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

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FORM 10-K/A
(AMENDMENT NO. 1)
(Mark One)

[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934

For the YEARLY period ended March 31, 2001

[_] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934

Commission File number 0-22114

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

California 94-2942251

(State or other jurisdiction (Federal employer
of incorporation or organization) identification No.)

48761 Kato Road, Fremont, California 94538
(Address of principal executive offices)

(510) 661-5000
(Registrant's telephone number, including area code)

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Securities registered pursuant to Section 12(b) of the Act:
None

Securities registered pursuant to Section 12(g) of the Act:
common stock, no par value.

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Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such report), and (2) has been subject to such
filing requirements for the past 90 days. Yes [X]

Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to
the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K [_]

There were 35,131,040 shares of common stock, no par value, outstanding as
of June 1, 2001. The aggregate market value of voting stock held by non-
affiliates of the registrant based upon the closing sales quotation of the
common stock on June 1, 2001 was approximately $654,139,965.

DOCUMENTS INCORPORATED BY REFERENCE

Portions of the following documents are incorporated by reference in this
report:
Definitive Proxy Statement in connection with 2001 Annual Meeting of
Shareholders
(Part III of this Report)

The 2001 Proxy Statement shall be deemed to have been "filed" only to the
extent portions thereof are expressly incorporated by reference.

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EXPLANATORY NOTE

By filing this amendment to our Annual Report on Form 10-K for the year
ended March 31, 2001, Asyst Technologies, Inc. is amending:

1. The second paragraph of Part I, "Item 1--Business-Industry Overview"
to revise the value of a 25-wafer lot from $1,000,000 to $450,000;

2. The penultimate paragraph of Part I, "Item 1--Business--Risk Factors,"
under the heading "We may not be able to secure additional financing to
meet our future capital needs" to revise the amount of unsecured loans owed
by Asyst Japan, Inc. from $26.4 million to $28.7 million;

3. The selected Quarterly Financial Data of Part III, "Item 7--
Management's Discussion and Analysis of Financial Condition and Results of
Operations--Selected Quarterly Financial Data" to correct certain financial
data for the fiscal quarter ended March 31, 2000 and the presentation of
certain financial data; and

4. Exhibit 21.1 to correct the jurisdiction of incorporation of
Progressive System, Inc.

The foregoing revisions are necessary to correct administrative errors that
appear in our Form 10-K filed with the Securities and Exchange Commission on
June 19, 2001.

Other than the above-referenced changes, the information set forth below is
identical to the information set forth under "Item 1--Business," under "Item
7--Management's Discussion and Analysis of Financial Condition and Results of
Operations" and Exhibit 21.1 in our Annual Report on Form 10-K filed with the
SEC on June 19, 2001.

PART I

FORWARD LOOKING STATEMENTS

Except for the historical information contained herein, the following
discussion includes 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 that involve risks and uncertainties. We intend such forward-
looking statements to be covered by the safe harbor provisions for forward-
looking statements contained in the Private Securities Litigation Reform Act
of 1995, and we are including this statement for purposes of complying with
these safe harbor provisions. We have based these forward-looking statements
on our current expectations and projections about future events. Our actual
results could differ materially. These forward-looking statements are not
guarantees of future performance and are subject to risks, uncertainties and
assumptions, including those set forth in this section as well as those under
the caption, "Management's Discussion and Analysis of Financial Condition and
Results of Operations."

Words such as "expect," "anticipate," "intend," "plan," "believe,"
"estimate," "seek," "could," "predict," "continue," "future, "may," and
variations of such words and similar expressions are intended to identify such
forward-looking statements. We undertake no obligation to publicly update or
revise any forward-looking statements, whether as a result of new information,
future events or otherwise. In light of these risks, uncertainties and
assumptions, the forward-looking events discussed in this document might not
occur.

Asyst is our registered trademark. AXYS, Asyst-SMIF System, SMART-Traveler
System, SMIF-Pod, SMIF-FOUP, SMIF-Arms, SMIF-Indexer, SMIF-LPI, SMIF-LPO,
SMIF-LPT, SMIF-E, SMART-Tag, SMART-Comm, SMART-Storage Manager, SMART-Fab,
Substrate Management System, Retical Management System, Wafer Management
System, VersaPort 2200, Global Lot Server, FluoroTrac Auto ID System, AdvanTag
and SMART-Station are our trademarks. This report also contains registered
trademarks of other entities.

ITEM 1--Business

Overview

We are a leading provider of integrated automation systems for the
semiconductor manufacturing industry. We design systems that enable
semiconductor manufacturers to increase their manufacturing productivity and
protect their investment in silicon wafers during the manufacture of
integrated circuits, or ICs. We sell our systems directly to semiconductor
manufacturers, as well as to original equipment manufacturers, or OEMs, that
integrate our systems with their equipment for sale to semiconductor
manufacturers. We believe that our systems are becoming increasingly important
as the semiconductor manufacturing industry adopts integrated automation
technology in the production of ICs with smaller line widths on wafers with
larger diameters.

We are the only supplier with expertise in what we believe are the five key
elements required to provide the semiconductor manufacturing industry with
integrated automation systems: isolation systems, work-in-process materials
management, substrate-handling robotics, automated transport and loading
systems, and connectivity automation software. These systems help control
exposure to contamination and provide wafer level identification, tracking and
logistics management within the semiconductor manufacturing facility,
resulting in higher production yields and improved facility utilization.

Industry Background

In recent years, advances in semiconductor production equipment and
facilities have supported continuation of historical trends toward production
of ICs with ever smaller line widths on ever larger wafers. Currently, most
semiconductor manufacturing facilities, or fabs, process wafers with diameters
of 150mm or 200mm. However, several fabs are currently operating pilot
production lines utilizing 300mm wafers and a significant portion of new fabs
are expected to be configured for 300mm wafers. Concurrently, line widths for
ICs have decreased to

0.13 micron and are expected to decrease further. Keeping pace with these
changes presents semiconductor manufacturers with a number of technical and
economic challenges.

As the complexity and cost of new fabs and state-of-the-art process
equipment, or tools, increases, semiconductor manufacturers have sought to
remain competitive by improving production yields and overall fab efficiency.
These manufacturers are utilizing minienvironment technology and manufacturing
automation systems to maximize tool utilization and to minimize wafer
mishandling, misprocessing and contamination. We believe that semiconductor
manufacturers will increase their commitments to these solutions in their
300mm fabs, given the significant value of work-in-process inventory, which
could exceed $450,000 per 25-wafer lot, and the ergonomic issues introduced by
the significantly increased weight and bulk of loaded 300mm pods.

As device dimensions decrease, the harmful effects of microscopic
contamination during the manufacturing process increase, heightening the need
for controlled environments around tools. Minienvironment technology allows
for control of the environment in the immediate vicinity of the in-process
wafers and the tools. Wafers are enclosed in sealed containers, or pods, which
provide additional environmental control during storage, transport and loading
and unloading of the tools. Pods holding wafers up to 200mm are known as
standard mechanical interface pods, or SMIF-Pods, and pods holding 300mm
wafers are known as front-opening unified pods, or FOUPs. Minienvironment
systems consist of enclosures with engineered airflows that encapsulate tools,
pods and robotics systems, which transfer wafers between pods and tools
through a portal. Automated transport and tool loading automation focuses on
assuring the timely delivery, loading and unloading of work-in-process wafers
to minimize idle time at process steps.

Manufacturing automation systems increase productivity by managing the flow
of wafers throughout the production process and are segmented by function as
follows:

. Portal Automation Systems. These systems use a standard interface,
such as SMIF, to transfer wafers and information between the tool
minienvironment and pods. The wafers are then transported in pods to
storage systems or to other tools. An integrated portal automation
system includes atmospheric robots, environmental control systems,
integrated input/output interfaces for loading wafers into and out
of tools, automated identification and tracking systems, pods and
connectivity automation software.

. Facility Automation Systems. These systems use robotics to manage
the transportation of wafers throughout the facility as they move
between tools. Facility automation systems also provide
work-in-process management systems that track and store wafers
throughout the manufacturing process. These systems include overhead
rail systems, automated storage and retrieval systems, hoist systems
and system control software.

. Tool-centric Automation Systems. These systems manage the movement
of wafers in the vacuum environment within the tool. Tool-centric
automation systems include robots, wafer handling systems,
environmental control software and thermal conditioning modules.

Semiconductor manufacturers are currently making, and are expected to
continue to make, significant investments in manufacturing capacity through
the construction of new 200mm wafer facilities and the upgrade of existing
200mm wafer facilities. Early stage investments are beginning to occur as the
industry transitions to 300mm wafer facilities. Dataquest, an independent
research group, estimated in April 2001 that semiconductor manufacturers spent
approximately $33.2 billion on wafer fab equipment in 2000 and that this
spending will grow to approximately $55.7 billion in 2005. Spending on 300mm
wafer fab equipment in 2000 was estimated to be between $2.0 billion and $2.5
billion. Additionally, Dataquest forecasts that 300mm equipment could
represent more than 60 percent of total industry wafer fab equipment shipments
by 2005.

A growing portion of the semiconductor capital equipment spending is
attributable to manufacturing automation systems. Dataquest estimated in April
2001 that semiconductor manufacturers spent approximately $2.1 billion,
including OEM sales, on manufacturing automation and control systems in 2000
and that this spending will grow to approximately $4.3 billion by the year
2005.

The Asyst Solution

Comprehensive Solution. We are the only supplier with expertise in what we
believe are the five key elements required to provide the semiconductor
manufacturing industry with integrated facility automation solutions:

. isolation systems;

. work-in-process materials management;

. substrate-handling robotics;

. automated transport and loading systems; and

. connectivity automation software.

We believe we offer the most comprehensive line of integrated automation
processing systems for the semiconductor manufacturing automation market. Our
integrated solutions provide semiconductor manufacturers with several
advantages, including standard maintenance and training, a uniform user
interface and single vendor accountability.

Increased Manufacturing Productivity. We believe that semiconductor
manufacturers are able to attain a higher level of productivity and
performance from their equipment by integrating our products into their
manufacturing processes. In addition, our connectivity software provides
semiconductor manufacturers with facility ready automation capabilities,
resulting in faster implementation times and more efficient operational
productivity. With our automated transportation and loading solutions, tool
idle time is reduced and timely wafer delivery is improved, thereby increasing
equipment utilization and productivity. Our systems offer semiconductor
manufacturers the flexibility to add capacity while minimizing disruption of
ongoing production in their fab.

Value Assurance Through Wafer Protection. Increasingly sophisticated ICs
with smaller line widths have resulted in an increase in the value of a pod of
wafers. Currently, a pod of 200mm wafers can be worth as much as $200,000.
With 300mm wafers, the value can be as much as $450,000 per pod. Our isolation
technology, robotics solutions and automated transport and loading systems
provide semiconductor manufacturers with efficient contamination control
throughout the wafer manufacturing process and greater protection from wafer
mishandling, resulting in more rapid achievement of higher yields. Our work-
in-process materials management and connectivity software permits wafer level
identification, tracking and logistics management, and minimizes yield loss
due to misprocessing.

Strategy

Our overall strategy is to continue to build upon our success in the 150mm
and 200mm markets by capitalizing on the accelerating demand for integrated
automation systems in both 200mm and 300mm fabs. The principal elements of our
strategy are:

. Continue to Enhance our Leading Integrated Automation Systems for
the 200mm Market. We intend to continue to enhance our leadership
position and our technical expertise in the 200mm market by
developing increasingly efficient automation solutions for this
market. Historically, increased demand for ICs has led to the
construction of new 200mm fabs and upgrades of existing fabs. We
believe that this pattern will repeat itself with the next
semiconductor market upturn. In addition, we believe that there will
be new markets for our 200mm products, as evidenced by our recent
shipments of 200mm systems to Malaysia and the People's Republic of
China.

