
period  beginning  after  August  13, 2003. The Company believes the adoption of
this  standard  will  have  no  material  effect  on  our consolidated financial
statements.

     In  April 2003, the FASB issued SFAS No. 149, Amendment of Statement 133 on
Derivative  Instruments  and  Hedging  Activities.  SFAS  No.  149  amends  and
clarifies  financial  accounting  and  reporting  of  derivative instruments and
hedging  activities  under  SFAS  No.  133.  The amendments pertain to decisions
made:  (i)  as part of the Derivatives Implementation Group process that require
amendment  to SFAS 133, (ii) in connection with other FASB projects dealing with
financial  instruments,  and  (iii) in connection with the implementation issues
raised related to the application of the definition of a derivative. SFAS 149 is
effective  for  contracts  entered  into or modified after June 30, 2003 and for
designated  hedging  relationships after June 30, 2003. SFAS 149 will be applied
prospectively. The Company adopted SFAS 149 during the third quarter of 2003 and
the  adoption  did  not result in any material impact on our financial position,
cash  flows  or  results  of  operations.

     In May 2003, the FASB issued SFAS No. 150, Accounting for Certain Financial
Instruments  with Characteristics of both Liabilities and Equity.  The Statement
establishes  standards  for  how  an  issuer  classifies  and  measures  certain
financial  instruments  with  characteristics of both liabilities and equity and
further  requires  that  an  issuer classify as a liability (or an asset in some
circumstances)  financial  instruments  that  fall within its scope because that
financial  instrument  embodies  an  obligation  of  the  issuer.  Many  of such
instruments  were  previously  classified as equity.  The statement is effective
for  financial  instruments  entered  into  or  modified after May 31, 2003, and
otherwise  is  effective  at the beginning of the first interim period beginning
after  June  15,  2003, except for mandatory redeemable financial instruments as
they  relate  to  minority  interest  in consolidated finite-lived entities. The
Statement is to be implemented by reporting the cumulative effect of a change in
accounting  principle  for  financial instruments created before the issuance of
the  date  of  the  Statement and still existing at the beginning of the interim
period  of  adoption. Restatement is not permitted. The Company adopted SFAS 150
during the third quarter of 2003 and the adoption did not result in any material
impact  on  our  financial  position,  cash  flows  or  results  of  operations.


                                       15
        Notes to Condensed Consolidated Financial Statements (Unaudited)
<PAGE>
     In  January  2003,  the  FASB issued FASB Interpretation No. 46 ("FIN 46"),
Consolidation  of  Variable Interest Entities - an interpretation of ARB No. 51.
FIN  46  requires  certain  variable interest entities to be consolidated by the
primary  beneficiary  of the entity if the equity investors in the entity do not
have  the  characteristics  of  a  controlling financial interest or do not have
sufficient  equity  at  risk  for  the  entity to finance its activities without
additional  subordinated  financial  support  from  other  parties.  FIN  46  is
effective immediately for all new variable interest entities created or acquired
after January 31, 2003. For variable interest entities created or acquired prior
to  February  1,  2003,  the  provisions  of FIN 46 must be applied to the first
reporting  period ending after December 15, 2003.  The Company believes that the
adoption  of  this  standard  will  have  no material effect on our consolidated
financial  statements.


Subsequent  Events

On  November 7, 2003, the Company completed a private placement of approximately
6.4  million  shares  of  its  common  stock  at a per share price of $5.25. The
offering  resulted  in  gross  proceeds  to  the  company of approximately $33.6
million,  before  costs related to the private placement. The purchase price for
the shares represented approximately a 5 percent discount to the average closing
price  for  10  days  prior  to  the close on November 7, 2003. No warrants were
issued  in  this  transaction.

The  company  stated that it expects to use the net proceeds of the offering for
working  capital and general corporate purposes.  Halpern Capital, Inc. acted as
the  lead  placement  agent  to  Genus  for  this  private  placement.


                                       16
<PAGE>
Item 2.  Management's Discussion and Analysis of Financial Condition and Results
of  Operations

     Certain  information  contained  in  this  Quarterly Report on Form 10-Q is
forward-  looking in nature. All statements included in this Quarterly Report on
Form  10-  Q  or  made  by  management  of Genus, Inc., other than statements of
historical  fact,  are  forward-looking  statements. Examples of forward-looking
statements  include statements regarding the Company's future financial results,
operating  results,  business strategies, projected costs, products, competitive
positions  and  plans  and objectives of management for future operations. These
forward-looking  statements  are based on management's estimates and projections
as of the date hereof and include the assumptions that underlie such statements.
In  some cases, forward-looking statements can be identified by terminology such
as  "may,"  "will,"  "should",  "would,"  "expects,"  "plans,"  "anticipates,"
"believes," "estimates," "predicts," "potential," "continue," or the negative of
these  terms  or  other  comparable terminology. Any expectations based on these
forward-looking  statements  are  subject  to  risks and uncertainties and other
important factors, including those discussed in the section below entitled "Risk
Factors." Other risks and uncertainties are disclosed in the Company's prior SEC
filings,  including  its  Annual  Report  on Form 10-K for the fiscal year ended
December  31,  2002.  These  and  many  other factors could affect the Company's
future financial and operating results, and could cause actual results to differ
materially  from  expectations  based on forward-looking statements made in this
document or elsewhere by the Company or on its behalf.

