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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  March  31,  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  April  30,  2003,  the  issuer  had  28,956,073  shares  of common stock
outstanding.

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


This  Quarterly  Report  on  Form  10-Q,  including "Management's Discussion and
Analysis  of  Financial Condition and Results of Operations" in Item 2, contains
forward-looking  statements  that  involve  risks  and uncertainties, as well as
assumptions  that, if they never materialize or prove incorrect, could cause the
results  of  Genus, Inc. to differ materially from those expressed or implied by
such  forward-looking  statements.  All  statements  other  than  statements  of
historical  fact are statements that could be deemed forward-looking statements,
including any projections of earnings, revenue, synergies, accretion, margins or
other financial items; any statements of the plans, strategies and objectives of
management  for  future  operations,  including the execution of integration and
restructuring  plans;  any statement concerning proposed new products, services,
developments  or  industry  rankings;  any  statements regarding future economic
conditions  or  performance;  any  statements  of  belief; and any statements of
assumptions  underlying  any  of  the  foregoing.  The  risks, uncertainties and
assumptions  referred to above include the performance of contracts by customers
and  partners;  employee  management  issues;  the  challenge  of managing asset
levels,  including  inventory;  the  difficulty  of aligning expense levels with
revenue  changes;  and  other  risks  that  are  described  herein  and that are
otherwise  described  from  time  to  time  in  Genus'  Securities  and Exchange
Commission  reports.  Genus  assumes no obligation and does not intend to update
these  forward-looking  statements.


PART  I.  FINANCIAL  INFORMATION

Item  1.  Financial  Statements

Condensed  Consolidated  Statements  of  Operations
for  the  three  months  ended  March  31,  2003  and  March  31,  2002      4

Condensed  Consolidated  Balance  Sheets  as  of  March  31,  2003
and  December  31,  2002                                                     5

Condensed  Consolidated  Statements  of  Cash  Flows
for  the  three  months  ended  March  31,  2003  and  March  31,  2002      6

Notes  to  Condensed  Consolidated Financial Statements                      7

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

Item  3. Quantitative and Qualitative Disclosures About Market Risk         30

Item  4.  Controls  and  Procedures                                         31

                                        2
<PAGE>
PART  II.  OTHER  INFORMATION

Item  6:  Exhibits  and  Reports  on  Form  8-K                             31

Signatures                                                                  34

                                        3
<PAGE>
                         PART I.  FINANCIAL INFORMATION

ITEM  1.  FINANCIAL  STATEMENTS
<TABLE>
<CAPTION>
                          GENUS, INC. AND SUBSIDIARIES
           CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
                      (IN THOUSANDS, EXCEPT PER SHARE DATA)


                                                 THREE MONTHS ENDED
                                                    MARCH  31,
                                                  2003      2002
                                                 -------  --------
<S>                                              <C>      <C>
Net sales                                        $17,695  $ 9,591
Costs and expenses:
  Cost of goods sold                              11,577    7,467
  Research and development                         2,113    2,185
  Selling, general and administrative              3,174    3,436
                                                 -------  --------
Income (loss) from operations                        831   (3,497)

Other expenses, net                                  423      255
                                                 -------  --------

Net income (loss)                                $   408  $(3,752)
                                                 =======  ========

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

Shares used in per share calculation - basic      28,913   25,249
                                                 =======  ========
Shares used in per share calculation - diluted    30,532   25,249
                                                 =======  ========
</TABLE>

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

                                        4
<PAGE>
<TABLE>
<CAPTION>
                          GENUS, INC. AND SUBSIDIARIES
                 CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
                                  (IN THOUSANDS)


                                                        MARCH 31,    DECEMBER 31,
                                                          2003           2002
                                                       -----------  --------------
<S>                                                    <C>          <C>
ASSETS
Current Assets:
  Cash and cash equivalents                            $   12,483   $      11,546
  Accounts receivable (net of allowance for doubtful
    accounts of $69 in 2003 and $69 in 2002)               14,050           7,505
  Inventories                                              12,766          11,405
  Other current assets                                      1,442           1,336
                                                       -----------  --------------
    Total current assets                                   40,741          31,792
Equipment, furniture and fixtures, net                      8,853           8,661
Other assets                                                1,238           1,057
                                                       -----------  --------------
    Total assets                                       $   50,832   $      41,510
                                                       ===========  ==============

LIABILITIES
Current Liabilities:
  Short-term bank borrowings                           $   10,074   $       7,813
  Accounts payable                                          7,109           6,498
  Accrued expenses                                          3,974           3,064
  Deferred revenue                                          8,099           2,713
  Customer advances                                         1,151           1,809
  Long-term liabilities, current portion                      253             245
                                                       -----------  --------------
    Total current liabilities                              30,660          22,142

Convertible notes                                           5,451           5,301
Long-term liabilities                                         183             270
                                                       -----------  --------------
    Total liabilities                                      36,294          27,713
                                                       -----------  --------------
Contingencies (see note on legal proceeding)

SHAREHOLDERS' EQUITY
Common stock, no par value:
  Authorized 50,000 shares;
    Issued and outstanding 28,945 shares in
    2003 and 28,621 in 2002                               124,335         123,890
  Accumulated deficit                                    (107,401)       (107,809)
  Note receivable from shareholder                           (151)           (151)
  Accumulated other comprehensive loss                     (2,245)         (2,133)
                                                       -----------  --------------
    Total shareholders' equity                             14,538          13,797
                                                       -----------  --------------
    Total liabilities and shareholders' equity         $   50,832   $      41,510
                                                       ===========  ==============
</TABLE>