. Leverage our Success in the 200mm Market to Capitalize on the
Transition to the 300mm Market. We have achieved market leadership
in SMIF-based systems for the 200mm wafer market. This experience in
portal automation and SMIF technology has enabled us to transition
our existing technology to the 300mm wafer market. Based on our
belief that new 300mm wafer facilities will incorporate portal
automation using similar technology, we have developed an integrated
line of 300mm automation processing systems. Some of these systems
are already being used in 300mm pilot lines.

. Further Increase Penetration of the Japanese Market. Dataquest
projects that Japan will account for approximately 23.0 percent of
worldwide semiconductor production for the years 2001 through 2004.
We believe Japanese semiconductor manufacturers will continue to
build new 200mm facilities, upgrade existing facilities and begin to
build new 300mm facilities. As a result, we believe that a
significant opportunity exists for our products in the Japanese
market. In 2000, we increased our ownership percentage of MECS
Corporation, a Japanese engineering and robotics company, to
95.3 percent. This acquisition has been the basis of our increased
presence in Japan during the past year. We intend to continue to
augment our ability to directly supply our products to Japanese
customers by further increasing our local engineering, manufacturing
and customer support presence in Japan.

. Focus on Portal Automation. Our portal automation solutions are
designed to integrate atmospheric robots, environmental control
systems, integrated input/output interfaces, auto identification and
tracking systems, pods and connectivity software. These solutions
are designed to allow OEMs to improve their productivity and
decrease total cost and time to market of their products. By
leveraging our existing relationships with OEMs and semiconductor
manufacturers, we will seek to capitalize on the increasing demand
for a standardized interface between the tool and the factory
environment.

. Leverage our Semiconductor Manufacturer Relationships to Stimulate
OEM Demand. The demand for our systems has been enhanced by the
strong relationships we have developed with our semiconductor
manufacturer customers. By working closely with these customers, we
are able to better understand their specific process requirements
and communicate to them the benefits of our systems. We believe this
interaction encourages semiconductor manufacturers to specify our
systems to OEMs as their preferred solution.

. Capitalize on Outsourcing Trend to Broaden Offerings of Products and
Services to OEMs. We intend to enhance our capabilities as an end-
to-end supplier for our OEM customers in order to earn more business
from these customers. The general industrial trend toward
outsourcing non-core competencies and the need to reduce the number
of suppliers provides an opportunity for us to become a supplier of
products and services that are ancillary to portal automation. In
February 2001, we acquired Advanced Machine Programming, Inc., or
AMP, and SemiFab, Inc. AMP specializes in providing precision
machined parts to the semiconductor equipment industry, principally
Applied Materials, Inc. SemiFab specializes in temperature and
humidity control enclosures and other mechanical and electro-
mechanical contract manufacturing services to the semiconductor
equipment industry.

. Strengthen the Software Elements of our Connectivity Offering. We
are currently a leader in providing systems for material tracking
and materials movement management. In May 2001, we acquired GW
Associates, Inc., the largest merchant provider of the industry-
standard software driver protocol for communications between tools
and fab host systems, known as SECS/GEM. We intend to combine GW's
leading technology with our existing software capabilities to
develop a broader and deeper industry-standard product set for
communications between tools and fab infrastructure systems.

Products

We design systems that enable semiconductor manufacturers to increase their
manufacturing productivity and protect their investment in silicon wafers
during the manufacture of ICs. We offer isolation systems,

work-in-process materials management, substrate-handling robotics, automated
transport and loading systems, and connectivity automation software. We have
incorporated the technologies from these areas to create our Plus-Portal
System for OEMs.

Isolation Systems

The Asyst-SMIF System is designed to provide a continuous, ultraclean
environment for semiconductor wafers as they move through the fab. Asyst-SMIF
Systems can significantly reduce contamination by using minienvironments to
protect the in-process wafers and tools from exposure to contaminants caused
by the human handling of cassettes and the migration of contaminants from
elsewhere in the cleanroom.

The Asyst-SMIF System consists of three main components:

. SMIF-Pods and SMIF-FOUPs, used for storage and transport of 200mm
and 300mm wafers, respectively;

. SMIF-Enclosures, which reduce contamination by providing custom
minienvironment chambers built around tools; and

. input/output systems including SMIF-Arms, SMIF-Indexers, SMIF-LPIs,
SMIF-LPOs, SMIF-LPTs, Versaport 2200's, FL-300s, and related
products, each of which assists in the transfer of wafers from the
SMIF-Pod into the tool or SMIF-Enclosure, thereby preventing the
mishandling of wafers.

In addition to our standard Asyst-SMIF System products, we also offer our
advanced SMIF-E System, which provides the capability to store, transport and
transfer wafers in a controlled environment to reduce contamination by water
vapor, oxygen and airborne molecular contaminants. We also offer the Asyst-
SMIF System for the handling and isolation of reticles, which are templates
used to transfer circuit patterns onto wafer surfaces.

Work-in-Process Materials Management

The Asyst SMART-Traveler System allows semiconductor manufacturers to reduce
manufacturing errors by significantly decreasing the opportunities for
operator-associated misprocessing during the production process. The Asyst
SMART-Traveler System includes SMART-Tag, an electronic memory device that
combines display, logic and communication technologies to provide process
information, such as wafer lot number and next processing steps, regarding the
wafers inside the carrier. The FluoroTrac Auto ID System, or AdvanTag, uses a
radio-frequency based identification tag that can be attached to or embedded
into wafer carriers or storage boxes.

The Asyst SMART-Traveler System also includes the SMART-Comm, a multiplexing
and communication protocol converting device that increases operator and tool
efficiency in semiconductor facilities by optimizing communications and
minimizing hardware and software layers, and the SMART-Storage Manager, an
interactive system built around a personal computer and a network of
controllers and communication probes that provides work-in-process control and
management of wafers in storage racks or automated stockers.

Our substrate management systems, or sorters, are used to rearrange wafers
and reticles between manufacturing processes without operator handling, which
helps to increase fab yields. Sorters avoid the mishandling of wafers by
enabling the tracking and verification of each wafer throughout the production
process. Sorters also reduce scratches by automating the handling of wafers.
Substrate management systems utilize our input/output systems, auto
identification systems, robots, prealigners and minienvironment technology.

Substrate-Handling Robotics

We offer comprehensive robotic substrate-handling solutions to the
semiconductor industry. Our products are incorporated by OEMs for use outside
of the semiconductor process tool to transfer wafers between the pod, the tool
input/output system and the tool itself. These products include robots
specifically designed for

atmospheric, harsh chemical or wet chemical process applications and
prealigners used to orient the wafer. We also use our robots and prealigners
in our Plus-Portal System and wafer sorter products.

Our AXYS robot family includes atmospheric robots used in metrology and
other clean room tools and harsh chemical robots used in chemical mechanical
polishing and plating processes. The SYNCHRUS robot family consists of
atmospheric and harsh chemical robots used in chemical mechanical polishing
tools to transport wafers through the processing sequence from input cassettes
through multiple polishing stages and wafer cleaning steps, and back to output
cassettes. Our prealigners are used to locate the exact center of a wafer and
to locate and orient a feature on the circumference of the wafer, both of
which are important steps in wafer processing.

Our MECS designed and manufactured families of substrate-handling and liquid
crystal display, or LCD, handling robotics span the range of atmospheric
robots, harsh environment robots, water-proof wafer handling robots and six-
axis robots. All of these robots are configurable for wafers up to 300mm.
Additionally, our atmospheric and vacuum robots can be configured for rigid
disk handling for the disk drive manufacturing industry. Our LCD handling
robots are scalable to handle all the major wafer sizes and varieties from
LCDs through plasma displays. MECS also designs and manufactures prealigners
for use with the above robotics as well as elevators and transfer systems for
LCD carriers.

Automated Transport and Loading Systems

Automated transport and loading systems move wafer containers into and out
of tools and between process locations in fabs. Our automated transport and
loading systems employ a unique concept referred to as continuous flow
technology, or CFT. Competing systems use monorail cars that can cause delays
in the fab when a monorail car is not available at the correct location to
move material. CFT, on the other hand, offers significant improvements in fab
efficiency over car-based monorail systems. CFT allows SMIF-Pods or FOUPs to
move asynchronously on our track-based transport system for transportation to
the next tool, eliminating the delays associated with moving empty or
partially filled monorail cars. The result is more predictable wafer delivery
times, making tool loading more efficient.

Until recently, transport automation systems were principally focused on
inter-bay transport and storage automation. Movement of the wafer lots from
the storage location to the tool was generally a manual process. As a result,
the implementation of the transport automation system was often a
facilitization matter and not related to process equipment or tool portal
decision making. However, due to the economic and human factors associated
with handling 300mm wafer lots, we believe tool loading automation for 300mm
will become a significant part of transport and loading automation decision
making.

Connectivity Automation Software

Our software services for equipment automation solutions provide improved
material control, line yield and cycle time abilities, as well as increased
overall equipment effectiveness. In addition to automating the processing of
each wafer lot during the manufacturing cycle, our customizable software links
directly to the facility host system, thereby providing users with the ability
to pre-schedule material movement to specific tools. Our SMART-Fab suite of
Windows NT-based products includes SMART-Station, which uses workflow and
distributed object technology to rapidly automate manufacturing equipment.
Other SMART-Fab products include SMART-Storage Manager and Global Lot Server.
These products provide material staging, work-in-process materials management
and global wafer lot location. With the acquisition of GW, we are now the
largest provider of SECS/GEM interface protocol drivers to OEMs.

Plus-Portal System

Our Plus-Portal System combines our expertise in isolation systems, work-in-
process materials management, substrate handling robotics and connectivity
automation software to provide a complete front-end for process equipment.
This system uses a standard interface, such as SMIF, to transfer wafers and
information

between the tools, minienvironments and pods. An integrated portal automation
system includes atmospheric robots, environmental control systems, integrated
input/output interfaces, automated ID and tracking systems, pods and
connectivity automation software. With the acquisition of SemiFab, we now also
offer precision temperature and humidity control capabilities.

Customers

Historically, our customers have primarily been semiconductor manufacturers
that are either building new fabs or upgrading existing fabs. In fiscal 2001,
sales to semiconductor manufacturers represented 55 percent of our net sales.
As the industry migrates to 300mm wafer fabs, we believe that successful OEMs
will design their tools to include integrated automation systems. As a result,
sales which were historically made directly to semiconductor manufacturers may
now be made to OEMs. We believe that our historical relationships with
semiconductor manufacturers, coupled with our existing relationship with OEMs,
will enhance the likelihood that our systems will be designed into OEM 300mm
products. In addition, the customer base of our recently acquired companies is
heavily skewed to OEMs. Nevertheless, we expect that semiconductor
manufacturers will continue to represent a significant portion of our net
sales during the next several years.

Our net sales to any particular semiconductor manufacturer customer are
dependent on the number of fabs a semiconductor manufacturer is constructing
and the number of fab upgrades a semiconductor manufacturer undertakes. As
major projects are completed, the amount of sales to these customers will
decline unless they undertake new projects.

In fiscal year 2001, Taiwan Semiconductor Manufacturing Co., Ltd., or TSMC,
United MicroElectronics Corporation, or UMC, and Texas Instruments accounted
for approximately 8.5 percent, 7.1 percent and 6.6 percent of our net sales,
respectively. During fiscal year 2001, these three customers in aggregate
accounted for approximately 22.2 percent of our net sales and were the only
customers that individually accounted for more than 5 percent of net sales.
During fiscal year 2001, there were no customers that individually accounted
for more than 10 percent of net sales. In fiscal year 2000, TSMC and UMC
accounted for approximately 11.3 percent and 11.0 percent of our net sales,
respectively. During fiscal year 2000, these two customers in aggregate
accounted for approximately 22.3 percent of our net sales and were the only
customers that individually accounted for more than 10 percent of net sales.
During fiscal year 1999, Worldwide Semiconductor Manufacturing Company
accounted for 11.0 percent of our net sales and no other customer accounted
for more than 10 percent of net sales.

