<PAGE>


                     SECURITIES AND EXCHANGE COMMISSION
                           Washington, D.C.  20549
                                ______________

                                 FORM 10-KSB

(Mark One)
[ X ]  Annual report under Section 13 or 15 (d) of the Securities 
       Exchange Act of 1934  [Fee required] 

          For the fiscal year ended DECEMBER 30, 1995, or

[    ]  Transition report under Section 13 or 15 (d) of the  Securities
        Exchange Act of 1934 
        [No fee required] 

       For the transition period from _________ to __________  


                          Commission file number 0-11880

                            HYTEK MICROSYSTEMS, INC.
                  (Name of small business issuer in its charter)

         California                                 94-2234140
(State or other jurisdiction of                 (I.R.S. Employer
incorporation or organization)                  Identification No.)

400 Hot Springs Road, Carson City, Nevada             89706
(Address of principal executive offices)            (Zip Code)

Issuer's telephone number, including area code:  (702) 883-0820

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

Securities registered pursuant to Section 12(g) of the Exchange Act:

                    Common Stock, no par value
                         (Title of Class)

Check whether the issuer (1) filed all reports required to be filed by 
Section 13 or 15(d) of the  Exchange Act during the past 12 months (or for 
such shorter period that the registrant was required to file such reports), 
and (2) has been subject to such filing requirements for the past 90 days.   
                              Yes ___X___         No  ______

Check if there is no disclosure of delinquent filers in response to Item 405 of
Regulation S-B contained in this form, and no disclosure will 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-KSB or any
amendment to this Form 10-KSB.    [     ]

Revenues of the Issuer for the most recent fiscal year ended December 30, 1995
were:  $5,409,000.                           

The aggregate market value of the voting stock held by non-affiliates of the
registrant (based on the average of the bid and asked prices reported on the
Over the Counter bulletin board of the National Association of Securities
Dealers, Inc.) on March 15, 1996 was approximately $4,422,884.  For purposes of
such calculation,  shares of Common Stock held by each executive officer and
director and by each person who owns more than 5% of the outstanding Common
Stock have been excluded in that such persons may be deemed to be affiliates. 
This determination of affiliate status is not necessarily a conclusive
determination for other purposes.

As of March 18, 1996, the issuer had outstanding 2,868,091 shares of Common
Stock, no par value.

                    DOCUMENTS INCORPORATED BY REFERENCE

Parts of the Company's definitive Proxy Statement for its Annual Meeting of
Shareholders to be held on May 17, 1996 (the "Proxy Statement") are incorporated
by reference into Part III of this Annual Report on Form 10-KSB.


<PAGE>


                                   PART I

ITEM 1.   DESCRIPTION OF BUSINESS.

     Hytek Microsystems, Inc.  ("Hytek" or the "Company") designs, 
manufactures, markets and sells custom and standard hybrid microcircuits.  
These microcircuits utilize thick film technology and consist of conductive 
and non-conductive inks that are bonded onto a substrate and interconnected 
with various subminiature electronic components to form a hybrid 
microcircuit.  In addition to custom thick film hybrid microcircuits, the 
Company also manufactures delay lines, thermo-electric cooler controllers and 
laser diode driver standard products.

Net  revenues in 1995 increased 30%  from 1994 levels. The Company had a net 
profit of $521,000 in 1995 as compared to a net profit of $2,000 during 1994. 
During 1995, the Company had negative cash flow  but experienced an overall 
net increase in total assets and working capital position from the 1994 
year-end. See "Management's Discussion and Analysis or Plan of Operation" in 
Part II, Item 6 hereof.

Hytek was incorporated as a California corporation on January 4, 1974.  
Unless the context otherwise requires, the terms "Hytek" and the "Company" 
refer to Hytek Microsystems, Inc.   See Note 1 of Notes to Financial 
Statements.

This Annual Report on Form 10-KSB contains 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.  Actual results could differ materially 
from those projected in the forward-looking statements as a result of the 
risk factors set forth below and elsewhere in this Report.  See "Management's 
Discussion and Analysis or Plan of Operation--Factors Affecting Future 
Results." The Company has attempted to identify forward-looking statements by 
placing an asterisk immediately following the sentence or phrase containing 
the forward-looking statement(s).

PRODUCTS AND MARKETS

     Products manufactured by the Company are sold primarily to original 
equipment manufacturers (OEMs) serving the military, computing, 
telecommunications, medical and industrial electronic systems, and automatic 
test equipment markets.  Approximately 88% of the Company's net revenues in 
1995 were derived from products designed and manufactured to meet a 
particular customer's specifications.  The remaining 12% of net revenues in 
1995 were accounted for by standard products designed by the Company's 
engineering staff.

     During 1995,  approximately 70% of the Company's revenues were derived 
from commercial and industrial private sector programs.  This is a 
significant change from the prior year when over 80% of revenues were derived 
from government-related programs.  Reductions in defense spending by the U.S. 
Government has reduced the number of opportunities in the military and 
government  market and created heavy competition for the remaining business. 

     From 1987, when the Company was certified under MIL-Standard-1772,  
through 1994, sales of military and government products have increased.  1995 
has been the first year that the Company has experienced a decline in the 
sale of military and government products.  The Company has actively pursued 
growth in the military market since 1987 and continued to do so during 1995.  
Offshore producers with significantly lower costs have in the past been 
precluded from participating in many U.S. military applications; however, it 
is not certain that this preclusion will remain in effect in the future.  
Military products are subject to much more stringent criteria than the 
commercial product manufacturing and have in the past commanded significantly 
higher prices.  The Company intends to continue its efforts to remain 
competitive in the military market. *



                                      2

<PAGE>


     Projections for overall future defense spending by the U.S. Government 
are uncertain at this time.  However, it is anticipated that the electronics 
content of future defense spending will remain somewhat stable. *  Recent 
changes in federal procurement practices, such as Commercial Off The Shelf 
(COTS) purchasing, may further increase the competition in the military and 
government market. *  While the Company believes that the outlook for 
increased military business is uncertain,  we intend to continue  active 
participation in the military market while simultaneously attempting to 
develop additional custom and standard products for commercial markets. *  
The development of new standard commercial products may help to offset the 
potential negative effects of additional reductions in the military 
electronics market that could be forthcoming in future years. * However, 
there can be no assurance that new standard commercial products being 
developed or to be developed by the Company will achieve market acceptance in 
the commercial arena.

     The commercial custom hybrid market has historically been an extremely 
competitive, low margin arena.  In many commercial applications, U.S. 
manufacturers are competing against offshore producers that have 
significantly lower costs.  However, there are certain segments of this 
market that require high reliability custom hybrid products.  Such high 
reliability products command higher prices and margins.  It is in this 
segment of the commercial market where the Company has been successful during 
1995. 

     Historically, a substantial majority of the Company's revenues have been 
derived from custom products that are manufactured to a customer's 
specifications for a unique application.  While the Company still derives a 
large majority of its revenues from custom products, it has placed an 
increased emphasis on the development of additional standard products.  
Custom products require significant engineering and development resources to 
bring each new hybrid into production.  These products generally have a 
shorter life cycle than standard products and fit only a single 
customer-specific application.  Although standard products may also require 
significant one-time development effort, they usually have a much longer life 
cycle and are designed for use in multiple applications by more than one 
customer.

       In February 1993, the Company announced a new standard commercial 
product, the Thermo-Electric Cooler Controller (TECC), which has applications 
in fiber optic communications and various "detector" product markets.  During 
1994, additional TECC devices were designed and introduced.  These products 
have received favorable response from the marketplace and have been shipped 
to a wide variety of customers.  Further, during 1995, the Company introduced 
its High Speed Laser Diode Driver (HSLDD).  The Company expects the market 
for these products to grow as new communications technologies develop, and as 
a result of recent federal de-regulation in the telecommunications industry. 
* Hytek expects to continue its research and development and sales promotion 
efforts in this area. *

HYBRID CIRCUIT TECHNOLOGY

     Complex electrical circuits require the integration, in a single 
package, of various resistors, transistors and other components.  The 
principal packaging technologies used in producing electrical circuits 
include printed circuit boards, integrated circuits, thick film hybrid 
circuits and thin film hybrid circuits.  These technologies are not 
interchangeable in all applications, and the extent to which they are 
interchangeable depends on such requirements as size, performance, 
reliability and cost.