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

                                        5
<PAGE>
<TABLE>
<CAPTION>
                          GENUS, INC. AND SUBSIDIARIES
           CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
                                 (IN THOUSANDS)


                                                             THREE MONTHS ENDED
                                                                  MARCH 31,
                                                               2003      2002
                                                             --------  --------
<S>                                                          <C>       <C>
Cash flows from operating activities:
  Net income (loss)                                          $   408   $(3,752)
  Adjustments to reconcile net income (loss) to net cash
    from operating activities:
    Depreciation and amortization                                809       895
    Provision for excess and obsolete inventories and
       lower of cost or market                                   100       368
    Amortization of deferred finance costs                       222         -
    Write-off of fixed assets                                     36         -
    Changes in assets and liabilities:
      Accounts receivable                                     (6,545)    1,059
      Inventories                                             (1,691)    3,605
      Other current assets                                      (706)      396
      Other assets                                              (253)     (181)
      Accounts payable                                           611    (2,743)
      Accrued expenses                                           252      (844)
      Deferred revenue and customer deposits                   5,386      (474)
                                                             --------  --------
      Net cash used in operating activities                   (1,371)   (1,671)
                                                             --------  --------
Cash flows from investing activities:
  Acquisition of equipment, furniture and fixtures              (207)     (275)
                                                             --------  --------
      Net cash used in investing activities                     (207)     (275)
                                                             --------  --------
Cash flows from financing activities:
  Proceeds from issuance of common stock                         445     7,971
  Proceeds (payments) from short-term bank borrowings, net     2,261      (633)
  Proceeds from debt                                               -     1,200
  Payments for debt                                              (79)     (228)
                                                             --------  --------
      Net cash provided by financing activities                2,627     8,310
                                                             --------  --------
Effect of exchange rate changes on cash                         (112)       49
                                                             --------  --------
Net increase (decrease) in cash and cash equivalents             937     6,413
Cash and cash equivalents, beginning of period                11,546     3,043
                                                             --------  --------
Cash and cash equivalents, end of period                     $12,483   $ 9,456
                                                             ========  ========
Supplemental cash flow information
  Cash paid during the period for:
  Interest                                                   $   319   $    70
  Income taxes                                               $   151   $     -
  Non-cash investing and financing activities
  Transfer of inventory to fixed assets                      $   525   $     -
  Transfer of fixed assets to inventory                      $   295   $     -
  Transfer of prepaids to fixed assets                       $   600   $     -
</TABLE>

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

                                        6
<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 $107 million and cash used
in operations of $1.4 million during the three months ended March 31, 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  INCOME  (LOSS)  PER  SHARE

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

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

<TABLE>
<CAPTION>
                                      THREE MONTHS ENDED
                                           MARCH 31,
                                        2003      2002
                                      --------  --------
<S>                                   <C>       <C>
Basic:
Net income (loss)                     $    408  $(3,752)
                                      ========  ========
  Weighted average common shares
  outstanding                           28,913   25,249
                                      ========  ========
  Basic net income (loss) per share   $   0.01  $ (0.15)
                                      ========  ========
</TABLE>

                                        7
<PAGE>
<TABLE>
<CAPTION>
                                      THREE MONTHS ENDED
                                           MARCH 31,
                                        2003      2002
                                       -------  --------
<S>                                    <C>      <C>
Diluted:
  Net income (loss)                    $   408  $(3,752)
  Weighted average common shares
  outstanding                           28,913   25,249
  Effect of dilutive stock options         648        -
  Effect of dilutive warrants              971        -
                                       -------  --------
                                        30,532   25,249
                                       =======  ========

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

     Stock  options,  warrants  and  convertible debt to purchase approximately
7,764,121  shares of common stock were outstanding during the three months ended
March 31, 2003, but were not included in the computation of diluted net earnings
per  share  because  of  the  anti-dilutive  effects.

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

Stock  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 months ended March 31, 2003 and 2002 (in thousands, except
per  share  data):

<TABLE>
<CAPTION>
                                                     THREE MONTHS ENDED
                                                          MARCH 31,
                                                       2003      2002
                                                      -------  --------
<S>                                                   <C>      <C>
  Net income (loss), as reported                      $  408   $(3,752)
  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            (703)     (794)
                                                      -------  --------
    Pro forma net loss attributable to common
  shareholders                                        $ (295)  $(4,546)
                                                      =======  ========

                                        8
<PAGE>
Earnings per share
  Basic - as reported                                 $ 0.01   $ (0.15)
  Basic - pro forma                                   $(0.01)  $ (0.18)
  Diluted - as reported                               $ 0.01   $ (0.15)
  Diluted - as pro forma                              $(0.01)  $ (0.18)
</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  months  ended  March  31,  2003,  and  2002;

<TABLE>
<CAPTION>
                             THREE MONTHS ENDED
                                  MARCH 31,
                               2003      2002
                            ---------  ---------
<S>                         <C>        <C>
  Risk free interest rates  2.17%      3.83%
  Expected life             3.0 years  3.0 years
  Expected volatility       100%       107%
  Expected dividend yield   0%         0%
</TABLE>

     The  weighted  average  fair  value of options granted in the three months
ended  March  31,  2003  and  2002  was  $1.63  and  $1.76,  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 three months ended
March  31,  2003  and  2002.