Our ten largest customers based on cumulative sales during fiscal years
1999, 2000 and 2001, arranged alphabetically, were:

Applied Materials TSMC
Chartered Semiconductor
Manufacturing, Ltd. Texas Instruments
KLA--Tencor Corporation UMC
Lam Research Corporation WaferTech LLC
Macronix International Co.,
Ltd. Worldwide Semiconductor Manufacturing Company

Sales and Marketing

We sell our products principally through a direct sales force in the United
States, Japan, Europe and the Asia/Pacific region. Our sales organization is
based in Northern California, and domestic field sales personnel are stationed
in Minnesota, Colorado, Arizona, Vermont, Washington and Texas. Japan is
supported by sales and service offices in Nagoya and Yokohama, Japan. The
European market is supported through offices near Horsham and Newport in the
United Kingdom and Dresden, Germany, and augmented by distributors based in
France, Germany, Israel and the United Kingdom. The Asia/Pacific region is
supported through sales and service offices in Hsin-Chu, Taiwan; Kuching and
Kulim, Malaysia; Singapore; Tianjin, People's Republic of China; and Seoul,
South Korea.

International sales, which consist mainly of export sales from the United
States, accounted for approximately 51.0 percent, 60.0 percent and 60.9
percent of total sales for fiscal years 1999, 2000 and 2001, respectively.
Prior to fiscal year 2001, international sales were generally invoiced in U.S.
dollars and, accordingly, have not historically been subject to fluctuating
currency exchange rates. In fiscal 2001, approximately 20.9 percent of total
net sales originated from Asyst Japan, Inc., or AJI, and were typically
invoiced in Japanese yen or other regional currencies.

The sales cycle to new customers ranges from six months to 12 months from
initial inquiry to placement of an order, depending on the complexity of the
project and the time required to communicate the nature and benefits of our
systems. For sales to existing customers, the sales cycle is relatively short.
The sales cycle for follow-on orders by OEM customers can be as short as two
to three weeks.

An important part of our marketing strategy has been participation in key
industry organizations such as International SEMATECH and SEMI, as well as
attendance at events coordinated by the Semiconductor Industry Association. In
addition, we actively participate in industry trade shows and conferences and
have sponsored symposiums with technology and business experts from the
semiconductor industry.

Systems Integration

After a sales contract for our Asyst-SMIF System is finalized, our systems
integration and OEM applications organizations are responsible for the
engineering, procurement and manufacturing of SMIF-Enclosures and interfaces
necessary to integrate that system with the tool. Our systems integration
organization provides integration, installation, qualification of the Asyst-
SMIF System and other services associated with the Asyst-SMIF System.

Our systems integration and OEM applications organizations focus on
understanding our customer's manufacturing methodology and anticipated
production applications to develop customer-specific solutions. For
retrofitting and upgrading existing facilities with SMIF solutions, our
systems integration organization works with our customer's facilities and
manufacturing personnel to develop programs, schedules and solutions to
minimize disruption during the installation of our products into our
customer's fab. In the case of a new fab or tool design, our OEM applications
and systems integration organizations work with our customer's facility
planners and operations personnel, as well as with cleanroom designers,
architects and engineers.

In the case of OEM integration, our OEM applications organization designs
and integrates the SMIF components directly into the tool. Our OEM
applications organization works very closely with the OEM to understand the
process equipment and the processing requirements to provide our customer with
an optimized solution.

Research and Development

Research and development efforts are focused on enhancing our existing
products and developing and introducing new products in order to maintain
technological leadership and meet a wider range of customer needs. Our
research and development expenses were approximately $18.0 million, $21.6
million and $44.3 million during fiscal years 1999, 2000 and 2001,
respectively.

Our research and development employees are involved in mechanical and
electrical engineering, software development, micro-contamination control,
product documentation and support. Our central research and development
facilities include a prototyping lab and a cleanroom used for product
research, development and equipment demonstration purposes. These research and
development facilities are primarily located in Northern California. In
addition, we maintain a research and development facility in Austin, Texas,
which is used for our new efforts in the area of wafer sorting and reticle
handling.

Manufacturing

Our manufacturing activities consist of assembling and testing components
and sub-assemblies, which are then integrated into finished systems. While we
use standard components whenever possible, most mechanical parts, metal
fabrications and castings are made to our specifications. Once our systems are
completed, we perform final tests on all electronic and electromechanical sub-
assemblies and cycle products before shipment. Much of the cleaning, assembly
and packaging of our SMIF-Pods is conducted in cleanroom environments.

We currently maintain manufacturing facilities for our Asyst-SMIF Systems,
SMART-Traveler System products, Plus-Portal Systems, automated transport
systems and software products and services in Fremont, California. We
fabricate our custom SMIF-Enclosures at both the Fremont facility and, in the
case of large system orders, near customer sites, where we lease temporary
space for the manufacture of SMIF-Enclosures. Our robotic products are
manufactured in our Sunnyvale, California and Nagoya, Japan facilities. Our
substrate and reticle handling systems products are assembled and integrated
in our principal Austin, Texas facility. Manufacturing of AMP products is
conducted in Morgan Hill, California and a secondary Austin, Texas location.
The products of SemiFab are manufactured in Hollister, California.

Competition

We currently face direct competition in all of our products. Many of our
competitors have extensive engineering, manufacturing and marketing
capabilities and potentially greater financial resources than those available
to us. The markets for our products are highly competitive and subject to
rapid technological change. Several companies, including Brooks Automation,
Inc. through its acquisition of Jenoptik Infab, Inc., offer one or more
products that compete with our Asyst-SMIF System and SMART-Traveler System
products. We compete primarily with Entegris, Inc. in the area of SMIF-Pods
and SMIF-FOUPS. We also compete with several competitors in the robotics area,
including, but not limited to, PRI Automation, Inc., Kensington Labs, now part
of Newport Corp., Rorze Corporation and Yaskawa--Super Mectronics Division.
While price is a competitive factor in the sale of robots, we believe that our
ability to deliver quality, reliability and on time shipments are the factors
which will largely impact our success over our competition in this area. In
the area of transport automation systems, our products face competition from
the main product line of PRI Automation, as well as from Daifuku Co., Ltd.,
Murata Co., Ltd., and Shinko, Ltd. Our products in the area of storage and
management of wafers and reticles compete primarily with products from Brooks
Automation and Recif, Inc.

Although most of our competitors currently do not compete with us across our
entire line of integrated automation systems, we expect that many will attempt
to do so in the future. In addition, the transition to 300mm wafers is likely
to draw new competitors to the facility automation market. In the 300mm wafer
market, we expect to face intense competition from a number of companies such
as PRI Automation and Brooks Automation, as well as potential competition from
semiconductor equipment and cleanroom construction companies.

We believe that the principal competitive factors in our market are the
technical capabilities and characteristics of systems and products offered,
technological experience and know how, product breadth, proven product
performance, quality and reliability, ease of use, flexibility, a global,
trained, skilled field service support organization, the effectiveness of
marketing and sales, and price. We believe that we compete favorably with
respect to the foregoing factors. We also believe our ability to provide a
more complete automation and wafer isolation solution provides a significant
competitive advantage with respect to most of our competitors.

We expect that our competitors will continue to improve the design and
performance of their products and to introduce new products with competitive
performance characteristics. We believe we will be required to maintain a high
level of investment in research and development and sales and marketing in
order to remain competitive.

Intellectual Property

We primarily pursue patent, trademark and copyright protection for our
minienvironment and Asyst-SMIF System technology, our SMART-Traveler products,
our software products, our semiconductor wafer transport technology and our
robotics and wafer sorter technologies. We currently hold 81 patents in the
United States and 64 foreign patents, have 31 pending patent applications in
process in the United States, 99 pending foreign patent applications in
process and intend to file additional patent applications as appropriate. Our
patents expire between 2005 and 2021. There can be no assurance that patents
will be issued from any of these pending applications or that any claims in
existing patents, or allowed from pending patent applications, will be
sufficiently broad to protect our technology.

There has been substantial litigation regarding patent and other
intellectual property rights in semiconductor-related industries. While we
intend to protect our intellectual property rights vigorously, there can be no
assurance that any of our patents will not be challenged, invalidated or
avoided, or that the rights granted thereunder will provide us with
competitive advantages. Litigation may be necessary to enforce our patents, to
protect our trade secrets or know how or to defend us against claimed
infringement of the rights of others or to determine the scope and validity of
the patents or other intellectual rights of others. Any such litigation could
result in substantial cost and divert the attention of management, which by
itself could have a material adverse effect on our financial condition and
operating results. Further, adverse determinations in such litigation could
result in our loss of intellectual property rights, subject us to significant
liabilities to third parties, require us to seek licenses from third parties
or prevent us from manufacturing or selling our products, any of which could
have a negative impact on our financial condition and results of operations.
For more information regarding litigation in which we are currently engaged,
please see "Item 3--Legal Proceedings" below.

We also rely on trade secrets and proprietary technology that we seek to
protect, in part, through confidentiality agreements with employees,
consultants and other parties. There can be no assurance that these agreements
will not be breached, that we will have adequate remedies for any breach, or
that our trade secrets will not otherwise become known to or independently
developed by others. Also, the laws of some foreign countries do not protect
our intellectual property rights to the same extent as the laws of the United
States.

Backlog

Our backlog was approximately $143.8 million and $119.6 million as of the
fiscal years ended March 31, 2000 and 2001, respectively. Ten customers with
orders on backlog totaling between $3.2 million to $16.3 million comprised
approximately 50 percent of the total backlog as of March 31, 2001. We include
in our backlog only orders for which a customer's purchase order has been
received and a delivery date within 12 months has been specified. In the
second half of fiscal year 2001, the demand for our products decreased
significantly as semiconductor manufacturers sharply reduced capital
expenditures, which led to slower bookings, significant push outs and
cancellations of orders in the fourth quarter of fiscal year 2001. As purchase
orders may be cancelled or delayed by customers with limited or no penalty,
our backlog is not necessarily indicative of future revenues or earnings.

Employees

As of May 26, 2001, we employed 1,543 persons on a full-time basis,
including 246 in research and development, 541 in manufacturing operations, 24
in system integration, 227 in sales and marketing, which includes customer
service, 32 in quality assurance, 135 in finance and administration, and 338
in international operations. Additionally, we employed 48 persons on a
temporary basis, including 18 in manufacturing operations. We have never had a
work stoppage or strike and no employees are represented by a labor union or
covered by a collective bargaining agreement. We consider our employee
relations to be good. Late in fiscal year 2001, we restructured certain
domestic and international operations in response to the drop in our net
sales. As a result of these restructuring activities, late in fiscal year 2001
we terminated the employment of approximately 144 full-time employees from our
operations in the United States and approximately 5 employees from our
international operations. Early in fiscal year 2002, also as part of these
restructuring activities, we terminated the employment of approximately 109
full-time employees from our operations in the United States and approximately
44 employees from our international operations.

Financial Information by Business Segment and Geographic Data

We operate in one reportable segment. We recognized approximately 60.9
percent of revenue from customers located outside the United States in fiscal
year 2001. Sales to Taiwan accounted for approximately 32.9 percent of our
revenues in fiscal year 2001. The information included in Note 9 of Notes to
the Consolidated Financial Statements, is incorporated herein by reference.

Risk Factors

This Annual Report on Form 10-K contains forward looking statements that
involve risk and uncertainties, including statements about our future plans,
objectives, intentions and expectations. Many factors, including those
described below, could cause actual results to differ materially from those
discussed in any forward looking statements.

