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, 2000  or

[ ]    Transition  report  pursuant  to  Section 13 or 15(d) of the Securities
Exchange  Act  of  1934 for  the  transition  period  from  ___  to  ___

Commission  file  number  0-17139

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

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

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

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

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


Indicate by check mark whether the registrant (1)has filed all reports required
to  be filed  by  Sections  13  or 15(d) of the Securities Exchange Act of 1934
during the preceding  12  months (or for such period that the registrant was
required to file  such  reports),  and  (2)  has  been  subject to such filing
requirements for the past 90 days.  Yes  X  No
                                             --

Indicate  the  number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date:

Common shares outstanding at November 13, 2000:        19,212,583
<PAGE>


                         PART I.  FINANCIAL INFORMATION


ITEM 1. FINANCIAL STATEMENTS

<TABLE>
<CAPTION>
                               GENUS, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
                           (In thousands, except share data)


                                                THREE MONTHS ENDED            NINE MONTHS ENDED
                                                   SEPTEMBER 30,                 SEPTEMBER 30,
                                                2000          1999            2000          1999
                                                ----          ----             ----          ----
<S>                                            <C>           <C>           <C>           <C>
Net sales . . . . . . . . . . . . . . . . . .  $     14,165  $      8,818  $     38,798  $    22,736
Costs and expenses:
 Cost of goods sold . . . . . . . . . . . . .         8,122         5,021        21,840       13,120
 Research and development . . . . . . . . . .         2,034         1,474         5,762        4,018
 Selling, general and administrative. . . . .         2,820         2,072         8,013        5,954
Income (loss) from operations . . . . . . . .         1,189           251         3,183         (356)
                                               ------------  ------------  ------------  ------------

Other income (expenses), net. . . . . . . . .           101            62           383          237
Income (loss) before income taxes . . . . . .         1,290           313         3,566         (119)
                                               ------------  ------------  ------------  ------------

Provision for income taxes. . . . . . . . . .           100             0           450            0
                                               ------------  ------------  ------------  ------------
Net income (loss) . . . . . . . . . . . . . .  $      1,190  $        313  $      3,116  $      (119)
                                               ============  ============   ===========  ============

Net income (loss) per share - basic . . . . .  $       0.06  $       0.02  $       0.17  $     (0.01)
                                               ============  ============   ===========  ============

Net income (loss) per share - diluted . . . .  $       0.06  $       0.02  $       0.15  $     (0.01)
                                               ============  ============   ===========  ============

Shares used in per share calculation-basic. .        19,126        18,267        18,845       18,083
                                               ============  ============   ===========  ============
Shares used in per share calculation-diluted.        20,593        18,943        20,600       18,083
                                               ============  ============   ===========  ============
</TABLE>

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


<PAGE>
<TABLE>
<CAPTION>
                            GENUS, INC. AND SUBSIDIARIES
                       CONSOLIDATED BALANCE SHEETS (UNAUDITED)
                           (In thousands, except share data)


                                                    SEPTEMBER 30,         DECEMBER 31,
                                                        2000                 1999
                                                   --------------        --------------
<S>                                                <C>                   <C>
ASSETS
Current assets:
 Cash and cash equivalents. . . . . . . . . . . .  $             9,105   $       6,739
 Accounts receivable (net allowance for doubtful
   accounts of $241 in 2000 and $241 in 1999. . .                7,910           7,629
 Inventories. . . . . . . . . . . . . . . . . . .               10,733           7,266
 Other current assets . . . . . . . . . . . . . .                1,196             883
   Total current assets . . . . . . . . . . . . .               28,944          22,517
                                                   --------------------  --------------
 Property and equipment, net. . . . . . . . . . .                7,139           4,894
 Other assets, net. . . . . . . . . . . . . . . .                  252             333
                                                   --------------------  --------------
  Total assets . . . . . . . . . . . . . . . . .  $            36,335   $      27,744
                                                   ====================  ==============

LIABILITIES
Current liabilities:
 Accounts payable . . . . . . . . . . . . . . . .  $             7,686   $       4,146
 Accrued expenses . . . . . . . . . . . . . . . .                4,494           4,220
                                                   --------------------  --------------
   Total current liabilities. . . . . . . . . . .               12,180           8,366
                                                   --------------------  --------------

Contingencies (see notes)

SHAREHOLDERS' EQUITY
Preferred stock, no par value:
 Authorized 1,982,000 shares;
   Issued and outstanding, none . . . . . . . . .                    0               0
Common stock, no par value:
 Authorized 50,000,000 shares;
   Issued and outstanding 19,206,383 shares at
   September 30, 2000 and 18,469,000 shares at
   December 31, 1999. . . . . . . . . . . . . . .              102,682         101,042
 Accumulated deficit. . . . . . . . . . . . . . .              (76,756)        (79,872)
 Accumulated other comprehensive loss . . . . . .               (1,771)         (1,792)
                                                   --------------------  --------------
   Total shareholders' equity . . . . . . . . . .               24,155          19,378
                                                   --------------------  --------------
                                                   $            36,335   $      27,744
                                                   ====================  ==============
</TABLE>