                                        9
<PAGE>
<TABLE>
<CAPTION>
                             THREE MONTHS ENDED
                                  MARCH 31,
                               2003       2002
                            ---------  ---------
<S>                         <C>        <C>
  Risk free interest rates  1.10%      1.21%
  Expected life             0.5 years  0.5 years
  Expected volatility       93%        123%
  Expected dividend yield   0%         0%
</TABLE>

     The  weighted  average  fair value of those purchase rights granted in the
three  months  ended  March 31, 2003 and 2002 was $0.82 and $1.18, 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.

     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 did not
have  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 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.  At March 31, 2003 and December 31, 2002, the
Company  had  deferred  revenue  of $8.1 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.

SHORT-TERM  BANK  BORROWINGS

          As  of  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
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 debt subordinated) of $15 million.  As of March 31,
2003,  there  was  $10  million  outstanding  under  this  credit  facility.

                                       10
<PAGE>
    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  $436,000  outstanding  at  March  31,  2003.

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

     -    $7.5 million of the convertible notes are convertible into common
          stock at a price of $1.42 per share and a $300,000 convertible note is
          convertible 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 convertible notes
          are redeemable three years after issuance or may be converted into
          5,521,000 shares of common stock prior to the redemption date at the
          election of the investors.

     -    Warrants exercisable for 2,641,000 shares of common stock have an
          exercise price of $1.42 per share and warrants exercisable for 120,000
          shares of common stock have an exercise price of $1.25 per share. All
          warrants are currently exercisable, expire on August 15, 2006 and are
          callable by the Company after one year if the common stock price
          exceeds 200% of the respective exercise prices. The Company determined
          the fair value of the warrants, using the Black Scholes option pricing
          model with a risk free interest rate of 4.4 percent, volatility of
          75%, a term of three years and no dividend yield.

     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. 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 exceeds the
carrying  value  of  the convertible notes, resulting in a beneficial conversion
feature.  The  beneficial conversion feature is accreted over the stated term of
the  convertible  notes  in  accordance  with  EITF  No.  00-27.

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

     Convertible  note                   $ 5,560
     Detachable  warrants                  1,312
     Beneficial  conversion  feature         928
                                         --------
                                           7,800
     Other  asset,  issuance  costs         (814)
                                         --------
                                         $ 6,986
                                         ========

     The  $2.2 million difference between the $5.6 million carrying value of the
notes  and  the  $7.8 million face value of the notes, representing the value of
the  warrants and the beneficial conversion feature, has been recorded as equity
and  the  corresponding  debt  discount 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  obligations of $814,000 and warrants with a Black Scholes value of $54,000
to  purchase  79,000  shares  of  common  stock  at  $1.42 per share issued to a
placement  agent in connection with the transaction. In the first quarter ending
March  31,  2003,  15,000  shares  were  issued  related  to these warrants. The
remaining  warrants  are  currently  exercisable  and expire on August 15, 2006.
Issuance  costs  are  deferred and amortized as interest expense over the stated
term  of the convertible notes; accordingly, the Company recorded interest costs
of $72,000 during the three months ended March 31, 2003.  The remaining deferred
issuance  costs  at  March  31,  2003  was  $692,000.

                                       11
<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                                      -                -
Accretion and amortization                     150               72
                                      -------------  ---------------

Balance at March 31, 2003             $      5,451            ($692)
                                      =============  ===============
</TABLE>

     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.

     During  the  fourth quarter of 2002, convertible notes with a face value of
$675,000  were  converted  into  489,544  shares  of  common  stock.

     During  the first quarter of 2003, warrants were exercised for an aggregate
of  315,000  shares  of  common  stock.

INVENTORIES

     Inventories  comprise  the  following  (in  thousands):

<TABLE>
<CAPTION>
                                   MARCH 31,   DECEMBER 31,
                                      2003         2002
                                   ----------  -------------
<S>                                <C>         <C>
Raw materials and purchased parts  $    3,806  $       4,493
Work in process                         2,881          3,417
Finished goods                            482            175
Inventory at customers' locations       5,597          3,320
                                   ----------  -------------
                                   $   12,766  $      11,405
                                   ==========  =============
</TABLE>

                                       12
<PAGE>
     Inventory  at customers' locations represent the cost of systems shipped to
customers  for  which  we  are  awaiting  customer  acceptance.

ACCRUED  EXPENSES

     Accrued  expenses  comprise  the  following  (in  thousands):

<TABLE>
<CAPTION>
                                                     MARCH 31,   DECEMBER 31,
                                                        2003         2002
                                                     ----------  -------------
<S>                                                  <C>         <C>
System warranty                                      $    1,290  $         970
Accrued compensation, commissions and related items         638            509
Federal, state and foreign income taxes                     595            751
Accrued sales tax                                           438             72
Accrued legal expenses                                      434            129
Deferred rent                                               212            162
Other                                                       367            471
                                                     ----------  -------------
                                                     $    3,974  $       3,064
                                                     ==========  =============
</TABLE>

     Genus  adopted  Financial  Accounting Standards Board Interpretation No. 45
"Guarantor's  Accounting  and  Disclosure Requirements for Guarantees, including
Indirect  Indebtedness  of  Others"  (FIN 45) during the first fiscal quarter of
2003.  FIN  45  requires disclosures concerning Genus' obligations under certain
guarantees.