. The semiconductor manufacturing industry is highly cyclical, and the
current substantial downturn is harming our operating results

Our business is entirely dependent upon the capital expenditures of
semiconductor manufacturers, which at any point in time are dependent on the
then-current and anticipated market demand for ICs, as well as products
utilizing ICs. The semiconductor industry is cyclical and has historically
experienced periodic downturns. These periodic downturns, whether the result
of general economic changes or capacity growth temporarily exceeding growth in
demand for ICs, are difficult to predict and have often had a severe adverse
effect on the semiconductor industry's demand for tools.

The industry is currently experiencing one of its periodic downturns due to
decreased worldwide demand for semiconductors. During this downturn, some of
our customers have implemented substantial reductions in capital expenditures
which has adversely impacted our business. For the fourth quarter of fiscal
2001, net sales declined by 10.1 percent from the third quarter of fiscal
2001. Additionally, we experienced slower bookings, significant push outs and
cancellations of orders during the fourth quarter of fiscal 2001.

The current downturn is impairing our ability to sell our systems and to
operate profitably. If demand for ICs and our systems remains depressed for an
extended period, it will seriously harm our business. The decline in our
profitability has been exacerbated by excess manufacturing capacity and
special charges associated with cost-cutting programs. Moreover, we have been
unable to reduce our expenses quickly enough to avoid incurring a loss. For
the three months ended March 31, 2001, our net loss was $16.2 million,
compared with net income of $9.8 million for the three months ended March 31,
2000. This net loss reflected the impact of the 10.1 percent decline in net
sales between the third and fourth quarters of fiscal year 2001, charges taken
in connection with write downs of excess and obsolete inventory and excess
purchase commitments, loss reserves on certain sales commitments and non-
recurring charges related to a reduction in our workforce and a facility
closure in Japan. We expect to undertake additional cost-cutting measures in
response to a continuation of the current downturn and, as a result, we may be
unable to continue to invest in marketing, research and development and
engineering at the levels we believe are necessary to maintain our competitive
position. Our failure to make these investments could seriously curtail our
long-term business prospects.

We believe that our future performance will continue to be affected by the
cyclical nature of the semiconductor industry and, as a result, be adversely
affected by such industry downturns.

. Because the semiconductor manufacturing industry is subject to rapid
demand shifts which are difficult to predict, our inability to
efficiently manage our manufacturing capacity in response to these rapid
shifts may cause a reduction in our gross margins, profitability and
market share

The rapid and significant downturn in the current business cycle has
resulted in falling demand for our products. Our ability to respond to falling
demand depends, in part, upon timely cost reductions associated with

our manufacturing capacity. However, we incur manufacturing overhead and other
costs, many of which are fixed in the short-term, based on projections of
anticipated customer demand. Our ability to quickly reduce our production
costs is impaired by manufacturing costs incurred as a result of projections
which, in turn, prevents us from operating profitably. Furthermore, we may not
be able to expand our manufacturing capacity when demand increases which could
lead to reduced profitability.

. We depend on large purchases from a few significant customers, and any
loss, cancellation, reduction or delay in purchases by, or failure to
collect receivables from, these customers could harm our business

The markets in which we sell our products are comprised of a relatively
small number of OEMs and semiconductor manufacturers. Large orders from a
relatively small number of customers account for a significant portion of our
revenues and makes our relationship with each customer critical to our
business. We may not be able to retain our largest customers or attract
additional customers, and our OEM customers may not be successful in selling
our systems. Our success will depend on our continued ability to develop and
manage relationships with significant customers. During the fourth quarter of
fiscal 2001, we experienced slower bookings, significant push outs and
cancellations of orders. In addition, our customers have in the past sought
price concessions from us and may continue to do so in the future. Further,
some of our customers may in the future shift their purchases of products from
us to our competitors. Additionally, the inability to successfully develop
relationships with additional customers or the need to provide future price
concessions would have a negative impact on our business.

If we are unable to collect a receivable from a large customer, our
financial results will be negatively impacted. In addition, since each
customer represents a significant percentage of net sales, the timing of the
completion of an order can lead to a fluctuation in our quarterly results. As
we complete projects for a customer, business from that customer will decline
substantially unless it undertakes additional projects incorporating our
products.

. Because we do not have long-term contracts with our customers, our
customers may cease purchasing our products at any time if we fail to
meet their needs

We do not have long-term contracts with our customers. As a result, our
agreements with our customers do not provide any assurance of future sales.
Accordingly:

. our customers can cease purchasing our products at any time without
penalty;

. our customers are free to purchase products from our competitors;

. we are exposed to competitive price pressure on each order; and

. our customers are not required to make minimum purchases.

Sales are typically made pursuant to individual purchase orders and product
delivery often occurs with extremely short lead times. If we are unable to
fulfill these orders in a timely manner, we could lose sales and customers.

. The timing of the transition to 300mm technology is uncertain and
competition may be intense

We have invested, and are continuing to invest, substantial resources to
develop new systems and technologies to automate the processing of 300mm
wafers. However, the timing of the industry's transition from the current,
widely used 200mm manufacturing technology to 300mm manufacturing technology
is uncertain, partly as a result of the recent period of reduced demand for
semiconductors. Delay in the adoption of 300mm manufacturing technology could
adversely affect our potential revenues.

Manufacturers implementing factory automation in 300mm pilot projects may
initially seek to purchase systems from multiple vendors. Competition,
including price competition, for these early 300mm orders could be vigorous. A
vendor whose system is selected for an early 300mm pilot project may have, or
be perceived to have, an advantage in competing for future orders, and thus
the award to a competitor of one or more early 300mm orders could cause our
stock price to fall.

. If we are unable to meet our customers' stringent specifications for the
Plus-Portal System our growth prospects could be negatively impacted

Our Plus-Portal System, which has been on the market for over a year, offers
our OEM customers a complete, automated interface between the OEM's tool and
the fab. Currently, many OEMs design and manufacture automated equipment
front-ends for their tools utilizing purchased components and in-house
engineering and manufacturing resources. The Plus-Portal System offers OEMs a
standard, outsourced alternative. The Plus-Portal System has not been widely
adopted by OEMs. OEMs have made limited purchases in order to evaluate our
ability to meet stringent design, reliability and delivery specifications. If
we fail to satisfy these expectations, whether based on limited or expanded
sales levels, OEMs will not adopt the Plus-Portal system. We believe that our
growth prospects in this area depend in large part upon our ability to gain
acceptance of the Plus-Portal System by a broader group of OEM customers.
Notwithstanding our solution, OEMs may purchase components to assemble
interfaces or invest in the development of their own complete interfaces. The
decision by an OEM to adopt the system for a large product line involves
significant organizational, technological and financial commitments by this
OEM. The market may not adopt the Plus-Portal System.

. If we are unable to develop and introduce new products and technologies
in a timely manner, our business could be negatively impacted

Semiconductor equipment and processes are subject to rapid technological
changes. The development of more complex ICs has driven the need for new
facilities, equipment and processes to produce these devices at an acceptable
cost. We believe that our future success will depend in part upon our ability
to continue to enhance our existing products to meet customer needs and to
develop and introduce new products in a timely manner. We often require long
lead times for development of our products, which requires us to expend
significant management effort and incur material development costs and other
expenses. During development periods we may not realize corresponding revenue
in the same period, or at all. We may not succeed with our product development
efforts and we may not respond effectively to technological change.

. We may not be able to effectively compete in a highly competitive
semiconductor equipment industry

The markets for our products are highly competitive and subject to rapid
technological change. We currently face direct competition with respect to all
of our products. Some of our competitors may have greater name recognition,
more extensive engineering, manufacturing and marketing capabilities and
substantially greater financial, technical and personnel resources than those
available to us.

Several companies, including Brooks Automation, offer one or more products
that compete with our Asyst-SMIF System and SMART-Traveler System products. We
compete primarily with Entegris in the area of SMIF-Pods and SMIF-FOUPS. We
also compete with several competitors in the robotics area, including, but not
limited to, PRI Automation, Kensington Labs, Rorze and Yaskawa--Super
Mectronics Division. In the area of transport automation systems, our products
face competition from the main product line of PRI Automation, as well as from
Daifuku, Murata and Shinko. Our products in the area of storage and management
of wafers and reticles compete primarily with products from Brooks Automation
and Recif.

In addition, the transition to 300mm wafers is likely to draw new
competitors to the facility automation market. In the 300mm wafer market, we
expect to face intense competition from a number of companies such as PRI
Automation and Brooks Automation, as well as potential competition from
semiconductor equipment and cleanroom construction companies.

We expect that our competitors will continue to develop new products in
direct competition with our systems, improve the design and performance of
their products and introduce new products with enhanced performance
characteristics. In order to remain competitive, we need to continue to
improve and expand our product line, which will require us to maintain a high
level of investment in research and development.
Ultimately, we may not be able to make the technological advances and
investments necessary to remain
competitive.

New products developed by our competitors or more efficient production of
their products could increase pricing pressure on our products. In addition,
companies in the semiconductor capital equipment industry have been facing
pressure to reduce costs. Either of these factors may require us to make
significant price reductions to avoid losing orders. Further, our current and
prospective customers continuously exert pressure on us to lower prices,
shorten delivery times and improve the capabilities of our products. Failure
to respond adequately to such pressures could result in a loss of customers or
orders.

. We may not be able to efficiently integrate the operations of our
acquisitions

We have made and, most likely, will continue to make additional acquisitions
of, or significant investments in, businesses that offer complementary
products, services, technologies or market access. Our recent acquisitions
include Hine Design Incorporated, or HDI, Progressive Systems Technologies,
Inc., or PST, PAT, AMP, SemiFab, GW and MECS. We subsequently merged MECS into
AJI.

We are likely to make additional acquisitions of, or significant investments
in, businesses that offer complementary products, services, technologies or
market access. If we are to realize the anticipated benefits of these
acquisitions, the operations of these companies must be integrated and
combined efficiently. The process of integrating supply and distribution
channels, computer and accounting systems and other aspects of operations,
while managing a larger entity, will present a significant challenge to our
management. In addition, it is not certain that we will be able to incorporate
different technologies into our integrated solution. We cannot assure that the
integration process will be successful or that the anticipated benefits of the
business combinations will be fully realized. The dedication of management
resources to such integration may detract attention from the day-to-day
business, and we may need to hire additional management personnel to
successfully rationalize our acquisitions. The difficulties of integration may
be increased by the necessity of combining personnel with disparate business
backgrounds and combining different corporate cultures. We are unable to
assure that there will not be substantial costs associated with such
activities or that there will not be other material adverse effects of these
integration efforts. Such effects could materially reduce our short-term
earnings. Consideration for future acquisitions could be in the form of cash,
common stock, rights to purchase stock or a combination thereof. Dilution to
existing shareholders and to earnings per share may result to the extent that
shares of common stock or other rights to purchase common stock are issued in
connection with any future acquisitions.

. We may be unable to protect our intellectual property rights and we may
become involved in litigation concerning the intellectual property rights
of others

We rely on a combination of patent, trade secret and copyright protection to
establish and protect our intellectual property. While we intend to protect
our patent rights vigorously, we cannot assure that our patents will not be
challenged, invalidated or avoided, or that the rights granted thereunder will
provide us with competitive advantages. We also rely on trade secrets that we
seek to protect, in part, through confidentiality agreements with employees,
consultants and other parties. We cannot assure that these agreements will not
be breached, that we will have adequate remedies for any breach, or that our
trade secrets will not otherwise become known to, or independently developed
by, others.

Intellectual property rights are uncertain and involve complex legal and
factual questions. We may unknowingly infringe on the intellectual property
rights of others and may be liable for that infringement, which could result
in significant liability for us. If we do infringe the intellectual property
rights of others, we could be forced to either seek a license to intellectual
property rights of others or alter our products so that they no longer
infringe the intellectual property rights of others. A license could be very
expensive to obtain or may not be available at all. Similarly, changing our
products or processes to avoid infringing the rights of others may be costly
or impractical or could detract from the value of our product.