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


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


                                                               NINE MONTHS ENDED
                                                                 SEPTEMBER 30,
                                                              2000          1999
                                                           ------------  ------------
<S>                                                        <C>           <C>
Cash flows from operating activities:
 Net income (loss). . . . . . . . . . . . . . . . . . . .  $     3,116   $      (119)
 Adjustments to reconcile net income (loss) to
 net cash provided by (used in) operating activities:
   Depreciation and amortization. . . . . . . . . . . . .        1,080         1,327
   Stock compensation . . . . . . . . . . . . . . . . . .          490             0
   Changes in assets and liabilities:
     Accounts receivable. . . . . . . . . . . . . . . . .         (281)          927
     Inventories. . . . . . . . . . . . . . . . . . . . .       (3,467)         (223)
     Other assets . . . . . . . . . . . . . . . . . . . .         (232)          (53)
     Accounts payable . . . . . . . . . . . . . . . . . .        3,540         1,574
     Accrued expenses . . . . . . . . . . . . . . . . . .          274        (1,038)
                                                           ------------  ------------
     Net cash provided by operating activities. . . . . .        4,520         2,395
                                                           ------------  ------------

Cash flows from investing activities:
 Acquisition of property and equipment. . . . . . . . . .       (3,325)       (1,164)
                                                           ------------  ------------
     Net cash used in investing activities. . . . . . . .       (3,325)       (1,164)
                                                           ------------  ------------

Cash flows from financing activities:
 Proceeds from issuance of common stock . . . . . . . . .        1,150           165
 Proceeds from short-term bank borrowings . . . . . . . .        4,000             0
 Payments of short-term bank borrowings . . . . . . . . .       (4,000)       (4,000)
                                                           ------------  ------------
     Net cash provided by (used in) financing activities.        1,150        (3,835)
                                                           ------------  ------------

Effect of exchange rate changes on cash . . . . . . . . .           21            13
                                                           ------------  ------------
Net increase (decrease) in cash and cash equivalents. . .        2,366        (2,591)
Cash and cash equivalents, beginning of period. . . . . .        6,739         8,125
                                                           ------------  ------------
Cash and cash equivalents, end of period. . . . . . . . .  $     9,105   $     5,534
                                                           ============  ============
</TABLE>

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


<PAGE>
                             GENUS, INC. AND SUBSIDIARIES
                     NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                             SEPTEMBER 30, 2000 (UNAUDITED)

     Basis  of  Presentation. The accompanying consolidated financial statements
have  been  prepared  in  accordance with SEC requirements for interim financial
statements.  These  financial  statements should be read in conjunction with the
consolidated  financial  statements  and notes thereto included in the Company's
1999  Annual  Report  on  Form  10-K.

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

     Net  Income (Loss) Per Share. Basic net income (loss) per share is computed
by  dividing  income  (loss)  available  to  common shareholders by the weighted
average  number  of common shares outstanding for the period. Diluted net income
(loss)  per  share  is  computed  by  dividing income (loss) available to common
shareholders,  adjusted  for  convertible  preferred  dividends  and  after-tax
interest expense on convertible debt, if any, by the sum of the weighted average
number of common shares outstanding and potential common shares (when dilutive).


Net  Income  (Loss)  Per  Share

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


<TABLE>
<CAPTION>
                                                       THREE MONTHS ENDED       NINE MONTHS ENDED
                                                          SEPTEMBER 30,            SEPTEMBER 30,
                                                        2000        1999        2000        1999
                                                    -----------  ----------  ----------  ------------
<S>                                                 <C>          <C>         <C>        <C>
Numerator-basic:
Net income (loss) available to common shareholders
                                                    $     1,190  $      313  $    3,116  $       (119)

Denominator-basic:
Weighted average common stock
outstanding. . . . . . . . . . . . . . . . . . . .       19,126       18,267      18,845       18,083
                                                    ===========  ===========  ==========  ===========
Basic net income (loss) per share. . . . . . . . .  $      0.06  $      0.02  $     0.17  $     (0.01)
                                                    ===========  ===========  ==========  ===========

Numerator-diluted:
Net income (loss) available to common shareholders
                                                    $     1,190  $       313  $    3,116  $      (119)

Denominator-diluted:
Weighted average common stock outstanding. . . . .       19,126       18,267      18,845       18,083
Effect of dilutive securities: stock options . . .        1,313          676       1,552            0
Effect of dilutive securities: warrants                     154            0         203            0
                                                    -----------  -----------   ---------   ----------
                                                         20,593       18,943      20,600       18,083
                                                    ===========  ===========  ==========   ==========

Diluted net income (loss) per share. . . . . . . .  $      0.06  $      0.02  $     0.15  $     (0.01)
                                                    ===========  ===========  ==========   ==========
</TABLE>


<PAGE>
                          GENUS, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                         SEPTEMBER 30, 2000 (UNAUDITED)

     Anti-dilutive stock options to purchase approximately 573,598 shares of
common stock were excluded from the computation of diluted net income per share
for the nine months ended September 30, 2000, because the exercise price of the
options exceeded the average fair market value of the stock for the nine months
ended September 30, 2000.