     The  Company's  warranty  period  terminates  for  material  coverage  in
twenty-four  months  and  for labor coverage in twelve months after the warranty
period  begins,  but  in  any  event  no later than twenty-seven months from the
product  shipment  date  for  material  coverage  and  fifteen  months for labor
coverage,  unless otherwise stated in the quotation.  The Company provides labor
for  all product repairs and replacement parts, excluding consumable items, free
of  charge  during  the  warranty  period.

     Changes  in  the  warranty reserves during the first fiscal quarter of 2003
were  as  follows  (in  thousands):

Balance,  December  31,  2002                                         $ 970,000
Accrual for warranty liability for revenues recognized in the period    455,000
Settlements  made                                                      (135,000)
                                                                     -----------
Balance, March 31, 2003                                              $1,290,000
                                                                     ===========

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.

                                       13
<PAGE>
     In  the  May 2001 private placement transaction the Company issued warrants
to  purchase 1,270,891 shares of Company Common Stock (the "May 2001 Warrants"),
at  an  exercise  price  of $3.50 per share. As a result of the January 25, 2002
financing,  and  pursuant  to  the  terms  of the May 2001 Warrants, the Company
reduced  the  exercise  price  for the May 2001 Warrants from $3.50 per share to
$2.19 per share and increased the underlying shares to an aggregate of 2,031,094
shares.  The  May  2001  Warrants  have  now  been exercised.  May 2001 Warrants
representing  610,872  shares  were exercised for cash in an aggregate amount of
approximately  $1.3  million  and  the  remaining May 2001 Warrants representing
1,420,224  shares  were  exercised  on  a cash-less basis.  The Company issued a
total  of  642,295  shares  as  a  result  of the cash-less exercise of May 2001
Warrants  pursuant  to  the  terms  therein.

     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 partner of Wilson
Sonsini Goodrich & Rosati, the general counsel of the Company.  During the first
quarters of 2003 and 2002, the Company paid $138,000 and $108,000, respectively,
to  Wilson  Sonsini  Goodrich  &  Rosati.  At  March  31, 2003, the Company owed
approximately  $189,000  to  Wilson  Sonsini  Goodrich  &  Rosati.

COMPREHENSIVE  INCOME  (LOSS)

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

<TABLE>
<CAPTION>
                                            THREE MONTHS ENDED
                                                MARCH 31,
                                             2003        2002
                                          -----------  --------
<S>                                       <C>          <C>
Net income (loss)                         $      408   $(3,752)
Foreign currency translation adjustment.        (112)       49
                                          -----------  --------
  Comprehensive income (loss)             $      296   $(3,703)
                                          ===========  ========
</TABLE>

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

<TABLE>
<CAPTION>
                                   MARCH 31  DECEMBER 31
                                     2002       2002
                                   --------  -----------
<S>                                <C>       <C>
Cumulative translation adjustment  $(2,245)  $   (2,133)
                                   ========  ===========
</TABLE>

                                       14
<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.

                                       15
<PAGE>
RECENT  ACCOUNTING  PRONOUNCEMENTS

          In November 2002, the FASB issued FASB Interpretation, or FIN, No. 45,
"Guarantor's  Accounting  and  Disclosure Requirements for Guarantees, Including
Indirect  Guarantees  of  Indebtedness  of  Others."  FIN No. 45 requires that a
liability  be  recorded  in  the  guarantor's  balance  sheet upon issuance of a
guarantee.  In  addition,  FIN  No. 45 requires disclosures about the guarantees
that an entity has issued, including a reconciliation of changes in the entity's
product  warranty  liabilities.  The initial recognition and initial measurement
provisions  of  FIN  No.  45 are applicable on a prospective basis to guarantees
issued  or  modified  after  December  31, 2002, irrespective of the guarantor's
fiscal  year-end.  The  disclosure  requirements of FIN No. 45 are effective for
financial  statements  of  interim  or  annual periods ending after December 15,
2002.  We have adopted the disclosure provision of FIN No. 45 for the year ended
December 31, 2002.  The adoption of FIN No. 45 did not have a material impact on
the consolidated financial statements for the three months ended March 31, 2003.

     In  November  2002,  the  EITF  reached  a  consensus  on  Issue No. 00-21,
"Accounting for Revenue Arrangements with Multiple Deliverables." EITF Issue No.
00-21  provides  guidance  on  how  to account for arrangements that involve the
delivery  or  performance  of  multiple  products, services and/or rights to use
assets.  The  provisions  of  EITF  Issue  No.  00-21  will  apply  to  revenue
arrangements  entered  into  in fiscal periods beginning after June 15, 2003. We
are  currently  assessing the impact of EITF Issue No. 00-21 on our consolidated
financial  statements.

