Exhibit 99.1
AXCELIS TECHNOLOGIES, INC.

Form 10-Q for the quarter ended September 30, 2003

FACTORS AFFECTING FUTURE OPERATING RESULTS


From time to time, we may make forward-looking public statements,
such as statements concerning our then expected future revenues or
earnings or concerning the prospects for our markets or our product
development, projected plans, performance, order procurement as well
as other estimates relating to future operations. Forward-looking
statements may be in reports filed under the Securities Exchange Act
of 1934, as amended (the "Exchange Act"), in registration statements
filed under the Securities Act of 1933, as amended (the "Securities
Act"), in press releases or informal statements made with the
approval of an authorized executive officer. The words or phrases
"will likely result," "are expected to," "will continue," "is
anticipated," "estimate," "project," or similar expressions are
intended to identify "forward-looking statements" within the meaning
of Section 21E of the Exchange Act and Section 27A of the Securities
Act, as enacted by the Private Securities Litigation Reform Act of
1995.

We wish to caution you not to place undue reliance on these
forward-looking statements which speak only as of the date on
which they are made. In addition, we wish to advise you that the
factors listed below, as well as other factors that we may or may
not have not currently identified, could affect our financial or
other performance and could cause our actual results for future
periods to differ materially from any opinions or statements
expressed with respect to future periods or events in any current
statement.

We will not undertake and specifically decline any obligation to
publicly release revisions to these forward-looking statements to
reflect either circumstances after the date of the statements or
the occurrence of events which may cause us to re-evaluate our
forward-looking statements.

In connection with the "safe harbor" provisions of the Private
Securities Litigation Reform Act, we are hereby filing cautionary
statements identifying important factors that could cause our
actual results to differ materially from those projected in
forward-looking statements made by us or on our behalf.

If semiconductor manufacturers do not make sufficient capital
expenditures, our sales and profitability will be harmed.

	We anticipate that a significant portion of our new orders
will depend upon demand from semiconductor manufacturers who build
or expand fabrication facilities. If the rate of construction or
expansion of fabrication facilities declines, demand for our systems
will decline, reducing our revenues. This would also hurt our
profitability, because our continued investments in engineering,
research and development and marketing necessary to develop new
products and to maintain extensive customer service and support
capabilities limit our ability to reduce expenses in proportion
to declining sales.

	A number of factors may cause semiconductor manufacturers to make
reduced capital expenditures, including the following.


Downturns in the semiconductor industry may further reduce demand for our
products, harming our sales and profitability.

	The semiconductor business is highly cyclical and the industry has
been in a severe down cycle since early in 2001, the length of which cannot
be predicted. This continues to reduce demand for new or expanded
fabrication facilities. Any continuing weakness or future downturns or
slowdowns in the industry may adversely affect our financial condition.

Oversupply in the semiconductor industry reduces demand for capital
equipment, including our products.

	Inventory buildups in the semiconductor industry, resulting in part
from the down cycle, have produced a current oversupply of semiconductors.
This has caused semiconductor manufacturers to revise capital spending plans,
resulting in reduced demand for capital equipment such as our products.  If
this oversupply is not reduced by increasing demand from the various
electronics industries that use semiconductors, which we cannot accurately
predict, our sales and profitability will be harmed.

Industry consolidation and outsourcing of semiconductor manufacturing may
reduce the number of our potential customers, harming our revenues.

	The substantial expense of building, upgrading or expanding a
semiconductor fabrication facility is increasingly causing semiconductor
companies to contract with foundries to manufacture their semiconductors.
In addition, consolidation and joint venturing within the semiconductor
manufacturing industry is increasing. We expect these trends to continue,
which will reduce the number of our potential customers.  This increased
concentration of our customers potentially makes our revenues more
volatile as a higher percentages of our total revenues are tied to a
particular customer's buying decisions.

If we fail to develop and introduce reliable new or enhanced products and
services that meet the needs of semiconductor manufacturers, our results
will suffer.

	Rapid technological changes in semiconductor manufacturing processes
require us to respond quickly to changing customer requirements. Our future
success will depend in part upon our ability to develop, manufacture and
successfully introduce new systems and product lines with improved
capabilities and to continue to enhance existing products, including products
that process 300 millimeter wafers. This will depend upon a variety of
factors, including new product selection, timely and efficient completion
of product design and development and of manufacturing and assembly
processes, product performance in the field and effective sales and
marketing. In particular:

* We must develop the technical specifications of competitive new systems, or
enhancements to our existing systems, and manufacture and ship these systems
or enhancements in volume in a timely manner.