There has been substantial litigation regarding patent and other
intellectual property rights in semiconductor-related industries. Litigation
may be necessary to enforce our patents, to protect our trade secrets or know
how, to defend Asyst against claimed infringement of the rights of others or
to determine the scope and validity of the patents or intellectual property
rights of others. Any litigation could result in substantial cost to us and
divert the attention of our management, which by itself could have an adverse
material effect on our financial condition and operating results. Further,
adverse determinations in any litigation could result in our loss of
intellectual property rights, subject us to significant liabilities to third
parties, require us to seek licenses from third parties or prevent us from
manufacturing or selling our products. Any of these effects could have a
negative impact on our financial condition and results of operations.

. Because of intense competition for highly skilled personnel, we may not
be able to recruit and retain necessary personnel

Our future success will depend in large part upon our ability to recruit and
retain highly skilled technical, manufacturing, managerial, financial and
marketing personnel. Our future performance depends substantially on the
continued service of our senior management team, in particular Dr. Mihir
Parikh, our Chairman of the Board and Chief Executive Officer, and Anthony
Bonora, our Executive Vice President, Chief Technical Officer and Asyst
Fellow. We do not have long term employment agreements with any of our senior
management team, except Dr. Parikh, and we do not maintain any key-man life
insurance policies.

Due to the cyclical nature of the demand for our products, we have had to
reduce our workforce and then rebuild our workforce as our business has gone
cyclical peaks and troughs. Because of the industry downturn during fiscal
year 1999, we restructured our operations and terminated approximately 110
employees in the United States and approximately 30 employees internationally.
In fiscal year 2000, we hired a number of highly skilled employees, especially
in manufacturing, to meet customer demand. As our industry entered a downturn,
we terminated approximately 144 full-time employees in the United States and 5
full-time employees internationally in the fourth quarter of the 2001 fiscal
year, and a further 109 full-time employees in the United States and 44 full-
time employees internationally early in the first quarter of the 2002 fiscal
year. The labor markets in which we operate are highly competitive and as a
result, this type of employment cycle increases our risk of not being able to
retain and recruit key personnel. Moreover, our failure to maintain good
employee relations could negatively impact our operations.

If the current downturn ends suddenly, we may not have enough personnel to
promptly return to our previous production levels. If we are unable to expand
our existing manufacturing capacity to meet demand, a customer's placement of
a large order for the development and delivery of factory automation systems
during a particular period might deter other customers from placing similar
orders with us for the same period. It could be difficult for us to rapidly
recruit and train the substantial number of qualified engineering and
technical personnel who would be necessary to fulfill one or more large,
unanticipated orders. A failure to retain, acquire or adequately train key
personnel could have a material adverse impact on our performance.

. Because our quarterly operating results are subject to variability,
quarter to quarter comparisons may not be meaningful

Our revenues and operating results can fluctuate substantially from quarter
to quarter depending on factors such as:

. the timing of significant customer orders;

. the timing of product shipment and acceptance;

. variations in the mix of products sold;

. the introduction of new products;

. changes in customer buying patterns;

. fluctuations in the semiconductor equipment market;

. the availability of key components;

. pressure from competitors; and

. general trends in the semiconductor manufacturing industry,
electronics industry and overall economy.

The sales cycle to new customers ranges from six months to 12 months from
initial inquiry to placement of an order, depending on the complexity of the
project. This extended sales cycle makes the timing of customer orders uneven
and difficult to predict. A significant portion of the net sales in any
quarter is typically derived from a small number of long-term, multi-million
dollar customer projects involving upgrades of existing facilities or the
construction of new facilities. Generally, our customers may cancel or
reschedule shipments with limited or no penalty. These factors increase the
risk of unplanned fluctuations in net sales. Moreover, a shortfall in net
sales in a quarter as a result of these factors could negatively impact our
operating results for the quarter. Given these factors, we expect quarter to
quarter performance to fluctuate for the foreseeable future. In one or more
future quarters, our operating results are likely to be below the expectations
of public market analysts and investors, which may cause our stock price to
decline.

. Shortages of components necessary for our product assembly can delay our
shipments and can lead to increased costs which may negatively impact our
financial results

When demand for semiconductor manufacturing equipment is strong, as it was
during the first two quarters of fiscal 2001, our suppliers, both domestic and
international, strained to provide components on a timely basis and, in some
cases, on an expedited basis at our request. Although to date we have
experienced only minimal delays in receiving goods from our key suppliers,
disruption or termination of these sources could have a serious adverse effect
on our operations. Many of the components and subassemblies used in our
products are obtained from a single supplier or a limited group of suppliers.
We believe that, in time, alternative sources could be obtained and qualified
to supply these products in the ordinary course of business. However, a
prolonged inability to obtain some components could have an adverse effect on
our operating results and could result in damage to our customer
relationships. Shortages of components may also result in price increases for
components and as a result, could decrease our margins and negatively impact
our financial results.

. We face significant economic and regulatory risks because a majority of
our net sales are from outside the United States

A majority of our net sales for the fiscal years ended March 31, 2000 and
2001, were attributable to sales outside the United States, primarily in
Taiwan, Japan, Europe and Singapore. We expect that international sales will
continue to represent a significant portion of our total revenues in the
future. In particular, net sales to Taiwan represented 35.0 percent and 20.0
percent of our total net sales for the fiscal years ended March 31, 2000 and
2001, respectively. Net sales to Japan represented 13.6 percent and 20.9
percent of our total net sales for the fiscal years ended March 31, 2000 and
2001, respectively. This concentration increases our exposure to any risks in
this area. Sales to customers outside the United States are subject to various
risks, including:

. exposure to currency fluctuations;

. the imposition of governmental controls;

. the need to comply with a wide variety of foreign and U.S. export
laws;

. political and economic instability;

. trade restrictions;

. changes in tariffs and taxes;

. longer payment cycles typically associated with foreign sales;

. the greater difficulty of administering business overseas; and

. general economic conditions.

As of March 31, 2000 and 2001, a majority of our accounts receivable, net,
were due from international customers located primarily in Taiwan, Japan,
Singapore and Europe. Receivables collection and credit evaluation in new
geographic regions challenge our ability to avert international risks. In
addition, the laws of certain foreign countries may not protect our
intellectual property to the same extent as do the laws of the United States.
We invoice a majority of our international sales in United States dollars.
However, for sales in Japan, we invoice our sales in Japanese yen. We cannot
assure that our future results of operations will not be adversely affected by
currency fluctuations.

. Rising energy costs in California may result in increased operating
expenses and reduced net income

California is currently experiencing an energy crisis. As a result, energy
costs in California, including natural gas and electricity, may rise
significantly over the next year relative to the rest of the United States.
Because we maintain manufacturing facilities in California, our operating
expenses with respect to these locations may increase if this trend continues.
If we cannot pass along these costs to our customers, our profitability will
suffer.

. Anti-takeover provisions in our articles of incorporation, bylaws and our
shareholder rights plan may prevent or delay an acquisition of Asyst that
might be beneficial to our shareholders

Our articles of incorporation and bylaws include provisions that may have
the effect of deterring hostile takeovers or delaying changes in control or
management of Asyst. These provisions include certain advance notice
procedures for nominating candidates for election to our Board of Directors, a
provision eliminating shareholder actions by written consent and a provision
under which only our Board of Directors, our Chairman of the Board, our
President or shareholders holding at least 10 percent of the outstanding
common stock may call special meetings of the shareholders. We have entered
into agreements with our officers and directors indemnifying them against
losses they may incur in legal proceedings arising from their service to
Asyst, including losses associated with actions related to third-party
attempts to acquire Asyst.

We have adopted a share purchase rights plan, pursuant to which we have
granted to our shareholders rights to purchase shares of junior participating
preferred stock. Upon the earlier of (1) the date of a public announcement
that a person, entity, or group of associated persons has acquired 15 percent
of our common stock or (2) 10 business days following the commencement of, or
announcement of, a tender after or exchange offer, the rights granted to our
shareholders will become exercisable to purchase our common stock at a price
substantially discounted from the then applicable market price of our common
stock. These rights could generally discourage a merger or tender offer
involving the securities of Asyst that is not approved by our Board of
Directors by increasing the cost of effecting any such transaction and,
accordingly, could have an adverse impact on shareholders who might want to
vote in favor of such merger or participate in such tender offer.

In addition, our Board of Directors has authority to issue up to 4,000,000
shares of preferred stock and to fix the rights, preferences, privileges and
restrictions, including voting rights, of those shares without any future vote
or action by the shareholders. The issuance of preferred stock while providing
desirable flexibility in connection with possible acquisition and other
corporate purposes, could have the effect of making it more difficult for a
third party to acquire a majority of our outstanding voting stock, thereby
delaying, deferring or preventing a change in control of Asyst. Furthermore,
such preferred stock may have other rights, including economic rights senior
to the common stock, and as a result, the issuance thereof could have a
material adverse effect on the market value of the common stock. We have no
present plans to issue shares of preferred stock.

. Our stock price may fluctuate significantly which could be detrimental to
our shareholders

Our stock price has in the past fluctuated and will fluctuate in the future
in response to a variety of factors, including the following:

. quarterly fluctuations in results of operations;

. announcements of new products by Asyst or our competitors;

. changes in either our earnings estimates or investment
recommendations by stock market analysts;

. announcements of technological innovations;

. conditions or trends in the semiconductor manufacturing industry;

. announcements by Asyst or our competitors of acquisitions, strategic
partnerships or joint ventures;

. additions or departures of senior management; and

. other events or factors many of which are beyond our control.

In addition, in recent years, the stock market in general and shares of
technology companies in particular have experienced extreme price
fluctuations, and such extreme price fluctuations may continue. These broad
market and industry fluctuations may adversely affect the market price of our
common stock.

. We may not be able to secure additional financing to meet our future
capital needs

We currently anticipate that our available cash resources, which include
existing cash and cash equivalents, short-term investments, cash generated
from operations and other existing sources of working capital will be
sufficient to meet our anticipated needs for working capital and capital
expenditures through the fourth quarter of fiscal 2002. If we are unable to
generate sufficient cash flows from operations to meet our anticipated needs
for working capital and capital expenditures we may need to raise additional
funds after twelve months to develop new or enhanced products, respond to
competitive pressures or make acquisitions. We may be unable to obtain any
required additional financing on terms favorable to us, if at all. If adequate
funds are not available on acceptable terms, we may be unable to fund our
expansion, successfully develop or enhance products, respond to competitive
pressures or take advantage of acquisition opportunities, any of which could
have a material adverse effect on our business. If we raise additional funds
through the issuance of equity securities, our shareholders may experience
dilution of their ownership interest, and the newly-issued securities may have
rights superior to those of the common stock. If we raise additional funds by
issuing debt, we may be subject to limitations on our operations. As of March
31, 2001, AJI owes approximately $28.7 million in unsecured loans from banks,
which have been guaranteed by us, and secured bonds with interest rates
ranging between 1.4 percent to 2.0 percent per annum. This strain on our
capital resources could have a material adverse effect on our business.

PART II

ITEM 7--Management's Discussion and Analysis of Financial Condition and
Results of Operations

The following discussion of our financial condition and results of
operations should be read in conjunction with our consolidated financial
statements and the related notes included elsewhere in this Annual Report on
Form 10-K. This discussion contains forward looking statements which involve
risk and uncertainties. Our actual results could differ materially from those
anticipated in the forward looking statements as a result of certain factors,
including but not limited to those discussed in "Risk Factors" and elsewhere
in this Annual Report.

Overview

We are a leading provider of integrated automation systems for the
semiconductor and related electronics manufacturing industries. We design
systems that enable semiconductor manufacturers to increase their
manufacturing productivity and protect their investment in silicon wafers
during the manufacture of ICs. We sell our systems directly to semiconductor
manufacturers, as well as to OEMs that integrate our systems with their
equipment for sale to semiconductor manufacturers. Our sales are tied to
capital expenditures at fabs and as such are cyclical in nature. Fiscal years
1999, 2000 and 2001 have demonstrated the cyclical nature of our business, as
discussed below.