                                      3

<PAGE>



Thick film hybrid circuit technology is a subminiature electronic packaging 
method.  The term "thick film network" describes a method for screen printing 
conductors, resistors and capacitors onto a ceramic substrate.  This thick 
film network becomes a hybrid circuit when components such as integrated 
circuits, semiconductors, capacitors and inductors are added to the network 
in order to form a functioning electrical circuit.

     Theoretically, hybrid circuit packaging techniques can be employed in 
virtually any electronic application, but they have various advantages and 
disadvantages in any given application as compared with alternative  
techniques. In general, the alternative techniques are printed circuit 
designs, integrated circuits and thin film hybrid technology.

     In those applications in which either hybrid circuits or printed circuit 
boards can be used, hybrid circuits often offer the advantages of size 
reduction, increased performance, reduced cost and proprietorship.

     Hybrid circuit packaging techniques are generally chosen over integrated 
circuit designs if the circuits are difficult to integrate, or if the higher 
cost of an integrated circuit is not warranted.  For example, circuit 
applications requiring inductors, large capacitors or devices from several 
semiconductor technologies  cannot currently be integrated into a silicon 
chip. However, as integrated circuit technology advances rapidly, currently 
there are fewer  such cases and the advantages of hybrid technology have been 
eroding away.  Despite this erosion, not all applications are adaptable to 
integrated circuit technology; therefore; hybrid technology remains as a 
stable alternative for certain applications.

     While thin film hybrid technology allows for greater size reductions and 
more compact circuits than does thick film hybrid technology, it is a more 
expensive process and requires a much larger initial investment in process 
equipment.  As a result of these cost differences, the Company believes that 
there will continue to be a significant market for hybrid circuits produced 
with thick film technology.

     All of the microcircuits currently produced by Hytek are manufactured 
using thick film hybrid circuit packaging techniques, including thick film 
screen print, firing and laser trimming, chip and wire assembly, and 
automatic testing. The Company may, however, seek to develop additional 
process technologies in the future that could enable the Company to offer 
more sophisticated circuits than those currently provided by Hytek. *

PRODUCT APPLICATIONS

     Custom products accounted for approximately 88% of the Company's sales 
in 1995.  These products serve a variety of applications in the oil 
exploration, military, computing, telecommunications, and industrial markets. 
In the production of custom products, the Company generally accepts full 
responsibility for product design, having received blueprints and/or input 
and output specifications from the potential customer.  In most cases, 
prototypes are developed and delivered to the customer, and are evaluated by 
the customer, before a firm order for production quantities is placed.  In 
the case of a new custom product, a typical production cycle time from 
initial customer contact to shipment of the product in commercial quantities 
would be 20 to 30 weeks.  The Company places a strong emphasis on developing 
a working relationship between its own engineering staff and the engineering 
staff of a potential customer during the product development phase.

     Standard products accounted for approximately 12% of the Company's sales 
in 1995.  These products consist of delay lines, thermo-electric cooler 
controllers and laser diode driver products produced for applications in the 
military, computing, industrial electronic systems, telecommunications, and 
automatic test equipment markets.

                                       4

<PAGE>



     Within the primary markets served by the Company' s customers, the
following are some applications in which the Company's custom and standard
products are currently being used:

          OIL EXPLORATION -- geophysical measurement equipment.

          MILITARY -- communications, guidance systems, delay lines, fuses, and
          avionics.
          
          COMPUTING -- delay lines, VLSI thick film packages, gate arrays, disk
          drive controllers, dynamic memory and networking circuits for data
          processing. 
          
          TELECOMMUNICATIONS -- video systems, fiber optical data transmission
          networks, solid state relays, subscriber line interface circuits,
          paging systems and custom logic arrays.
          
          INDUSTRIAL ELECTRONIC SYSTEMS -- measurement and diagnostics on
          rotating machinery.
          
          AUTOMATIC TEST EQUIPMENT --  Integrated circuit test systems.


MARKETING

     The Company markets its products in the United States through its own 
sales staff and through independent sales  representatives.  At December 30, 
1995, the Company's direct sales staff consisted of three employees operating 
from the Company's principal office in Carson City.  In addition, at such 
date the Company had three independent sales representatives located 
throughout the United States and one independent representative located in 
Israel.

     In addition to this marketing organization, the Company uses its 
technical engineering staff to assist in its marketing effort.  In this 
marketing effort, the Company first seeks to identify product types with 
component functions that can be well served utilizing hybrid circuit 
packaging.  The  Company then identifies and contacts the manufacturers or 
proposed manufacturers of the particular product types.  The initial contact 
is usually made by a sales representative for the geographic area.  If the 
proposed sale involves a custom product, the Company's in-house design and 
engineering staff support the sales effort.  In addition, at the present 
time, senior members of management of the Company are directly involved in 
the marketing and sales activities of the Company.

     The Company has identified certain existing customers who it feels offer 
greater potential for increased levels of future business.  The Company 
strives to maintain a higher level of contact and customer support for these 
"key accounts".

     The Company's Carson City, Nevada facility is MIL-Standard-1772 
certified and qualified.  This certification is a prerequisite to participate 
in certain military contracts, and is subject to periodic audits by the U.S. 
government. Loss of the MIL-Standard-1772 certification would have a material 
adverse impact on the Company's business prospects and financial condition.

CUSTOMERS

     During 1995, the Company's five largest customers accounted for 81% of 
the Company's net revenues.  Those customers were Chesapeake Sciences 
Corporation (62%), TRW, Inc. (7%), Lockheed-Martin Corporation (6%), Texas 
Instruments, Inc. (3%) and Litton Applied Technology, Inc. (3%).  The Company 
anticipates a continuing business relationship with all of these customers in 
the future. * A large portion (72%) of the Company's backlog of orders for 
1996 is attributable to Chesapeake Sciences Corporation.  Any lengthy 
disruption in the supply of materials for the Chesapeake Sciences program 
would have a significant negative effect on


                                      5

<PAGE>

revenues and earnings during that quarterly period.  Any delay in scheduled 
shipments to, or cancellation of orders by Chesapeake, would have a material 
adverse effect on the Company's business, results of operations and financial 
condition.

MANUFACTURING

     Each hybrid product produced by the Company passes through a number of
complex processes, each of which requires a high degree of skill and precision.

     The hybrid manufacturing process begins with a blueprint, which, in the 
case of a custom product, is produced by, or with the assistance of, the 
customer.  This blueprint is the basis for an engineering print that the 
Company produces, which in turn serves to provide a set of artwork for each 
product. The artwork consists of up to 20 photographic negatives, one for 
each layer of imprint on the substrate described below.  The artwork is then 
photographically reduced and used to generate stainless steel screens, which 
are used in the printing process.

     The screens are used to print on substrates, which are generally 
miniature ceramic wafers.  Metallic conductive and nonconductive inks (thick 
films) are printed on the substrates.  Those films, when fired, will conduct 
and resist the flow of electric current.  The drying or firing process is 
achieved using temperature-controlled furnaces, typically operating in the 
range of 525DEG. Celsius to 935DEG.  Celsius.  Each printing must be fired 
before the next one is started.

     After printing, resistance values are adjusted by high precision laser 
trimming.  Laser cuts are made in the resistive films to alter the resistance 
value, using computer-controlled laser equipment.  During the trimming 
process, the electrical characteristics are simultaneously retested against 
specification before the substrate is passed to assembly.

     In assembly, which is primarily a manual process, other electronic 
components, such as integrated circuits, semiconductors, capacitors and 
inductors, are added to the thick film substrate, thus resulting in a hybrid 
circuit.  Positioning is critical, and the work is primarily done under 
microscopes.  Wire bonding, using miniaturized wire, is also done under 
microscopes.  Wire bonding provides the electrical connection from the 
attached components to the printed substrate.  The hybrid circuit is then 
packaged and hermetically sealed in metal, ceramic or plastic.

     Much of the Company's test equipment is automated and computer 
controlled, each unit being subjected to tests at various points in the 
production process as well as to a final test by the quality assurance staff. 
Product yield is dependent on environmental control as well as stringent 
process and production control.

