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UNITED STATES
SECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549



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FORM 10-K

|           |  |                                                                                         
|---------- |  | ----------------------------------------------------------------------------------------
|(Mark One) |  |                                                                                         
|          
|x          |  | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934    
|          
|           |  | For the fiscal year ended March 31, 2002                                                
|          
|OR        
|          
|o          |  | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|          
|           |  | For the transition period from _________________ to __________________                  

COMMISSION FILE NUMBER 001-14165



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IXYS CORPORATION

(Exact name of Registrant as specified in its charter)


|                                                                        |  |                                                
|----------------------------------------------------------------------- |  | -----------------------------------------------
|Delaware
(State or other jurisdiction of incorporation or organization) |  | 94-3187233
(I.R.S. Employer Identification No.)

3540 Bassett Street
Santa Clara, California 95054-2704
(Address of principal executive offices and zip code)

(408) 982-0700
(Registrants telephone number, including area code))



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

None
(Title of Class)

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

Common stock, par value $.01 per share
(Title of Class)



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Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 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 [   ]

Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to
the best of Registrants knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Annual Report on Form 10-K
or any amendments to this Annual Report on Form 10-K. Yes [X] No [   ]

The aggregate market value of the voting stock held by non-affiliates of
the Registrant as of June 19, 2002, was approximately $80,037,356.* The
number of shares of the Registrants Common Stock outstanding as
of June 19, 2002 is 26,298,578.

* Based on
a closing price of $6.35 per share of the Registrants Common
Stock on June 19, 2002 held by executive officers and directors and stockholders
whose ownership exceeds 5% of the Common Stock outstanding at
June 19, 2002.
Exclusion of such shares should not be construed to indicate that any such
person possesses the power, direct or indirect, to direct or cause the
direction of the management or policies of the Registrant or that such person
is controlled by or under common control with the Registrant.



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TABLE OF CONTENTS



|              |                                                                                                |  |  |  |  |  |  | 
|------------- | ---------------------------------------------------------------------------------------------- |  |  |  |  |  |  | 
|PART I       
|              | ITEM 1.  IXYS BUSINESS                                                                        
|RISK FACTORS 
|              | ITEM 2.  PROPERTIES                                                                           
|              | ITEM 3.  LEGAL PROCEEDINGS                                                                    
|              | ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS                                  
|PART  II     
|              | ITEM 5.  MARKET FOR REGISTRANTS COMMON EQUITY AND RELATED STOCKHOLDERS MATTERS               
|              | ITEM 6.  SELECTED FINANCIAL DATA                                                              
|              | ITEM 7.  MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|              | ITEM 7A.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK                          
|              | ITEM 8.  FINANCIAL STATEMENTS                                                                 
|              | ITEM 9.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE 
|PART  III    
|              | ITEM 10.  DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT                                  
|              | ITEM 11.  EXECUTIVE COMPENSATION                                                              
|              | ITEM 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT                      
|              | ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS                                      
|PART  IV     
|              | ITEM 14.  EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K                    
|SIGNATURES   
|Exhibit Index
|EXHIBIT 23.1 



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IXYS CORPORATION

ANNUAL REPORT ON FORM 10-K
FOR THE FISCAL YEAR ENDED MARCH 31, 2002

TABLE OF CONTENTS

|          |  |          |  |                                                                                       |  |     
|--------- |  | -------- |  | ------------------------------------------------------------------------------------- |  | ----
|          |  |          |  |                                                                                       |  | Page
|          |  |          |  |                                                                                       |  |     
|Part  I   | 
|          |  | Item 1.  |  | IXYS Business                                                                         |  | 1   
|          |  |          |  | Risk Factors                                                                          |  | 11  
|          |  | Item 2.  |  | Properties                                                                            |  | 21  
|          |  | Item 3.  |  | Legal Proceedings                                                                     |  | 22  
|          |  | Item 4.  |  | Submission of Matters to a Vote of Security Holders                                   |  | 24  
|Part  II  | 
|          |  | Item 5.  |  | Market for Registrants Common Equity and Related Stockholders Matters                |  | 25  
|          |  | Item 6.  |  | Selected Financial Data                                                               |  | 26  
|          |  | Item 7.  |  | Managements Discussion and Analysis of Financial Condition and
Results of Operations |  | 28  
|          |  | Item 7a  |  | Quantitative and Qualitative Disclosures About Market Risk                            |  | 35  
|          |  | Item 8.  |  | Financial Statements                                                                  |  | 36  
|          |  | Item 9.  |  | Changes In and Disagreements With Accountants on Accounting and
Financial Disclosure  |  | 62  
|Part  III | 
|          |  | Item 10  |  | Directors and Executive Officers of The Registrant                                    |  | 63  
|          |  | Item 11. |  | Executive Compensation                                                                |  | 65  
|          |  | Item 12. |  | Security Ownership of Certain Beneficial Owners and Management                        |  | 68  
|          |  | Item 13. |  | Certain Relationships and Related Transactions                                        |  | 70  
|Part  IV  | 
|          |  | Item 14. |  | Exhibits, Financial Statement Schedules, and Reports on Form 8-K                      |  | 71  