     Stock options to purchase approximately 2,189,122 shares of common stock
were outstanding during the three months ended September 30, 1999 but were not
included in the computation of diluted loss per share because the Company had a
net loss for the three months ended September 30, 1999.

    Warrants to purchase 400,000 shares of common stock were outstanding during
the three months ended September 30, 1999 but were not included in the
computation of diluted loss per share because the Company had a net loss for the
nine months ended September 30, 1999.

     Statement of Cash Flow Information (amounts in thousands):


<TABLE>
<CAPTION>
                                  NINE MONTHS ENDED
                                    SEPTEMBER 30,

                                     2000   1999
                                     -----  -----
<S>                                  <C>    <C>
Supplemental cash flow information:
 Cash paid during the period for:
   Interest . . . . . . . . . . . .  $  76  $ 183
   Income taxes . . . . . . . . . .  $ 152  $   1
</TABLE>


<PAGE>
     Line of Credit. In November 1999, the Company entered into a $10 million
revolving line of credit with Venture Bank. Amounts available under the line are
based on 80% of eligible accounts receivable, and borrowings under the line of
credit are secured by all corporate assets and bear interest at prime plus
0.25%. The line of credit expires in November 2001. The line of credit contains
covenants that require the Company to maintain a minimum quick ratio and a
maximum debt to tangible net equity ratio. In addition, the line requires the
Company to have annual profitability beginning in 2000 and a maximum quarterly
loss of $1 million with no two consecutive quarterly losses. Additionally, the
Company is prohibited from distributing dividends. The amount available to
borrow at September 30, 2000 was $2.1 million at a rate of 9.75%.  There is no
current outstanding balance against this line of credit.

INVENTORIES
Inventories comprise the following (in thousands):

<TABLE>
<CAPTION>
                                   SEPTEMBER 30,   DECEMBER 31,
                                        2000           1999
<S>                                <C>             <C>
Raw materials and purchased parts  $        8,260  $       5,439
Work in process . . . . . . . . .           2,388          1,055
Finished goods. . . . . . . . . .              85            772
                                   --------------  -------------
                                   $       10,733  $       7,266
                                   ==============  =============
</TABLE>

                          GENUS, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                         SEPTEMBER 30, 2000 (UNAUDITED)

ACCRUED EXPENSES
Accrued expenses comprise the following (in thousands):

<TABLE>
<CAPTION>
                                          SEPTEMBER 30,   DECEMBER 31,
                                              2000           1999
<S>                                      <C>             <C>
System installation and warranty. . . .  $        1,217  $         817
Accrued commissions and incentives. . .             468            364
Accrued compensation and related items.           1,099            872
Federal, state and foreign income taxes             962            622
Customer deposits . . . . . . . . . . .               0            420
Other                                               748          1,125
                                         --------------  -------------
                                         $        4,494  $       4,220
                                         ==============  =============
</TABLE>


LEGAL PROCEEDINGS

     The Company has been named as a defendant in a claim involving an
automobile accident by a former employee of the Company, which resulted in the
death of an individual. General, punitive, and exemplary damages are being
sought by the plaintiffs. The Company believes it is not at fault in this
matter, and has appointed legal counsel to defend the claim. While the outcome
of this matter is not presently determinable, management does not believe that
resolution of this matter will have a material adverse effect on the financial
position or results of operations of the Company.


<PAGE>
COMPREHENSIVE INCOME

     Statement of Financial Accounting Standards No. 130 (SFAS 130), "Reporting
Comprehensive Income" establishes rules for the reporting and display of
comprehensive income and its components.

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

<TABLE>
<CAPTION>
                                       THREE MONTHS ENDED  NINE MONTHS ENDED
                                           SEPTEMBER 30,   SEPTEMBER 30,
                                            2000   1999    2000    1999
                                           ------  -----  ------  ------
<S>                                        <C>     <C>    <C>     <C>
Net income (loss) . . . . . . . . . . . .  $1,190  $ 313  $3,116  $(119)
Foreign currency translation adjustments.       1     52      21     13
                                           ------  -----  ------  ------
 Comprehensive income (loss). . . . . . .  $1,191  $ 365  $3,137  $(106)
                                           ======  =====  ======  ======
</TABLE>

     The  components  of  accumulated other comprehensive income, are as follows
(in  thousands):

<TABLE>
<CAPTION>
                                      SEPTEMBER 30,    DECEMBER 31,
                                          2000             1999
<S>                                 <C>              <C>
Cumulative translation adjustments  $       (1,771)  $      (1,792)
</TABLE>

                          GENUS, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                         SEPTEMBER 30, 2000 (UNAUDITED)