     The primary materials from which the Company manufactures its hybrid 
products are resistive materials (wire, alloys and inks), ceramic bases and 
electronic components (primarily integrated circuits, capacitors and 
inductors). The raw materials and components that Hytek purchases are 
generally available from several sources.  Some of the Company's major 
suppliers include Aegis, Inc., Circuit Functions, Inc., E. I. DuPont,  
Electro Science Laboratories, Semi-Films Inc., Harris Semiconductor, Inc. and 
Micross Components, Inc.. Although the Company has at times experienced long 
lead times with respect to deliveries from its vendors, the Company believes 
that adequate alternative sources of supply are currently available for a 
majority of the Company's materials requirements.  The Company currently has 
one "sole source" component utilized on its largest customer program 
(Chesapeake Sciences).  Any significant delay in shipments from,  or 
disruption of manufacturing capability by, this sole source supplier would 
create a material adverse impact on the Company's revenues and results of 
operations.


                                       6

<PAGE>


     Government regulations impose various environmental controls on the 
chemicals used in electronics manufacturing.  The Company employs various 
safeguards to avoid the discharge of harmful materials into the environment 
and believes that its activities conform to present state and federal 
environmental regulations.   However, there can be no assurance that the 
Company will not in the future be exposed to increased costs relating to 
required clean-up or compliance with ever-tightening regulations. * The 
Company complies with new federal labeling regulations, which took effect in 
May 1993, regarding the use of Ozone Depleting Chemicals (ODCs) as set forth 
in the Clean Air Act of 1990. The new labeling requirements  have had only a 
minor cost impact on operations.  At the present time, the Company is not 
aware of any other proposed or pending government regulation that would have 
a material impact on the operations or financial condition of the Company. *

RESEARCH AND DEVELOPMENT

     During 1995, the Company completed the development of its High Speed 
Laser Diode Driver (model HY-6110).  The device was released to production 
and introduced to the marketplace in the spring of 1995.  Although sales of 
this product were minimal during 1995, certain customers have ordered custom 
configurations and "system integrations" of the product.  The Company 
believes this product has growth potential and that future revenue will 
increase as the product is supported by larger amounts of advertising and 
promotion. *

     Further, during 1995, the Company began development efforts on a hybrid 
D/C-to-D/C converter product.  This is a joint development effort with a 
nationally recognized manufacturer of converter and power supply products.  
The initial product from this joint development effort will be targeted at 
the military market.  The initial circuit design for this product has been 
completed.  The Company expects to being prototype development in April 1996. 
*

     During 1995 and 1994, the Company spent $592,000 and $647,000, 
respectively, on research and development efforts.  The decrease in 
expenditure in 1995 is primarily the result of changes in the mix of  
personnel devoted to development efforts.  All expenditures are expensed as 
incurred.

COMPETITION

     Because of the variety of applications in the markets it serves, and a 
smaller military market, the Company faces significant competition from a 
variety of sources.  Most of the Company's competitors have substantially 
greater financial, marketing, manufacturing, engineering and management 
resources than the Company.  However, the Company believes that its smaller 
size, in some instances, provides for greater flexibility in meeting customer 
requirements, and is not necessarily detrimental to the Company's competitive 
position.

     The Company believes that the hybrid circuit industry includes large 
OEMs, such as IBM, TRW, Inc. and Western Electric, that manufacture 
exclusively for their own use (so called "captive" manufacturers), and other 
OEMs, such as Teledyne Industries, Inc.  and Hughes Aircraft Co., that 
manufacture for both their own use and for sale to others.  Some of these 
large "captive" and OEM hybrid manufacturers have curtailed or reduced their 
internal hybrid operations and begun to procure their hybrid requirements 
from outside sources.   This has led to increased opportunities for the 
entire hybrid circuit industry.  
     
     In addition, there exists a large number of independent hybrid circuit 
manufacturers, such as the Company, that manufacture exclusively for sale to 
others.  Further, over 30 of the known independent manufacturers are 
certified to MIL-Standard-1772, as is the Company.  The Company's current 
share of the overall hybrid circuit market is small.


                                     7

<PAGE>

     
     In those applications where hybrid circuits and integrated circuits are 
interchangeable, hybrid circuit manufacturers often compete with major 
integrated circuit manufacturers.

     The primary factors of competition in the markets served by the Company 
are product reliability, timely delivery, price, performance and stability of 
the manufacturer.  The Company believes that it generally competes favorably 
with respect to all of these factors; however, stability, has been a concern 
to certain of the Company's customers during past  years.  The improvement in 
revenues and earnings for the past two years should help to strengthen the 
stability factor. *

TRADEMARKS, PATENTS AND LICENSES

     The Company, at this time, has no registered trademarks or patents on 
its current products. However, on March 7, 1995, the Company  filed an 
application for a patent on the circuitry developed for its High Speed Laser 
Diode Driver. In September 1995, the Company was notified by the U. S. 
Department of Commerce Patent Office that all claims made in the application 
regarding this device had been allowed.  The Company is proceeding with the 
patent registration process. As other new products are developed, the Company 
will pursue trademarks or patents as appropriate.  The Company has no 
licenses material to the conduct of its business.

EMPLOYEES

     As of December 30, 1995, the Company employed a total of 63 full-time 
employees, of whom 48 were in manufacturing, three were in marketing and 
sales, ten were in research and development and two were in administration. 
The Company's success depends in part on its ability to attract and retain 
skilled personnel, for whom there is strong demand.   None of the Company's 
employees are covered under a collective bargaining agreement, and the 
Company has not experienced any labor strike or related work stoppage.

GOVERNMENT CONTRACTS

     During 1995, the Company derived approximately 30% of its total revenues 
from government contracts and subcontracts.  Such contracts and subcontracts 
generally contain provisions allowing termination for the convenience of the 
government.  In the event of such termination, the Company would generally be 
entitled to receive a termination settlement consisting of (i) the contract 
price for completed items accepted by the government or prime contractor and 
(ii) the Company's costs incurred in the performance of work terminated prior 
to completion, together with a reasonable profit on such work.  During 1995, 
the Company experienced no such termination for government convenience.

ITEM 2.   DESCRIPTION OF PROPERTY.

     The Company currently leases a total of approximately 23,800 square feet 
of manufacturing, engineering and support facilities in a single building in 
Carson City, Nevada.  The current lease term runs through June 2000.  The 
facility is currently operating at approximately 35% to 40% of capacity.  The 
Company believes that this facility has sufficient additional manufacturing  
capacity to significantly increase production levels with only minor 
increases in manufacturing overhead costs. *


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ITEM 3.   LEGAL PROCEEDINGS.

          Not applicable.

ITEM 4.   SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

          The Company did not submit any matters to a vote of security holders
during the fourth quarter of the fiscal year ended December 30, 1995.

               EXECUTIVE OFFICERS OF THE COMPANY

     Information concerning the executive officer of the Company who is not 
also a director of the Company is set forth below:
     
     Jon B. Presnell, age 45, was promoted to the position of Vice-President 
and General Manager of Custom Products for the Company in October 1993.  Mr. 
Presnell has been an employee of the Company since 1980, and served as 
General Manager of the Carson City facility from May 1987 through December 
1988.  From January 1989 until October 1993, Mr. Presnell served as Director 
of Sales and Marketing of the Company.  Prior to joining Hytek,  Mr. Presnell 
was employed as an Electrical Engineer for Texas Instruments, Inc.

                                PART II


ITEM 5.   MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.

     Incorporated by reference to the table on page F-2 of this Form 10-KSB 
entitled  "Selected Quarterly Financial Data (unaudited)" and the text 
following such table.

ITEM 6.   MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION.

      For purposes of this discussion, all dollar amounts have been rounded 
to the nearest $1,000 and all percentages have been rounded to the nearest 1%.

     This Annual Report on Form 10-KSB contains certain 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.  Actual results could 
differ materially from those projected in the forward-looking statements as a 
result of the risk factors set forth below and elsewhere in this Report.  See 
"Management's Discussion and Analysis or Plan of Operation--Factors Affecting 
Future Results."  The Company has attempted to identify forward-looking 
statements by placing an asterisk immediately following the sentence or 
phrase containing the forward-looking statement(s).


                                       9

<PAGE>


Results of Operations

     Net revenues in 1995 were $5,409,000, a 30% increase from 1994 net 
revenues of $4,162,000.  The increase in net revenues is attributable to the 
large, high-volume shipments to Chesapeake Sciences Corporation 
("Chesapeake") during 1995. Sales to Chesapeake represented 62% of the 
Company's net revenues in 1995.

     During 1995, approximately 70% of the Company's net revenues were 
derived from sales of products for commercial and industrial uses  and 30% 
were derived from sales  for military or government applications.  