i.





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This Annual Report on Form 10-K contains forward-looking statements that
include, but are not limited to, statements concerning projected revenues,
expenses, gross profit and income, the need for additional capital, the outcome
of pending litigation and the acquisition of Clare, Inc., a Massachusetts
corporation (Clare). These forward-looking statements are based on IXYS
current expectations, estimates and projections about IXYS industry,
managements beliefs, and certain assumptions made by IXYS. In some cases,
these statements may be identified by terminology such as may, will,
should, expects, plans, anticipates, believes, estimates,
predicts, potential, or continue or the negative of such terms and other
comparable expressions. These statements involve known and unknown risks and
uncertainties that may cause our results, levels of activity, performance or
achievements or our industry to be materially different than those expressed or
implied by the forward-looking statements. Factors that may cause or contribute
to such differences include, but are not limited to, our ability to compete
successfully in our industry, to continue to develop new products on a timely
basis, cancellation of customer orders, successful integration of the Clare
business and other factors discussed below and under the caption Risk
Factors. IXYS disclaims any obligation to update any of the forward-looking
statements contained in this report to reflect any future events or
developments.

ii.





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PART I




ITEM 1.  IXYS BUSINESS

We are a leading company in the design, development, manufacture and
marketing of high power, high performance power semiconductors. Our power
semiconductors improve system efficiency and reliability by converting
electricity at relatively high voltage and current levels into the finely
regulated power required by electronic products. We focus on the market for
power semiconductors that are capable of processing greater than 500 watts of
power.

We were founded in 1983. In 1989, we acquired from ABB our semiconductor
operation in Lampertheim, Germany, now called IXYS Semiconductor GmbH.

In 1995, we reincorporated in Delaware. Also in 1995, ABB converted
approximately $10.5 million in debt owed to it by us into our capital stock. In
January 1998, we purchased the Lampertheim facility, which had previously been
leased from ABB.

In September 1998, we merged with Paradigm Technology, a Delaware
corporation that designed and marketed SRAM products, in a transaction
accounted for as a reverse merger. In the merger, Paradigm issued us common
stock in exchange for all outstanding shares of our capital stock. At the
conclusion of the merger, our stockholders held approximately 96% of the
combined company, and the historical accounting records of IXYS became those of
the combined company. Accordingly, Paradigm formally changed its name to IXYS
Corporation.

In May 2000, we acquired Directed Energy, which gave us added scientific
expertise and additional products related to laser diode drives, high voltage
pulse generators and modulators. In connection with this acquisition, we issued
250,370 shares of our common stock to the former shareholders of Directed
Energy in a transaction that was accounted for under the purchase method.

On January 22, 2002, we acquired Westcode Semiconductors Limited, a
UK-based power semiconductor manufacturer, for approximately $9.0 million in
cash.

On June 10, 2002, we completed the acquisition of Clare, Inc., a provider
of high-voltage analog and mixed-signal semiconductor integrated packages and
discrete components for use in electronic communications, computer, and
industrial equipment. In connection with this acquisition, we issued
approximately 4.89 million shares of IXYS common stock to the holders of
outstanding shares of Clare common stock and assumed options to purchase
approximately 1.0 million shares of IXYS common stock.

