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

                                    FORM 10-Q

(MARK  ONE)

[X]     QUARTERLY  REPORT  PURSUANT  TO  SECTION  13  OR 15(D) OF THE SECURITIES
EXCHANGE  ACT  OF  1934
FOR  THE  QUARTERLY  PERIOD  ENDED  JUNE  30,  1999  OR

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

COMMISSION  FILE  NUMBER  0-17139

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

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

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

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

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

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

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

Common  shares  outstanding  at  August  9,  1999:           18,258,096
                                                             ----------

<PAGE>
                         PART I.  FINANCIAL INFORMATION


ITEM  1.  FINANCIAL  STATEMENTS
<TABLE>
<CAPTION>

                              GENUS, INC. AND SUBSIDIARIES
              CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
                                      (UNAUDITED)

                      (AMOUNTS IN THOUSANDS, EXCEPT PER SHARE DATA)


                                                        THREE MONTHS ENDED        SIX MONTHS ENDED
                                                              JUNE 30,                 JUNE 30,
                                                     ------------------------   --------------------
                                                         1999          1998        1999       1998
                                                     ----------  ------------   ---------  ---------
<S>                                                  <C>         <C>            <C>        <C>
Net sales                                            $    7,966  $     10,270   $ 13,918   $ 17,508

Costs and expenses:
  Cost of goods sold                                      4,495         9,724      8,099     16,665
  Research and development                                1,341         2,939      2,544      6,271
  Selling, general and administrative                     2,017         5,683      3,882      9,906
  Special charge                                              0        13,216          0     13,216
                                                     ----------  -------------  ---------  ---------
    Income (loss) from operations                           113       (21,292)      (607)   (28,550)

Other, net                                                   66          (237)       175       (393)
                                                     ----------  -------------  ---------  ---------
  Net income (loss)                                         179       (21,529)      (432)   (28,943)

Deemed dividends on preferred stock                           0           (74)         0     (1,903)
                                                     ----------  -------------  ---------  ---------

Net income (loss) available to common shareholders   $      179  $    (21,603)  $   (432)  $(30,846)
                                                     ==========  =============  =========  =========

Basic and diluted net income (loss) available to
common shareholders per common share and
per common share assuming dilution                         0.01         (1.26)     (0.02)     (1.80)
                                                     ==========  =============  =========  =========

Shares used in per share calculation
Basic shares                                             18,117        17,160     17,991     17,143
                                                     ==========  =============  =========  =========
Diluted shares                                           18,624        17,160     17,991     17,143
                                                     ==========  =============  =========  =========
<FN>

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

<PAGE>
<TABLE>
<CAPTION>

                                GENUS, INC. AND SUBSIDIARIES
                                CONSOLIDATED BALANCE SHEETS
                                        (UNAUDITED)

                       (AMOUNTS IN THOUSANDS, EXCEPT PER SHARE DATA)


                                                        JUNE 30, 1999   DECEMBER 31, 1998
                                                       ---------------  -----------------
<S>                                                    <C>              <C>
ASSETS
Current assets:
  Cash and cash equivalents                            $        7,397   $          8,125
  Accounts receivable (net of allowance for doubtful
  accounts of $499 in 1999 and $500 in 1998)                    9,940             13,008
  Inventories                                                   4,362              5,338
  Other current assets                                            398                379
                                                       ---------------  -----------------
    Total current assets                                       22,097             26,850

  Property and equipment, net                                   4,343              4,659
  Other assets, net                                               318                318
                                                       ---------------  -----------------
    Total assets                                       $       26,758   $         31,827
                                                       ===============  =================

LIABILITIES
Current liabilities:
  Short-term bank borrowings                           $            0   $          4,000
  Accounts payable                                              2,537              2,193
  Accrued expenses                                              3,858              4,908
                                                       ---------------  -----------------
    Total current liabilities                                   6,395             11,101
                                                       ---------------  -----------------