     Cost of sales increased to $3,784,000, or 70% of net revenues in 1995, 
as compared to $3,045,000, or 73% of net revenues in 1994.  The increase in 
dollar amount is the result of the higher volume of products shipped in 1995. 
 The decrease in cost of sales as a percentage of net revenues is primarily 
the result of spreading fixed costs over a larger revenue base, partially 
offset by an increase in the cost of direct materials to 35% of net revenues 
in 1995 as compared to 34% of net revenues in 1994.  

     Research and development expenses were $592,000 in 1995, or 11% of net 
revenues, as compared to $647,000, or 16% of net revenues, in 1994.  The 
decrease in these expenses in 1995  is the result of changes in the mix of 
employee resources devoted to development projects.  The Company intends to 
continue its investment in the development of new standard products in the 
future, as resources permit, in an effort to reduce its current dependency on 
custom products.* The Company believes that standard  products may ultimately 
provide a more stable revenue stream over their life cycle and will utilize 
fewer engineering resources, after initial development, than will custom 
products.*

     Selling, general and administrative expenses were $513,000, or 9% of net 
revenues, in 1995, as compared to $469,000, or 11% of net revenues, in 1994.  
This increase in dollar amount is attributable to increased compensation 
costs resulting from additional employees, together with increases in legal 
expenses, bad debt reserves and shareholder-related expenses, partially 
offset by reductions in sales commission expense.  Revenues generated from 
Chesapeake are not subject to sales commission expense.  The decrease in 
selling, general and administrative expense as a percentage of net revenues 
results from spreading these expenses over a higher revenue base.

     The Company's operating income was $520,000 for 1995, as compared to 
virtually break-even in 1994.  This change from the prior year is the 
combined result of factors discussed above.

     Interest income was $3,000 for 1995, as compared to $2,000 in 1994, 
reflecting higher  average balances in the Company's money market account 
during portions of 1995.  The Company had interest expense of $2,000 in 1995 
as compared to no interest expense in 1994.  The interest expense incurred in 
1995 resulted from a short-term capital lease on equipment.

     The Company has no liability for income taxes for 1995 as a result of 
utilizing net operating loss carry-forwards from prior years.

     The Company accounts for deferred income taxes under the method 
prescribed by Financial Accounting Standards Board Statement No. 109, 
"Accounting for Income Taxes".  Under this statement,  deferred tax 
liabilities and assets are determined based  on differences between financial 
reporting and tax bases of assets and liabilities.  

                                       10

<PAGE>



FACTORS AFFECTING FUTURE RESULTS

     There are several factors that could significantly affect the future 
results of operations of the Company.

     Currently, the Company is very dependent on a single large customer, 
Chesapeake. Chesapeake accounts for $5,733,000, or 72%, of the 1995 ending 
backlog.  The loss of business from Chesapeake, cancellation of orders by By 
Chesapeake or rescheduling of delivery dates to Chesapeake would have a 
material adverse effect on the Companys business.  A disruption in 
Chesapeake's operations, or their loss of financial stability, would have a 
major adverse impact on the Company's future operations.  Further, the 
products for Chesapeake are ultimately utilized in undersea geophysical oil 
exploration.  Consequently, any major changes, either positive or negative, 
in the nature of the world-wide oil market, or significant changes in the 
demand for oil, could have a major impact on the Company's future business 
with Chesapeake Sciences. 

     During 1995, the Company realized 30% of its net revenues from 
government or military funded sources.  A significant portion of this 
business is dependent on the Company maintaining its MIL-STD-1772 
certification and qualification. While the Company fully expects to maintain 
this certification and qualification (*), the loss of same would have a 
material adverse impact on the Company's ability to capture this type of 
business.  In addition, the potential for additional decreases in defense 
spending exists and could adversely affect future operations.

     The Company is currently very dependent on the custom product market for 
a majority of its revenue.  This market is generally more volatile than the 
standard product market.  Further, the custom product market is considerably 
more competitive than the market for the Company's standard products.  The 
Company must maintain a cost-effective structure and operation to remain 
competitive in the custom product market.

     The Company is dependent on certain key suppliers of raw materials and 
for one high volume component, deals with a sole source supplier.  Any major 
disruption in production capability by these suppliers would have an adverse 
impact on the Company's future operations.

LIQUIDITY AND CAPITAL RESOURCES

     During 1995, total assets increased by $1,189,000 and the net effect of 
changes in current assets and current liabilities resulted in a net working 
capital increase of $523,000.

     The Company had $93,000 in cash and cash equivalents at December 30, 
1995, as compared to $384,000 at the 1994 fiscal year end.  This decrease is 
primarily the result of increased levels of accounts receivable and 
inventories associated with the Chesapeake Sciences program.

     Accounts receivable were $1,180,000 at December 30, 1995, as compared to 
$465,000 at the 1994 fiscal year end. The increase is attributable to the 
overall growth in sales during 1995 combined with a high level of sales 
during December 1995.   At December 30, 1995, accounts in excess of 60 days 
were less than 1% of total receivables as compared to 2% of total receivables 
at the 1994 fiscal year end.

     Inventories increased to $1,240,000 at December 30, 1995 as compared to 
$502,000 at the 1994 fiscal year end.  Inventories expanded significantly 
during 1995 as the result of significantly higher levels of production for 
the Chesapeake Sciences program and customer initiated schedule changes on 
another large program resulting in "stockpiling" of material for that program.


                                       11

<PAGE>

     Property, plant and equipment, net of accumulated depreciation, 
increased by $31,000 during 1995 as the result of additions to machinery and 
equipment during the year of $67,000 offset by fiscal 1995 depreciation of 
$36,000.  

     Accounts payable were $674,000 at December 30, 1995 as compared to 
$286,000 at 1994 fiscal year end.  This increase is attributable to increased 
raw material purchases required to support higher levels of production.

     Accrued employee compensation and benefits increased  by $82,000 from 
fiscal year end 1994 to fiscal year end 1995.  This increase is attributable 
to an increase in the number of employees during 1995 and the initiation, by 
the Company's Board of Directors, during 1995, of an employee profit sharing 
plan. At December 30, 1995, $75,000 had been accrued for the employee profit 
sharing plan.

     Accrued warranty reserve was constant at $75,000 at both December 30, 
1995 and December 31, 1994.

     Customer prepayments were $179,000 at December 30, 1995 as compared to 
$17,000 at December 31, 1994.  This increase is the result of payment 
received from a major customer who initiated delays in their delivery 
schedule and asked that the Company "stockpile" materials for future delivery.

      Commissions and other accrued liabilities were $130,000 at December 30, 
1995 as compared to $121,000 at December 31, 1994.  This increase is 
attributable to normal ongoing accruals, partially offset by reductions in 
accrued sales commissions.

     There are no income taxes payable at December 30, 1995 as the Company 
utilized a portion of its net operating loss carryforward to offset the 
income taxes computed on 1995 earnings.  The Company has remaining net 
operating loss carryforwards for Federal  income tax purposes at December 30, 
1995 of approximately $5.8 million.  These carryforwards will expire between 
2004 and 2008.

       At December 30, 1995, the Company had no long-term debt outstanding.  
However, as of December 11, 1995, the Company has established a line of 
credit for $100,000 with Sierra Bank of Nevada.  This line of credit is for a 
term of one year and bears  interest  at the prime rate plus 2.5%.  At 
December 30, 1995, the Company was in compliance with all of the covenants of 
the loan agreement.  This line of credit is collateralized with the Company's 
accounts receivable and inventories.  Management believes that ongoing 
operations during 1996 will provide sufficient cash to meet operating needs 
without  additional financing activity. *  However, should the Company need 
to  pursue additional debt or equity financing in the future, there is no 
certainty that such financing could be obtained or that the terms on which it 
might be obtained would be favorable.

FUTURE OUTLOOK

     The Company's backlog of unfilled customer orders has increased 
significantly.  Backlog at December 30, 1995 was $7,912,000 as compared to 
$2,816,000 at December 31, 1994. This increase in backlog is primarily due to 
the large orders received from Chesapeake Sciences during 1995.  

      Based on current backlog, the Company currently anticipates that 
revenues for the ensuing fiscal year will exceed those for fiscal 1995. *  
However, there can be no assurance that existing orders will not be cancelled.

                                      12

<PAGE>


     In addition, because customers may place orders for delivery at various 
times throughout the year, and because of the possibility of customer changes 
in delivery schedules or cancellation of orders, the Company's backlog as of 
any particular date may not be a reliable indicator of actual future sales.  