     In December 2002, the FASB issued SFAS No. 148, "Accounting for Stock-Based
Compensation  -  Transition  and Disclosure - an amendment of FASB Statement No.
123."  SFAS  No.  148 provides alternative methods of transition for a voluntary
change  to  the  fair  value based method of accounting for stock-based employee
compensation.  SFAS  No.  148  also  requires  that disclosures of the pro forma
effect  of  using  the  fair value method of accounting for stock-based employee
compensation  be  displayed  more  prominently  and  in  a  tabular  format.
Additionally,  SFAS  No.  148  requires  disclosure  of  the pro forma effect in
interim  financial statements. The transition and annual disclosure requirements
of  SFAS  No.  148 are effective for fiscal years ended after December 15, 2002.
The  interim disclosure requirements are effective for interim periods beginning
after  December 15, 2002.  We have chosen to continue to account for stock-based
compensation  using  the intrinsic value method prescribed in APB Opinion No. 25
and  related  interpretations.  Accordingly,  compensation  expense  for  stock
options  is  measured as the excess, if any, of the estimate of the market value
of  our  stock  at the date of the grant over the amount an employee must pay to
acquire our stock.  We have adopted the annual disclosure provisions of SFAS No.
148  in  our  financial  reports  for  the year ended December 31, 2002 and have
adopted  the  interim  disclosure  provisions  for  quarterly  financial reports
starting  quarter  ending  March  31,  2003.  As  the  adoption of this standard
involves  disclosures  only,  we  do  not  expect  a  material  impact  on  our
consolidated  financial  statements.

In January 2003, the FASB issued FIN No. 46, "Consolidation of Variable Interest
Entities,  an  Interpretation  of  ARB  No.  51."  FIN  No.  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  No. 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 No. 46 must be applied for the first interim or annual period
beginning  after  June  15,  2003.  The adoption of this standard did not have a
material  impact on our financial position, results of operations, or cash flows
for  the  three  months  ended  March  31,  2003.

                                       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  we  believe 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 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 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.  At  March  31,  2003 and 2002, the Company had deferred revenue of
$8.1  million  and  $6.9  million,  respectively.

                                       17
<PAGE>
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 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
March  31,  2003  and  2002,  the  Company  had accrued $1,290,000 and $968,000,
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  were  $3.8  million  and  $4.2  million  at  March  31,  2003 and 2002,
respectively.  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.  At  March  31,  2003  and  2002,  the Company increased its inventory
reserve  by  $100,000  and  $368,000,  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 three months ended March 31, 2003 of $17.7 million
represented a increase of 84% when compared to net sales of $9.6 million for the
same  quarter  of 2002, and increased 57% sequentially from $11.3 million in the
fourth  quarter of 2002.  Two 300 mm ALD system, three 200 mm ALD system and one
200  mm  CVD  system  were  recognized  as revenue in the first quarter of 2003.
First  quarter  of  2002 revenues consisted of one 300 mm CVD system, one 300 mm
ALD system, one 200 mm CVD system. In the fourth quarter of 2002, one 300 mm CVD
system,  one  200  mm  CVD  system  and one 200 mm ALD system were recognized as
revenue.

                                       18
<PAGE>
     COST OF GOODS SOLD. Cost of goods sold for the three months ended March 31,
2003  was  $11.6  million, compared to $7.5 million for the same period in 2002.
Cost of goods was $8.7 million in the fourth quarter of 2002.  Gross profit as a
percentage  of revenues was 35 % in the first quarter of 2003 compared to 22% in
the same period of 2002.  Gross profit as a percentage of revenue was 23% in the
fourth  quarter  of  2002.  The  higher  gross  profit  percentages in the first
quarter  of  2003  was  a  direct  result  of  increasing production volumes and
manufacturing  efficiencies compared to the first quarter of 2002 and the fourth
quarter  of  2002.  First  quarter  2002 cost of sales also included $368,000 of
inventory  reserves and fourth quarter 2002 cost of sales included $1,227,000 of
inventory  reserves  compared  to  first quarter of 2003, when $100,000 reserves
were  recorded.

     RESEARCH  AND  DEVELOPMENT. Research and development (R&D) expenses for the
quarter  ended  March  31, 2003 was $2.1 million, compared with $2.2 million for
the  same  period  in  2002.  Research  and  development expenses for the fourth
quarter  of  2002  were  $1.9  million.  As a percent of net sales, research and
development  expenses  were 12%, 23% and 17% in the first quarter of 2003, first
quarter  of  2002 and fourth quarter of 2002, respectively.  The dollar decrease
in  the  first  quarter  of  2003  when  compared  to 2002 was mainly due to the
decrease  in  headcount.

     SELLING,  GENERAL  AND  ADMINISTRATIVE. Selling, general and administrative
(SG&A)  expenses were $3.2 million in the first quarter of 2003 compared to $3.4
million  in  the first quarter of 2002 and $2.4 million in the fourth quarter of
2002.  As  a  percent of net sales, selling, general and administrative expenses
were  18%,  36% and 21 % in the first quarter of 2003, first quarter of 2002 and
fourth  quarter  of  2002,  respectively.  The  increase in selling, general and
administrative expenses in the first quarter of 2003 when compared to the fourth
quarter  of  2002 was mainly due to an increase in professional fees of $617,000
including  increase in legal fees of $356,000 primarily related to settlement of
the  "ASMI"  lawsuit  and  increases  in  sales  commission of $71,000 due to an
increase  in  sales.

