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Response Letter

 October 11, 2005

 Mary Beth Breslin, Attorney-Advisor

 Division of Corporation Finance

 United States Securities and Exchange Commission

 100 F Street, N.E.

 Washington, D.C. 20549

Re:
Amtech Systems, Inc.

 Annual Report on Form 10-K for
fiscal year ended September 30, 2004

 File No. 0-11412

 Ladies and Gentlemen:

 Below, in question and answer format, please find our responses to your follow-up questions and comments dated September 19, 2005.

 Form 10-K or the Fiscal Year Ended
September 30, 2004

 Consolidated
Financial Statements

 Note. 1. Summary
of Significant Accounting Policies, page 41

 Revenue Recognition, page 41

1.
We note your response to prior comment 17 in our letter dated June 30, 2005. You explain that the gross margin of deferred items has significantly increased because it is
related to “holdbacks”, i.e. payments contingent upon the completion of installation and acceptance. We see that deferred gross margin is 100% at March 31, 2005 and decreases to 40% at June 30, 2004 [2005]. Please explain
the circumstances contributing to the decrease in deferred gross margin. Clarify why you would not defer a consistent amount of revenue and costs for sales that have not met the revenue recognition criteria. Clarify how you determine the amount of
product costs to be deferred for the holdback related to products that have not been accepted by the customer. Future filings should also clearly disclose the underlying reasons for changes in the amount of revenue and costs deferred.

R.
The decrease in gross margin was partially caused by the fact that during the quarter ended June 30, 2005, we completed the installation unit of accounting and obtained
customer sign-off on thirteen orders on which we had previously deferred $693,000 of revenue and gross profit. Those orders also included both an equipment unit of accounting and an installation unit of accounting, requiring us to allocate the
selling

 Mary Beth Breslin, Attorney-Advisor

 Division of Corporation Finance

 United States Securities and Exchange Commission

 October 11, 2005

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 price between the two units of accounting. The portion of the selling price allocated to the
installation unit of accounting is the portion of the selling price that is contingent upon completion of the installation, i.e. the holdback. As a result, the revenue associated with the installation unit of accounting is generally significantly
greater than the fair value and cost of the installation unit of accounting. Depending on the timing of the installation work, the costs incurred can range from zero, at the date of shipment to the date installation commences, to generally between
five and twenty percent of the total deferred revenue. Often, all of the costs and activities of installation for equipment sales occur in the same period that the installation unit of accounting meets the criteria for revenue recognition. For these
reasons, we believe the cumulative cost of installation on deferred installation units of accounting is not material and therefore we do not separately track them by project.

 Also contributing to the decline in the deferred gross margin as of June 30, 2005 was the deferral of all the revenue
attributable to a new product delivered during that quarter with a $0.7 million selling price. That order shipped near the end of June 2005 and the related equipment and installation units of accounting did not meet the criteria for revenue
recognition as of the end of the quarter. Therefore, all of the revenue (both product and installation) and all related direct costs incurred for that system were deferred. Because this order had no profit in it, the deferred costs equaled the
deferred revenue, i.e. had 0% deferred gross margin, greatly reducing the overall deferred gross margin.

 In EITF 00-21 the task force agreed not to provide guidance on Issue 4, accounting for direct costs in an arrangement with multiple deliverables. In SAB
Topic 13 we also find no guidance that indicates that we should defer a consistent amount of revenue and costs for sales that have not met the revenue recognition criteria. The remainder of our response to this comment No. 1 is devoted to
describing how we apply the existing guidance to the recognition of revenues and how we are complying with Staff Accounting Bulletin 104.

 Approximately fifty percent of our revenue is comprised of equipment (furnaces, automated loaders and lapping/polishing machines) sales and the remainder
is derived from the sale of parts, upgrades and services. Multiple deliverables, installation services and equipment, are included in nearly all our equipment sales contracts. In accordance with Staff Accounting Bulletin Topic 13.1, we first make a
“determination of the units of accounting within our arrangements by reference to the applicable accounting literature”, EITF 00-21, prior to the application of the guidance in SAB Topic 13. Our equipment sales and the related installation
meet the criteria for separate units of accounting in paragraph 9 of EITF 00-21, as follows:

a.
The delivered equipment has value to the customer on a standalone basis, because (1) similar equipment with the same functionality is sold separately by other vendors and
(2) the customer could resell the delivered equipment on a standalone basis and this often occurs when the customer has excess capacity and there are brokers and other businesses that facilitate the resale of such equipment.