ITEM 7.   FINANCIAL STATEMENTS

     The financial statements of the Company (including the notes thereto) at 
December 30, 1995 and December 31, 1994 and for the years then ended, and the 
report of independent auditors thereon, are included herein on pages F- 3 
through F-16 of this Form 10-KSB.

ITEM 8.   CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
          FINANCIAL DISCLOSURE.

     Not applicable.

                                     PART III

ITEM 9.   DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL
          PERSONS; COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT.

     Information regarding directors of the Company is to be set forth under 
the heading titled "Election of Directors - Nominees for Director"  in the 
Company's Proxy Statement and is hereby incorporated herein by reference.

     Information regarding the executive officer of the Company who is not 
also a director of the Company is included in Part I of this Form 10-KSB 
under the heading "Executive Officers of the Company" and is hereby 
incorporated herein by reference.

     Information regarding compliance with Section 16(a) of the Securities 
Exchange Act of 1934 is to be set forth under the heading titled "Election of 
Directors - Compliance with Section 16(a) of the Exchange Act" in the 
Company's Proxy Statement and is hereby incorporated herein by reference. 

ITEM 10.  EXECUTIVE COMPENSATION.

     Information regarding the Company's remuneration of its executive 
officers and directors is to be set forth under the heading  "Election of 
Directors-Executive Compensation", "Election of Directors-Directors' 
Compensation" and "Election of Directors--Directors' Option Plan" in the 
Company's Proxy Statement, which information is incorporated herein by 
reference.

ITEM 11.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.

     Information regarding the security ownership of certain beneficial 
owners and management is to be set forth under the heading "Election of 
Directors - Security Ownership" in the Company's Proxy Statement, which 
information is incorporated herein by reference.

ITEM 12.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

     Not applicable.


                                     13

<PAGE>




ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K.

          (a)        EXHIBITS
                     
                    The exhibit index at page X-1, which follows the signature
          pages, is hereby incorporated by reference into this Item 13 (a).
                                             
          (b)  REPORTS ON FORM 8-K

                    There were no Current Reports on Form 8-K filed during the
                    fourth quarter of the Company's fiscal year ended December
                    30, 1995.


<PAGE>


                          HYTEK MICROSYSTEMS, INC.

    INDEX TO SELECTED QUARTERLY FINANCIAL DATA AND FINANCIAL STATEMENTS



                                                                REFERENCE PAGE
                                                                IN FORM 10-KSB
                                                                --------------

Selected Quarterly Financial Data (unaudited)  .  .  .  .  .  .  .  .   F-2

Balance Sheet, December 30, 1995
    and December 31, 1994   .  .  .  .  .  .  .  .  .  .  .  .  .  .  . F-3

Statement of Operations for the Years Ended  
    December 30, 1995 and December 31, 1994    .  .  .  .  .  .  .  .   F-4

Statement of Changes in Shareholders' Equity
   for the Years Ended December 30, 1995 and
   December 31, 1994     .  .  .  .  .  .  .  .  .  .  .  .  .  .  .    F-5

Statement of Cash Flows for the Years Ended
    December 30, 1995 and December 31, 1994 .  .  .  .  .  .  .  .  .   F-6

Notes to Financial Statements   .  .  .  .  .  .  .  .  .  .  .  .  .   F-7

Report of Independent Auditors   .  .  .  .  .  .  .  .  .  .  .  .  .  F-15

Consent of Independent Auditors   .  .  .  .  .  .  .  .  .  .  .  .  . F-16











                                        F-1
<PAGE>


                                        HYTEK MICROSYSTEMS, INC.

                           SELECTED QUARTERLY FINANCIAL DATA  (UNAUDITED)

                                (In thousands, except per share data)


<TABLE>
<CAPTION>

                                 ---------------------------------------------------------------------------------
                                                                       Quarter Ended
                                 ---------------------------------------------------------------------------------
                                            FISCAL       1995                        FISCAL      1994
                                 -------------------------------------   -----------------------------------------

                                  Dec. 30   Sept. 30  Jul. 1    Apr. 1    Dec. 31    Oct. 1     Jul. 2     Apr. 2
                                 --------  ---------  -------   ------   -------     ------     ------     -------
<S>                              <C>       <C>       <C>       <C>       <C>         <C>       <C>       <C> 
Net revenues                     $ 1,880   $ 1,309   $ 1,380   $   840   $ 1,083    $   956    $ 1,006    $ 1,117

Gross profit                     $   562   $   436   $   455   $   172   $   279    $   186    $   296    $   356

Net income (loss)                $   284   $   167   $   176   $  (106)  $   (12)   $   (72)   $    34    $    52

Net income (loss) per share      $   0.09  $   0.06  $   0.06  $ (0.04)  $   0.00   $ (0.03)   $   0.01   $   0.02

Market price range 
  per share              High    $   3.25  $   3.13  $   0.69  $   0.19  $   0.19   $   0.25   $   0.31   $   0.31
                         Low     $   1.50  $   0.38  $   0.06  $   0.06  $   0.06   $   0.09   $   0.13   $   0.25

------------------------------------------------------------------------------------------------------------------


</TABLE>

  Since January 1992, the Company's Common Stock has been traded in the 
  over-the-counter market but has not been quoted on the National Association 
  of Securities Dealers, Inc. Automated Quotation ("NASDAQ") System.  Since 
  March 26, 1992,  Hytek's Common Stock has been quoted on the OTC Bulletin 
  Board. The range of prices reported above indicates the high and low bid 
  quotations as provided by the National Quotation Bureau, Inc.  Such 
  quotations reflect inter-dealer prices, without retail markups, mark-downs or 
  commissions and may not represent actual transactions.

  As of March 18, 1996, there were approximately 244 holders of record of the 
  Company's Common Stock.

  The Company has never paid any cash dividends on its Commom Stock and has no 
  intentions of paying cash dividends in the foreseeable future.

  Per the terms of its loan agreement with Sierra Bank of Nevada, the Company 
 is prohibited from paying cash dividends at this time.


                                      F-2

<PAGE>

                           HYTEK MICROSYSTEMS, INC.

                                 BALANCE SHEET

                  December 30, 1995 and December 31, 1994

<TABLE>
<CAPTION>

                                 ASSETS                               12/30/95                 12/31/94
                                                                  ----------------         -----------------
<S>                                                              <C>                      <C>
Current assets:
  Cash and cash equivalents                                      $          92,995        $         383,555
  Accounts receivable - net of allowance for doubtful
     accounts of $20,000 in 1995 and  $6,741 in 1994                     1,179,847                  465,279
  Inventories                                                            1,239,785                  501,840
  Prepaid expenses and deposits                                             31,585                   30,198
                                                                  ----------------         ----------------

     Total current assets                                                2,544,212                1,380,872

 Property, plant and equipment, at cost
  less accumulated depreciation                                            101,375                   70,230

Other assets                                                                     0                    5,958
                                                                  ----------------         ----------------


                                                                 $       2,645,587        $       1,457,060
                                                                  ----------------         ----------------
                                                                  ----------------         ----------------


                LIABILITIES AND SHAREHOLDERS' EQUITY

Current liabilites:
  Accounts payable                                               $         673,531        $         285,857
  Accrued employee compensation and benefits                               191,267                  109,074
  Accrued warranty                                                          75,000                   75,000
  Customer pre-payments                                                    178,664                   16,919
  Commissions and other accrued liabilities                                129,747                  121,404
                                                                  ----------------         ----------------

     Total current liabilities                                           1,248,209                  608,254

Commitments                                                                     -                        -

Shareholders' equity:
  Common stock, no par value;  authorized - 7,500,000
       shares; issued and outstanding - 2,811,425 in 1995
       and 2,751,425 in 1994                                             4,913,806                4,886,275
  Accumulated deficit                                                  (3,516,428)              (4,037,469)
                                                                  ----------------         ----------------

     Total shareholders' equity                                          1,397,378                  848,806
                                                                  ----------------         ----------------

                                                                 $       2,645,587        $       1,457,060
                                                                  ----------------         ----------------
                                                                  ----------------         ----------------

</TABLE>


                         See accompanying notes.


                                    F-3

<PAGE>

                            HYTEK MICROSYSTEMS, INC.