Our power semiconductor products have historically been divided into two
primary categories, power metal oxide semiconductor, or MOS, transistors and
bipolar products. Our power semiconductors are sold as individual units and are
also packaged in high power modules that frequently consist of multiple
semiconductor dies. In fiscal year 2002, power semiconductors constituted
approximately 93% of our revenues, which included 39% from power MOS
transistors and 54% from bipolar products. We also sell gallium arsenide
products, which has become a primary product category. In addition to power
semiconductors, we manufacture our proprietary direct copper bond, or DCB,
substrate for use in our own power semiconductors as well as for sale to other
power semiconductor manufacturers. We also sell integrated circuits, or ICs,
that have applications associated with power management, and high speed, high
density static random access memory, or SRAM, products.

IXYS products are used primarily to control electricity in:



| |  |  | power conversion systems, including uninterruptible power
supplies, or UPS, and switch mode power supplies, or SMPS, for
communications infrastructure applications such as wireless base
stations, network servers and telecommunication switching stations;
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |  |  | motor drives for industrial applications such as industrial
transportation, robotics and process control equipment; and                                                                                                                                      

1.



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| |  |  | medical electronics for sophisticated applications, such as
defibrillators and medical imaging.
| | - |  | -----------------------------------------------------------------------------------------------

We design our products primarily for industrial and business applications,
rather than for use in personal computers, mobile phones or other household
appliances. In fiscal year 2002, we sold our products to over 2,000 customers
worldwide. Our major customers include ASCOM, Still, Siemens, Guidant,
Medtronics, Tyco, Aztec, Delta Electronics and Huawei. In many cases, our
customers incorporate our products into systems sold to their own customers,
which include Ericsson, General Electric, General Motors, Hewlett-Packard, IBM,
Motorola and Nokia.

Industry Background

Demand for electricity in the 21st century is forecasted to increase
faster than demand for other forms of energy. The worldwide demand for
electrical energy is currently increasing due to:



| |  |  | proliferation of technology driven products that
require electricity, including computers, telecommunications
equipment and the infrastructure to support portable electronics;
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |  |  | increased use of electronic content in traditional
products such as airplanes, automobiles and home appliances;                                                                
|
| |  |  | increased use of automation and electrical processes in industry and mass transit systems; and                                                                                 
|
| |  |  | penetration of technology into developing countries.                                                                                                                           

Not only is demand increasing, but the requirements for electricity are
also changing. Electronic products in all markets are becoming increasingly
sophisticated, offering more intelligence through the use of microprocessors
and additional components. For example, the Information Technology Industry
Council reported that computers represented 13% of U.S. electrical consumption
in 1998, versus only 6% in 1994. The increasing complexity of such products
requires more precisely regulated power quality and greater power reliability.
In addition, the increasing costs of electricity, coupled with governmental
regulations and environmental concerns, have caused an increased demand for
energy efficiency.

Power semiconductors are used to provide the precisely regulated power
required by sophisticated electronic products and equipment and address the
growing demand for energy efficiency. In most cases, power semiconductors:



| |  |  | convert or rectify alternating current, or AC, power
delivered by electrical utilities to direct current, or DC, power
which is required by most electronic equipment;
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |  |  | convert DC power at a certain voltage level to DC power
at a different voltage level to meet the specific voltage
requirement for an application;                       
|
| |  |  | invert DC power to high frequency AC power to permit
the processing of power using substantially smaller electronic
components; or                                      
|
| |  |  | rectify high frequency AC power from switch-mode power
supplies to meet the specific DC voltage required by an
application.                                             

The more sophisticated the end product, the greater the need for specially
formatted, finely regulated power, and the greater the need for a high
performance power semiconductor. According to the Digital Power Report, less
than 15% of the worlds electricity is currently switched by power
semiconductors, but this percentage is expected to grow significantly to meet
the need for higher quality power.

Power semiconductors improve system efficiency and reliability by
processing and converting electrical energy into more usable, higher quality
power. Specifically, power semiconductors are used primarily in controlling
energy in power conversion systems, including switch mode power supplies, or
SMPS, and uninterruptible power

2.



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supplies, or UPS, and motor drive controls. Switch mode power supplies
efficiently convert power to meet the specific voltage requirements of an
application, such as communications equipment. Uninterruptible power supplies
provide a short term backup of electricity in the event of power failure. Motor
drive controls regulate the voltage, current and frequency of power to a motor.

Market Size And Trends

The primary markets we serve are characterized by complex technological
development and higher power level requirements. We believe the following key
trends are driving the demand for our products:

Growth in communications devices and infrastructure.The worldwide
communications industry has experienced rapid growth in recent years, fueled
largely by growth in the Internet, deregulation, competition, privatization and
other technological advances, including the convergence of voice, video and
data communication. The proliferation of electronic devices and the
infrastructure to support them is resulting in increasing power level
requirements and the demand for greater power reliability.