     OTHER  INCOME (EXPENSE), NET.  Other expenses for the first quarter of 2003
were  $423,000  compared  to  $255,000 in first quarter of 2002. The increase in
other  expenses  in  first quarter of 2003 compared to the first quarter of 2002
was  primarily related to interest charges of $347,000 on convertible notes. The
convertible  notes  were  issued  in  the  third  quarter  of 2002. The interest
expenses  in  first  quarter  of  2003 was partially offset by increase in other
income  of  $76,000,  comprised of interest income from cash deposits of $22,000
and currency exchange gain of $54,000 whereas in the first quarter of 2002 total
other  income  was  $44,000

     PROVISION  FOR  INCOME  TAXES.  We  did not record any provision for income
taxes  for  the  three  months  ended  March  31, 2003 for U.S as we have enough
federal  loss carry-forwards to cover net income recorded in U.S for the quarter
ended  March 31, 2003.  We did not record any provision for income taxes for the
three  months  ended  March  31, 2002. We provide for a full valuation allowance
against  the  tax  benefit  associated  with  the  losses.

LIQUIDITY  AND  CAPITAL  RESOURCES

     At  March  31,  2003,  our cash and cash equivalents were $12.5 million, an
increase of $1.0 million over cash and cash equivalents of $11.5 million held as
of  December  31,  2002.  Cash used by operating activities totaled $1.4 million
for  the  three  months  ended  March  31,  2003, and consisted primarily of net
increase  in customer accounts receivables of $6.5 million due to an increase in
sales  and  increase  of inventories $1.7 million for building future shipments,
partially  offset  by depreciation and amortization expenses of $1.0 million and
increase in deferred revenue and customer deposits of $5.4 million because of an
increase  in  shipments.

                                       19
<PAGE>
     Financing  activities  provided  cash  of $2.6 million for the three months
ended March 31, 2003 and primarily consists of net proceeds from short-term bank
borrowings compared with $8.3 million for the three months ended March 31, 2002.
The  increase in cash provided from financing activities in the first quarter of
2002  was  mainly  due  to $8 million of proceeds received from a sale of common
stock  and  warrants  to  purchase  common  stock.

     We  made  capital expenditures of $207,000 for the three months ended March
31,  2003.  These  expenditures  were primarily related to purchase of property,
plant  and  equipment

     Our primary source of funds at March 31, 2003 consisted of $12.5 million in
cash  and  cash  equivalents,  $14.1 million of accounts receivable and a credit
line  of  $15  million  with  Silicon  Valley  Bank,  of  which  $10  million is
outstanding  at  March  31,  2003.

     A summary of our contractual obligations as of March 31, 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  $ 10,074  $  10,074  $        -  $       -  $       -  $     -
Citicapital       .       436        N/A         253        183          -        -
Convertible Notes*      7,125        N/A           -      7,125          -        -
Operating Leases       17,680        N/A       1,628      4,946      3,768    7,338
                     --------  ---------  ----------  ---------  ---------  -------
                     $ 35,315  $  10,074  $    1,881  $  12,254  $   3,768  $ 7,338
                     ========  =========  ==========  =========  =========  =======
<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 $107 million and cash used
in operations of $1.4 million during the three months ended March 31, 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>
RELATED  PARTY  TRANSACTIONS

     Mario  M.  Rosati,  a  director  of the Company is also a partner of Wilson
Sonsini  Goodrich  and  Rosati,  the general counsel of the Company.  During the
first  quarters  of  2003  and  2002,  the  Company  paid $138,000 and $108,000,
respectively,  to  Wilson  Sonsini  Goodrich  &  Rosati.  At March 31, 2003, the
Company  owed  approximately  $189,000  to  Wilson  Sonsini  Goodrich  & Rosati.

RECENT  ACCOUNTING  PRONOUNCEMENTS

          In November 2002, the FASB issued FASB Interpretation, or FIN, No. 45,
"Guarantor's  Accounting  and  Disclosure Requirements for Guarantees, Including
Indirect  Guarantees  of  Indebtedness  of  Others."  FIN No. 45 requires that a
liability  be  recorded  in  the  guarantor's  balance  sheet upon issuance of a
guarantee.  In  addition,  FIN  No. 45 requires disclosures about the guarantees
that an entity has issued, including a reconciliation of changes in the entity's
product  warranty  liabilities.  The initial recognition and initial measurement
provisions  of  FIN  No.  45 are applicable on a prospective basis to guarantees
issued  or  modified  after  December  31, 2002, irrespective of the guarantor's
fiscal  year-end.  The  disclosure  requirements of FIN No. 45 are effective for
financial  statements  of  interim  or  annual periods ending after December 15,
2002.  We have adopted the disclosure provision of FIN No. 45 for the year ended
December 31, 2002.  The adoption of FIN No. 45 did not have a material impact on
the consolidated financial statements for the three months ended March 31, 2003.

     In  November  2002,  the  EITF  reached  a  consensus  on  Issue No. 00-21,
"Accounting for Revenue Arrangements with Multiple Deliverables." EITF Issue No.
00-21  provides  guidance  on  how  to account for arrangements that involve the
delivery  or  performance  of  multiple  products, services and/or rights to use
assets.  The  provisions  of  EITF  Issue  No.  00-21  will  apply  to  revenue
arrangements  entered  into  in fiscal periods beginning after June 15, 2003. We
are  currently  assessing the impact of EITF Issue No. 00-21 on our consolidated
financial  statements.