                            STATEMENT OF OPERATIONS

              YEARS ENDED DECEMBER 30, 1995 AND DECEMBER 31, 1994

<TABLE>
<CAPTION>

                                           1995                   1994
                                   ---------------         ---------------
<S>                                <C>                     <C>
Net revenues                       $     5,409,072         $    4,161,588

Costs and expenses:
  Cost of sales                          3,783,726              3,044,741
  Research and development                 592,395                647,433
  Selling, general and
    administrative                         513,258                469,257
                                   ---------------         ---------------
    Total costs and expenses             4,889,379              4,161,431
                                   ---------------         ---------------

Operating income                          519,693                     157

Interest income                             3,198                   1,809
Interest expense                            1,850                    -
                                   ---------------         ---------------

Income  before provision
  for income taxes                        521,041                   1,966
Provision for income taxes                   -                       -
                                   ---------------         ---------------

Net income                         $      521,041          $        1,966
                                   ---------------         ---------------
                                   ---------------         ---------------




  Net income per common
  and dilutive common 
  equivalent share                 $          .18         $           .00
                                   ---------------         ---------------
                                   ---------------         ---------------



Common and common equivalent
  shares used in per share 
  calculations                          2,910,503               2,751,425


</TABLE>


                                     See accompanying notes.

                                       F-4

<PAGE>

                          HYTEK MICROSYSTEMS, INC.
                   STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY

                 YEARS ENDED DECEMBER 30, 1995 AND DECEMBER 31, 1994


<TABLE>
<CAPTION>
                                                       Common Stock 
                                                 -----------------------------                         Total
                                                                                   (Accumulated     Shareholders'
                                                     Shares          Amount          Deficit)          Equity     
                                                --------------  ---------------    -------------    --------------
<S>                                             <C>              <C>              <C>              <C>

Balances, January 1, 1994                          2,751,425     $  4,886,275     $ (4,039,435)    $    846,840
Net income                                                                               1,966            1,966
                                                 -----------     ------------     ------------     ------------

Balances, December 31, 1994                        2,751,425        4,886,275       (4,037,469)         848,806
Common Stock issued upon exercise
  of stock oiptions                                   60,000           27,531           -                27,531
Net income                                             -                -              521,041          521,041
                                                 -----------     ------------     ------------     ------------

Balances, December 30, 1995                        2,811,425     $  4,913,806     $ (3,516,428)    $  1,397,378
                                                 -----------     ------------     ------------     ------------
                                                 -----------     ------------     ------------     ------------


</TABLE>




                          See accompanying notes.




                                     F-5
<PAGE>


                              HYTEK MICROSYSTEMS, INC.

                              STATEMENT OF CASH FLOWS

              YEARS ENDED DECEMBER 30, 1995 AND DECEMBER 31, 1994

                INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS





<TABLE>
<CAPTION>

                                                                       1995               1994
                                                                  -------------       ----------
<S>                                                               <C>                 <C>
Cash flows from operating activities:
 
   Net income:                                                     $    521,041      $     1,966


   Adjustments to reconcile net income to net cash
     (used in) provided by operating activities:

        Depreciation and amortization                                    36,063           66,803
        Other assets                                                      5,958           11,712
        Accounts receivable, net                                       (714,568)         (26,124)
        Inventories                                                    (737,945)         318,665
        Prepaid expenses and other current assets                        (1,387)          16,979
        Accounts payable                                                387,674         (131,339)
        Accrued employee compensation and benefits                       82,193          (18,774)
        Accrued liabilities and customer prepayments                    170,088          (58,800)

                                                                  -------------       ----------
        Total adjustments                                              (771,924)         179,122
                                                                  -------------       ----------

        Net cash provided by (used in) operating activities            (250,883)         181,088

Cash flows from investing activities:
  Cash purchases of equipment                                           (67,208)         (12,925)
                                                                  -------------       ----------
        Net cash used in investing activities                           (67,208)         (12,925)

Cash flows from financing activities:
  Proceeds from exercise of stock options                                27,531                -
                                                                  -------------       ----------
       Net cash provided by financing activities                         27,531                -
                                                                  -------------       ----------

Net increase (decrease) in cash and cash equivalents                   (290,560)         168,163
Cash and cash equivalents at beginning of period                        383,555          215,392
                                                                  -------------       ----------
Cash and cash equivalents at end of period                         $     92,995       $  383,555
                                                                  -------------       ----------
                                                                  -------------       ----------
</TABLE>



                        See accompanying notes.

                                       F-6

<PAGE>


                            Hytek Microsystems, Inc.

                        Notes to Financial Statements

               Years ended December 30, 1995 and December 31, 1994


1.ACCOUNTING POLICIES

DESCRIPTION OF BUSINESS

The principal business of Hytek Microsystems, Inc. (the "Company") is the
engineering, manufacturing and sale of hybrid microcircuits.  Products
manufactured by the Company are sold primarily to original equipment
manufacturers (OEMs) serving the computer, telecommunications, military,
medical, industrial electronic system and automatic test equipment markets.  The
Company markets through its own sales staff and through independent sales
representatives.

BASIS OF PRESENTATION

The accompanying financial statements have been prepared in conformity with
generally accepted accounting principles which require the Company's management
to make estimates and assumptions that affect the amounts reported therein.
Actual results could vary from such estimates.  In addition, certain
reclassifications have been made to prior years' financial statements to conform
with the 1995 presentation.  The Company uses a 52/53 week fiscal year ending on
the last Saturday in December.  The years ended December 30, 1995, and December
31, 1994 were 52 week years.

CONCENTRATION OF RISK

The Company performs ongoing credit evaluations of its customers' financial
condition, and generally requires no collateral from its customers.  Non-
performance by these parties would result in losses up to the recorded amount of
the related receivables.  Management does not anticipate significant non-
performance, and believes the Company has adequately provided for uncollectible
receivables in the Company's allowance for doubtful accounts.

The Company has sales to certain customers which represent more than 10% of the
Company's net revenues.  In 1995, the Company had sales to Chesapeake Sciences
which aggregated 62% of net revenues.  The products sold to Chesapeake Sciences
are used in the eventual production of off-shore geophysical oil exploration
equipment.  Any volatility in the oil market could affect the operating results
of the Company.  In 1994, the Company had sales to E-Systems which aggregated
41% of net revenues.

                                      F-7

<PAGE>


                             Hytek Microsystems, Inc.

                    Notes to Financial Statements (continued)


1.ACCOUNTING POLICIES (CONTINUED)

The Company currently buys all of its resistor networks, an important 
component of its products, including those for sale to Chesapeake Sciences, 
from one supplier.  Although there are a limited number of manufacturers of 
the particular resister, management believes that other suppliers could 
provide similar networks.  A change in suppliers, however, could cause a 
delay in manufacturing and a possible loss of sales, which would adversely 
affect operating results.

CASH AND CASH EQUIVALENTS

Cash and cash equivalents consist of highly liquid debt instruments with
insignificant interest rate risk and with maturities of less than ninety days.

INVENTORIES

Inventories are stated at the lower of cost (determined using the first-in,
first-out method), or market.  Due to its nature, certain of the Company's
inventory at December 30, 1995 and December 31, 1994 is subject to technological
change and potential obsolescence.  Management does not anticipate these amounts
to be material, and believes that they have adequately provided for any losses
that may result.

PLANT AND EQUIPMENT

Plant and equipment are stated at cost.  Depreciation is provided on a straight-
line basis over the estimated useful lives of the assets, generally three to
five years.  Leasehold improvements are amortized over the term of the lease or
their estimated useful lives, whichever is shorter.

EARNINGS PER SHARE OF COMMON STOCK

Net income per share of common stock is computed by dividing the net income 
by the weighted average number of shares of common stock and dilutive common 
stock equivalents outstanding during the period.  The weighted average shares 
used to compute net income per share is approximately 2,910,000 and 2,751,000 
in 1995 and 1994, respectively.  Fully diluted per share amounts are the same 
as primary per share amounts for the periods presented.

                                       F-8


<PAGE>

                               Hytek Microsystems, Inc.

                     Notes to Financial Statements (continued)


1. ACCOUNTING POLICIES (CONTINUED)

INCOME TAXES

The Company accounts for income taxes using the provisions of Statement of
Financial Accounting Standards ("SFAS") No. 109, which requires that the
liability method be used.  Under this method, deferred tax assets and
liabilities are determined based on differences between financial reporting and
tax bases of assets and liabilities and are measured using the enacted tax rates
and laws that will be in effect when the temporary differences are expected to
reverse.  Additionally, SFAS No. 109 requires deferred tax liabilities and
assets be separated into current and non-current amounts based on the
classification of the related assets and liabilities for financial reporting
purposes.