RECENT  ACCOUNTING  PRONOUNCEMENTS

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

     In  December  1999,  the SEC staff issued Staff Accounting Bulletin ("SAB")
No.  101,  "Revenue  Recognition." The SEC staff addresses several issues in SAB
No.  101,  including  the  timing  for  recognizing revenue derived from selling
arrangements  that  involve  contractual  customer  acceptance  provisions  and
installation  of  the  product  occurs after shipment and transfer of title. Our
existing  revenue  recognition  policy  is  to recognize revenue at the time the
customer  takes title to the product, generally at the time of shipment, because
we  have,  in  the past, routinely met our installation obligations and obtained
customer  acceptance.  Applying  the  requirements of SAB No. 101 to our present
selling  arrangements  for  the  sale  of semiconductor production equipment may
require  a  change  in  our  accounting  policy  for revenue recognition and the
deferral  of  the  recognition  of  revenue  from  such  equipment  sales  until
installation  is  complete  and  accepted  by the customer. The effect of such a
change,  if  any,  must  be  recognized  as  a  cumulative effect of a change in
accounting  no  later  than the quarter ending December 31, 2000. We believe the
effects  on liquidity, cash flow and financial position will not be material. At
the  current  time,  it  is not possible to determine the effect this change may
have  on  our  results of operations. However, should the Company be required to
record a cumulative effect of a change in accounting, it will result in a charge
to  net income (loss). We are also considering potential changes to our standard
contracts  for  equipment  sales that could mitigate the potential impact of SAB
No.  101  on  a  going  forward  basis.

     In  March  2000,  the  Financial  Accounting  Standards  Board  issued
Interpretation  No.  44  (FIN 44) "Accounting for Certain Transactions Involving
Stock  Compensation," which addresses certain accounting issues that arose under
the  previously-established  accounting  principles  relating  to  stock-based
compensation.  The  adoption  of  this  interpretation  did  not have a material
effect  on  our  financial  position  or  results  of  operations.


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

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


RESULTS  OF  OPERATIONS

     NET SALES. Net sales for the three and nine months ended September 30, 2000
were  $14.2  million  and $38.8 million, representing an increase of 61% and 71%
over  the  net  sales  of  $8.8  million and $22.7 million for the corresponding
periods  in  1999.  System  shipments  in  the  third  quarter  consisted of our
mainstream  tungsten  silicide  products  to Samsung Electronics, Ltd. in Korea.
Non-system  revenue was 22% of total sales,  primarily due to process conversion
kits purchased by Samsung, enabling them to deposit a different film using their
existing  equipment.  Year  to  date  system  shipments included an atomic layer
deposition  (ALD)  system  to  a  new  customer,  Infineon  Technologies AG, and
tungsten  silicide  systems to Samsung.  Year to date non-system revenue was 23%
of  sales,  compared to 14% during the first nine months of 1999.  This increase
was  primarily due to Samsung's program to upgrade their installed base of Lynx2
systems  to  the  current  generation high productivity process chamber, and the
process  conversion  kits  shipped  in the third quarter.  The increase in sales
levels  in 2000 over 1999 reflects an overall strengthening in the semiconductor
equipment  market.

     COST  OF GOODS SOLD. Cost of goods sold for the three and nine months ended
September  30, 2000 was $8.1 million and $21.8 million, compared to $5.0 million
and  $13.1 million for the same periods in 1999. Gross profit as a percentage of
net  sales  for  the three and nine months ending September 30, 2000 was 43% and
44%, relatively flat with the 43% and 42% recorded for the same periods in 1999.
Third  quarter  gross  margin percentage remained flat with 1999, despite higher
sales  volumes.  The  systems  we shipped this quarter had higher material costs
due  to  configuration  enhancements,  and  our  manufacturing and service costs
increased  to support the higher sales volumes. Year to date gross margin of 44%
was  a  slight  increase  over  1999.  Worldwide operations and service overhead
costs  have  increased  to  support the rapid revenue growth we have experienced
over  the  past  year, and included opening a service organization in Japan. Our
gross  profits  have historically been affected by variations in average selling
prices,  configuration  differences,  changes  in the mix of product sales, unit
shipment  levels,  the level of foreign sales and competitive pricing pressures.

     RESEARCH AND DEVELOPMENT. Research and development expenses for the quarter
ended  September  30,  2000  were  $2.0  million, representing 14% of net sales,
compared  with $1.5 million or 17% of net sales for the same period in 1999. R&D
spending  for  the  first nine months of 2000 was $5.8 million, or 15% of sales,
compared  with  $4.0  million,  or  18%  in  1999.  These spending increases are
associated  with  investments  in our ALD technology, particularly new films and
applications, tungsten products, and our 300mm Lynx3 system. We are aggressively
pursuing non-semiconductor applications for ALD, including magnetic disk drives,
telecommunications,  and inkjet printers. We expect our research and development
spending  levels  to  continue  to  increase  throughout  2000.

     SELLING,  GENERAL  AND  ADMINISTRATIVE. Selling, general and administrative
expenses  were  $2.8  million,  or  20% of sales, for the third quarter of 2000,
compared  with  $2.1  million,  or  23% of sales, for the third quarter of 1999.
Year  to date SG&A expenses were $8.0 million, or 21% of sales, compared to $6.0
million, or 26% of sales during the first half of 1999.  Higher spending in 2000
is primarily due to the increase in business levels over the past 12 months, and
include  higher sales commissions, profit sharing accruals, headcount increases,
and  travel  costs.  Additional  resources have been added to sales, focused ALD
marketing  directed  at  semiconductor  and  non-semiconductor  markets,  and
information  technology.