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

SHAREHOLDERS' EQUITY
Common stock, no par value:
  Authorized 50,000,000 shares;
  Issued and outstanding 18,257,762 shares at
  June 30, 1999 and 17,361,162 shares at
  December 31, 1998                                           100,730             99,849
Accumulated deficit                                           (78,687)           (78,255)
Accumulated other comprehensive loss                           (1,680)            (1,641)
                                                       ---------------  -----------------
  Total shareholders' equity                                   20,363             19,953
                                                       ---------------  -----------------
    Total liabilities, redeemable preferred stock,
    and shareholders' equity                           $       26,758   $         31,827
                                                       ===============  =================
<FN>

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

<PAGE>
<TABLE>
<CAPTION>

                                 GENUS, INC. AND SUBSIDIARIES
                            CONSOLIDATED STATEMENTS OF CASH FLOWS
                                         (UNAUDITED)

                        (AMOUNTS IN THOUSANDS, EXCEPT PER SHARE DATA)


                                                                   SIX MONTHS ENDED
                                                                       JUNE 30,
                                                                ---------------------
                                                                    1999       1998
                                                                ----------  ---------
<S>                                                             <C>         <C>
Cash flows from operating activities:
  Net income (loss)                                             $    (432)  $(28,943)
  Adjustments to reconcile net income (loss)
  to net cash from operating activities:
    Depreciation and amortization                                     831      1,863
    Special charge                                                      0     13,216
    Changes in assets and liabilities:
      Accounts receivable                                           3,068     10,402
      Inventories                                                     976     (2,656)
      Other current assets                                            (19)       251
      Accounts payable                                                344      2,804
      Accrued expenses                                             (1,050)      (620)
      Other, net                                                        0       (817)
                                                                ----------  ---------
        Net cash used in operating activities                       3,718     (4,500)
                                                                ----------  ---------

Cash flows from investing activities:
  Acquisition of property and equipment                              (515)      (373)
                                                                ----------  ---------

Cash flows from financing activities:
  Proceeds from issuance of common stock                              108        121
  Proceeds from issuance of preferred stock and warrants, net           0      4,815
  Payments of short-term bank borrowings                           (4,000)    (4,400)
  Payments of long-term debt                                            0       (739)
                                                                ----------  ---------
    Net cash provided by financing activities                      (3,892)      (203)
                                                                ----------  ---------

Effect of exchange rate changes on cash                               (39)       130
                                                                ----------  ---------

Net decrease in cash and cash equivalents                            (728)    (4,946)
Cash and cash equivalents, beginning of period                      8,125      8,700
                                                                ----------  ---------
Cash and cash equivalents, end of period                        $   7,397   $  3,754
                                                                ==========  =========
<FN>

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

                          GENUS, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                            JUNE 30, 1999 (UNAUDITED)

Basis  of  Presentation

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

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

Net  Income  (Loss)  Per  Share

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

<PAGE>
                          GENUS, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                            JUNE 30, 1999 (UNAUDITED)

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

                                           (AMOUNTS IN THOUSANDS, EXCEPT PER SHARE DATA)

                                              THREE MONTHS ENDED       SIX MONTHS ENDED
                                                   JUNE 30,                JUNE 30,
                                         --------------------------  ------------------
                                             1999         1998          1999      1998
                                         -----------  -------------  --------  ---------
<S>                                      <C>          <C>            <C>       <C>
Numerator-basic:
  Net income (loss)                      $       179  $    (21,529)  $  (432)  $(28,943)
  Deemed dividends on preferred stock              0           (74)        0     (1,903)
                                         -----------  -------------  --------  ---------
    Net income (loss) available to
    common shareholders                  $       179  $    (21,603)     (432)   (30,846)
                                         ===========  =============  ========  =========

Denominator-basic:
  Weighted average common shares
  outstanding                                 18,117        17,160    17,991     17,143
                                         ===========  =============  ========  =========

Basic net income (loss) per share        $      0.01  $      (1.26)  $ (0.02)  $  (1.80)
                                         ===========  =============  ========  =========

Numerator-diluted:
  Net income (loss)                      $       179  $    (21,529)  $  (432)  $(28,943)
  Deemed dividends on preferred stock              0           (74)        0     (1,903)
                                         -----------  -------------  --------  ---------
    Net income (loss) available to
    common shareholders                  $       179  $    (21,603)  $  (432)  $(30,846)
                                         ===========  =============  ========  =========