We use a dedicated direct sales force worldwide, which is supported by
distributors in Europe. Our functional currency is the U.S. dollar, except in
Japan where our functional currency is the Japanese yen. To date, the impact
of currency translation gains or losses has not been material to our sales or
results of operations.

During fiscal year 1999, we experienced a sharp downturn in our business in
response to a dramatic slowdown in the Asian economies and an over capacity of
memory chip manufacturing. In fiscal year 2000, we experienced significant
growth due to the dramatic growth in capital spending by semiconductor
manufacturers. The increase in capital spending was driven by the growth in
demand for both memory and logic chips in a broad variety of products,
particularly those of internet and telecommunications equipment manufacturers.
In the first half of fiscal year 2001, the demand for our products remained
strong, but in the second half of fiscal year 2001, the demand for our
products decreased significantly as semiconductor manufacturers sharply
reduced capital expenditures. This decrease in capital expenditures resulted
in slower bookings and significant order push outs and cancellations in the
fourth quarter of fiscal year 2001.

In addition to the changes in the business cycle impacting demand for our
products, we are beginning to see a shift from 150mm and 200mm to 300mm
products. In fiscal year 1999, 150mm and 200mm products comprised virtually
all of our net sales. These products generate higher gross profit than our new
300mm products. While 200mm products remain dominant in our product mix, the
contribution of 300mm products has increased from 3.5 percent of net sales in
the first quarter of fiscal year 2001 to 13.5 percent of net sales for the
fourth quarter of fiscal year 2001. This shift negatively impacted our gross
profit, particularly in the fourth quarter of fiscal year 2001. During fiscal
years 2000 and 2001, our customers added significant capacity in 150mm and
200mm and in response we increased production of our related products.
Meanwhile, we continued to develop updated versions of these products. As a
result, the severity and quickness of the recent downturn in the semiconductor
business cycle left us with substantial raw material and purchase commitments
for our older 150mm and 200mm products. We do not believe that our customers
will continue to purchase older versions of our 150mm and 200mm products when
capital spending resumes. During the fourth quarter of fiscal year 2001, we
recorded $15.0 million of inventory reserves and took an additional $4.0
million charge for purchase commitments related to 150mm and 200mm products
that we do not believe are going to be consumed in the next upturn. In May
2001, we announced our intention to discontinue production of our 150mm
products due to our belief that there will be limited future spending on 150mm
fabs.

Prior to fiscal year 2001, our revenue policy was to recognize revenue at
the time the customer took title to the product, generally at the time of
shipment. Revenue related to maintenance and service contracts was

recognized ratably over the duration of the contracts. We changed our revenue
recognition policy during fiscal year 2001, based on guidance provided in
Securities and Exchange Commission Staff Accounting Bulletin No. 101, or SAB
101, "Revenue Recognition in Financial Statements." We now recognize revenue
when persuasive evidence of an arrangement exists, delivery has occurred or
service has been rendered, our price is fixed or determinable and
collectability is reasonably assured. Some of our products are large volume
consumables that are tested to industry and/or customer acceptance criteria
prior to shipment. Revenue for these types of products is recognized at
shipment. Certain of our product sales are accounted for as multiple-element
arrangements. If we have met defined customer acceptance experience levels
with both the customer and the specific type of equipment, we recognize the
product revenue at the time of shipment and transfer of title, with the
remainder recognized when the other elements, primarily installation, have
been completed. Certain other products are highly customized systems that
cannot be completed or adequately tested to customer specifications prior to
shipment from the factory and we do not recognize revenue until these products
are formally accepted by the customer. Revenue for spare parts sales is
recognized on shipment. Revenue related to maintenance and service contracts
is recognized ratably over the duration of the contracts. Unearned maintenance
and service contract revenue is not significant and is included in accrued
liabilities and other.

We account for software revenue in accordance with the American Institute of
Certified Public Accountants' Statement of Position 97-2, "Software Revenue
Recognition." Revenues for integration software work are recognized on a
percentage of completion. Software license revenue, which is not material to
the consolidated financial statements, is recognized when we ship the
software, payment is due within one year, collectability is probable and there
are no significant obligations remaining.

The majority of our revenues in any single quarter are typically derived
from a few large customers, and our revenues will therefore fluctuate based on
a number of factors, including:

. the timing of significant customer orders;

. the timing of product shipment and acceptance;

. variations in the mix of products sold;

. the introduction of new products;

. changes in customer buying patterns;

. fluctuations in the semiconductor equipment market;

. the availability of key components;

. pressure from competitors; and

. general trends in the semiconductor manufacturing industry,
electronics industry and overall economy.

Acquisitions

During the three fiscal years ended March 31, 2001, we acquired the
following companies:

In June 1999, we acquired all of the shares of PST, which manufactures
wafer-sorting equipment used by semiconductor manufacturers. The acquisition
was accounted for using the pooling of interests method of accounting.
Accordingly, our consolidated financial statements for all periods presented
have been restated to include the financial statements of PST.

In July 1998, we acquired HDI, which develops robotics equipment used by
semiconductor manufacturers. The transaction was accounted for using the
purchase method of accounting.

In August 1999, we acquired PAT, which develops continuous flow transport
systems for use in semiconductor manufacturing facilities. The transaction was
accounted for using the purchase method of accounting.

In 2000, we increased our ownership percentage of MECS, a Japanese
engineering and robotics manufacturing company, to 95.3 percent. We
subsequently merged MECS into AJI. The transactions were accounted for using
the purchase method of accounting.

In February 2001, we acquired AMP, a manufacturer of precision parts. The
transaction was accounted for using the purchase method of accounting.

In February 2001, we acquired SemiFab, a manufacturer of environmental
control equipment and a contract manufacturer. The transaction was accounted
for using the purchase method of accounting.

Fiscal Years Ended March 31, 1999, 2000 and 2001

The following table sets forth the percentage of net sales represented by
certain consolidated statements of operations data for the periods indicated:

Fiscal Year Ended
March 31,
---------------------
1999 2000 2001
----- ----- -----

Net sales.............................................. 100.0 % 100.0 % 100.0 %
Cost of sales.......................................... 64.4 54.3 62.2
----- ----- -----
Gross profit......................................... 35.6 45.7 37.8
----- ----- -----
Operating expenses:
Research and development............................. 19.4 9.6 9.0
Selling, general and administrative.................. 43.3 24.9 18.4
In-process research and development of acquired
business and product line........................... 7.6 2.2 --
Amortization of acquired intangible assets........... 1.8 1.1 1.4
Non-recurring charges................................ 6.0 1.0 0.2
----- ----- -----
Total operating expenses............................. 78.1 38.8 29.0
----- ----- -----
Operating income (loss).............................. (42.5) 6.9 8.8
Other income (expense), net............................ 1.9 0.9 0.7
----- ----- -----
Income (loss) before provision (benefit) for income
Taxes and cumulative effect of change in accounting
principle............................................. (40.6) 7.8 9.5
Provision (benefit) for income taxes................... (11.6) 3.3 3.5
----- ----- -----
Income (loss) before effect of change in accounting
policy................................................ (29.0) 4.5 6.0
Cumulative effect of change in accounting principle,
net of tax benefit.................................... -- -- (0.5)
----- ----- -----
Net income (loss)...................................... (29.0)% 4.5 % 5.5 %
===== ===== =====

Net sales. Our net sales in the fiscal year ended March 31, 2000 increased
by 142.8 percent to $225.6 million from $92.9 million for the fiscal year
ended March 31, 1999. Net sales in the fiscal year ended March 31, 2001
increased 117.9 percent to $491.5 million. Our fiscal year 1999 net sales were
negatively impacted by reduced capital spending by semiconductor manufacturers
because of a slowdown in Asian economies and demand for semiconductor devices.
Fiscal year 2000, on the other hand, benefited from a sharp upturn in capital
spending by semiconductor manufacturers and our 200mm product market
leadership and positioning. Our increase in net sales in fiscal year 2001 over
fiscal year 2000 resulted from approximately $52.7 million of net sales
contributed by MECS, AMP and SemiFab, which were not part of our consolidated
results for fiscal year 2000, and continued growth in demand for our other
products. While we had sequential growth in net sales for the first three
quarters of fiscal year 2001, fourth quarter net sales declined by 10.1
percent from the third quarter. This decline resulted from a substantial
reduction in capital spending by semiconductor manufacturers

worldwide. We experienced a material decline in net sales of our 200mm
products, which was partially offset by increased sales of our 300mm products.
For the first quarter of fiscal year 2002, we currently expect that net sales
will be $65.0 to $70.0 million.

Our international sales, including the local revenues recorded at our
foreign locations, were as follows (dollars in millions):

Fiscal Year Ended March 31,
----------------------------------------
1999 2000 2001
------------ ------------ ------------
% of % of % of
$ Sales $ Sales $ Sales
------ ----- ------ ----- ------ -----

Taiwan............................... $ 31.1 33.5% $ 78.9 35.0% $ 98.3 20.0%
Japan................................ 8.1 8.7 30.7 13.6 102.8 20.9
Other................................ 4.2 4.5 17.9 7.9 58.3 11.9
------ ---- ------ ---- ------ ----
Total Asia......................... 43.4 46.7 127.5 56.5 259.4 52.8
Europe............................... 4.1 4.4 7.9 3.5 39.8 8.1
------ ---- ------ ---- ------ ----
Total International................ $ 47.5 51.1% $135.4 60.0% $299.2 60.9%
====== ==== ====== ==== ====== ====

Direct sales to international customers remain a substantial portion of our
net sales. The increase in Japan's share of our international net sales in
fiscal year 2001 is due to the $45.8 million contribution to net sales from
MECS products. During fiscal year 2001, we achieved our first sales in
Malaysia to two new semiconductor manufacturers, and our systems were shipped
to the People's Republic of China for a new semiconductor manufacturing
facility of a major U.S. electronics company. Net sales to our European
customers in fiscal year 2001 grew by approximately 406 percent compared to
fiscal year 2000 net sales. This increase was primarily the result of our
ability to leverage a successful retrofit of a Texas Instruments U.S.
semiconductor facility using SMIF technology to win a subsequent Texas
Instruments 200mm project in Germany. As 300mm products comprise a higher
percent of our net sales, over time we expect that U.S. sales will continue to
grow as a percent of total net sales. This is because most of our 300mm
products will be sold to OEMs, most of which are located in the United States
and Japan and, to a lesser extent, in Europe.

During fiscal year 2001, we had one reportable segment. The net sales by
product or service categories comprising our net sales for the three fiscal
years ended March 31, 1999, 2000 and 2001 were as follows (dollars in
thousands):

Fiscal Year Ended March 31,
----------------------------
1999 2000 2001
-------- --------- ---------

SMIF Systems.................................... $ 66,609 $ 175,363 $ 334,143
Robotics........................................ 6,323 14,191 73,976
SMART Traveler Systems.......................... 6,227 14,527 38,962
Non-SMIF Systems................................ 8,794 11,208 34,815
Services & other................................ 4,995 10,265 9,646
-------- --------- ---------
Total......................................... $ 92,948 $ 225,554 $ 491,542
======== ========= =========

Gross profit. Our gross profit was 35.6 percent, 45.7 percent and 37.8
percent of net sales for the fiscal years ended March 31, 1999, 2000 and 2001,
respectively. Gross profit in fiscal year 1999 was negatively impacted because
we were unable to reduce our manufacturing overhead to compensate for the 49.0
percent decrease in revenues compared to fiscal year 1998. We also increased
our inventory reserves by $2.3 million during fiscal year 1999 in response to
a rapid decline in sales activity during that period resulting in increased
excess and obsolete inventories. In addition, significant orders were received
and shipped near the end of each quarter requiring higher levels of overtime
by our employees. During fiscal year 2000, the increase in gross profit
resulted from the combined effect of materials cost reduction achieved through
product re-design efforts and the

dramatically increased rate of absorption of fixed costs resulting from the
142.8 percent increase in net sales over fiscal year 1999. The decrease in our
gross profit in fiscal year 2001 to 37.8 percent is primarily due to the
acquisition of a majority ownership interest in MECS in late March 2000, other
changes in product mix and the need to take substantial inventory and loss
reserves in the fourth quarter of fiscal year 2001. Since we acquired a
majority ownership interest in MECS, we have made substantial improvements in
the gross profit at MECS through cost reduction engineering efforts and
improved absorption of fixed manufacturing overhead through higher sales
volumes. However, the gross profit on MECS' products is significantly lower
than the average gross profit produced on our other products. Other changes in
product mix that negatively impacted our fiscal year 2001 gross profit include
the increase in the percent of net sales of 300mm products. As our 300mm
products are still very early in their product life cycle, the gross profit on
these products are significantly lower than on our 150mm and 200mm products.
In March 2001, we expensed $23.3 million for excess inventories, purchase
commitments and losses on system sales for which future revenue would not
cover our expected costs to complete. In the first quarter of fiscal year
2002, we currently expect that gross profit will be in the range of 25.0 to
28.0 percent of net sales.