* We will need to accurately predict the schedule on which our customers will
be ready to transition to new products, in order to accurately forecast demand
for new products while managing the transition from older products.

* We will need to effectively manage product reliability or quality problems
that often exist with new systems, in order to avoid reduced orders, higher
manufacturing costs, delays in acceptance and payment and additional service
and warranty expenses.

* Our new products must be accepted in the marketplace.

	Our failure to meet any of these requirements will have a material
adverse effect on our operating results and profitability.

If we fail to compete successfully in the highly competitive semiconductor
equipment industry, our sales and profitability will decline.

	The market for semiconductor manufacturing equipment is highly
competitive and includes companies with substantially greater financial,
engineering, manufacturing, marketing and customer service and support
resources than we have that may be better positioned to compete
successfully in the industry. In addition, there are smaller, emerging
semiconductor equipment companies that provide innovative systems with
technology that may have performance advantages over our systems.
Competitors are expected to continue to improve the design and
performance of their existing products and processes and to introduce
new products and processes with improved price and performance
characteristics. If we are unable to improve or introduce competing
products when demanded by the markets, our business will be harmed.
In addition, if competitors enter into strategic relationships with
leading semiconductor manufacturers covering products similar to those
sold or being developed by us, our ability to sell products to those
manufacturers may be adversely affected.

We have been dependent on sales to a limited number of large customers;
the loss of any of these customers or any reduction in orders from them
could materially affect our sales.

	Historically, we have sold a significant proportion of our
products and services to a limited number of fabricators of semiconductor
products. For example, in 2002, one of our customers, IBM, accounted for
14% of our net sales, and our top ten customers accounted for 64% of our
net sales. None of our customers has entered into a long-term agreement
requiring it to purchase our products. Although the composition of the
group comprising our largest customers has varied from year to year, the
loss of a significant customer or any reduction or delays in orders from
any significant customer, including reductions or delays due to customer
departures from recent buying patterns, or market, economic or competitive
conditions in the semiconductor industry, could adversely affect us. The
ongoing consolidation of semiconductor manufacturers may also increase
the harmful effect of losing a significant customer.

Our quarterly financial results may fluctuate significantly and may
fall short of anticipated levels.

	We derive most of our revenues from the sale of a relatively small
number of expensive products to a small number of customers. The list prices
on these products range from $200,000 to over $4.0 million. At our current
sales level, each sale, or failure to make a sale, could have a material effect
on us in a particular quarter. Our lengthy sales cycle, coupled with customers'
competing capital budget considerations, make the timing of customer orders
uneven and difficult to predict. In a given quarter, a number of factors can
adversely affect our revenues and results, including changes in our product
mix, increased fixed expenses per unit due to reductions in the number of
products manufactured, and higher fixed costs due to increased levels of
research and development and expansion of our worldwide sales and marketing
organization. Our gross margins also may be affected by the introduction of
new products. We typically become more efficient in producing our products
as they mature. For example, our gross margins in 2001 and 2002 were adversely
affected in part as a result of the increased proportion of systems sold to
process 300 millimeter wafers. In addition, our backlog at the beginning of
a quarter typically does not include all orders required to achieve our sales
objectives for that quarter and is not a reliable indicator of our future
sales. As a result, our net sales and operating results for a quarter depend
on our shipping orders as scheduled during that quarter as well as obtaining
new orders for products to be shipped in that same quarter. Any delay in, or
cancellation of, scheduled shipments or in shipments from new orders could
materially and adversely affect our financial results. Due to the foregoing
factors, we believe that period-to-period comparisons of our operating results
should not be relied upon as an indicator of our future performance.

We access the important Japanese market for ion implant through a joint venture
which we do not control.

We own 50% of the equity of a Japanese corporation called Sumitomo Eaton Nova
or SEN, to which we have granted an exclusive license to manufacture and sell
ion implanters in Japan.  The remaining 50% of the equity is owned by Sumitomo
Heavy Industries, Ltd., a Japanese manufacturer of industrial machinery and
shipbuilding.  Our joint venture agreement with Sumitomo gives both owners veto
rights, so that neither of us alone can effectively control SEN.  SEN's
business is subject to the same risks as our business.  Royalties and income
from SEN have been a substantial contribution to our earnings, and a
substantial decline in SEN's sales and income from operations could have a
material adverse effect on our net income.   As a result of this joint
venture structure, we have less control over SEN management than over our
own management and may not have timely knowledge of factors affecting SEN's
business.  In addition, given the equal balance of ownership, it is possible
that the SEN Board may be unable to reach consensus from time to time.
Neither Axcelis or Sumitomo has the right to buy out the other's interest
in SEN and the SEN joint venture is perpetual, although termination
provisions in the license agreement  allow either SEN or Axcelis to
effectively terminate the joint venture at the end of 2004.  SEN has been
a very valuable partner to Axcelis since its formation and we expect to
renew our license to SEN for a further 5 year term.