     OTHER INCOME (EXPENSE), NET. Other income for the third quarter of 2000 was
$101,000  compared  to other income of $62,000 for the same period in 1999. Year
to  date  other income was $383,000, compared to $237,000 in 1999, due primarily
to  interest income received during the first quarter of 2000 from Samsung.  The
remainder  of  other income consists of interest income from short-term interest
bearing deposits and foreign currency exchange gains due to the strengthening of
the  Korean  won  against  the  U.S.  dollar.

     PROVISION  FOR  INCOME  TAXES.  Income  taxes  for the three- and six-month
periods  ending  September 30, 2000 were $100,000 and $450,000, compared to none
in  the same 1999 periods. Income taxes are related to the profit generated from
our  South  Korean  subsidiary.


LIQUIDITY  AND  CAPITAL  RESOURCES

     At  September 30, 2000, our cash and cash equivalents were $9.1 million, an
increase  of $2.4 million from cash and cash equivalents of $6.7 million held as
of  December 31, 1999.   During the third quarter of 2000, we collected accounts
receivable  of  approximately  $13  million,  including  the  amount due on four
systems.

     Cash  provided  by  operating  activities totaled $4.5 million for the nine
months  ending  September 30, 2000, and consisted of net income of $3.1 million,
and increases in accounts payable of $3.5 million, depreciation and amortization
of  $1.1  million,  stock  compensation  of  $490,000  and  accrued  expenses of
$274,000.  Partially  offsetting  this  were  increases  in  inventory  of  $3.5
million,  accounts  receivable  of  $281,000, and other assets of $232,000.  The
accounts  payable  increase  was  primarily due to increased levels of inventory
purchasing  activity  to support production requirements in the third and fourth
quarter.  Inventories increased due to material to build several ALD modules for
use  internally and for customer shipments.  We also had most of the material to
support  the  fourth  quarter revenue plan in inventory at the end of September,
2000.

     Financing  activities  provided  cash  of  $1.2 million for the nine months
ending  September 30, 2000, from the issuance of common stock from our incentive
stock  option  plan  and  our  employee  stock  purchase  plan.

     We  made  capital  expenditures  of $3.3 million for the nine months ending
September  30,  2000.  These expenditures principally related to the acquisition
and  upgrading  of  machinery and equipment for our research and development and
applications  laboratories,  and  personal  computer  related  equipment.  We
anticipate  spending  an  additional $2.5 million in capital expenditures during
the  remainder  of  2000.  We  currently  anticipate  that  additional  capital
expenditures will be funded through existing working capital or lease financing.

     Our primary source of funds at September 30, 2000 consisted of $9.1 million
in  cash  and cash equivalents, and $7.9 million of accounts receivable, most of
which  we  expect  to  collect  during  the  fourth  quarter  of  2000.

     In  November  1999,  we entered into a $10 million revolving line of credit
with Venture Bank. Amounts available under the line are based on 80% of eligible
accounts  receivable, and borrowings under the line are secured by all corporate
assets  and  bear  interest  at  prime plus 0.25%. The line of credit expires in
November 2001. The line of credit contains covenants that require us to maintain
a  minimum  quick  ratio  and  a  maximum  debt to tangible net equity ratio. In
addition,  the line of credit requires us to have annual profitability beginning
in  2000  and  a  maximum  quarterly  loss of $1 million with no two consecutive
quarterly  losses.  Additionally, we are prohibited from distributing dividends.
The  amount available to borrow at September 30, 2000 was $2.1 million at a rate
of  9.75%.  There  are  no  outstanding  borrowings against this line of credit.

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

RECENT  ACCOUNTING  PRONOUNCEMENTS

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

     In  December  1999,  the SEC staff issued Staff Accounting Bulletin ("SAB")
No.  101,  "Revenue  Recognition." The SEC staff addresses several issues in SAB
No.  101,  including  the  timing  for  recognizing revenue derived from selling
arrangements  that  involve  contractual  customer  acceptance  provisions  and
installation  of  the  product  occurs after shipment and transfer of title. Our
existing  revenue  recognition  policy  is  to recognize revenue at the time the
customer  takes title to the product, generally at the time of shipment, because
we  have,  in  the past, routinely met our installation obligations and obtained
customer  acceptance.  Applying  the  requirements of SAB No. 101 to our present
selling  arrangements  for  the  sale  of semiconductor production equipment may
require  a  change  in  our  accounting  policy  for revenue recognition and the
deferral  of  the  recognition  of  revenue  from  such  equipment  sales  until
installation  is  complete  and  accepted  by the customer. The effect of such a
change,  if  any,  must  be  recognized  as  a  cumulative effect of a change in
accounting  no  later  than the quarter ending December 31, 2000. We believe the
effects  on liquidity, cash flow and financial position will not be material. At
the  current  time,  it  is not possible to determine the effect this change may
have  on  our  results of operations. However, should the Company be required to
record a cumulative effect of a change in accounting, it will result in a charge
to  net income (loss). We are also considering potential changes to our standard
contracts  for  equipment  sales that could mitigate the potential impact of SAB
No.  101  on  a  going-forward  basis.