Research and development. Research and development expenses were $18.0
million, $21.6 million and $44.3 million for the fiscal years ended March 31,
1999, 2000 and 2001, respectively, representing 19.4 percent, 9.6 percent and
9.0 percent of net sales for the respective periods then ended. We increased
research and development spending in both fiscal years 2000 and 2001 to
support ongoing product development needs of acquired companies. This increase
is also due to increased spending to support our new SMIF-300 product series,
Plus Portal, transport product technologies, robotic products and increased
expenditures for the development of automated material handling technology for
the 300mm market. Our research and development expenses as a percent of net
sales can vary significantly based on the level of net sales and our need to
continue investing in research and development activities to remain
competitive. We capitalize certain legal costs related to our patents. We have
not capitalized costs associated with software development because such costs
incurred to date that are eligible for capitalization have not been material.
We expect our research and development activities and related expenditures to
increase in absolute dollars in future periods.

Selling, general and administrative. Selling, general and administrative
expenses were $40.2 million, $56.2 million and $90.4 million for the fiscal
years ended March 31, 1999, 2000 and 2001, respectively, representing 43.3
percent, 24.9 percent and 18.4 percent of net sales for the respective periods
then ended. Selling, general and administrative expenses as a percent of net
sales are subject to significant variation with changes in net sales because
it consists of many activities that have costs which are either fixed or semi-
variable. Selling and marketing expenses were $14.7 million, $21.4 million and
$52.3 million for the fiscal years ended March 31, 1999, 2000 and 2001,
respectively, representing 15.8 percent, 9.5 percent and 10.6 percent of net
sales for the respective periods then ended. The increasing trend in selling
and marketing expenses in the fiscal years ended March 31, 1999, 2000 and 2001
is the result of our expanding presence in Europe, Japan and Asia. General and
administrative expenses were $25.5 million, $34.8 million and $38.1 million
for the fiscal years ended March 31, 1999, 2000 and 2001, respectively,
representing 27.5 percent, 15.4 percent and 7.8 percent of net sales for the
respective periods then ended. General and administrative expenses have
increased largely as a result of our acquisitions in fiscal years 2000 and
2001. In fiscal year 2000, we also increased our infrastructure to support the
142.8 percent increase in net sales. As a result of our acquisitions during
the last three years, we currently operate with a number of independent
systems. In order to position ourselves for future growth opportunities, we
will need to increase our investment in administrative systems and processes
which will increase the fixed costs associated with general and administrative
functions. While these investments should provide long-term productivity
improvements, our transition to new systems may result in increased expense
levels before expense reductions from any productivity improvements are
realized.

Amortization of acquired intangible assets. Amortization expenses relating
to acquired intangible assets were $1.6 million, 2.6 million and $7.0 million
for the fiscal years ended March 31, 1999, 2000 and 2001, respectively,
representing 1.8 percent, 1.1 percent and 1.4 percent of net sales for the
respective periods then ended. We amortize the acquired intangible assets over
periods ranging from four to fourteen years.

Non-recurring charges. In the fiscal year ended March 31, 1999 we underwent
significant restructuring of our operations to reduce our cost structure in
response to a 49.0 percent reduction in net sales. We also restructured
activities in Japan and Europe to reposition those activities to compete more
effectively. In addition, we repositioned or eliminated certain product
offerings. The restructuring resulted in terminating the employment of 110
U.S. employees and 30 international employees. During fiscal year 2000, we
decided to move to a purely direct sales channel in Japan, replacing a
distributorship arrangement. As a result, we paid a fee of $2.5 million to
cancel the distribution agreement. In the fourth quarter of fiscal 2001, in
response to the drop in net sales and new orders in the fourth quarter, we
reduced our workforce by approximately 149 regular full-time employees and
approximately 150 temporary employees and contractors primarily based in
Fremont, California, and shut down a small manufacturing facility in Japan.
The charge associated with these actions was $1.0 million.

In-process research and development of acquired businesses and product
line. Charges to in-process research and development of acquired businesses
and product line were $7.1 million and $4.9 million for the fiscal years ended
March 31, 1999 and 2000 respectively, representing 7.6 percent and 2.2 percent
of net sales for the respective periods then ended. There were no charges in
fiscal year 2001. During the fiscal year ended March 31, 1999, we completed
the acquisitions of the FluoroTrac product line and HDI. We accounted for the
acquisition of HDI using the purchase method of accounting during the quarter
ended September 30, 1998. In connection with the purchase price allocation of
FluoroTrac, we recorded a write-off of approximately $1.2 million of in-
process research and development costs in the quarter ended June 30, 1998. In
connection with the purchase price allocation of HDI, we recorded a write-off
of approximately $5.9 million of in-process research and development costs in
the quarter ended September 30, 1998. During the year ended March 31, 2000, we
completed the acquisition of PAT and a majority interest in MECS. The PAT
acquisition was accounted for using the purchase method of accounting during
the quarter ended September 30, 1999 and the MECS acquisition was accounted
for using the purchase method of accounting during the quarter ended March 31,
2000. In connection with the purchase price allocation of PAT, we recorded a
write-off of approximately $4.0 million of in-process research and development
costs in the quarter ended September 30, 1999. In connection with the purchase
price allocation of MECS we recorded a write-off of approximately $0.9 million
of in-process research and development costs in the quarter ended March 31,
2000. The decision to write-off these costs was primarily due to the fact that
the acquired in-process research and development related to the FluoroTrac
product line, HDI, PAT and MECS had not yet reached technological feasibility
and had no perceived alternative future uses. Actions and comments regarding
other companies from the Commission have indicated that they are reviewing the
current valuation methodology of purchased in-process research and development
relating to acquisitions. The Commission is concerned that some companies are
writing off more of the value of an acquisition than is appropriate. We
believe that we are in compliance with all of the rules and related guidance
as they currently exist. However, the Commission may seek to reduce the amount
of purchased in-process research and development we have previously expensed.
This would result in the restatement of our previously filed financial
statements and could have a material negative impact on the financial results
for the period subsequent to the particular acquisition.

Other income (expense), net. Other income (expense), net was $1.7 million,
$2.1 million and $3.7 million for the fiscal years ended March 31, 1999, 2000
and 2001, respectively, representing 1.9 percent, 0.9 percent and 0.7 percent
of net sales for the respective periods then ended. The decrease as a
percentage of net sales during fiscal year 2000 over fiscal year 1999 was
largely due to the 142.8 percent increase in net sales activity during fiscal
year 2000. The decrease as a percentage of net sales during fiscal year 2001
over fiscal year 2000 was largely due to the 117.9 percent increase in net
sales activity during fiscal year 2001. Although other income (expense), net,
has fluctuated over the past several years, other income (expense), net, has
increased primarily because of the increase in interest income on our
increasingly higher cash levels.

Provision (benefit) for income taxes. Provision (benefit) for income taxes
were ($10.8) million, $7.5 million, and $17.2 million for the fiscal years
ended March 31, 1999, 2000 and 2001, respectively, representing an effective
tax rate of 28.6 percent, 42.8 percent and 36.8 percent for the respective
periods then ended. In fiscal year 2001, we experienced a lower effective tax
rate compared to the prior year's effective tax rate of 42.8 percent due to
the impact of prior year non-deductible in-process research and development
write-offs related to the acquisition of PAT and MECS, respectively.

As of March 31, 2001, we have recorded a net deferred tax asset of
approximately $20.1 million, of which $4.3 million relates to net operating
loss carryforwards and tax credits generated by us and our domestic
subsidiaries. These net operating loss carryforwards and tax credits expire at
various dates through March 31, 2021. Included in this amount are pre-merger
Federal net operating loss carryforwards of approximately $3.5 million
generated by PAT, PST and SemiFab, which will expire at various dates through
March 31, 2021. The utilization of the net operating losses are subject to
annual limitations due to the "change in ownership" provisions of the Internal
Revenue Code. As of March 31, 2001, $7.3 million of the MECS deferred tax
asset related to pre-merger foreign net operating loss carryforwards, which
expire in 2005. The deferred tax asset related to these foreign net operating
loss carryforwards is included in the foreign deferred tax asset related to
MECS. The utilization of the foreign net operating loss carryforwards is
subject to the ability of MECS to generate future foreign taxable income. A
valuation allowance has been recorded related to pre-merger net operating
losses and other deferred tax assets of PST, AMP, SemiFab and MECS of
approximately $1.6 million, $0.1 million, $1.1 million and $10.2 million,
respectively. Realization of the net deferred tax asset is dependent on
generating sufficient future taxable income. Although realization is not
assured, management believes that it is more likely than not that the deferred
tax asset will be realized. Although the deferred tax asset is considered
realizable, actual amounts could be reduced if sufficient future taxable
income is not achieved.

Cumulative effect on an accounting change, net of tax. We recorded a non-
cash charge of $2.5 million, net of an income tax benefit of $1.3 million, or
a loss of $0.07 per diluted share, to reflect the cumulative effect of the
accounting change to comply with SAB 101 as of the beginning of the year.

Selected Quarterly Financial Data

The following table sets forth our unaudited consolidated statement of
operations for each of the eight quarterly periods ended March 31, 2001. The
data for the four quarterly periods for fiscal year 2000 show the pro forma
effect of applying SAB 101 throughout fiscal year 2000, and reconciles the
differences with those amounts previously reported. The data for the four
quarterly periods for fiscal year 2001 show the effect of restating the first
three quarters of fiscal year 2001 as if the provisions of SAB 101 had been
applied, and reconciles the differences with those amounts previously
reported. You should read this information in conjunction with our
consolidated financial statements and related notes appearing elsewhere in
this Annual Report. We have prepared this unaudited consolidated information
on a basis consistent with our audited consolidated financial statements,
reflecting all normal recurring adjustments that we consider necessary for a
fair presentation of our financial position and operating results for the
quarters presented. You should not draw any conclusions about our future
results from the operating results for any quarter.