CRITICAL  ACCOUNTING  POLICIES

The  financial  statements are prepared in conformity with accounting principles
generally  accepted  in  the  United States of America and require management to
make  estimates  and  assumptions  in  certain circumstances that affect amounts
reported  in  the  accompanying  consolidated  financial  statements and related
footnotes.  As  such,  we  are required to make certain estimates, judgments and
assumptions that we believe are reasonable based upon the information available.
These  estimates  and  assumptions  affect  the  reported  amounts of assets and
liabilities  at the date of the financial statements and the reported amounts of
revenues  and expenses during the periods presented.  The significant accounting
policies  which  the  Company  believes  are  the  most critical to aid in fully
understanding  and  evaluating  our  reported  financial  results  include  the
following:

Revenue  recognition

The  Company  derives  revenue  from  the sale and installation of semiconductor
manufacturing  systems and from engineering services and the sale of spare parts
to  support  such  systems.

Equipment selling arrangements generally involve contractual customer acceptance
provisions and installation of the product occurs after shipment and transfer of
title.  Effective January 1, 2000, the Company did not have verifiable objective
evidence  of  the  fair  value  of installation services.  The Company generally
defers  recognition  of  revenue  from  equipment  sales  until  installation is
complete  and  the product is accepted by the customer.  In the third quarter of
2002,  the  Company  established  verifiable objective evidence of fair value of
installation  services,  one  of the requirements for Genus to recognize revenue
for  multiple-element arrangements prior to completion of installation services.
Accordingly,  if  a  product  delivered  to  a customer has met defined customer
acceptance  experience  levels  with  both the customer and the specific type of
equipment,  then  the  Company  recognizes  equipment  revenue upon shipment and
transfer  of  title.  A  portion of revenue associated with undelivered elements
such  as  installation  and  on-site  support  related  tasks  is recognized for
installation  when  the  installation  is completed and the customer accepts the
product  and  for  on-site  support  as  the  support  service is provided.  For
products  that have not been demonstrated to meet product specifications for the
customer  prior to shipment, revenue is recognized when installation is complete
and  the customer accepts the product. Revenues can fluctuate significantly as a
result  of  the timing of customer acceptances and the applicability of multiple
element  accounting  to  products shipped in any particular period. At September
30,  2003  and  2002,  the Company had deferred revenue of $2.6 million and $2.9
million,  respectively.

Revenues  from  sale  of  spare  parts  are  generally recognized upon shipment.
Revenues  from engineering services are recognized as the services are completed
over  the  duration  of  the  contract.


Accrual  for  warranty  expenses

The  Company generally provides one-year labor and two-year material warranty on
its  products.  Warranty  expenses  are  accrued  at  the  time  that revenue is
recognized  from  the  sale  of  products.  At  present,  based  upon historical
experience, the Company accrues material warranty equal to 2% and 5% of shipment
value  for its 200mm and 300mm  products, respectively, and labor warranty equal
to $20,000 per system for both its 200mm and 300mm products. At the end of every
quarter,  the  Company reviews its actual


                                       17
<PAGE>
spending on warranty and reassesses if its accrual is adequate to cover warranty
expenses on the systems in the field which are still under warranty. Differences
between  the  required  accrual  and recorded accrual are charged or credited to
warranty  expenses  for  the period. At September 30, 2003 and 2002, the Company
had  accrued  $1,586,000  and  $878,000,  respectively,  for  material and labor
warranty  obligations.  Actual  results  could  differ  from  estimates.  In the
unlikely  event  that  a  problem is identified that would result in the need to
replace  components  on  a large scale, we would experience significantly higher
expenses  and  our  results  of  operations  and  financial  condition  could be
materially  and  adversely  effected.


Valuation  of  Inventories

Inventories  are  recorded  at  the  lower  of standard cost, which approximates
actual  cost  on  a  first-in-first-out  basis,  or  market value. We write down
inventories  to  net  realizable  value  based  on  forecasted demand and market
conditions.  Raw  material and purchased parts include spare parts inventory for
systems  and  was  $4.5 million at September 30, 2003 and December 31, 2002. The
forecasted  demand  for spare parts takes into account the Company's obligations
to  support  systems  for  periods  that  are  as  long  as  five  years.

Actual demand and market conditions may be different from those projected by the
Company.  This  could  have a material effect on operating results and financial
position.  Net  inventory write-downs during the nine months ended September 30,
2003  and  2002,  were  $431,000  and  $901,000,  respectively.


Valuation  of  research  and  demonstration  equipment

Equipment includes research and demonstration equipment, which is located in our
Applications  Laboratory  and  is  used  to  demonstrate  to  our  customers the
capabilities  of  our  equipment  to process wafers and deposit films. The gross
value  of  demonstration  equipment is based on the cost of materials and actual
factory  labor  and  overhead  expenses incurred in manufacturing the equipment.
Costs  related  to refurbishing or maintaining existing demonstration equipment,
which  do  not  add to the capabilities or useful life of the equipment, are not
capitalized  and  are expensed as incurred. Demonstration equipment is stated at
cost  and  depreciated  over  a  period of five years.  If the Company sells the
equipment,  it  may  experience  gross margins that are different from the gross
margins  achieved  on  equipment  manufactured  specifically  for  customers.


RESULTS  OF  OPERATIONS
-----------------------

     NET SALES. Net sales for the three and nine months ended September 30, 2003
were  $  9.1  million  and  $41.5  million,  when compared to net sales of $12.2
million and $28.5 million for the corresponding periods in 2002. Revenues during
the  third  quarter  of  2003  included  two  300mm systems, one ALD and one CVD
system. Revenue during the third quarter of 2002 included one 200mm CVD systems,
two  200mm  ALD system and one 200mm ALD upgrade system revenue. During the nine
months  ended  September  30,  2003,  twelve  systems were recognized as revenue
compared to eight systems and an upgrade recognized as revenue in the first nine
months of 2002.