Denominator-diluted:
  Weighted average common shares
  outstanding                                 18,117        17,160    17,991     17,143
  Effect of dilutive securities: stock
  options                                        507             0         0          0
                                         -----------  -------------  --------  ---------
                                              18,624        17,160    17,991     17,143
                                         ===========  =============  ========  =========

Diluted net income (loss) per share      $      0.01  $      (1.26)  $ (0.02)  $  (1.80)
                                         ===========  =============  ========  =========
</TABLE>

<PAGE>
                          GENUS, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                            JUNE 30, 1999 (UNAUDITED)

Stock  options  to  purchase approximately 2,255,000 shares of common stock were
outstanding  during  the six months ended June 30, 1999 but were not included in
the  computation  of diluted income per share because the Company has a net loss
for  the  six  months  ended  June  30,  1999.

Stock  options  to  purchase approximately 2,502,000 shares of common stock were
outstanding  during  the six months ended June 30, 1998 but were not included in
the computation of diluted loss per share because the Company has a net loss for
the  six  months  ended  June  30,  1998.

The  outstanding  warrants  of  400,000  shares of common stock were outstanding
during  the  six  months  ended  June  30,  1999  but  were  not included in the
computation  of  diluted income per share because the Company has a net loss for
the  six  months  ended  June  30,  1998.
<TABLE>
<CAPTION>

Statement  of  Cash  Flow  Information

                                             (AMOUNTS IN THOUSANDS)

                                                   SIX MONTHS ENDED
                                                         JUNE 30,
                                                  -----------------
                                                    1999      1998
                                                  --------  -------
<S>                                               <C>       <C>
Supplemental Cash Flow Information:

  Cash paid during the period for:
    Interest                                      $      2  $   177

  Non-cash financing activities:
    Deemed dividends on preferred stock related
      to beneficial conversion feature            $      0  $ 1,792
    Net assets held for sale                             0   25,130
    Conversion of Series A Convertible Preferred
      Stock to common stock                              0      124
</TABLE>

Line  of  Credit

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

<PAGE>
                          GENUS, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                            JUNE 30, 1999 (UNAUDITED)
<TABLE>
<CAPTION>

INVENTORIES
Inventories comprise the following:        (AMOUNTS IN THOUSANDS)

                                        JUNE 30,     DECEMBER 31,
                                          1999           1998
                                     -------------  -------------
<S>                                  <C>            <C>
Raw materials and parts              $       3,484  $       5,094
Work in process                                878            244
                                     -------------  -------------
                                     $       4,362  $       5,338
                                     =============  =============
</TABLE>
<TABLE>
<CAPTION>

ACCRUED  EXPENSES

Accrued expenses comprise the following:        (AMOUNTS IN THOUSANDS)

                                              JUNE 30,    DECEMBER 31,
                                                1999          1998
                                          -------------  -------------
<S>                                       <C>            <C>
System installation and warranty          $         743  $         583
Accrued commissions and incentives                  303            538
Accrued payroll and related items                   571            536
Restructuring reserves                              598          1,240
Income taxes                                        456            456
Other                                             1,187          1,555
                                          -------------  -------------
                                          $       3,858  $       4,908
                                          =============  =============
</TABLE>

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

During  the  second  quarter of 1999, $135 of transaction and foreign subsidiary
costs  were  charged  against  the  restructuring  reserve.

At  June  30,  1999,  the  following  components  of  the  restructuring reserve
associated  with  the  special  charge  remain  unpaid:  $160  in  payroll costs
associated with the reduction in force, $50 in foreign subsidiary closing costs,
and  $388  in transaction costs. The Company expects these amounts to be paid by
the  end  of  the  third  quarter  of  1999.

<PAGE>
                          GENUS, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                            JUNE 30, 1999 (UNAUDITED)

ISSUANCE  OF  PREFERRED  STOCK  AND  WARRANTS

Warrants

In  connection  with  the  issuance  of the Series A Convertible Preferred Stock
("Series  A  Stock"),  the  Company  issued  warrants  for 400,000 shares of the
Company's  common  stock  to the holders of the Series A Stock. The warrants are
exercisable  at  any time until February 2001 for 300,000 shares of common stock
at  a  price  of  $3.67 per share and for 100,000 shares at a price of $4.50 per
share.