     In  March  2000,  the  Financial  Accounting  Standards  Board  issued
Interpretation  No.  44  (FIN 44) "Accounting for Certain Transactions Involving
Stock  Compensation," which addresses certain accounting issues that arose under
the  previously-established  accounting  principles  relating  to  stock-based
compensation.  The  adoption  of  this  interpretation  did  not have a material
effect  on  our  financial  position  or  results  of  operations.


RISK  FACTORS

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

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

     We  have  experienced  losses  of  $1.6  million,  $29.5 million, and $19.3
million  for  1999,  1998  and 1997, respectively. While we recorded a profit of
$3.1  million  during  the  nine months ending September 30, 2000, we may not be
able  to  attain  or  sustain consistent future revenue growth on a quarterly or
annual basis, or achieve and maintain consistent profitability on a quarterly or
annual  basis.  As  a  result,  our  business  could  be  materially  harmed.

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

     Historically,  we  have  relied  on  a  small  number  of  customers  for a
substantial  portion of our net sales. For example, Samsung Electronics Company,
Ltd.  and  Micron  Technology, Inc. accounted of 84% and 11% of our net sales in
1999  respectively.  During  the  first nine months of 2000, Samsung Electronics
Company,  Ltd.  and Infineon Technologies AG accounted for 88% and 9% of our net
sales.  In  addition,  Samsung Electronics Company, Ltd., and Micron Technology,
Inc.  represented  92%  of  accounts  receivable  at  December 31, 1999. Samsung
Electronics  Company,  Ltd.  and  Infineon  Technologies AG accounted for 91% of
accounts  receivable  at  September  30,  2000.  The semiconductor manufacturing
industry  generally  consists  of  a  limited  number  of  larger  companies. We
consequently  expect that a significant portion of our future product sales will
be  concentrated  within  a  limited  number  of  customers.

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

-     customer  departures  from  historical  buying  patterns;

-     general  market  conditions;

-     economic  conditions;  or

-     competitive  conditions in the semiconductor industry or in the industries
that  manufacture  products  utilizing  integrated  circuits.

OUR  QUARTERLY  FINANCIAL  RESULTS FLUCTUATE SIGNIFICANTLY AND MAY FALL SHORT OF
ANTICIPATED  LEVELS,  WHICH  COULD  CAUSE  OUR  STOCK  PRICE  TO  DECLINE

     Our  net  sales  and  operating  results  may  fluctuate significantly from
quarter  to  quarter.  We  derive  our  revenue  primarily  from  the  sale of a
relatively small number of high-priced systems, many of which may be ordered and
shipped  during  the  same  quarter.  Our results of operations for a particular
quarter could be materially adversely affected if anticipated orders, for even a
small number of systems, were not received in time to enable shipment during the
quarter,  if  anticipated  shipments  were  delayed  or  canceled by one or more
customers or if shipments were delayed due to manufacturing difficulties. At our
current  revenue  level,  each  sale,  or  failure  to make a sale, could have a
material  effect  on  us.  Our  lengthy sales cycle, coupled with our customers'
competing  capital  budget  considerations,  make  the timing of customer orders
uneven  and difficult to predict. In addition, our backlog at the beginning of a
quarter  typically  does  not  include  all orders required to achieve our sales
objectives  for  that  quarter. As a result, our net sales and operating results
for  a  quarter depend on us shipping orders as scheduled during that quarter as
well as obtaining new orders for systems to be shipped in that same quarter. Any
delay  in  scheduled  shipments or in shipments from new orders would materially
and  adversely  affect our operating results for that quarter, which could cause
our  stock  price  to  decline.

     In December 1999, the SEC issued Staff Accounting Bulletin No. 101. SAB 101
summarizes  certain  of  the  SEC  staff's  views in applying generally accepted
accounting  principles  to revenue recognition in financial statements. Prior to
SAB 101, we generally recognized revenue upon shipment of a system. Applying the
requirements  of SAB 101 to the present selling arrangements we use for the sale
of  semiconductor  production  equipment  may require a change in our accounting
policy  for  revenue recognition and deferral of the recognition of revenue from
such  equipment  sales  until  installation  is  complete  and  accepted  by the
customer.  The  effect  of  such  a  change,  if  any,  must  be recognized as a
cumulative  effect  of  a  change in accounting no later than the quarter ending
December  31,  2000.  Although  SAB  101  applies  to  every  company within our
industry,  there  is a risk that our stock price may be materially and adversely
impacted by SAB 101 if we are required to transition from recognizing revenue at
shipment,  to  customer  acceptance  of  a  system.

     Since  it  is possible that, under SAB 101, there may be a shift in revenue
recognition from the time of shipment to the time of acceptance by the customer,
certain revenue that we would have recognized in the first and third quarters of
2000  upon  shipment  of  products  may not be recognized until the products are
accepted.  We  cannot  assure  you  as  to  the  timing of such acceptances. Any
material  delay  in receipt of acceptances may have a material adverse effect on
our  results  of  operations.