     Based  on  the  slow recovery of the semiconductor capital equipment market
and  the  uncertainty  on  the  timing  of  the orders, Genus has maintained its
booking  guidance  to the $45 million to $60 million range and full year revenue
guidance  in  the  $50  million  to  $60  million  range.


                                       18
<PAGE>
     COST  OF GOODS SOLD. Cost of goods sold for the three and nine months ended
September 30, 2003 were $7.0 million and $29.4 million, compared to $7.8 million
and  $20.5 million for the same periods in 2002. Gross profit as a percentage of
revenues  was  23%  for  the  third quarter of 2003 compared to 36% in the third
quarter  of  2002. Gross profit as a percentage of revenues was 29% for the nine
months  ended September 30, 2003 compared to 28% for the corresponding period in
2002.  The decrease in gross margin as a percentage of revenues during the third
quarter  of  2003 as compared to third quarter of 2002 is primarily due to lower
revenues  resulting  in  lower  production  volumes  and decreased manufacturing
efficiencies.  The  adverse  mix  effect  during  the  third  quarter of 2003 as
compared  to  third  quarter  of  2002  was a result of our recognizing a higher
portion of 300mm systems during the third quarter of 2003, which currently has a
lower  margin  than  other systems. The increase in gross margin during the nine
months  ended September 30, 2003 compared to the nine months ended September 30,
2002  was  primarily  due  to  higher  revenues,  resulting in higher production
volumes  and  increased  manufacturing  efficiencies.

     RESEARCH  AND  DEVELOPMENT. Research and development (R&D) expenses for the
quarter  ended  September 30, 2003 were $1.7 million, compared with $2.1 million
or  18%  of net sales for the both periods in 2003 and 2002. For the nine months
ended September 30, 2003, research and development expenses were $5.8 million or
14%  of  sales, compared to $6.1 million or 21% of net sales for the nine months
ended  September  30,  2002.

     SELLING,  GENERAL  AND  ADMINISTRATIVE. Selling, general and administrative
(SG&A) expenses were $2.8 million and $8.8 million for the three and nine months
ended  September  30,  2003  compared  to  $3.5 million and $10.2 million in the
corresponding  periods in 2002.  As a percent of net sales, selling, general and
administrative  expenses  were  31%  and 21% for the three and nine months ended
September  30,  2003  compared  to  29% and 36% for the corresponding periods in
2002.  The  dollar  decreases in selling, general and administrative expenses in
the  nine  month  period  ended  September  30, 2003 compared with corresponding
period  in  2002  was  primarily  due  to lower legal costs, partially offset by
increased  in  facilities  expenses  and  severance  costs.

     INTEREST  EXPENSE.  Interest  expense  for  the three and nine months ended
September  30,  2003  was  $411,000  and  $1,318,000,  respectively, compared to
interest expense of $160,000 and $278,000 for the corresponding periods in 2002.
The  increase  in  interest  expense  during  the  three  and  nine months ended
September 30, 2003, compared with the corresponding period in 2002 was primarily
due  to  an  increase  in  interest  expense  and  accretion and amortization of
discount  and  issuance  costs related to the convertible notes that were issued
during  the  third  quarter  of  2002.


     OTHER  INCOME (EXPENSE), NET. Other income (expense), net for the three and
nine  months  ended  September  30,  2003  were $35,000 and $84,000 respectively
compared  to  other  income  (expense),  net of ($46,000) and ($215,000) for the
corresponding  periods  in  2002.

     PROVISION  FOR  INCOME  TAXES.  We  did not record any provision for income
taxes  in  the  U.S. and Japan for the three and nine months ended September 30,
2003  and  2002,  as we recorded losses in these entities. We provide for a full
valuation  allowance  against  the  tax benefit associated with these losses. We
recorded  $56,000  in income tax expense for our South Korean subsidiary for the
three  and  nine  months  ended  September  30, 2003, as compared to $71,000 and
$159,000 recorded for the corresponding periods in 2002.


                                       19
<PAGE>
LIQUIDITY  AND  CAPITAL  RESOURCES

     At  September 30, 2003, our cash and cash equivalents were $10.5 million, a
$1.0 million decrease over cash and cash equivalents of $11.5 million held as of
December  31,  2002 .The reduction in cash and cash equivalents at September 30,
2003 as compared with the cash and cash equivalents balance at December 31, 2002
primarily  resulted  from  losses  generated  in  the  nine  month  period ended
September  30, 2003. Cash generated by operating activities totaled $2.4 million
for  the  nine  months  ended September 30, 2003, and consisted primarily of net
loss  of  $3.8 million, decreases in accounts payable of $3.3 million, partially
offset  by  decrease  in  accounts  receivable  of  $4.2  million,  decrease  in
inventories  of $1.8 million, increase in accrued expenses and customer advances
of  $712,000,  decrease  in  other  assets of $757,000, and depreciation of $2.4
million.

     Financing activities used cash of $1.2 of million for the nine months ended
September  30,  2003,  and primarily consisted payments of debt of $5.8 million,
net,  partially  offset  from  proceeds  from  issuance  of common stock of $4.8
million.

     We  made  capital  expenditures  of  $2.4 million for the nine months ended
September  30,  2003.  These  expenditures were primarily related to purchase of
property,  plant  and  equipment.