Increased demand for energy efficiency in motor drives.Electronic motors
consume approximately one-half of the worlds electricity. Due to costs and
complexity, motor controls that permit variable speed operation, which in turn
reduce energy consumption, have been predominantly used only in higher end
applications. However, recent advancements in power management enable more cost
effective, variable speed motor controls, which enhance energy efficiency and
improve performance in a wide range of industrial and commercial applications,
such as heating, ventilation and air conditioning systems.

Emergence of new applications in medical electronics.Continued
advancements in medical technologies are resulting in more sophisticated
medical electronic devices. Power semiconductors can greatly reduce the size of
equipment and improve the precision of medical measurements and functionality.
For example, power semiconductors have enabled cardiac defibrillators to become
much smaller and more portable, improving the ability to install these devices
in more non-medical establishments, such as airplanes and office buildings.

Development of new technologies for power management.New technologies
such as the use of radio frequency, or RF, for nontraditional power
applications are opening new markets for power semiconductors. For example, RF
based semiconductor production equipment is migrating to high frequency power
MOS transistors from traditional RF tubes. Additionally, material science
developments, such as gallium arsenide, are enabling the production of higher
power density power management products, such as those required for wireless
base stations.

Demand for increasing power density.The need for higher levels of power
in end use applications is causing purchasers of power semiconductors to demand
more power for their applications from the same physical space. In the
communications industry, the growth in bandwidth demands is requiring
communications equipment providers to add more equipment or more powerful
equipment to confined spaces in highly populated areas. As a result, power
semiconductor manufacturers are being required to design and produce products
that enable their customers to expand power levels without expanding product
footprints, or maintaining levels of power while shrinking product footprints.

IXYS Strategy

Since our inception, we have focused on meeting the needs of the high
power, high performance segment of the power semiconductor market. We intend to
continue building a leading position within our targeted segment of this market
by pursuing the following strategies:

Maintain technological focus on high power, high performance market.Our
technological expertise enable us to focus on the high power, high performance
power semiconductor market. Due to technological complexities, fewer industry
players compete in this market, resulting in a more favorable competitive
environment for us. We believe our technological expertise differentiates us
from most of our competitors. This expertise encompasses a wide range of
scientific disciplines and technical capabilities, including physics,
mechanical engineering, chemistry, circuit design, material science and
packaging. Using our technological expertise, we continually strive to
introduce

3.



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innovative products. For example, we have recently brought to market a
gallium arsenide rectifier, one use of which will permit increased power
density in wireless base stations, as well as higher current gallium arsenide
products for surface mount packages.

Target rapid growth opportunities within the high power, high performance
market.We select the specific markets where we intend to compete by evaluating
their potential growth, our ability to establish an advantage based upon our
technological capabilities and the performance of competing products. For
example, to capitalize on the power density and switching speed of our
products, we have entered the telecommunications and data communications
segments of the communications infrastructure market. These segments include
applications for wireless base stations, internet servers for co-location
facilities and storage area networks.

Continue to diversify markets, customers and products.We believe that
diversifying the markets and customers we serve and the products we produce
enables us to minimize the traditional cyclical effects of the semiconductor
industry on our business. We have a significant market presence in Europe,
North America and Asia, the three principal geographic markets for high
performance power semiconductors. Moreover, our products are used in a broad
range of applications, from communications infrastructure to industrial
automation to medical electronics, thereby reducing our reliance on customers
from any particular industry. Our product line spans a broad range of
functionality and price, which allows us to provide an appropriate solution to
most of our customers power semiconductor needs. This product diversity
permits our customers to reduce the number of their suppliers by enabling them
to purchase a substantial portion of their power semiconductor needs from us.