LEGAL  PROCEEDINGS

The  Company  and  Varian  Associates,  Inc.  ("Varian")  are  in the process of
resolving  a  dispute  through  arbitration  as  required  by the Asset Purchase
Agreement.  The  original  dispute  was in regard to whether Genus or Varian has
rights  to  one  ion  implant  sale and inventory. Subsequently, Genus also made
claims  against  Varian  with  respect  to  the  earnout  provision in the Asset
Purchase  Agreement, which requires Varian to pay Genus one-third of all revenue
recorded  in  excess  of  $30  million  during  calendar  year 1998. Varian then
expanded its claim to include two other ion implant shipments that Varian claims
did  not meet revenue recognition requirements.  These two systems, valued at $7
million,  were  recorded  as  revenue by Genus prior to the closing of the Asset
Purchase Agreement.  If the Company prevails in the arbitration, any adjustments
to  the  Company's financial statements will be made in the quarter in which the
decision  is  rendered and the collection of the amount in question is probable.
The  Company is not conceding any rights to the disputed sales and believes that
it  will  prevail  in  the  arbitration.

The  Company  received  notice  that it has been named as a defendant in a claim
involving  an  automobile  accident  by  a former employee of the Company, which
resulted in the death of an individual. General, punitive, and exemplary damages
are  being sought by the plaintiffs.  The Company believes it is not at fault in
this  matter,  and  has  appointed  legal  council  to  defend  the  claim.

<PAGE>
                          GENUS, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                            JUNE 30, 1999 (UNAUDITED)

COMPREHENSIVE  INCOME

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

The  following  are  the  components  of  comprehensive  loss:
<TABLE>
<CAPTION>

                                                      (AMOUNTS IN THOUSANDS)

                                               THREE MONTHS ENDED      SIX MONTHS ENDED
                                                    JUNE 30,               JUNE 30,
                                           ------------------------  --------------------
                                              1999         1998         1999       1998
                                           ---------  -------------  ---------  ---------
<S>                                        <C>        <C>            <C>        <C>
Net income (loss)                          $    179   $    (21,603)  $   (432)  $(30,846)
Foreign currency translation adjustments        (58)           247        (39)     2,337
                                           ---------  -------------  ---------  ---------
  Comprehensive loss                       $    121   $    (21,356)      (471)   (28,509)
                                           =========  =============  =========  =========
</TABLE>

The components of accumulated other comprehensive income, net of related tax are
as  follows:
<TABLE>
<CAPTION>

                                          (AMOUNTS IN THOUSANDS)

                                        JUNE 30      DECEMBER 31
                                          1999          1998
                                    -------------  -------------
<S>                                 <C>            <C>
Cumulative translation adjustments  $     (1,680)  $     (1,641)
                                    =============  =============
</TABLE>

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

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

Results  of  Operations

Net  sales  for the three and six months ended June 30, 1999 were $8 million and
$13.9  million,  respectively,  compared to net sales of $10.3 million and $17.5
million  for the corresponding periods in 1998 when Genus was a two-product line
company.  Included  in the second quarter sales was a system to a new major U.S.
customer  in a new thin film market segment. The Company has now shipped systems
into  two  of  its  three  targeted  markets.

Gross  margin  for the three and six months ended June 30, 1999 was 44% and 42%,
respectively,  compared  to 5% and 5% for the same periods in 1998. In 1998, the
Company was structured to support much higher revenue levels than were achieved.
This  resulted  in  a  severe  underabsorption  of  fixed operations and service
overhead  expenses.  During  the second quarter of 1998, the Company implemented
cost  reduction  measures  which  significantly  decreased  these fixed overhead
expenses.  The  Company  believes that the current organization is more properly
sized  to  achieve  reasonable  gross  margins  going  forward, assuming revenue
targets  are  met.