STOCK-BASED COMPENSATION

The Company accounts for stock-based compensation in accordance with the
intrinsic value method prescribed by APB Opinion No. 25, "Accounting for Stock
Issued to Employees" ("APB No. 25").  Under the intrinsic value based method,
compensation cost is the excess, if any, of the quoted market price or fair
value of the stock at the grant date or other measurement date over the amount
an employee must pay to acquire the stock.

In October 1995, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 123, "Accounting for Stock-Based
Compensation" ("SFAS No. 123"), which is effective for the Company in 1996.
SFAS No. 123 allows companies the option of measuring and recognizing
compensation cost under the provisions of APB No. 25, or alternatively, by
measuring and recognizing stock-based compensation using a fair value based
methodology.  Under the fair value based method, compensation cost is measured
at the grant date based on the value of the award and is recognized over the
service period, which is usually the vesting period.  The Company anticipates
that it will continue the use of the intrinsic value method for accounting for
stock-based compensation, and accordingly, the adoption of SFAS No. 123 is not
expected to have a significant effect on the Company's financial condition or
results of operations.




                                       F-9


<PAGE>

                             Hytek Microsystems, Inc.

                    Notes to Financial Statements (continued)


2. INVENTORIES

Inventories consist of the following:

                                              1995       1994
                                         -----------------------
Finished goods                           $   21,100    $  30,203
Work-in-process                             547,590      172,934
Raw materials                               671,095      298,703
                                         -----------------------
                                         $1,239,785   $  501,840
                                         -----------------------
                                         -----------------------


3. PLANT AND EQUIPMENT

Plant and equipment consists of the following:

                                             1995       1994
                                         -----------------------

Leasehold improvements                     425,604      425,604
Machinery and equipment                  2,105,467    2,070,993
Furniture and fixtures                      10,972       10,972
Construction in progress                    11,686       -
                                         -----------------------
                                         2,553,729    2,507,569
                                         -----------------------
Less accumulated depreciation and
amortization                            (2,452,354)   (2,437,339)
                                         -----------------------
                                       $   101,375   $    70,230
                                         ----------------------- 
                                         ----------------------- 


Construction in progress at December 30, 1995 relates to uninstalled machinery
and equipment.

                                       F-10


<PAGE>


                              Hytek Microsystems, Inc.

                       Notes to Financial Statements (continued)


4. INCOME TAXES

The significant components of the Company's deferred tax assets and liabilities
as of December 30, 1995 are as follows:

Deferred tax assets:
   Net operating loss carryforwards                 $1,993,000
   Other                                               186,000
                                                    -----------
Total deferred tax assets                            2,179,000
Valuation allowance                                 (2,179,000)
                                                    -----------
Net deferred tax assets                             $    -
                                                    -----------
                                                    -----------


The valuation allowance as of December 31, 1994 was approximately $2,292,000 
resulting in a net decrease in the allowance of approximately $113,000 for 
the year ended December 30, 1995.

The provision for income taxes differs from the amount computed by applying 
the statutory federal tax rate to income before taxes due to the following:

                                             1995       1994
                                         ----------------------

Computed expected tax                    $177,000    $   1,000
Nondeductible expenses                      2,000       18,000
Benefit of operating loss
 carryforward                            (179,000)     (19,000)
                                         ----------------------
                                         $    -      $     -
                                         ----------------------
                                         ----------------------

As of December 30, 1995, the Company had a net operating loss carryforward for
Federal income tax purposes of approximately $5.8 million.  This carryforward
will expire between 2004 and 2008.  Future utilization of the Company's net
operating losses may be subject to an annual limitation in amount if there is a
greater than fifty percent change in ownership, as defined in Section 382 of the
Internal Revenue Code of 1986, as amended.


                                          F-11

<PAGE>

                                Hytek Microsystems, Inc.

                        Notes to Financial Statements (continued)


5. COMMITMENTS

The Company leases its administrative and production facility and also leases 
certain operating equipment under noncancelable operating lease arrangements 
with terms in excess of one year.  The aggregate future minimum annual rental 
commitment as of December 30, 1995 under these non-cancelable lease 
arrangements are as follows:

    1996                                  $166,000
    1997                                   171,000
    1998                                   172,000
    1999                                   173,000
    2000                                    89,000
                                        ----------
                                          $771,000
                                        ----------
                                        ----------


The Company's net rental expense charged to operations amounted to 
approximately $199,000 and $183,000 in 1995 and 1994, respectively.




                                      F-12

<PAGE>

                              Hytek Microsystems, Inc.

                      Notes to Financial Statements (continued)


6. STOCK OPTION PLANS

In February 1995, the Board of Directors of the Company (the "Board"), with 
the consent of its shareholders, authorized an increase to the number of 
shares reserved for issuance under the 1991 Stock Option Plan (the "1991 
Plan") to 276,175 shares of common stock.  The 1991 Plan expires May 2001 and 
96,175 shares were available for future grant as of December 30, 1995. The 
Company had a 1981 Incentive Stock Option Plan (the "1981 Plan") that expired 
in August 1991 and there were 140,000 options outstanding under this Plan at 
December 30, 1995. Outstanding stock options under the two plans are 
exercisable cumulatively in annual increments of one-third each year 
beginning one year after the grant date.  Options granted under the 1991 Plan 
and the 1981 Plan have terms of five years.  However, in February 1995, the 
Board extended the term of options under the 1981 Plan by five years, 
deferring expiration until 2000.  The exercise price of these extended 
options was in excess of the fair market value of the Company's common stock 
at the date of extension.  The following table shows the activity under the 
two plans:

                                       NUMBER OF       EXERCISE
                                        SHARES      PRICE PER SHARE
                                      ------------------------------
Options:
Outstanding at beginning of year       300,000     $0.19  -   $0.53
Granted                                185,000     $0.38  -   $1.44
Exercised                              (60,000)    $0.3   -   $0.53
Expired                                    -              -
Canceled                              (155,000)    $0.38  -   $0.41
                                      ---------
Outstanding at end of year             270,000
                                      ---------
                                      ---------
Exercisable at December 30, 1995       221,666     $0.19  -   $0.53
                                      ---------
                                      ---------



Under the 1991 Directors' Stock Option Plan (the "Directors' Plan"), 100,000 
shares of the Company's common stock had been reserved for issuance as of 
December 30, 1995, of which options to purchase 60,000 shares at an exercise 
price of $0.1875 had been granted.  None of the 60,000 exercisable options 
had been exercised as of December 30, 1995.  Options granted under the 
Directors' Plan become exercisable cumulatively on the first, second and 
third anniversaries of the grant date.  The Directors' Plan expires February 
2001.



                                         F-13

<PAGE>

                                Hytek Microsystems, Inc.

                      Notes to Financial Statements (continued)


6. STOCK OPTION PLANS  (CONTINUED)

The Company also has a Key Employee Stock Purchase Plan (the "Purchase Plan") 
under which key employees may be offered rights to purchase common stock at 
100% of the fair market value of such stock on the offering date.  As of 
December 30, 1995, 100,000 shares of the Company's common stock have been 
reserved for issuance under the Purchase Plan.  Under the Purchase Plan, the 
shares must vest at a rate of 33% per year.  Upon termination of employment 
of the shareholder, unvested shares are subject to repurchase by the Company 
at the original purchase price.  No current employees have purchased stock 
under the Purchase Plan.  As of December 30, 1995, all shares previously sold 
under the Purchase Plan to key employees had been repurchased by the Company, 
leaving 100,000 shares available for future purchase.  The Purchase Plan 
expires May 1996.

7. PROFIT SHARING PLAN

In February 1995 the Company's Board adopted the 1995 Profit Sharing Plan 
(the "Profit Sharing Plan") which is available to all eligible full-time 
employees of the Company, except executive officers of the Company, as 
defined. Under the Profit Sharing Plan, the Company will distribute to 
employees between 10% and 15% of the Company's pre-tax income, as defined.  
The distribution percentage is at the discretion of the Company's Board.  The 
Plan, which terminates by its own terms in December 2005, may be terminated 
or amended at any time by the Board. During the year ended December 30, 1995, 
the Board authorized $75,000 in profit sharing distributions to employees, 
which amount is included in accrued employee compensation in the accompanying 
balance sheet.