Pursue selective acquisition and investment strategy.We seek to access
additional technological capabilities and complementary product lines through
selective acquisitions and strategic investments. For example, through the
acquisition of Directed Energy, Inc. in May 2000, we added scientific expertise
and additional products related to laser diode drivers, high voltage pulse
generators and modulators. Through the acquisition of Westcode
Semiconductors Limited, a UK-based power semiconductor manufacturer, in January
2002, we added a portfolio of very high power semiconductor products that will
supplement our existing product line. Westcodes products are used in a variety
of applications including induction heating, welding, motion controls (AC and
DC drives), traction, electric vehicles and HVDC. Through the
acquisition of Clare we expect to expand our product offerings into the
semiconductor segment of the market for small signal relays. Clares
semiconductor products are capable of integrating a number of functions
previously provided by discrete components into one package and
including product applications such as
56K PCMCIA modems, modem interfaces to the Internet, cable set top boxes, and
other computer telephony uses such as voice mail systems. We also believe there
are significant opportunities to capitalize on our extensive distribution
system and market additional Clare products to many of our 2,000 customers.

Collaborate with select companies on product development.We seek to enter
into collaborative arrangements with existing and potential customers in
attractive end user markets in order to optimize our products for their use. We
believe that our ability to provide technical assistance to these companies in
the design of their hardware and software systems encourages the incorporation
of our products in their devices. For example, we partnered with manufacturers
of portable defibrillators at an early stage in the development of this market,
and we have become a leading supplier of power semiconductors for these
devices. In addition, we have had over 300 design wins in each of the last
three years.

Optimize mix between internal and external manufacturing.We intend to
continue using both internal wafer fabrication facilities and our external
foundry relationships. We also seek to balance our product assembly through
multiple sourcing relationships. We believe these strategies enable us to
maximize our manufacturing efficiency and flexibility. We also believe that our
internal manufacturing capabilities enable us to lower our manufacturing cost
with respect to certain products, bring products to market more quickly than
would be possible if we were required to rely exclusively on external
foundries, retain certain proprietary aspects of our process technology and
more quickly introduce new process and product innovations through close
collaboration between our design and process engineers. Our alliances with
external foundries and assembly subcontractors allow us to substantially reduce
capital spending and manufacturing overhead expenses, obtain competitive
pricing and technologies and expand manufacturing capacity more rapidly than
could be achieved with internal facilities alone.

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Products

Our power semiconductor products have historically been divided into two
primary categories, power MOS transistors and bipolar products. Our power
semiconductors are sold separately and are also packaged in high power modules
that frequently consist of multiple semiconductor dies. In fiscal year 2002,
power semiconductors constituted approximately 93% of our revenues, which
included 39% from power MOS transistors and 54% from bipolar products. In
fiscal year 2001, power semiconductors constituted approximately 92% of our
revenues, which included 49% from power MOS transistors and 43% from bipolar
products. In fiscal year 2000, power semiconductors constituted approximately
92% of our revenues, which included 45% from power MOS transistors and 47% from
bipolar products. We also sell gallium arsenide products, which has become a
primary product category. In addition to power semiconductors, we manufacture
our proprietary Direct Copper Bond (DCB) substrate for use in our own power semiconductors as well
as for sale to other power semiconductor manufacturers. We also sell ICs that
have applications associated with power management, and high speed, high
density SRAM products.

Power MOS Transistors.

Power MOS transistors offer significant price/performance benefits over
traditional bipolar transistors. Power MOS transistors operate at much greater
switching speeds, allowing the design of smaller and less costly end products,
primarily due to the smaller and less expensive peripheral components required
at higher switching frequencies. Power MOS transistors are activated by voltage
rather than current, so they require less external circuitry to operate, making
them more compatible with ICs controls. Power MOS transistors also offer more
reliable long term performance and are more rugged than traditional bipolar
transistors, permitting them to better withstand adverse operating conditions.
Our power MOS transistors consist of power MOSFETs and IGBTs.

Power MOSFETs.

A power MOSFET, or metal oxide semiconductor field effect transistor, is a
switch controlled by voltage at our gate. Power MOSFETs are used in combination
with passive components to vary the amperage and frequency of electricity by
switching on and off at high frequency.

Our power MOSFETs are used primarily in power conversion systems and are
focused on higher voltage applications ranging from 60 to 1,100 volts. Our
power MOSFETs have on state resistance among the lowest available for a given
die size and voltage. Lower on state resistance results in increased efficiency
of a power semiconductor device. We believe that as the power requirements of
workstations, servers and other computers increase as the result of larger and
more powerful microprocessors, disk drives and CD/ROMs, the designers of power
supplies will increasingly demand higher power density. MOSFETs accommodate
this need by providing higher power without increasing the physical size of the
power supply incorporated into the equipment.

IGBTs.