 Mary Beth Breslin, Attorney-Advisor

 Division of Corporation Finance

 United States Securities and Exchange Commission

 October 11, 2005

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b.
There is objective and reliable evidence of the fair value of the undelivered item(s). This is the going market rate for service engineers with experience in our product categories.

c.
Furthermore, our arrangements for the sale of equipment and installation do not include a general right of return.

 Next, we allocate the total contract price to the equipment and installation
units of accounting, according to paragraph 12 of EITF 00-21, which is based upon the relative fair value of the two units of accounting. However, in accordance with paragraph 14 of EITF 00-21, the amount allocable to the delivered equipment is
lesser of the amount otherwise allocable and the non-contingent amount. For us, this means that the delivered equipment is allocated the contract price less the holdback, i.e. the amount contingent upon installation. This has the effect of
allocating the contingent amount entirely to the installation unit of accounting. Since the contingent portion of the selling price allocated to the installation unit of accounting is 10-30% of the contract price, the revenue of that unit of
accounting is significantly higher than the related fair value and costs. Furthermore, since many of our equipment orders ship near the end of the quarter or the customer is not immediately ready for installation to take place, there often are no or
very little costs of installation incurred before the end of the period in which the equipment is delivered. Under these circumstances, there are no costs incurred related to the deferred revenue attributed to the installation unit of accounting to
defer, resulting in deferred gross margin of up to 100%.

 Next, we make a determination of whether the delivered equipment meets the criteria for revenue recognition, as follows. Section A.1. of Staff Accounting Bulletins Topic 13: Revenue Recognition states, “The staff believes that revenue
generally is realized or realizable and earned when all of the following criteria are met:

 •      Persuasive evidence of an arrangement exists

Persuasive evidence of an arrangement exists in the form of the customer’s purchase order.

 •      Delivery has occurred or services have been rendered

Delivery has occurred, as our terms are F.O.B. our plant, or the equivalent, and title transfers upon shipment. See below regarding customer acceptance provisions.

 •      The seller’s price to the buyer is fixed or determinable

The price is fixed and determinable by reference to the customer’s purchase order.

 •      Collectibility is reasonably assured”

Collectibility is reasonably assured because most of our customers are large and well established. Where that is not the case, we require a deposit, and we generally will have received
payment of 70 – 90% by the time our financial statements are finalized.

 Mary Beth Breslin, Attorney-Advisor

 Division of Corporation Finance

 United States Securities and Exchange Commission

 October 11, 2005

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3.
Delivery and Performance

b.
Customer Acceptance

 After delivery of a product or performance of a service, if uncertainty exists about customer acceptance, revenue should not be recognized until
acceptance occurs. When such contractual customer acceptance provisions exist, the staff generally believes that the seller should not recognize revenue until customer acceptance occurs or the acceptance provisions lapse. However, the interpretive
response to Question 1, states that formal customer sign-off is not always necessary to recognize revenue provided that the seller objectively demonstrates that the criteria specified in the acceptance provisions are satisfied.

 Interpretative response (a) to Question 1 of SAB Topic 13A3.b, Customer
Acceptance, concludes that “in arrangements where products are delivered for trial or evaluation purposes, revenue should not be recognized until the earlier of when acceptance occurs or the acceptance provisions lapse”. In the rare
situations that we enter into an arrangement that is for a trial or evaluation unit, we defer all revenue and costs unless and until we obtain an unconditional purchase order for the unit, generally at the end of the trial period or the contingency
has been resolved.

 That interpretative response continues
that, “In contrast, other arrangements do not purport to be for trial or evaluation purposes. In these instances, the seller delivers a specified product pursuant to a customer’s order, establishes payment terms, and transfers title to the
delivered product to the customer. However, customer acceptance provisions may be included in the arrangement to give the purchaser the ability to ensure the delivered product meets the criteria set forth in its order.” The latter describes
the arrangements that we have with our customers. Customer contract provisions are included to ensure our customers that we will complete the installation. These acceptance provisions are evaluated in accordance with (b), (c) and (d),
below.

