8-K

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                       SECURITIES AND EXCHANGE COMMISSION

                            Washington, D.C.  20549
                                  ____________

                                    Form 8-K


                                 CURRENT REPORT




                     Pursuant to Section 13 or 15(d) of the

                        Securities Exchange Act of 1934




Date of report (Date of earliest event reported):    August 26, 1996



                                 TEGAL CORPORATION                    
    _______________________________________________________________________
             (Exact name of registrant as specified in its charter)


   Delaware                        1-26824                       68-0370244
- -------------                    -----------                 ------------------
  (State of                      (Commission                   (IRS Employer
Incorporation)                   File Number)                Identification No.)



          2201 S. McDowell Blvd., P.O. Box 6020, Petaluma CA 94955-6020       
    _______________________________________________________________________
              (Address of principal executive offices) (Zip Code)



                                 (707) 763-5600
               __________________________________________________
              (Registrant's telephone number, including area code)




          ___________________________________________________________
         (former name or former address, if changed since last report)
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Item 5.  Other Events.

          On August 26, 1996, Tegal Corporation issued a press release, a copy
of which is attached hereto as Exhibit 99.1.  The information contained in such
press release is incorporated by reference herein in its entirety.


Item 7.  Financial Statements, Pro Forma Financial Information and Exhibits.

     (c)  The following exhibit is filed as part of this Report:

          99.1   Press Release of Tegal Corporation dated August 26, 1996.





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                                   SIGNATURE

          Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.


Dated:  September 4, 1996

                                  TEGAL CORPORATION



                                  By: /s/ David Curtis
                                     --------------------------------
                                     Name:   David Curtis
                                     Title:  Vice President, Finance and
                                             Administration and Chief Financial
                                             Officer





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                                 EXHIBIT INDEX

Exhibits.
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  99.1      Press Release of Tegal Corporation dated August 26, 1996.





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EX-99.1

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                                                                EXHIBIT 99.1

[TEGAL LOGO]                                                    NEWS RELEASE
Tegal Corporation
2201 S. McDowell Blvd., P.O. Box 6020, Petaluma, CA 94955-6020
                  Telephone (707) 763-5600 Fax (707) 765-8311

At Tegal Corporation:
David Curtis
Vice President, Finance and Administration
and Chief Financial Officer
(707) 765-5630


FOR IMMEDIATE RELEASE
- ---------------------


                     TEGAL ANNOUNCES REDUCTION IN WORKFORCE

        PETALUMA, Calif., August 26, 1996--Tegal Corporation (Nasdaq: TGAL)
announced today that it will reduce its global workforce by approximately 12
percent.  

        "The semiconductor capital equipment industry has experienced a
slowdown of orders due to excess capacity and that slowdown is also affecting
Tegal," noted Robert V. Hery, Chairman, President and CEO. "As a result, Tegal
has found it necessary to adjust its employment to its current level of
business. A reduction in force is a painful decision to make, but a necessary
one in light of the current outlook. Given this outlook, we expect quarter to
quarter revenues and earnings to decline below current analyst estimates,
beginning this quarter and that these declines will be commensurate with what
is happening in the industry as a whole," concluded Hery.

        Tegal Corporation, headquartered in Petaluma, California, is a leading
designer and manufacturer of plasma etch systems used in the production of
integrated circuits (ICs). Etching is a key process and must be performed
multiple times in the production of an IC. Tegal markets and services its
systems in all major regions of the world in which ICs are manufactured.

                                    --MORE--
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TEGAL ANNOUNCES REDUCTION IN WORKFORCE
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                              CAUTIONARY STATEMENT

The forward-looking statements in the above news release relate to the
near-term semiconductor capital equipment industry outlook, demand for the
Company's products, the Company's quarterly revenue prospects for the next two
or three quarters and other matters contained in such news release. Such
statements are based on concurrent expectations and beliefs and involve a
number of uncertainties and risks that could cause the actual results to differ
materially from those projected. Such uncertainties and risks include, but are
not limited to, recent weakening of demand for semiconductor manufacturing
equipment, particularly for equipment procured for capacity additions such as
the Company's non-critical etch systems, the cyclicality of the semiconductor
industry, dependence on recently introduced systems for the critical etch
markets, impediments to customer acceptance, fluctuations in quarterly
operating results, competitive pricing pressures, the introduction of
competitive products having technological and/or pricing advantages, the
importance of "Mix and Match" purchasing philosophy to non-critical etch system
sales, product volume and mix and other risks detailed from time to time in the
Company's SEC reports. For further information, refer to the business
description and additional risk factors sections included in the Company's Form
10-K for the year ended March 31, 1996, as filed with Security and Exchange
Commission.  


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