From time to time, we have allowed SEN to sell implanters outside of Japan.
We allow these sales when the customer requests SEN products.  Such requests
tend to occur when SEN customers participate, as joint venturers or technical
advisors, in fabrication facilities outside of Japan.  In those cases, the
financial benefit to Axcelis from the sale of a SEN implanter is less than the
financial  benefit of a sale of an Axcelis implanter, but our primary goal to
satisfy our customer with the product of their choice.  When these sales are
allowed, we act as exclusive agent for SEN to manage the terms of the sales
and to ensure that  they are consistent with our global product and customer
strategies.  We receive commissions from SEN on these extra-territorial sales
and assume most of the post-installation warranty responsibility.


A decline in sales of our products and services to customers outside the United
States would hurt our business and profits.

	We are substantially dependent on sales of our products and services
to customers outside the United States, which accounted for approximately
70%  62% and 51%, of our net sales in  2000 and 2001 and 2002, respectively.
We anticipate that international sales will continue to account for a
significant portion of our net sales. Because of our dependence upon
international sales, our results and prospects may be adversely affected by
a number of factors, including:

* unexpected changes in laws or regulations resulting in more burdensome
governmental controls, tariffs, restrictions, embargoes or export license
requirements;
* difficulties in obtaining required export licenses;
* volatility in currency exchange rates;
* political and economic instability, particularly in Asia;
* difficulties in accounts receivable collections;
* extended payment terms beyond those customarily offered in the United
States;
* difficulties in managing distributors or representatives outside the
United States;
* difficulties in staffing and managing foreign subsidiary and branch
operations; and
* potentially adverse tax consequences.

Making more sales denominated in foreign currencies to counteract the
strong dollar may expose us to additional risks that could hurt our results.

	Substantially all of our sales to date have been denominated in
U.S. dollars. Our products become less price competitive in countries with
currencies that are declining in value in comparison to the dollar. This
could cause us to lose sales or force us to lower our prices, which would
reduce our gross margins. Our equity income and royalty income from SEN are
denominated in Japanese yen, which exposes us to some risk of currency
fluctuations.  If it becomes necessary for us to make more sales denominated
in foreign currencies to counteract the strong dollar, we will become more
exposed to these risks.

We may not be able to maintain and expand our business if we are not able to
retain, hire and integrate additional qualified personnel.

	Our business depends on our ability to attract and retain qualified,
experienced employees. There is substantial competition for experienced
engineering, technical, financial, sales and marketing personnel in our
industry. In particular, we must attract and retain highly skilled design
and process engineers. Competition for such personnel is intense,
particularly in the areas where we are based, including the Boston
metropolitan area and the Rockville, Maryland area, as well as in other
locations around the world. If we are unable to retain our existing key
personnel, or attract and retain additional qualified personnel, we may
from time to time experience levels of staffing inadequate to develop,
manufacture and market our products and perform services for our customers.
As a result, our growth could be limited or we could fail to meet our
delivery commitments or experience deterioration in service levels or
decreased customer satisfaction, all of which could adversely affect our
financial results and cause the value of our notes and stock to decline.

Our dependence upon a limited number of suppliers for many components and
sub-assemblies could result in increased costs or delays in manufacture and
sales of our products.

	We rely to a substantial extent on outside vendors to manufacture
many of the components and subassemblies of our products. We obtain many of
these components and sub-assemblies from either a sole source or a limited
group of suppliers. Because of our reliance on outside vendors generally,
and on a limited group of suppliers in particular, we may be unable to
obtain an adequate supply of required components on a timely basis, on
price and other terms acceptable to us, or at all.

	In addition, we often quote prices to our customers and accept
customer orders for our products before purchasing components and
subassemblies from our suppliers. If our suppliers increase the cost of
components or subassemblies, we may not have alternative sources of supply
and may not be able to raise the price of our products to cover all or
part of the increased cost of components.