     In December 2002, the FASB issued SFAS No. 148, "Accounting for Stock-Based
Compensation  -  Transition  and Disclosure - an amendment of FASB Statement No.
123."  SFAS  No.  148 provides alternative methods of transition for a voluntary
change  to  the  fair  value based method of accounting for stock-based employee
compensation.  SFAS  No.  148  also  requires  that disclosures of the pro forma
effect  of  using  the  fair value method of accounting for stock-based employee
compensation  be  displayed  more  prominently  and  in  a  tabular  format.
Additionally,  SFAS  No.  148  requires  disclosure  of  the pro forma effect in
interim  financial statements. The transition and annual disclosure requirements
of  SFAS  No.  148 are effective for fiscal years ended after December 15, 2002.
The  interim disclosure requirements are effective for interim periods beginning
after  December 15, 2002.  We have chosen to continue to account for stock-based
compensation  using  the intrinsic value method prescribed in APB Opinion No. 25
and  related  interpretations.  Accordingly,  compensation  expense  for  stock
options  is  measured as the excess, if any, of the estimate of the market value
of  our  stock  at the date of the grant over the amount an employee must pay to
acquire our stock.  We have adopted the annual disclosure provisions of SFAS No.
148  in  our  financial  reports  for  the year ended December 31, 2002 and have
adopted  the  interim  disclosure  provisions  for  quarterly  financial reports
starting  quarter  ending  March  31,  2003.  As  the  adoption of this standard
involves  disclosures  only,  we  do  not  expect  a  material  impact  on  our
consolidated  financial  statements.

     In  January  2003,  the  FASB issued FIN No. 46, "Consolidation of Variable
Interest  Entities,  an  Interpretation  of  ARB  No.  51."  FIN No. 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 No. 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 No. 46 must be applied for the first
interim  or  annual period beginning after June 15, 2003.   The adoption of this
standard  did  not  have a material impact on our financial position, results of
operations,  or  cash  flows  for  the  three  months  ended  March  31,  2003.

                                       21
<PAGE>
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

     We  have experienced losses of $11.6 million, $6.7 million and $9.6 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  first quarter ended  March 31, 2003, Samsung Electronics Company, Ltd.,
Seagate  Technologies,  Inc.,  Selete  and ZMC Technology Pte Ltd. accounted for
67%,  19%,  8%, and 3% of revenues, respectively.  In first quarter ended  March
31,  2002,  Samsung Electronics Company, Ltd., and Selete accounted for 70%, and
27%  of  revenues,  respectively.

                                       22
<PAGE>
     The  semiconductor  manufacturing  industry generally consists of a limited
number  of  larger companies. Consequently, we expect that a significant portion
of  our  future  product sales will continue to be concentrated within a limited
number  of  customers,  even  though  we  are  making  progress  in reducing the
concentration of our reliance on these customers through our strategy of product
and  customer  diversification.

     None  of  our  customers  has  entered  into  a long-term agreement with us
requiring  them  to purchase our products. In addition, sales to these customers
may  decrease  in  the  future  when  they  complete their current semiconductor
equipment  purchasing  requirements.  If  any of our customers were to encounter
financial difficulties or become unable to continue to do business with us at or
near current levels, our business, results of operations and financial condition
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.

     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 98% of our total net sales for the
three months ended March 31, 2003. Net sales to our South Korean-based customers
accounted  for  approximately  66% of total net sales for the three months ended
March 31, 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:

                                       23
<PAGE>
     -    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.

     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.

                                       24
<PAGE>
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.

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,
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

                                       25
<PAGE>
     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.

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

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

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

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

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

                                       26
<PAGE>
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 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,
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  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.

                                       27
<PAGE>
     We  use  the  following  regulated  gases  at our manufacturing facility in
Sunnyvale:  tungsten hexafluoride, dichlorosilane silicide, silane and nitrogen.
We  also  use regulated liquids such as hydrofluoric acid and sulfuric acid. The
city  of  Sunnyvale,  California,  imposes  high  environmental  standards  to
businesses  operating  within  the city. Genus has 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  SIX  INDEPENDENT  SALES  REPRESENTATIVES  FOR  THE SALE OF OUR
PRODUCTS  AND  ANY  DISRUPTION  IN THESE RELATIONSHIPS WOULD ADVERSELY AFFECT US

     We  currently  sell and support our thin film products through direct sales
and customer support organizations in the United States, Europe, South Korea and
Japan  and through six 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  Japan.

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.

                                       28
<PAGE>
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  March 31, 2003, we have approximately of 6,897,061 shares of common
stock  underlying warrants, and outstanding employee stock options. Of the stock
options,  2,223,943  shares  are  exercisable  as  of March 31, 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 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.

                                       29
<PAGE>
     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.

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. The spare parts and service sales of $2.6
million  in  Q1  of  2003  generated  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.

     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.

                                       30
<PAGE>
ITEM  4.  CONTROLS  AND  PROCEDURES

Within  90  days  before  filing  this  report,  the  Company  evaluated  the
effectiveness  of  the  design  and  operation  of  its  disclosure controls and
procedures.  The  Company's  disclosure  controls and procedures are designed to
ensure  that the information that the Company must disclose in its reports filed
under  the  Securities  Exchange  Act  is communicated and processed in a timely
manner.  William  W.R.  Elder,  Chairman  of  the  Board,  President  and  Chief
Executive  Officer  and  Shum  Mukherjee,  Executive  Vice  President  and Chief
Financial  Officer,  participated  in  this  evaluation.

Based  on this evaluation, Messrs. Elder and Mukherjee concluded that, as of the
date  of their evaluation, the Company's disclosure controls and procedures were
effective,  except  as  noted  in  the  next  paragraph.  Since  the date of the
evaluation  described  above, there have not been any significant changes in the
Company's  internal controls or in other factors that could significantly affect
those  controls.

