Exhibit 99.1
		AXCELIS TECHNOLOGIES, INC.

	Form 10-K for the year ended December 31, 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.


Our quarterly financial results may fluctuate significantly and may fall
short of anticipated levels; forecasting quarterly revenues and
profitability is complex and may be inaccurate.

	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, 2002 and 2003 were
adversely affected in part as a result of the increased proportion of
systems sold to process 300 mm 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.


The SEC's Staff Accounting Bulletin 101 and the Financial Accounting
Standard Board's Emerging Issues Tax Force 00-21 addressing revenue
recognition have added additional complexity in forecasting quarterly
revenues and profitability.  Orders for our products may contain multiple
delivery elements that result in revenue deferral under generally accepted
accounting principles.  Management typically provides financial forecasts
for the subsequent quarter in the earnings release for each quarter.
These forecasts are based on reasonable assumptions of shipment timing
and contract terms, but in some cases, at the time the forecast is made
the final customer terms may not have been agreed and documented, so the
level of revenues recognizable in a particular quarter may vary from the
forecast.

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 from early 2001 through the third quarter of
2003.   It is anticipated that such a downturn will return after several
more robust quarters.  Such downturns 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.

	From time to time, inventory buildups in the semiconductor
industry, resulting in part from the down cycle, produce an oversupply
of semiconductors. This will cause semiconductor manufacturers to revise
capital spending plans, resulting in reduced demand for capital equipment
such as our products.  If an 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 2003,our customer, Samsung accounted for 12% of our net sales
and Micron represented 10.4% of net sales.  Also, in 2003, our top ten
customers accounted for 65% 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.


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.  Sumitomo Heavy Industries, Ltd., a Japanese
manufacturer of industrial machinery and ships, owns the remaining 50% of
the equity.  Neither Axcelis nor Sumitomo has the right to buy out the
other's interest in SEN and the SEN joint venture is perpetual.  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.

  In December 2003, each of SEN and Axcelis elected to trigger a provision
requiring a one year negotiation in good faith on modifications to the license
agreement.  If modifications are not agreed to, the license agreement will
continue in its existing form on a year-to-year basis, subject to the right of
either party to terminate.  Under the SEN bylaws, termination of the license
agreement by SEN would be an important matter requiring approval of a majority
of the SEN directors.  Given Axcelis' 50% representation on the SEN Board, the
license agreement will be perpetual until such time as Axcelis deems a
termination to be in its interest.  Axcelis does not expect to terminate the
SEN license agreement.

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. 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.



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.