Research and development expenses (R&D) for the second quarter of 1999 were $1.3
million,  or  17%  of  sales,  a  decrease  of $1.6 million compared to the $2.9
million  reported in the second quarter of 1998. R&D spending for the first half
of  1999  was  $2.5  million,  compared to $6.3 million during the first half of
1998. These reductions were primarily attributed to R&D expenses associated with
the  ion  implant  product  line  which  was sold to Varian in July of 1998. The
Company  expects spending levels to remain in the 17-20% range for 1999. In July
of  1999,  the  Company  introduced its RInG  (Rapidly Integrated Gate) product,
which  increases the access speed of the DRAM, and ALD (Atomic Layer Deposition)
which  can  deposit films an order of magnitude thinner than current technology.

Selling,  General  and  Administrative  expenses  (SG&A) were $2 million for the
second quarter of 1999, a decrease of $3.7 million from the $5.7 million of SG&A
for  the  second  quarter of 1998. Year-to-date SG&A expenses were $3.9 million,
compared  to $9.9 million for 1998. The expense reductions were related to costs
associated  with the ion implant product line, and a $1.4 million write-off of a
receivable  from  Innotech  Corporation,  formerly  the  Company's  Japanese
distributor,  during  the  second  quarter  of  1998.

For  the  second  quarter  of  1999, other income was $66,000, compared to other
expense  of  $237,000 in the second quarter of 1998. For the first half of 1999,
other  income  was  $175,000, while other expense for the first half of 1998 was
$393,000.  Other  income consists mainly of interest income, while other expense
for  1998  included  interest  expenses  associated  with  capital  leases  and
short-term  borrowings,  and  foreign  exchange  losses.

The  net  income for the quarter ended June 30, 1999 was $179,000. This compares
with  net loss of $21.5 million for the second quarter of 1998, which included a
$13.2  million  special  charge for costs associated with the selling of the ion
implant  product  line  to Varian and reorganizing the thin film operation to be
profitable  at  lower  revenue  levels. The net loss for the first six months of
1999  was $432,000, compared to net loss of $28.9 million for the same period in
1998,  which  also  included  deemed dividends of $1.9 million on the $5 million
worth  of  Series  A Convertible Preferred Stock, all of which has been retired.

Liquidity  and  Capital  Resources

During  the  three  months  ended  June  30,  1999,  the Company's cash and cash
equivalents were $7.4 million compared to $8.1 million at December 31, 1998. The
Company  collected  $7.5  million  of  outstanding receivables during the second
quarter,  including  most  of  the remaining ion implant receivables. Total cash
collected  in  1999  was  $14.5 million. Accounts receivable was $9.9 million at
June  30,  1999,  compared  to $13 million on December 31, 1998. Several systems
which  shipped  with  extended  payment  terms in 1998 were collected during the
first  half  of  1999. The current balance is mainly comprised of second quarter
shipments of $8 million and remaining ion implant receivables, of which $935,000
has  been  collected  since  the  close  of  the  second  quarter.

The  Company  believes that its existing working capital and cash generated from
operations  will  be  sufficient  to  satisfy  its cash needs through the end of
fiscal  1999. Currently, cash not required for operating purposes is invested in
short-term  money  market funds. The Company has an Accounts Receivable Purchase
Agreement  in  place,  which  can  provide a maximum of $4 million of borrowings
against  qualified  receivables.  This  agreement expires on September 30, 1999.
There  can be no assurance that any required additional funding, if needed, will
be  available  on  terms  attractive to the Company, which could have a material
adverse  effect  on  the Company's business, financial condition, and results of
operations. Any additional equity financing may be dilutive to shareholders, and
debt  financing,  if  available,  may  involve  restrictive  covenants.

Risk  Factors

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

Historical  Performance.  The  Company  has experienced losses of $29.5 million,
$19.3  million, and $9.2 million for the years ended December 31, 1998, 1997 and
1996,  respectively. In addition, the Company experienced a net loss of $432,000
in the first six months of 1999. As a result of the Company's volatile sales and
operating  results  in  recent years, there can be no assurance that the Company
will  be  able  to  attain  or  sustain  consistent  future  revenue growth on a
quarterly  or  annual  basis,  or  that  the  Company  will be able to attain or
maintain  consistent  profitability  on  a  quarterly  or  annual  basis.