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  has  established  a  project  plan  and  has
completed  the  initial  design  of  processes  and  controls  to  address these
deficiencies.  Development  is  ongoing  and  implementation/completion  of this
project  is  anticipated  in  2003.


PART  II.  OTHER  INFORMATION


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 June
      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)

                                       31
<PAGE>
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)

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)

99.1  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.

                                       32
<PAGE>
(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 June 30, 1992.

(7)   Incorporated by reference to the exhibit filed with the Registrant's
      Report on Form 8-K dated June 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.

(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 June 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 June 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  on  Form  8-K

None.

                                       33
<PAGE>
GENUS,  INC.
SIGNATURES


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


Date:  May  15,  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)

                                       34
<PAGE>
Sarbanes-Oxley  Section  302(a)  Certifications

I,  William  W.R.  Elder,  certify  that:

1.   I have reviewed this quarterly report on Form 10-Q of Genus, Inc.;
2.   Based on my knowledge, this quarterly report does not contain any untrue
     statement of a material fact or omit to state a material fact necessary to
     make the statements made, in light of the circumstances under which such
     statements were made, not misleading with respect to the period covered by
     this quarterly report;
3.   Based on my knowledge, the financial statements, and other financial
     information included in this quarterly report, fairly present in all
     material respects the financial condition, results of operations and cash
     flows of the registrant as of, and for, the periods presented in this
     quarterly report;
4.   The registrant's other certifying officers and I are responsible for
     establishing and maintaining disclosure controls and procedures (as defined
     in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:
     a)   designed such disclosure controls and procedures to ensure that
          material information relating to the registrant, including its
          consolidated subsidiaries, is made known to us by others within those
          entities, particularly during the period in which this quarterly
          report is being prepared;
     b)   evaluated the effectiveness of the registrant's disclosure controls
          and procedures as of a date within 90 days prior to the filing date of
          this quarterly report (the "Evaluation Date"); and
     c)   presented in this quarterly report our conclusions about the
          effectiveness of the disclosure controls and procedures based on our
          evaluation as of the Evaluation Date;
5.   The registrant's other certifying officers and I have disclosed, based on
     our most recent evaluation, to the registrant's auditors and the audit
     committee of registrant's board of directors (or persons performing the
     equivalent functions):
     a)   all significant deficiencies in the design or operation of internal
          controls which could adversely affect the registrant's ability to
          record, process, summarize and report financial data and have
          identified for the registrant's auditors any material weaknesses in
          internal controls; and
     b)   any fraud, whether or not material, that involves management or other
          employees who have a significant role in the registrant's internal
          controls; and
6.   The registrant's other certifying officers and I have indicated in this
     quarterly report whether or not there were significant changes in internal
     controls or in other factors that could significantly affect internal
     controls subsequent to the date of our most recent evaluation, including
     any corrective actions with regard to significant deficiencies and material
     weaknesses.

Date:  May  15,  2003
                                        /s/  William  W.  R.  Elder
                                        ---------------------------
                                        William  W.R.  Elder
                                        Chief  Executive  Officer


                                       35
<PAGE>
I,  Shum  Mukherjee,  certify  that:

1.   I have reviewed this quarterly report on Form 10-Q of Genus, Inc.;
2.   Based on my knowledge, this quarterly report does not contain any untrue
     statement of a material fact or omit to state a material fact necessary to
     make the statements made, in light of the circumstances under which such
     statements were made, not misleading with respect to the period covered by
     this quarterly report;
3.   Based on my knowledge, the financial statements, and other financial
     information included in this quarterly report, fairly present in all
     material respects the financial condition, results of operations and cash
     flows of the registrant as of, and for, the periods presented in this
     quarterly report;
4.   The registrant's other certifying officers and I are responsible for
     establishing and maintaining disclosure controls and procedures (as defined
     in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:
     a)   designed such disclosure controls and procedures to ensure that
          material information relating to the registrant, including its
          consolidated subsidiaries, is made known to us by others within those
          entities, particularly during the period in which this quarterly
          report is being prepared;
     b)   evaluated the effectiveness of the registrant's disclosure controls
          and procedures as of a date within 90 days prior to the filing date of
          this quarterly report (the "Evaluation Date"); and
     c)   presented in this quarterly report our conclusions about the
          effectiveness of the disclosure controls and procedures based on our
          evaluation as of the Evaluation Date;
5.   The registrant's other certifying officers and I have disclosed, based on
     our most recent evaluation, to the registrant's auditors and the audit
     committee of registrant's board of directors (or persons performing the
     equivalent functions):
     a)   all significant deficiencies in the design or operation of internal
          controls which could adversely affect the registrant's ability to
          record, process, summarize and report financial data and have
          identified for the registrant's auditors any material weaknesses in
          internal controls; and
     b)   any fraud, whether or not material, that involves management or other
          employees who have a significant role in the registrant's internal
          controls; and
6.   The registrant's other certifying officers and I have indicated in this
     quarterly report whether or not there were significant changes in internal
     controls or in other factors that could significantly affect internal
     controls subsequent to the date of our most recent evaluation, including
     any corrective actions with regard to significant deficiencies and material
     weaknesses.


Date:  May  15,  2003
                                        /s/  Shum  Mukherjee
                                        --------------------
                                        Shum  Mukherjee
                                        Chief  Financial  Officer


                                       36
<PAGE>