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

     Export  sales accounted for approximately 86%, 56% and 74% of our total net
sales  in  1999, 1998 and 1997, respectively, and accounted for 98% of our total
net  sales  during  the  nine  months ended September 30, 2000. Net sales to our
South  Korean-based  customers  accounted  for approximately 84%, 30% and 50% of
total  net  sales, respectively, during the same year-end periods, and accounted
for 90% of our total net sales during the nine months ending September 30, 2000.
We  anticipate  that  international  sales, including sales to South Korea, will
continue  to  account for a significant portion of our net sales. As a result, a
significant  portion  of  our  net  sales  will  be  subject  to  certain risks,
including:

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

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

     In  the  past,  turmoil in the Asian financial markets resulted in dramatic
currency  devaluations,  stock  market declines, restriction of available credit
and general financial weakness. For example, prices fell dramatically in 1998 as
some  integrated  circuit manufacturers sold DRAMs at less than cost in order to
generate  cash.  Currency  devaluations  make  dollar-denominated goods, such as
ours,  more  expensive  for  international  customers.  In  addition,  difficult
economic  conditions  may  limit  capital  spending  by  our  customers.  These
circumstances may also affect the ability of our customers to meet their payment
obligations,  resulting in the cancellations or deferrals of existing orders and
the  limitation  of  additional orders. As a result of any or all these factors,
our  business,  financial  condition and results of operations may be materially
harmed.

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

     Our  business  depends  upon  the  capital  expenditures  of  semiconductor
manufacturers, which in turn depend on the current and anticipated market demand
for  integrated  circuits  and  products  utilizing  integrated  circuits.  The
semiconductor  industry  is  cyclical and experiences periodic downturns both of
which reduce the semiconductor industry's demand for semiconductor manufacturing
capital equipment. Semiconductor industry downturns have significantly decreased
our  revenues, operating margins and results of operations in the past. There is
a  risk that our revenues and operating results will be materially harmed by any
future  downturn  in  the  semiconductor  industry.

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

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

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

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

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

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

     If  our  competitors  enter  into  strategic  relationships  with  leading
semiconductor manufacturers covering thin film products similar to those sold by
us,  it  would  materially  adversely 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 competition increases and we are not able to
respond  effectively.

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

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

     Once  a  semiconductor  manufacturer  selects a particular vendor's capital
equipment,  the  manufacturer  generally relies for a significant period of time
upon  equipment  from  this  vendor  of  choice for the specific production line
application. In addition, the semiconductor manufacturer frequently will attempt
to  consolidate  its  other capital equipment requirements with the same vendor.
Accordingly,  we  may  face  narrow windows of opportunity to be selected as the
"vendor  of  choice"  by  potential new customers. It may be difficult for us to
sell  to  a  particular  customer  for  a  significant  period of time once that
customer  selects  a  competitor's  product,  and  we  may  not be successful in
obtaining  broader  acceptance of our systems and technology. If we are not able
to  achieve  broader  market acceptance of our systems and technology, we may be
unable  to  grow  our business and our operating results and financial condition
will  be  materially  adversely  affected.

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

     Sales  of our systems depend upon the decision of a prospective customer to
increase  manufacturing capacity. That decision typically involves a significant
capital  commitment  by  our customers. Accordingly, the purchase of our systems
typically  involves  time-consuming  internal  procedures  associated  with  the
evaluation,  testing,  implementation  and introduction of new technologies into
our  customers'  manufacturing  facilities.  For  many  potential  customers, an
evaluation  as  to  whether  new semiconductor manufacturing equipment is needed
typically  occurs  infrequently.  Following  an evaluation by the customer as to
whether  our systems meet its qualification criteria, we have experienced in the
past  and  expect  to experience in the future delays in finalizing system sales
while  the  customer  evaluates  and  receives  approval for the purchase 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 even longer. This
lengthy  sales  cycle makes it difficult to accurately forecast future sales and
may  cause  our  quarterly and annual revenue and operating results to fluctuate
significantly  from  period  to  period.  If anticipated sales from a particular
customer  are  not  realized  in  a  particular period due to this lengthy sales
cycle,  our  operating  results  may  be  adversely  affected.

WE ARE DEPENDENT ON OUR INTELLECTUAL PROPERTY AND RISK LOSS OF A VALUABLE ASSET,
REDUCED  MARKET  SHARE AND LITIGATION EXPENSE IF WE CANNOT ADEQUATELY PROTECT IT

     Our  success depends in part on our proprietary technology. There can be no
assurance  that  we  will  be able to protect our technology or that competitors
will  not be able to develop similar technology independently. We currently have
a number of United States and foreign patents and patent applications. There can
be  no  assurance  that  any  patents  issued  to  us  will  not  be challenged,
invalidated  or  circumvented or that the rights granted thereunder will provide
us  with  competitive  advantages.

     From  time  to  time,  we have received notices from third parties alleging
infringement  of  such parties' patent rights by our products. In such cases, it
is our policy to defend against the claims or negotiate licenses on commercially
reasonable  terms  where appropriate. However, no assurance can be given that we
will  be  able to negotiate necessary licenses on commercially reasonable terms,
or  at  all,  or that any litigation resulting from such claims would not have a
material  adverse  effect  on  our  business  and  financial  results.