Reliance  on  International Sales. Export sales accounted for approximately 56%,
74%  and  84%  of  total  net  sales  in  the  years  ended 1998, 1997 and 1996,
respectively.  In  addition,  net  sales to South Korean customers accounted for
approximately 34%, 50% and 59%, respectively, of total net sales during the same
periods. In 1999, export sales to South Korea accounted for approximately 80% of
total  sales,  including 98% in the first quarter and 70% in the second quarter.
The  Company  anticipates  that  sales to one customer in Korea will continue to
account  for  a  significant  portion  of  net sales. As a result, a significant
portion  of  the  Company's  sales  will  be subject to certain risks, including
unexpected  changes  in  regulatory  requirements,  tariffs  and other barriers,
political  and  economic  instability,  difficulties  in  accounts  receivable
collection,  difficulties  in  managing  distributors  or  representatives,
difficulties  in  staffing  and  managing  foreign  subsidiary  operations  and
potentially  adverse  tax  consequences.  Although  the Company's foreign system
sales  are primarily denominated in U.S. dollars and the Company does not engage
in  hedging  transactions,  the Company's foreign sales are subject to the risks
associated  with  unexpected  changes  in  exchange  rates, which could have the
effect  of making the Company's products more or less expensive. There can be no
assurance  that  any of these factors will not have a material adverse effect on
the  Company's  business,  financial  condition  and  results  of  operations.

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

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

Reliance  on  a  Small  Number  of  Customers  and Concentration of Credit Risk.
Historically,  the  Company  has  relied  on a limited number of customers for a
substantial  portion  of  its  net  sales.  In  1998,  three  customers, Samsung
Electronics  Company,  Ltd.,  M/A Com and SGS Thomson, accounted for 68%, 8% and
5%,  respectively,  of the Company's thin films net sales. During the first half
of  1999,  two  customers  accounted  for 95% of sales. For the first quarter of
1999,  Samsung  accounted for 98% of total sales, and during the second quarter,
Samsung  and a new U.S. customer accounted for 95% of total sales. Additionally,
one customer accounted for an aggregate of 90% of thin films accounts receivable
at  December  31,  1998.  Because  the  semiconductor  manufacturing industry is
concentrated  in  a  limited  number  of generally larger companies, the Company
expects  that  a  significant  portion  of  its  future  product  sales  will be
concentrated  within  a limited number of customers. None of these customers has
entered  into  a  long-term  agreement  requiring  it  to purchase the Company's
products.  Furthermore,  sales to certain of these customers may decrease in the
future  when  those  customers  complete  their  current semiconductor equipment
purchasing  requirements for new or expanded fabrication facilities. The loss of
a  significant  customer or any reduction in orders from a significant customer,
including  reductions  due  to  customer departures from recent buying patterns,
market,  economic  or competitive conditions in the semiconductor industry or in
the  industries  that  manufacture products utilizing ICs, could have a material
adverse  effect  on  the  Company's business, financial condition and results of
operations.

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

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

Fluctuations in Quarterly Operating Results. The Company's revenue and operating
results may fluctuate significantly from quarter-to-quarter. The Company derives
its  revenue primarily from the sale of a relatively small number of high-priced
systems,  many  of which may be ordered and shipped during the same quarter. The
Company's  results  of  operations  for  a particular quarter could be adversely
affected  if  anticipated  orders,  for even a small number of systems, were not
received  in  time  to enable shipment during the quarter, anticipated shipments
were  delayed or canceled by one or more customers or shipments were delayed due
to  manufacturing  difficulties. The Company's revenue and operating results may
also  fluctuate due to the mix of products sold and the channel of distribution.

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

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

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

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

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

Dependence  on  Key  Suppliers.  Certain  of  the  components and sub-assemblies
included  in  the  Company's  products  are obtained from a single supplier or a
limited  group  of  suppliers.  Disruption or termination of these sources could
have  a  temporary  adverse  effect  on  the  Company's  operations. The Company
believes  that  alternative  sources  could  be obtained and qualified to supply
these  products,  if  necessary.  Nevertheless,  a prolonged inability to obtain
certain  components  could  have  a  material  adverse  effect  on the Company's
business,  financial  condition  and  results  of  operations.