The first three quarters of our fiscal year end on a Saturday, and thus the
actual date of the quarter-end is usually different from the quarter-end dates
used throughout this Form 10-K (in thousands, except for per share amounts):

Unaudited
------------------------------------------------------------------------------
Fiscal Quarter Ended Fiscal Quarter Ended
-------------------------------------- --------------------------------------
Jun. 30, Sep. 30, Dec. 31, Mar. 31, Jun. 30, Sep. 30, Dec. 31, Mar. 31,
1999 1999 1999 2000 2000 2000 2000 2001
-------- -------- -------- -------- -------- -------- -------- --------
Pro Pro Pro Pro Restated Restated Restated Restated
Forma Forma Forma Forma

Net Sales
As previously reported. $27,086 $40,696 $63,816 $93,956 $123,671 $126,922 $127,439 $115,079
Effect of change in
accounting principle.. (826) (474) (984) (2,816) (1,188) (922) 541 --
After the effect of SAB
101................... 26,260 40,222 62,832 91,140 122,483 126,000 127,980 115,079
Cost of Sales
As previously reported. 15,840 22,327 34,505 49,827 67,604 67,458 70,451 101,503
Effect of change in
accounting principle.. (10) (13) (32) (1,213) (453) (301) (466) --
After the effect of SAB
101................... 15,830 22,314 34,473 48,614 67,151 67,157 69,985 101,503
Gross profit
As previously reported. 11,246 18,369 29,311 44,129 56,067 59,464 56,988 13,576
Effect of change in
accounting principle.. (816) (461) (952) (1,603) (735) (621) 1,007 --
After the effect of SAB
101................... 10,430 17,908 28,359 42,526 55,332 58,843 57,995 13,576
Operating Expenses:
Research and
development........... 4,235 4,456 5,298 7,595 9,721 10,851 12,042 11,649
Selling, general and
administrative........ 10,728 11,729 15,333 18,456 21,451 22,984 24,237 21,763
Amortization of
acquired intangible
assets................ 614 614 676 681 1,702 1,366 1,336 2,559
In-process research and
development of
acquired business..... -- 4,000 -- 884 -- -- -- --
Non-recurring charges.. -- -- -- 2,300 -- -- -- 979
Total operating
expenses.............. 15,577 20,799 21,307 29,916 32,874 35,201 37,615 36,950
Operating (loss) income
As previously reported. (4,331) (2,430) 8,004 14,213 23,193 24,263 19,373 (23,374)
Effect of change in
accounting principle.. (816) (461) (952) (1,603) (735) (621) 1,007 --
After the effect of SAB
101................... (5,147) (2,891) 7,052 12,610 22,458 23,642 20,380 (23,374)
Other income (expense),
net.................... (14) 299 803 983 1,311 1,648 469 227
Income (loss) before
provision for income
taxes
As previously reported. (4,345) (2,131) 8,807 15,196 24,504 25,911 19,842 (23,147)
Effect of change in
accounting principle.. (816) (461) (952) (1,603) (735) (621) 1,007 --
After the effect of SAB
101................... (5,161) (2,592) 7,855 13,593 23,769 25,290 20,849 (23,147)
Provision (benefit) for
income taxes
As previously reported. (1,477) 635 2,966 5,384 8,619 8,937 6,724 (6,906)
Effect of change in
accounting principle.. (274) (155) (319) (578) (239) (228) 322 --
After the effect of SAB
101................... (1,751) 480 2,647 4,806 8,380 8,709 7,046 (6,906)
Net income (loss)
As previously reported. (2,868) (2,766) 5,841 9,812 15,885 16,974 13,118 (16,241)
Effect of change in
accounting principle.. (542) (306) (633) (1,025) (496) (393) 685 --
Cumulative effect of
change in accounting
principle............. -- -- -- -- (2,506) -- -- --
Net income (loss)....... $(3,410) $(3,072) $ 5,208 $ 8,787 $ 12,883 $ 16,581 $ 13,803 $(16,241)
Basic Earnings (loss)
Per Share:
Earnings (loss) per
share before
cumulative effect of
change in accounting
principle
As previously reported. $ (0.12) $ (0.11) $ 0.20 $ 0.31 $ 0.49 $ 0.53 $ 0.40 $ (0.48)
Effect of change in
accounting principle.. $ (0.02) $ (0.01) $ (0.02) $ (0.03) $ (0.01) $ (0.02) $ 0.03 --
After the effect of SAB
101................... $ (0.14) $ (0.12) $ 0.18 $ 0.28 $ 0.48 $ 0.51 $ 0.43 $ (0.48)
Cumulative effect of
change in accounting
principle............. -- -- -- -- $ (0.08) -- -- --
Earnings after
cumulative effect of
change in accounting
principle............. $ (0.14) $ (0.12) $ 0.18 $ 0.28 $ 0.40 $ 0.51 $ 0.43 $ (0.48)
Diluted Earnings (loss)
Per Share:
Earnings (loss) per
share before
cumulative effect of
change in accounting
principle
As previously reported. $ (0.12) $ (0.11) $ 0.18 $ 0.27 $ 0.45 $ 0.49 $ 0.39 $ (0.48)
Effect of change in
accounting principle.. $ (0.02) $ (0.01) $ (0.02) $ (0.03) $ (0.02) $ (0.01) $ 0.02 --
After the effect of SAB
101................... $ (0.14) $ (0.12) $ 0.16 $ 0.24 $ 0.43 $ 0.48 $ 0.41 $ (0.48)
Cumulative effect of
change in accounting
principle............. -- -- -- -- $ (0.07) -- -- --
Earnings (loss) after
cumulative effect of
change in accounting
principle............. $ (0.14) $ (0.12) $ 0.16) $ 0.24 $ 0.36 $ 0.48 $ 0.41 $ (0.48)
Shares used in per share
calculation:
Basic.................. 24,456 25,656 28,964 31,345 32,162 32,308 32,416 33,901
Diluted................ 24,456 25,656 32,722 35,999 35,377 34,840 33,937 33,901

New Accounting Pronouncement

In June 2000, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards, or SFAS, No. 138, "Accounting for Certain
Derivative Instruments and Hedging Activities," an amendment of SFAS No. 133,
which is effective for all fiscal years beginning after June 15, 2000. SFAS
No. 138 establishes accounting and reporting standards requiring that every
derivative instrument be recorded in the balance sheet as either an asset or
liability measured at its fair value. The statement also requires that changes
in the derivative's fair value be recognized currently in earnings unless
specific hedge accounting criteria are met. Because we do not currently hold
any derivative instruments and do not currently engage in any material hedging
activities, we believe that the application of SFAS No. 138 will not have a
material impact on our financial position or results of operations.

Liquidity and Capital Resources

Since inception, we have funded our operations primarily through the private
sale of equity securities and public stock offerings, customer pre-payments,
bank borrowings and cash generated from operations. As of March 31, 2001, we
had approximately $34.7 million in cash and cash equivalents, $52.5 million in
restricted cash equivalents and short-term investments, $3.0 million in short-
term investments, $179.2 million in working capital and $5.5 million in long-
term debt and finance leases.

Cash flows from operating activities. Net cash provided by operating
activities in fiscal year 2001 was $31.0 million. The net cash provided by
operating activities in 2001 was primarily attributable to our net income of
$27.0 million and non-cash charges to net income including depreciation and
amortization of $16.4 million and inventory reserve adjustments of $16.5
million, partially offset by an increase in inventories of $34.6 million and a
decrease in accounts payable of $11.8 million.

Cash flows from investing activities. Net cash used in investing activities
in fiscal year 2001 was $9.0 million. We used $52.5 million in connection with
a synthetic lease for land and land improvements. In addition, we used $3.1
million in connection with the acquisition of additional ownership interest in
MECS, $20.7 million in connection with the acquisition of AMP and $5.2 million
in connection with the acquisition of SemiFab. We also used $17.9 million to
modify our facilities and purchase new equipment and furniture used in our
operations. The uses were partially offset by the sale of short-term
investments of $90.4 million, net.

Cash flows from financing activities. During fiscal year 2001, we made net
principal payments on short-term and long-term debt and finance leases of $4.5
million. During fiscal year 2001, we issued 568,380 shares of common stock in
connection with our employee stock programs for an aggregate of $4.6 million.

Effective as of June 30, 2000, we entered into a synthetic lease transaction
with ABN AMRO Bank N.V., or ABN, as agent for certain lenders, to acquire and
finance certain unimproved real property in Fremont, California. In connection
with that transaction, we leased the real property, committed to payments
aggregating $38,295,000 plus interest over a five-year lease period and agreed
to construct a manufacturing and campus facility on the property thereon.
Effective February 21, 2001, we amended the agreement with ABN to obtain ABN's
commitment to fund an additional sum of approximately $61,705,000 for
construction of improvements to the property, of which $2.6 million was
advanced by the syndicate for certain engineering costs incurred in
preparation for making leasehold improvements to the land. Due to changes in
our infrastructure needs, we later determined not to proceed with development
of the property as required by the agreements, and effective May 30, 2001,
amended our agreements with ABN and committed to purchase the property for an
aggregate purchase price of $38,295,000 plus interest and other charges on or
before December 31, 2001. Under these latest amendments, we are, among other
things, released from our obligation to improve the property and ABN is
released from its commitment to fund construction costs. We have not yet
determined whether to sell the property or hold it for future development or
sale. We believe that the current fair market value of the land is
substantially less than the original purchase price due to a decline in the
real estate market in the Freemont area. If sold in today's market, we
estimate that proceeds from the sale would be in the range of $10 to 20
million less than the amount due to the bank syndicate. We also believe that
we will be required to record an impairment charge or other reserve with
respect to the land during the quarter ending June 30, 2001, the exact size of
which has not yet been determined.

We anticipate that operating expenses will constitute a material use of our
cash resources. In addition, we may utilize cash resources to fund
acquisitions or investments in other businesses, technologies or product
lines. The cyclical nature of the semiconductor industry makes it very
difficult for us to predict future liquidity requirements with certainty.
However, we believe that our available cash and cash equivalents will be
sufficient to meet our working capital and operating expense requirements
until the end of fiscal year 2002. At some point in the future we may require
additional funds to support our working capital and operating expense
requirements or for other purposes and may seek to raise these additional
funds through public or private debt or equity financings. Such financing may
not be available to us on a timely basis if at all or, if available, on terms
acceptable to us and not dilutive to our shareholders. If we fail to obtain
acceptable additional financing, we may be required to reduce planned
expenditures or forego acquisition opportunities which could reduce our
revenues, increase our losses, and harm our business.

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Company has duly caused this report on Form 10-K to
be signed on its behalf by the undersigned, thereunto duly authorized on the
29th day of June 2001.

Asyst Technologies, Inc.

/s/ Mihir Parikh
By: _________________________________
Mihir Parikh
Chairman and Chief Executive
Officer
(Principal Executive Officer)

POWER OF ATTORNEY

KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Mihir Parikh and Douglas J. McCutcheon, and
each of them, his attorney-in-fact, and agents with the power of substitution,
for him in any and all capacities, to sign any amendments to this Annual
Report on Form 10-K/A or to the Annual Report on Form 10-K for the year ended
March 31, 2001 as filed with the Securities and Exchange Commission on June
19, 2001, and to file the same, with exhibits thereto and other documents in
connection therewith, with the Securities and Exchange Commission, hereby
ratifying and confirming all that the said attorney-in-fact, or agents, or any
of them, or his substitute or substitutes, may lawfully do or cause to be done
by virtue hereof.

Pursuant to the requirements of the Securities Exchange of 1934, this report
has been signed below by the following persons on behalf of the registrant and
in the capacities and on the dates indicated.

Signature Title Date
--------- ----- ----

/s/ Mihir Parikh Chairman of the Board, June 29, 2001
______________________________________ Chief Executive Officer
Mihir Parikh and Director (Principal
Executive Officer)

/s/ Douglas J. McCutcheon Senior Vice President and June 29, 2001
______________________________________ Chief Financial Officer
Douglas J. McCutcheon (Principal Financial and
Accounting Officer)

/s/ P. Jackson Bell Director June 28, 2001
______________________________________
P. Jackson Bell

/s/ Stanley Grubel Director June 26, 2001
______________________________________
Stanley Grubel

/s/ Robert A. McNamara Director June 29, 2001
______________________________________
Robert A. McNamara

/s/ Anthony E. Santelli Director June 28, 2001
______________________________________
Anthony E. Santelli

/s/ Walter W. Wilson Director June 26, 2001
______________________________________
Walter W. Wilson

EXHIBIT INDEX

Exhibit No. Description
----------- -----------

21.1 Subsidiaries of the Company