     Our  primary  source  of  funds  at  September  30, 2003 consisted of $10.5
million  in  cash and cash equivalents, $3.3 million of accounts receivable, and
our  credit  line  of  up to $15 million with Silicon Valley Bank, of which $2.0
million,  the  maximum available amount, was outstanding at September 30, 2003.

     A  summary  of  our  contractual obligations as of September 30, 2003 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  $ 1,969  $    1,969  $        -  $        -  $        -  $      -
Citicapital              313         N/A         266          47           -         -
Convertible Notes*     6,975         N/A           -       6,975           -         -
Operating Leases      16,866         N/A       1,628       4,946       3,768     6,524
                     -------  ----------  ----------  ---------  ----------  ---------
                     $26,123  $    1,969  $    1,894  $   11,968  $    3,768  $  6,524
                     ======   ==========  ==========  ==========  ==========  ========
<FN>

*In  the  event  of  a  change of control in the Company, the note holder may elect to
receive  repayment  of  the  notes  at  a  premium  of  10%.
</TABLE>


          The  Company  has  an  accumulated deficit of $111.6 million and a net
loss  of  $3.8  million  during  the  nine  months ended September 30, 2003. The
Company  is  in  the process of executing its business strategy and has plans to
eventually  achieve  profitable  operations  on  an  ongoing  basis.  Management
believes  that  existing  cash,  cash  generated  by  operations,  and available
financing  will  be  sufficient  to  meet  projected  working  capital,  capital
expenditure  and other cash requirements for the next twelve months.  Management
cannot  provide  assurances  that  its  cash  and  its  future  cash  flows from
operations alone will be sufficient to meet operating requirements and allow the
Company  to  service debt and repay any underlying indebtedness at maturity.  If
the  Company does not achieve anticipated cash flows, we may not be able to meet
planned  product release schedules and forecast sales objectives.  In such event
the  Company  will  require  additional  financing  to fund on-going and planned
operations  and  may  need to implement expense reduction measures. In the event
the  Company  needs additional financing, there is no assurance that funds would
be  available  to  the  Company  or,  if  available,  under  terms that would be
acceptable  to  the  Company.



                                       20
<PAGE>
RECENT  ACCOUNTING  PRONOUNCEMENTS

     In  November  2002,  the  Emerging Issues Task Force reached a consensus on
Issue  00-21(EITF  00-21), Multiple-Deliverable Revenue Arrangements. EITF 00-21
addresses  how  to  account  for  arrangements  that may involve the delivery or
performance  of  multiple  products,  services  and/or rights to use assets. The
consensus  mandates  how to identify whether goods or services or both which are
to  be  delivered  separately in a bundled sales arrangement should be accounted
for separately because they are "separate units of accounting." The guidance can
affect  the  timing of revenue recognition for such arrangements, even though it
does not change rules governing the timing or patterns of revenue recognition of
individual  items  accounted  for  separately.  The  final  consensus  will  be
applicable to agreements entered into in fiscal periods beginning after June 15,
2003,  with  early adoption permitted. Additionally, companies will be permitted
to  apply  the consensus guidance to all existing arrangements as the cumulative
effect  of  a  change  in  accounting  principle  in  accordance with Accounting
Principles  Board  Opinion  No. 20, Accounting Changes. The Company adopted EITF
00-21  during  the  third quarter of 2003 and the adoption did not result in any
material  impact on our financial position, cash flows or results of operations.

     In  May  2003,  the  EITF  reached a consensus on Issue 03-05 (EITF 03-05),
Applicability  of  AICPA Statement of Position 97-2 to Non-Software Deliverables
in  Arrangement  Containing  More-Than-Incidental  Software. EITF 03-05 provides
guidance  on  whether  non-software  deliverables  included in arrangements that
contain more-than-incidental software are included within the scope of SOP 97-2.
This issue does not address the allocation of the overall arrangement fee to the
software  and  the non-software elements of the arrangement. This issue does not
address  the  determination  of whether the software is more than incidental but
assumes  that  an  arrangement includes software that is more than incidental to
the products or services as a whole. The provisions of EITF 03-05 applies to new
revenue  arrangements  entered into after the beginning of an entity's reporting
period  beginning  after  August  13, 2003. The Company believes the adoption of
this  standard  will  have  no  material  effect  on  our consolidated financial
statements.

     In  April 2003, the FASB issued SFAS No. 149, Amendment of Statement 133 on
Derivative Instruments and Hedging Activities. SFAS No. 149 amends and clarifies
financial  accounting  and  reporting  of  derivative  instruments  and  hedging
activities  under SFAS No. 133. The amendments pertain to decisions made: (i) as
part  of  the Derivatives Implementation Group process that require amendment to
SFAS  133,  (ii)  in  connection with other FASB projects dealing with financial
instruments,  and  (iii)  in  connection  with  the implementation issues raised
related  to  the  application  of  the  definition  of a derivative. SFAS 149 is
effective  for  contracts  entered  into or modified after June 30, 2003 and for
designated  hedging  relationships after June 30, 2003. SFAS 149 will be applied
prospectively. The Company adopted SFAS 149 during the third quarter of 2003 and
the  adoption  did  not result in any material impact on our financial position,
cash  flows  or  results  of  operations.