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

Volatility  of  Stock  Price.  The  Company's  common  stock  has  experienced
substantial  price  volatility,  particularly  as a result of quarter-to-quarter
variations  in  the actual or anticipated financial results of, or announcements
by,  the  Company,  its  competitors  or  its  customers,  announcements  of
technological  innovations  or  new  products by the Company or its competitors,
changes  in  earnings  estimates  by  securities  analysts  and  other events or
factors.  Also,  the  stock  market  has  experienced  extreme  price and volume
fluctuations  which have affected the market price of many technology companies,
in  particular, and which have often been unrelated to the operating performance
of these companies. These broad market fluctuations, as well as general economic
and  political  conditions  in  the United States and the countries in which the
Company  does  business,  may adversely effect the market price of the Company's
Common  Stock.  In  addition,  the  occurrence of any of the events described in
these  "Risk Factors" could have a material adverse effect on such market price.

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

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

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

Enterprise  Resources  Program.  During  the second quarter of 1999, the Company
decided to pursue the installation of Baan instead of Dataworks product that was
planned  for  implementation  by  August  1, 1999. The cutover from the existing
system  to the new system is now scheduled for October 1, 1999. The Baan product
has  been  certified as Y2K compliant, and this product is running at many major
manufacturing  companies  worldwide.  The  system  is  considered to be the most
critical  internal  Company resource at risk to the Year 2000 problem, so timely
implementation  is  essential.

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

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

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

At  this  time, the Company does not plan to use any outside agencies to provide
independent  verification  of  readiness,  although  individual  implementation
project managers may decide to include independent verification as part of their
project  plans.  The  independent  verification requirement will be based on the
risk  associated  with  failure of the particular project/system. The Company is
setting  up  a program to use in-house quality system auditors to perform audits
of  some  of  the  critical  projects  to provide some independent assessment of
readiness.

<PAGE>
                           PART II.  OTHER INFORMATION


ITEM  4.  SUBMISSION  OF  MATTERS  TO  A  VOTE  OF  SECURITY  HOLDERS

The  Company's  Annual Meeting of Shareholders was held on May 19, 1999 in Santa
Clara, California. Proxies for the meeting were solicited pursuant to Regulation
14A.  At  the  Company's Annual Meeting, the shareholders approved the following
resolutions:
<TABLE>
<CAPTION>

(1)  Election of the following persons as directors.
<S>                        <C>          <C>
    Director                In Favor    Withheld
------------------------   ----------   --------
    William W.R. Elder     14,502,405   407,805
    Todd S. Myhre          14,515,805   394,405
    G. Frederick Forsyth   14,586,205   324,005
    Mario M. Rosati        14,586,055   324,155
</TABLE>
<TABLE>
<CAPTION>

(2)  Amendment to the 1991 Incentive Stock Option Plan increasing the number of
     shares  reserved  for  issuance  thereunder  by  500,000 additional shares.
<S>                     <C>
    For:                13,190,244
    Against:             1,637,383
    Abstain:                75,925
    Broker Non-Vote:     3,210,239
</TABLE>
<TABLE>
<CAPTION>

(3)  Amendment to the 1989 Employee Stock Purchase Plan increasing the number of
     shares  reserved  for  issuance  thereunder  by  300,000 additional shares.
<S>                     <C>
    For:                13,733,257
    Against:             1,102,420
    Abstain:                67,875
    Broker Non-Vote:     3,210,239
</TABLE>
<TABLE>
<CAPTION>

(4)  Ratification and appointment of PricewaterhouseCoopers LLP as independent accountants.
<S>                     <C>
    For:                14,659,888
    Against:               174,686
    Abstain:                73,978
    Broker Non-Vote:     3,205,239
</TABLE>

ITEM  6.  EXHIBITS  AND  REPORTS  ON  FORM  8-K

(a)     Exhibits

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

<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:  August 13, 1999                                   GENUS, INC.




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




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

<PAGE>
                                   GENUS, INC.
                                INDEX TO EXHIBITS


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

<PAGE>