	The manufacture of some of these components and subassemblies is
an extremely complex process and requires long lead times. As a result, we
have in the past and may in the future experience delays or shortages. If
we are unable to obtain adequate and timely deliveries of our required
components or subassemblies, we may have to seek alternative sources of
supply or manufacture these components internally. This could delay our
ability to manufacture or to ship our systems on a timely basis, causing
us to lose sales, incur additional costs, delay new product introductions
and suffer harm to our reputation.


In certain circumstances, we may need additional capital.

	Our capital requirements may vary widely from quarter to quarter,
depending on, among other things, capital expenditures, fluctuations in
our operating results, financing activities, acquisitions and investments
and inventory and receivables management. We believe that our available
cash, our credit line and our future cash flow from operations will be
sufficient to satisfy our working capital, capital expenditure and research
and development requirements for the foreseeable future. This, of course,
depends on the accuracy of our assumptions about levels of sales and
expenses, and a number of factors, including those described in these
"Risk Factors," could cause us to require additional capital from external
sources. In addition, in the future, we may require or choose to obtain
additional debt or equity financing in order to finance acquisitions or
other investments in our business. Depending on market conditions, future
equity financings may not be possible on attractive terms and would be
dilutive to the existing holders of our common stock and convertible notes.
Our existing credit agreement contains restrictive covenants and future debt
financings could involve additional restrictive covenants, all of which  may
limit the manner in which we conduct our business.

We may incur costly litigation to protect our proprietary technology, and
if unsuccessful, we may lose a valuable asset or experience reduced market
share.

	We rely on a combination of patents, copyrights, trademark and
trade secret laws, non-disclosure agreements and other intellectual
property protection methods to protect our proprietary technology.
Despite our efforts to protect our intellectual property, our competitors
may be able to legitimately ascertain the non-patented proprietary technology
embedded in our systems. If this occurs, we may not be able to prevent their
use of this technology. Our means of protecting our proprietary rights may
not be adequate and our patents may not be sufficiently broad to prevent
others from using technology that is similar to or the same as our technology.
In addition, patents issued to us have been, or might be challenged, and might
be invalidated or circumvented and any rights granted under our patents may
not provide adequate protection to us. Our competitors may independently
develop similar technology, duplicate features of our products or design
around patents that may be issued to us. As a result of these threats to
our proprietary technology, we may have to resort to costly litigation to
enforce or defend our intellectual property rights.

	On January 8, 2001, we filed a lawsuit against Applied Materials,
Inc. ("Applied") in the United States District Court for the District of
Massachusetts. The complaint alleged that Applied's medium current/high
energy ion implanter machine launched in November 2000 infringes our
patent for ion implantation equipment using radio frequency linear
accelerator technology. We have also alleged that Applied unlawfully
interfered with our existing and future contracts. On January 18, 2001,
we filed a motion for a preliminary injunction for the reason, among
others, that infringement at the time of transition between equipment
capable of handling 200 mm wafers and equipment capable of handling 300
mm wafers would irreparably harm us. Through this motion, we asked the
court to stop Applied from manufacturing, selling or offering to sell
its medium current/high energy ion implanter machine and to order Applied
to remove all Axcelis patented technology from implanters that Applied may
have placed in chipmakers' plants for process development trials. Applied
filed counterclaims of unfair competition, defamation, and tortious
interference with prospective economic advantage, all of which it
contends arise from certain communications allegedly made by Axcelis
about the lawsuit and its claims of infringement.

	A jury trial on the sole issue of infringement commenced on
June 16, 2003. On July 2, 2003, the jury issued a verdict in favor of
Applied Materials. The Company filed a notice of appeal in August 2003,
which was docketed with the Federal Circuit Court for the First Circuit
in September 2003.   While there can be no assurance of a favorable
outcome from an appeal, we continue to believe our claims are meritorious.
The appeal is being handled on a capped contingency basis by our outside
litigation counsel and we expect the requisite investment in legal
expense to pursue this appeal will be minimal. The patent at issue
expires in mid 2005.

We might face intellectual property infringement claims or patent
disputes that may be costly to resolve and, if resolved against us,
could be very costly to us and prevent us from making and selling
our systems.

	From time to time, claims and proceedings have been or
may be asserted against us relative to patent validity or
infringement matters. Our involvement in any patent dispute or
other intellectual property dispute or action to protect trade
secrets, even if the claims are without merit, could be very
expensive to defend and could divert the attention of our management.
Adverse determinations in any litigation could subject us to significant
liabilities to third parties, require us to seek costly licenses from
third parties and prevent us from manufacturing and selling our systems.
Any of these situations could have a material adverse effect on us and
cause the value of our common stock to decline.