                                       21
<PAGE>
     In May 2003, the FASB issued SFAS No. 150, Accounting for Certain Financial
Instruments  with  Characteristics of both Liabilities and Equity. The Statement
establishes  standards  for  how  an  issuer  classifies  and  measures  certain
financial  instruments  with  characteristics of both liabilities and equity and
further  requires  that  an  issuer classify as a liability (or an asset in some
circumstances)  financial  instruments  that  fall within its scope because that
financial  instrument  embodies  an  obligation  of  the  issuer.  Many  of such
instruments were previously classified as equity. The statement is effective for
financial instruments entered into or modified after May 31, 2003, and otherwise
is  effective  at the beginning of the first interim period beginning after June
15,  2003,  except for mandatory redeemable financial instruments as they relate
to  minority interest in consolidated finite-lived entities. The Statement is to
be  implemented  by  reporting  the  cumulative effect of a change in accounting
principle  for  financial instruments created before the issuance of the date of
the  Statement  and  still  existing  at  the beginning of the interim period of
adoption.  Restatement is not permitted. The Company adopted SFAS 150 during the
third  quarter of 2003 and the adoption did not result in any material impact on
our  financial  position,  cash  flows  or  results  of  operations.


     In  January  2003,  the  FASB issued FASB Interpretation No. 46 ("FIN 46"),
Consolidation  of  Variable Interest Entities - an interpretation of ARB No. 51.
FIN  46  requires  certain  variable interest entities to be consolidated by the
primary  beneficiary  of the entity if the equity investors in the entity do not
have  the  characteristics  of  a  controlling financial interest or do not have
sufficient  equity  at  risk  for  the  entity to finance its activities without
additional  subordinated  financial  support  from  other  parties.  FIN  46  is
effective immediately for all new variable interest entities created or acquired
after January 31, 2003. For variable interest entities created or acquired prior
to  February  1,  2003,  the  provisions  of FIN 46 must be applied to the first
reporting  period ending after December 15, 2003.  The Company believes that the
adoption  of  this  standard  will  have  no material effect on our consolidated
financial  statements.




RISK  FACTORS

     Sections of Management's Discussion and Analysis of Financial Condition and
Results  of  Operations 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 the Risk
Factors  set  forth  below.




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


                                       22
<PAGE>
     We  have experienced losses of $11.6 million, $6.7 million and $9.7 million
for  2002,  2001  and  2000,  respectively.

     While  we  believe our cash position, anticipated cash from operations, and
our  available  credit  facilities are sufficient for the next twelve months, we
cannot  provide  assurances  that  future  cash  flows  from  operations will be
sufficient to meet operating requirements and allow us to service debt and repay
any  underlying  indebtedness at maturity.   If we do not achieve the cash flows
that  we  anticipate,  we  may  not  be able to meet our planned product release
schedules  and  our  forecast  sales  objectives.  In such event we will require
additional  financing  to  fund  on-going and planned operations and may need to
implement further expense reduction measures, including, but not limited to, the
sale  of  assets,  the consolidation of operations, workforce reductions, and/or
the  delay, cancellation or reduction of certain product development, marketing,
licensing,  or other operational programs.  Some of these measures would require
third-party  consents  or  approvals,  including that of our bank, and we cannot
provide assurances that these consents or approvals will be obtained.  There can
be  no  assurance that we will be able to make additional financing arrangements
on  satisfactory  terms,  if  at  all, and our operations and liquidity would be
materially  adversely  affected.

     We  cannot  assure  our  shareholders  and  investors  that we will achieve
profitability  in  fiscal 2003 and beyond, nor can we provide assurances that we
will  achieve  the  sales  necessary  to avoid further expense reductions in the
future.
..

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

     In nine month period ended September 30, 2003, Samsung Electronics Company,
Ltd.,  Seagate  Technologies,  Inc.  and  IBM, accounted for 74%, 9%, and 9%, of
revenues,  respectively.  In  the  nine  month  period ended September 30, 2002,
Samsung Electronics Company, Ltd., and Seagate accounted for 51%, and 23% of our
revenues,  respectively.

     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

     None  of  our  customers  has  entered  into  a long-term agreement with us
requiring  them  to  purchase  our  products.  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  could  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  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.


                                       23
<PAGE>
     We  rely  on  third  parties  to  manufacture  the  components  used in our
products.  Some  of our suppliers are sole or limited source.  In addition, some
of these suppliers are relatively small-undercapitalized companies that may have
difficulties  in  raising  sufficient funding to continue operations.  There are
risks associated with the use of independent suppliers, including unavailability
of  or  delays  in  obtaining  adequate  supplies  of components and potentially
reduced  control  of  quality,  production costs and timing of delivery.  We may
experience  difficulty  identifying  alternative  sources  of supply for certain
components  used  in our products.  In addition, the use of alternate components
may  require  design  alterations,  which  may  delay  installation and increase
product  costs.  These  components  may  not  be  available  in  the  quantities
required, on reasonable terms, or at all.  Financial or other difficulties faced
by  our  suppliers  or  significant  changes  in  demand for these components or
materials  could  limit their availability.  Any failures by these third parties
to  adequately  perform  may  impair our ability to offer our existing products,
delay the submission of products for regulatory approval, and impair our ability
to  deliver  products  on  a  timely  basis  or otherwise impair our competitive
position.  Establishing  our  own  capabilities  to manufacture these components
would  be  expensive  and  could significantly decrease our profit margins.  Our
business,  results  of  operations  and  financial  condition would be adversely
affected  if we were unable to continue to obtain components in the quantity and
quality  desired  and  at  the  prices  we  have  budgeted.