8. BUSINESS LOAN AGREEMENT

In December 1995 the Company entered into a revolving business loan agreement 
(the "Loan Agreement") with a bank under which it may borrow up to $100,000 
at the bank's prime rate plus 2.5% (aggregating 11% at December 30, 1995). 
Interest accrued shall be due and payable monthly up to the maturity date, 
December 5, 1996, at which time all unpaid principal and interest become due. 
The Loan Agreement is collateralized by all of the Company's accounts 
receivable and inventory.  Under the Loan Agreement, the Company is required 
to maintain a minimum net worth level, as defined.  The Loan Agreement also 
imposes certain limitations on the payment of dividends and incurrence of 
additional indebtedness.  At December 30, 1995, the Company had no 
outstanding borrowings under this Loan Agreement.

                                        F-14

<PAGE>


                         Report of Independent Auditors

The Board of Directors and Shareholders
Hytek Microsystems, Inc.

We have audited the accompanying balance sheet of Hytek Microsystems, Inc. at 
December 30, 1995 and December 31, 1994, and the related statements of 
operations, shareholders' equity, and cash flows for the years then ended. 
These financial statements are the responsibility of the Company's 
management. Our responsibility is to express an opinion on these financial 
statements based on our audits.

We conducted our audits in accordance with generally accepted auditing 
standards. Those standards require that we plan and perform the audit to 
obtain reasonable assurance about whether the financial statements are free 
of material misstatement. An audit includes examining on a test basis, 
evidence supporting the amounts and disclosures in the financial statements. 
An audit also includes assessing the accounting principles used and 
significant estimates made by management, as well as evaluating the overall 
financial statement presentation. We believe that our audits provide a 
reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in 
all material respects, the financial position of Hytek Microsystems, Inc. at 
December 30, 1995 and December 31, 1994, and the results of its operations 
and its cash flows for the years then ended in conformity with generally 
accepted accounting principles.

                                                 /s/ Ernst & Young LLP


Reno, Nevada
February 23, 1996



                                       F-15

<PAGE>

                                 SIGNATURES

     In accordance with Section 13 or 15(d) of the  Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.

                                        HYTEK MICROSYSTEMS, INC.


                                        By:  /s/ Charles S. Byrne
                                            ________________________
                                               Charles S. Byrne
                                               President and Chief
                                               Executive Officer

                                        Date:   March 25, 1996


                          POWER OF ATTORNEY

     KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints Charles S. Byrne and Shou-Chen Yih, or
either of them, his or her attorney-in-fact, each with the power of
substitution, for him or her in any and all capacities, to sign any amendments
to this Report on Form 10-KSB, 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 each of said attorneys-in-
fact, or his substitute or substitutes, may do or cause to be done by virtue
hereof.

     In accordance with the Exchange Act, 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/ Charles S. Byrne          President and Chief            March 25, 1996
__________________________    Executive Officer
    Charles S. Byrne          (Principal Executive
                              Officer), Chief Financial
                              Officer (Principal Financial
                              and Accounting Officer)
                              and Director

                                     S-1

<PAGE>

      SIGNATURE                        TITLE                    DATE
__________________________    ___________________________    _______________

  /s/ Robert Boschert         Director                       March 7, 1996
__________________________
    Robert Boschert

   /s/ Edward W. Moose        Director                       March 7, 1996
__________________________
     Edward W. Moose


   /s/ Edward Y. Tang         Director                       March 8, 1996
__________________________
     Edward Y. Tang


   /s/ Shou-Chen Yih          Director                       March 11, 1996
__________________________
    Shou-Chen Yih



                                             S-2

<PAGE>


                         HYTEK MICROSYSTEMS, INC.

                       Annual Report on Form 10-KSB
                for the fiscal year ended December 30, 1995

                              EXHIBIT INDEX

(The Registrant will furnish to any shareholder who so requests a copy of this
Annual Report on Form 10-KSB, as amended, including a copy of any Exhibit listed
below, provided that the Registrant may require payment of a reasonable fee not
to exceed its expense in furnishing any such Exhibit.)

<TABLE>
<CAPTION>

Exhibit                                                                     Page
Number                     Exhibit Description                             Number
--------       ----------------------------------------------            ---------
<S>              <C>                                                     <C>
3.1 (1)          Amended and Restated Articles of Incorporation              --
                  filed on February 10, 1983.

3.2 (2)          Certificate of Amendment of Articles of Incorp-             --
                  oration filed June 28, 1988.

3.3 (10)         Amended and Restated Bylaws, as amended                     --
                  through July 27, 1992.

4.1              Reference Exhibits 3.1 and 3.2.                             --

9.1 (4)          Shareholders' Agreement dated as of                         --
                  April 9, 1990.

10.1a (9) (*)    Incentive Stock Option Plan, as amended                     --
                  July 27, 1992. 

10.1b (5) (*)    Forms of Incentive Stock Option Agreement and               --
                  Non-statutory Stock Option Agreement used under
                  Incentive Stock Option Plan.

10.2 (11) (*)    Form of Amendment to Option Agreements of                   --
                  Charles S. Byrne, Jay L. Kimball and Jonathan B.
                  Presnell.

10.3a (11) (*)   1991 Stock Option Plan, as amended                          --
                  February 10, 1995.

</TABLE>


                              X-1  (Footnotes at end of index)
<PAGE>
<TABLE>
<CAPTION>


Exhibit                                                                     Page
Number                     Exhibit Description                             Number
--------       ----------------------------------------------            ---------
<S>            <C>                                                       <C>

10.3b (9)(*)     Form of Agreement used under the 1991                       --
                  Stock Option Plan.

10.4  (7)(*)     1991 Director's Stock Option Plan and form of               --
                  Agreement thereunder.

10.5a (3)(*)     Key Employee Stock Purchase Plan.                           --

10.5b (5)  (*)   Form of Stock Purchase Agreement used under                 --
                  the Key Employee Stock Purchase Plan.

10.6   (7)  (*)  Form of Indemnification Agreement entered into              --
                  by the Registrant with each of its directors and
                  executive officers.

10. 7  (6)       Proprietary Information Agreement dated                     --
                  as of March 25, 1992, between James M. Phalan
                  and the Registrant.

10.8             Line of Credit Agreement between Hytek 
                  Microsystems, Inc. and Sierra Bank of Nevada.              **

13.1             President's Letter to Shareholders dated
                  April 8, 1996, which together with
                  this Form 10-KSB comprises the Registrant's
                  1995 Annual Report to Shareholders.

21.1             The Registrant has no subsidiaries.                         --

23.1             Consent of Independent Auditors                            F-16
                  (see page F- 16).

24.1             Power of Attorney (see page S-1).                          S-1

27.1             Financial Data Schedule.


</TABLE>


(1)       Incorporated by reference to Exhibit filed with the
          Registration Statement on Form S-1 (File No. 2-82140).

(2)       Incorporated by reference to Exhibit filed with the
          Quarterly Report on Form 10-Q for the quarter ended July 2,
          1988.
                              X-2  (Footnotes at end of of index)

<PAGE>

(3)       Incorporated by reference to Exhibit filed with the Annual
          Report on Form 10-K for the year ended December 29, 1990.

(4)       Incorporated by reference to Exhibit filed with the Annual
          Report on Form 10-K for the year ended December 30, 1989.

(5)       Incorporated by reference to Exhibit filed with the Annual
          Report on Form 10-K for the year ended December 31, 1986.

(6)       Incorporated by reference to Exhibit filed with the Annual
          Report on Form 10-K for the year ended December 28, 1991.

(7)       Incorporated by reference to Exhibit filed with the Annual
          Report on Form 10-K for the year ended December 31, 1988.

(8)       Incorporated by reference to Exhibit filed with the Current
          Report on Form 8-K dated December 22, 1989.

(9)       Incorporated by reference to Exhibit filed with the Quarterly
          Report on Form 10-Q for the quarter ended September 26, 
          1992.

(10)      Incorporated by reference to the Exhibit filed with the Quarterly
          Report on Form 10-Q for the quarter ended
          June 27, 1992.

(11)      Incorporated by reference to Exhibit filed with the Annual
          Report on Form 10-KSB for the year ended December 31, 1994.

(*)       Management contract or compensatory plan or arrangement in which any
          director or executive officer named in the Registrant's Annual
          Report on Form 10-KSB or Proxy Statement
          has participated or participates.

**   To be filed by amendment.



                              X-3