“(b) Acceptance provisions that grant a right of return or exchange on the basis of subjective matters.”

This criteria does not apply, because no right of return or exchange is granted in our arrangements.

 Mary Beth Breslin, Attorney-Advisor

 Division of Corporation Finance

 United States Securities and Exchange Commission

 October 11, 2005

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“(c) Acceptance provisions based on seller-specified objective criteria. An example of such a provision is one that gives the customer a right of return or replacement if the delivered
product is defective or fails to meet the vendor’s published specifications for the product.”

We do not grant a right of return, so this is not applicable.

“(d) Acceptance provisions based on customer-specified objective criteria. These provisions are referred to in this document (SAB Topic 13) as “customer-specific acceptance
provisions” against which substantial completion and contract fulfillment must be evaluated. While formal customer sign-off provides the best evidence that these acceptance criteria have been met, revenue recognition also would be
appropriate, presuming all other revenue recognition criteria have been met, if the seller reliably demonstrates that the delivered products or services meet all of the specified criteria prior to customer acceptance. (Emphasis added).
For example, if a seller reliably demonstrates that a delivered product meets the customer-specified objective criteria set forth in the arrangement, the delivery criterion would generally be satisfied when title and the risks and rewards of
ownership transfers unless product performance may reasonably be different under the customer’s testing conditions specified by the acceptance provisions. Further, the seller should consider whether it would be successful in enforcing a claim
for payment even in the absence of formal sign-off. Whether the vendor has fulfilled the terms of the contract before customer acceptance is a matter of contract law, and depending on the facts and circumstances, an opinion of counsel may be
necessary to reach a conclusion.”

When we sell equipment where the customer’s specifications have not been previously met with at least two similarly configured systems with similar process specifications, we defer all
revenue (both product and installation) and the directly related incurred costs at the time of shipment. These deferred revenues and costs are later recognized in income at the time of customer acceptance. Conversely, when we have previously
completed at least two or more prior installations and obtained customer acceptance of similarly configured equipment, with similar acceptance criterion, we have effectively demonstrated that the delivered equipment meets the customer-specific
acceptance provisions, and we recognize the revenue allocated to the delivered equipment unit of accounting unless product performance may reasonably be different under the customer’s testing conditions specified by the acceptance provisions.
Our position regarding acceptance is supported by the fact that in the twenty years Amtech has been in the equipment business, a customer has returned equipment only once and that was a product that would have been considered a new product,
requiring 100% deferral, under our revenue recognition policy.

 Mary Beth Breslin, Attorney-Advisor

 Division of Corporation Finance

 United States Securities and Exchange Commission

 October 11, 2005

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 The above analysis provides a sound foundation for our deferral and recognition of the equipment
revenue. However, the installation and customer sign-off often occur in a period subsequent to the period in which the equipment is delivered. In other words, the installation services have not been delivered or completed. Therefore, revenue
attributable to the installation unit of accounting is always deferred until the installation is complete and accepted, as this is not considered inconsequential or perfunctory in relation to the installation unit of accounting. We have also
considered whether there are any remaining performance obligations that might affect our recognition of revenue, as follows:

 SAB Topic 13A3.c. Inconsequential or perfunctory performance obligations

 “Question 1

 Does the failure to complete all activities related to a unit of accounting preclude recognition of revenue for that unit of accounting?

 Interpretive Response:

 No. Assuming all other recognition criteria are met, revenue for the unit of
accounting may be recognized in its entirety if the seller’s remaining obligation is inconsequential or perfunctory.”

 “A seller should substantially complete or fulfill the terms specified in the arrangement related to the unit of accounting at issue in order for
delivery or performance to have occurred. When applying the substantially complete notion, the staff believes that only inconsequential or perfunctory actions may remain incomplete such that the failure to complete the actions would not result in
the customer receiving a refund or rejecting the delivered products or services performed to date. (emphasis added) In addition, the seller should have a demonstrated history of completing the remaining tasks in a timely manner and
reliably estimatin