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 78% of our total net sales for the
nine  months  ended  September  30,  2003.  Net  sales to our South Korean-based
customers accounted for approximately 73% of total net sales for the nine months
ended  September 30, 2003. Export sales accounted for approximately 72%, 93% and
98%  of  our  total net sales in 2002, 2001 and 2000, respectively. Net sales to
our South Korean-based customers accounted for approximately 56%, 73% and 92% of
total  net  sales  in  2002,  2001  and  2000,  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  additional  risks,  including:

-     unexpected  changes  in  foreign  law  or  regulatory  requirements;
-     exchange  rate  volatility;
-     tariffs  and  other  barriers;
-     political  and  economic  instability;
-     military  confrontation;
-     Severe  Acute  Respiratory  Syndrome  (SARS);
-     difficulties  in  accounts  receivable  collection;
-     extended  payment  terms;
-     difficulties  in  managing  distributors  or  representatives;
-     difficulties  in  staffing  our  subsidiaries;
-     difficulties  in  managing  foreign  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
increase  the  cost  of  our  products  to  our  customers  and could lead these
customers  to  delay  or  defer  their  purchasing  decisions.


                                       24
<PAGE>
     Wherever  currency  devaluations  occur  abroad,  our  goods  become  more
expensive  for  our  customers  in that country. In addition, difficult economic
conditions  may limit capital spending by our customers. These circumstances may
also  affect  the  ability  of  our customers to meet their payment obligations,
resulting  in  the  cancellations  or  deferrals  of  existing  orders  and  the
limitation  of  additional  orders.

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  magnetic  thin  film  heads,  flat  panel  displays,
micro-electromechanical  systems  and inkjet printers, we are still dependent on
sales  to  semiconductor  manufacturers.  The semiconductor industry is cyclical
which  impacts  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.
However,  the  2001  downturn  in the industry marked a corresponding decline in
unit  production,  as well as price reduction.  We expect that our revenues will
continue  to  be further impacted by the continued downturn in the semiconductor
industry  and  global economy, which may prevent us from increasing our revenues
and  achieving  profitability.


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

     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,  or  even a delay in our
introduction of new products or enhancements, 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-ten 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 or at all.


                                       25
<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 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, and
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  system  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.

     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.


                                       26
<PAGE>
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.

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  any  such  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.

     Litigation  is  time consuming, expensive and its outcome is uncertain.  We
may  not prevail in any litigation in which we are involved.  Should we be found
to  infringe  any  of  the  patents  asserted or any other intellectual property
rights  of  others, in addition to potential monetary damages and any injunctive
relief  granted,  we  may  need  either to obtain a license to commercialize our
products  or  redesign  our  products  so they do not infringe any third party's
intellectual  property.  If  we  are  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  products,  which  would  have  an immediate and
materially  adverse  impact  on  our  business  and  our  operating  results.

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

     We  are highly dependent on key personnel to manage our business, and their
knowledge  of  business,  management  skills  and  technical  expertise would be
difficult  to replace. Our success depends upon the efforts and abilities of Dr.
William  W.R.  Elder,  our  chairman  and chief executive officer, Dr. Thomas E.
Seidel,  our  chief  technology  officer, and other key managerial and technical
employees.  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 employees are at
will.


                                       27
<PAGE>
     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,
market, or manufacture our products or to 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 our failure to meet delivery commitments or
our  service  levels  could  lead  to  customer  dissatisfaction.


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, where our facilities are located, imposes high
environmental  standards  to  businesses  operating  within  the city. Genus 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  NINE  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 United States, Europe, South Korea and
Japan and through nine independent sales representatives and distributors in the
United  States,  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

     In  2000,  we  invested  significant  resources  in Japan by establishing a
direct  sales  organization,  Genus-Japan,  Inc.  To  date,  we have had limited
success  in penetrating in Japanese semiconductor industry. Although we continue
to  invest  significant  resources  in  our  Japan office, 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 our office in
Japan.


                                       28
<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 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.


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  are  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 WILL DILUTE YOUR PERCENTAGE OWNERSHIP IN GENUS

     As  of September 30, 2003, we have approximately 3,798,000 shares of common
stock  underlying warrants, and outstanding employee stock options. Of the stock
options,  1,816,000  shares are exercisable as of September 30, 2003. 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  because  there may not be sufficient demand to purchase the
increased  number  of  shares  that  would  be  available  for  sale.


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

     On  September 7, 2000, the Company's Board of Directors declared a dividend
pursuant to a newly adopted Share Purchase Rights Plan, which replaced a similar
earlier  plan  that  had  expired  on July 3, 2000.  The intended purpose of the
Rights  Plan  is  to protect shareholders' rights and to maximize share value in
the  event  of an unfriendly takeover attempt.  As of the record date of October
13,  2000, each


                                       29
<PAGE>
share of common stock of Genus, Inc. outstanding was granted one right under the
new  plan.  Each  right is exercisable only under certain circumstances and upon
the  occurrence  of  certain  events and permits the holder to purchase from the
Company  one  one-thousandth  (0.001)  of  a  share  of  Series  C Participating
Preferred  Stock  at an initial exercise price of forty dollars ($40.00) per one
one-thousandth  share.  The 50,000 shares of Series C preferred stock authorized
in  connection  with  the  Rights  Plan  will  be  used  for the exercise of any
preferred  shares  purchase  rights  in  the event that any person or group (the
Acquiring  Person)  acquires  beneficial  ownership  of  15%  or  more  of  the
outstanding  common  stock.  In  such  event,  the  shareholders (other than the
Acquiring  Person)  would  receive  common  stock of the Company having a market
value  of twice the exercise price. Subject to certain restrictions, the Company
may  redeem the rights issued under the Rights Plan for $0.001 per right and may
amend  the  Rights  Plan  without the consent of rights holders. The rights will
expire  on  October  13,  2010,  unless  redeemed  by  the  Company.