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

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

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

OUR FAILURE TO COMPLY WITH ENVIRONMENTAL REGULATIONS COULD RESULT IN SUBSTANTIAL
LIABILITY  TO  US

     We  are  subject  to  a variety of federal, state and local laws, rules and
regulations  relating  to  the  protection  of health and the environment. These
include  laws,  rules  and  regulations  governing  the use, storage, discharge,
release,  treatment  and  disposal  of  hazardous  chemicals  during  and  after
manufacturing,  research and development and sales demonstrations. If we fail to
comply  with  present  or future regulations, we could be subject to substantial
liability  for  clean  up efforts, property damage, personal injury and fines or
suspension or cessation of our operations. Restrictions on our ability to expand
or continue to operate from our present locations could be imposed upon us or we
could  be  required  to  acquire  costly  remediation  equipment  or incur other
significant  expenses.

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

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

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

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

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

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

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

     Our common stock has experienced substantial price volatility, particularly
as  a  result  of  quarter-to-quarter  variations  in  our  competitors'  or our
customers'  actual  or anticipated financial results, in our competitors' or our
customers'  announcements  of  technological  innovations,  revenue  recognition
policies,  or  changes  in  earnings  estimates by securities analysts and other
events  or  factors.  Also,  the  stock market has experienced extreme price and
volume  fluctuations  which  have  affected  the market price of many technology
companies,  in  particular, and which have often been unrelated to the operating
performance  of  these  companies.  These  broad market fluctuations, as well as
general economic and political conditions in the United States and the countries
in  which  we  do  business, may adversely effect the market price of our common
stock.

     In  the  past, securities class action litigation has often been instituted
against  a company following periods of volatility in the company's stock price.
This  type of litigation, if filed against us, could result in substantial costs
and  divert  our  management's  attention  and  resources.

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

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

FORWARD-LOOKING  STATEMENTS

     Some  of  the  information in this Quarterly Report on Form 10-Q and in the
documents  that  are  incorporated  by  reference,  including  the risk factors,
contains  forward-looking statements that involve risks and uncertainties. These
statements  relate to future events or our future financial performance. In many
cases, you can identify forward-looking statements by terminology such as "may,"
"will,"  "should,"  "expects,"  "plans," "anticipates," "believes," "estimates,"
"predicts," "potential," or "continue," or the negative of these terms and other
comparable  terminology.  These  statements  are  only  predictions.  Our actual
results  could differ materially from those anticipated in these forward-looking
statements  as  a result of a number of factors, including the risks faced by us
described  above  and  elsewhere  in  this  Quarterly  Report  on  Form  10-Q.

     We  believe  it  is  important  to  communicate  our  expectations  to  our
shareholders. However, there may be events in the future that we are not able to
predict  accurately  or  over  which we have no control. The risk factors listed
above, as well as any cautionary language in this Quarterly Report on Form 10-Q,
provide  examples  of  risks, uncertainties and events that may cause our actual
results  to  differ  materially  from  the  expectations  we  describe  in  our
forward-looking  statements.

ITEM  3.  QUANTITATIVE  AND  QUALITATIVE  DISCLOSURES  ABOUT  MARKET  RISK

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

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


<PAGE>
PART  II.  OTHER  INFORMATION


ITEM  2.  CHANGES  IN  SECURITIES  AND  USE  OF  PROCEEDS

Pursuant  to  a  Preferred  Stock  Rights  Agreement  between  Genus,  Inc. (the
"Company")  and ChaseMellon Shareholder Services, Inc., as Rights Agent, entered
into  as  of  September  26,  2000,  the Company's Board of Directors declared a
dividend of one right to purchase one one-thousandth of a share of the Company's
Series  C  Participating  Preferred  Stock  for each outstanding share of Common
Stock,  no  par  value,  of the Company.  The dividend is payable on October 13,
2000,  to shareholders of record as of the close of business on that date.  Each
Right  entitles  the  registered  holder  to  purchase  from  the  Company  one
one-thousandth of a share of Series C Preferred at an exercise price of  $40.00,
subject  to  adjustment.


ITEM  6.  EXHIBITS  AND  REPORTS  ON  FORM  8-K

(a)     Exhibits

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

(b)     Report  on  Form  8-K

The Company filed a Form 8-K on September 27, 2000 reporting that on September
26, 2000, the Company issued a press release announcing that the Board of
Directors of the Company had approved the adoption of a Preferred Stock
Rights Agreement.


<PAGE>
                                    GENUS,  INC.
                                    SIGNATURES

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






Date:  November 14, 2000       GENUS,  INC.


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




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


<PAGE>
                                   GENUS, INC.
                                INDEX TO EXHIBITS


EXHIBIT NO.          DESCRIPTION
-----------          -----------
10.1          Preferred  Stock Rights Agreement, dated as of September 26, 2000,
              between  Genus,  Inc.  and ChaseMellon Shareholder Services, Inc.,
              including the Certificate  of  Designation,  the form of Rights
              Certificate and the Summary of Rights attached thereto as Exhibits
              A,  B,  and  C,  respectively. (This is incorporated by reference
              to Exhibit 4.7 to Genus, Inc.'s Form 8-A filed October 3,  2000.)

27.1          Financial  Data  Schedule


<PAGE>