     In  the  event  that  circumstances  trigger  the  transferability  and
exercisability  of  rights  granted in our Rights Plan, 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 and your failure to
exercise  your  rights  under  the  Rights  Plan.

     In  the  event  of a change of control of the Company, the convertible note
holders may elect to receive repayment of the notes at a premium of 10% over the
face  value  of  the  notes.


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, including those set forth above in "Risk
Factors,",  and  in  documents  incorporated  into  this  10-Q  report, 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,  including  those  set  forth  above in "Risk
Factors,"  and  in  documents  incorporated  into this report, 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.


                                       30
<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 and Japan,
are  currently denominated in U.S. dollars. The spare parts and service sales of
$7.2  million  for  nine  months ended September 30, 2003 generated by the South
Korean  subsidiary  are  WON  denominated  and  Japanese  subsidiary  are  YEN
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.

     We have both fixed rate and floating rate interest obligations.  Fixed rate
obligations  may  result  in  interest  expenses  in  excess  of market rates if
interest  rates  fall,  while floating rate obligations may result in additional
interest  costs  if interest rates rise.  An increase of one percentage point in
interest  rates  would  not  materially  impact  the  results of our operations.

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



ITEM  4.  CONTROLS AND PROCEDURES

     EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES. Our management evaluated,
with  the  participation  of  our  Chief  Executive  Officer and Chief Financial
Officer,  the  effectiveness of our disclosure controls and procedures as of the
end  of  the period covered by this Quarterly Report on Form 10-Q. Based on this
evaluation,  our  Chief  Executive  Officer and our Chief Financial Officer have
concluded  that  our  disclosure controls and procedures are effective to ensure
that  information  we are required to disclose in reports that we file or submit
under the Securities Exchange Act of 1934 is recorded, processed, summarized and
reported within the time periods specified in Securities and Exchange Commission
rules  and  forms.

     CHANGES IN INTERNAL CONTROLS OVER FINANCIAL REPORTING.  There was no change
in  our  internal  control over the financial reporting that occurred during the
period  covered  by  this  Quarterly  Report  on  Form  10-Q that has materially
affected,  or  is  reasonably  likely to materially affect, our internal control
over  financial  reporting.

     During  the  fiscal  2002  financial  reporting  process,  management,  in
consultation with the Company's independent accountants, identified deficiencies
involving  internal  controls  over  inventories,  warranties  and the Company's
Korean  operations  which  constituted  a "Reportable Condition" under standards
established  by  the  American  Institute  of  Certified  Public  Accountants.
Management  believes  that these matters have not had any material impact on our
financial  statements.  Management  established  a  project plan and implemented
processes  and  controls  to  address  these  deficiencies.


                                       31
<PAGE>
PART  II.  OTHER  INFORMATION

ITEM  1.  LEGAL  PROCEEDINGS

The  information  required  by  this  Part  II, Item 1 is incorporated herein by
reference  to  that  certain disclosure under the caption "Legal Proceedings" in
Part  I,  Item  1  of  this  Form  10-Q


ITEM  5.  OTHER INFORMATION

On  November 7, 2003, the Company completed a private placement of approximately
6.4  million  shares  of  its  common  stock  at a per share price of $5.25. The
offering  resulted  in  gross  proceeds  to  the  company of approximately $33.6
million,  before  costs related to the private placement. The purchase price for
the shares represented approximately a 5 percent discount to the average closing
price  for  10  days  prior  to  the close on November 7, 2003. No warrants were
issued  in  this  transaction.

ITEM  6.  EXHIBITS  AND  REPORTS  ON  FORM  8-K

(a)  Exhibits

Exhibit
  No.    Description
----     -----------
2.1   Asset  Purchase  Agreement,  dated  April  15, 1998, by and between Varian
      Associates,  Inc.  and  Registrant  and  exhibits  thereto  (15)
3.1   Amended  and  Restated  Articles  of  Incorporation of Registrant as filed
      September  6,  1997  (11)
3.2   By-laws  of  Registrant,  as  amended  (13)
4.1   Common  Shares  Rights  Agreement,  dated  as  of  April 27, 1990, between
      Registrant  and  Bank  of  America,  N.T.  and  S.A.,  as Rights Agent (4)
4.2   Convertible  Preferred  Stock  Purchase Agreement, dated February 2, 1998,
      among  the  Registrant  and  the  Investors  (14)
4.3   Registration  Rights  Agreement,  dated  February  2,  1998,  among  the
      Registrant  and  the  Investors  (14)
4.4   Certificate  of  Determination  of  Rights,  Preferences and Privileges of
      Series  A  Convertible  Preferred  Stock  (14)
4.5   Certificate  of  Determination  of  Rights,  Preferences and Privileges of
      Series  B  Convertible  Preferred  Stock  (17)
4.6   Redemption  and  Exchange  Agreement,  dated  July  16,  1998,  among  the
      Registrant  and  the  Investors  (17)
4.7   Registration Rights Agreement, dated January 17, 2002, as amended, amongst
      the  Registrant  and  the  Investors  (20)
4.8   Securities  Purchase  Agreement  dated July 31, 2002 among the Company and
      the  Purchasers  signatory  thereto.  (21)
4.9   Resale  Registration  Rights  Agreement  dated  August  14, 2002 among the
      Company  and  the  Purchasers  signatory  thereto.  (21)
4.10  7%  Convertible  Subordinated  Note  Due  2005 dated August 14, 2002. (21)
10.1  Lease,  dated  December 6, 1985, for Registrant's facilities at 4 Mulliken
      Way,  Newburyport,  Massachusetts,  and  amendment and extension of lease,
      dated  March  17,  1987  (1)
10.2  Assignment of Lease, dated April 1986, for Registrant's facilities at Unit
      11A,  Melbourn  Science  Park,  Melbourn,  Hertz,  England  (1)
10.3  Registrant's  1989  Employee  Stock  Purchase  Plan,  as  amended  (5)
10.4  Registrant's  1991  Incentive  Stock  Option  Plan,  as  amended  (10)
10.5  Registrant's  2000  Stock  Plan  (19)
10.6  Distributor/Representative  Agreement,  dated  August  1,  1984,  between
      Registrant and Aju Exim (formerly Spirox Holding Co./You One Co. Ltd.) (1)
10.7  Exclusive  Sales  and  Service  Representative Agreement, dated October 1,
      1989,  between  Registrant  and  AVBA  Engineering  Ltd.  (3)


                                       32
<PAGE>
10.8  Exclusive Sales and Service Representative Agreement, dated as of April 1,
      1990,  between  Registrant  and  Indosale  PVT  Ltd.  (3)
10.9  License  Agreement,  dated November 23, 1987, between Registrant and Eaton
      Corporation  (1)
10.10 Exclusive  Sales  and Service Representative Agreement, dated May 1, 1989,
      between  Registrant  and  Spirox  Taiwan,  Ltd.  (2)
10.11 Lease,  dated  April 7, 1992, between Registrant and The John A. and Susan
      R.  Sobrato  1979  Revocable  Trust  for  property at 1139 Karlstad Drive,
      Sunnyvale,  California  (6)
10.12 Asset  Purchase  Agreement,  dated  May  28,  1992,  by  and  between  the
      Registrant  and  Advantage  Production  Technology,  Inc.  (7)
10.13 License  and  Distribution Agreement, dated September 8, 1992, between the
      Registrant  and  Sumitomo  Mutual  Industries  Ltd.  (8)
10.14 Lease  Agreement,  dated  October 1995, for Registrant's facilities at Lot
      62,  Four  Stanley  Tucker  Drive,  Newburyport,  Massachusetts  (9)
10.15 International  Distributor  Agreement,  dated  July  18,  1997,  between
      Registrant  and  Macrotron  Systems  GmbH  (12)
10.16 Credit  Agreement,  dated August 18, 1997, between Registrant and Sumitomo
      Bank  of  California  (12)
10.18 Settlement  Agreement  and  Mutual  Release, dated April 20, 1998, between
      Registrant  and  James  T.  Healy  (16)
10.19 Form  of  Change  of  Control  Severance  Agreement  (16)
10.20 Settlement  Agreement  and Mutual Release, dated January 1998, between the
      Registrant  and  John  Aldeborgh  (18)
10.21 Settlement  Agreement  and  Mutual  Release,  dated  May 1998, between the
      Registrant  and  Mary  Bobel  (18)
31    Certification  of  Chief  Executive  Officer  and  Chief Financial Officer
      pursuant  to  Exchange Act Rule 13a-14(a).
32    Certification  of  Chief  Executive  Officer  and  Chief Financial Officer
      pursuant  to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of
      the  Sarbanes-Oxley  Act  of  2002.

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

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


                                       33
<PAGE>
(10)  Incorporated  by  reference  to  the  exhibit  filed with the Registrant's
      Quarterly  Report  on  Form  10-Q  for  the  quarter ended March 31, 1997.
(11)  Incorporated  by  reference  to  the  exhibit  filed with the Registrant's
      Quarterly  Report  on  Form 10-Q for the quarter ended September 30, 1997.
(12)  Incorporated  by  reference  to  the  exhibit  filed with the Registrant's
      Quarterly  Report  on  Form 10-Q for the quarter ended September 30, 1997.
(13)  Incorporated  by  reference  to  the  exhibit  filed with the Registrant's
      Quarterly  Report  on  Form 10-Q for the quarter ended September 30, 1998.
(14)  Incorporated  by  reference  to  the  exhibit  filed with the Registrant's
      Current  Report  on  Form  8-K  dated  February  12,  1998.
(15)  Incorporated  by  reference  to  the  exhibit  filed with the Registrant's
      Current  Report  on  Form  8-K  dated  April  15,  1998.
(16)  Incorporated  by  reference  to  the  exhibit  filed with the Registrant's
      Annual  Report  on  Form  10-K/A  for  the  year  ended December 31, 1997.
(17)  Incorporated  by  reference  to  the  exhibit  filed with the Registrant's
      Current  Report  on  Form  8-K  dated  July  29,  1998.
(18)  Incorporated  by  reference  to  the  exhibit  filed with the Registrant's
      Quarterly  Report on Form 10-Q/A for the quarter ended September 30, 1998.
(19)  Incorporated  by  reference  to  the  exhibit  filed with the Registrant's
      Annual  Report  on  Form  10-K  for  the  year  ended  December  31, 2000.
(20)  Incorporated  by  reference  to  the  exhibit  filed with the Registrant's
      Current  Report  on  Form  8-K  dated  January  25,  2002.
(21)  Incorporated  by  reference  to  the  exhibit  filed with the Registrant's
      Current  Report  on  Form  8-K  dated  August  20,  2002.

(b)  Report  of  Form  8-K

The  Company  furnished, but did not file, one current report on Form 8-K during
the  three  months  ended  September  30,  2003. The report dated July 31, 2003,
contained  the  Company's  press  release announcing it's earnings for the three
months  ended  June  30,  2003.


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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:  November 13, 2003
       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)



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