IGBTs, or insulated gate bipolar transistors, also are used as switches.
IGBTs have achieved many of the advantages of power MOSFETs and of traditional
bipolar technology by combining the voltage controlled switching features of
power MOSFETs with the superior conductivity and energy efficiency of bipolar
transistors. For a given semiconductor die size, IGBTs can operate at higher
currents and voltages, making them a more cost effective device compared to
power MOSFETs for high energy applications. The principal tradeoff of IGBTs
compared to power MOSFETs is the switching speed of IGBTs, which is slower than
that of power MOSFETs. IGBTs are seldom used in applications where very fast
switching is required, including SMPS operating at speeds over 150 kilohertz.

Since inception, we have been a leader in the development of IGBTs for
high voltage applications. In 1986, we introduced the first 800 volt, 50 amp
device into the market. Our current products are focused on voltage
applications ranging from 300 volts to 2,000 volts. Our IGBTs are used
principally in AC motor drives and defibrillators.

5.



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Bipolar Products

Bipolar products are also used to process electricity, but are activated
by current rather than voltage. Bipolar products are capable of switching
electricity at substantially higher power levels than power MOS transistors.
However, switching speeds of bipolar products are slower than those of power
MOS transistors, and as a result, bipolar products are preferred where very
high power is required. Our bipolar products consist of rectifiers and
thyristors.

Rectifiers

Rectifiers convert AC power to DC power and are used primarily in input
and output rectification and inverters. Our rectifiers are used in DC and AC
motor drives, power supplies, lighting and heating controls and welding
equipment.

A subset of our rectifier product group is a very fast switching device
known as a FRED, or fast recovery epitaxial diode. FREDs limit spikes in
voltage across the power switch to reduce power dissipation and electromagnetic
interference. Our FREDs are used principally in AC motor drives and power
supplies.

Thyristors

Thyristors are switches that can be turned on by a controlled signal and
turned off only when the output current is reduced to zero, which occurs in the
flow of AC power. Thyristors are preferred over power MOSFETs and IGBTs in high
voltage, low frequency AC applications because their on state resistance is
lower than the on state resistance of power MOSFETs and IGBTs. Our thyristors
are used in motor drives, defibrillators, power supplies, lighting and heating
controls and welding.

Gallium Arsenide Products

IXYS began to sell gallium arsenide products in fiscal year 2000. Our
first gallium arsenide product was a Schottky rectifier, useful for high power
density applications, such as power supplies for wireless communications base
stations. Gallium arsenide offers higher frequency and higher temperature
operation, enabling substantially greater power density than silicon-based
solutions.

Other Products

We manufacture our proprietary DCB substrates for use in our own
semiconductor products as well as for sale to a variety of customers, including
those in the power semiconductor industry. DCB technology cost effectively
provides excellent thermal transfer while maintaining high electrical
isolation. This technology addresses thermal fatigue and die cracking problems
encountered by manufacturers of power semiconductor modules utilizing
traditional copper base plates.

We also markets ICs that have applications associated with power
semiconductors, such as high voltage current regulators, motion controllers,
digital pulse width modulators and power MOSFET/IGBT drivers. Additionally, we
manufacture and sell laser diode drivers, high voltage pulse generators and
modulators and sell synchronous and asynchronous SRAMs, a legacy product from
the Paradigm merger. Our SRAMs are available in a variety of configurations and
commercial and industrial temperature range versions.

Customers and Applications

Our power semiconductors are used primarily to control electricity in
power conversion systems, motor drives and medical electronics. The following
table summarizes the primary categories of uses for power semiconductors, our
products used in each category, the end user applications served by these
products and our representative customers for each category.

6.



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|                         |  |                                        |  |                                                                                                             |  |                                                                                           
|------------------------ |  | -------------------------------------- |  | ----------------------------------------------------------------------------------------------------------- |  | ------------------------------------------------------------------------------------------
|Category                 |  | IXYS Products                          |  | End User Applications                                                                                       |  | Selected Customers                                                                        
|                         |  |                                        |  |                                                                                                             |  |                                                                                           
|Power Conversion
Systems |  | FREDs
IGBTs
Modules
MOSFETs
Rectifiers |  | SMPS and UPS for:
Wireless base stations
Internet co-locator
facilities
Storage Area Networks
RF Generators |  | Alpha Technologies
ASCOM
Delta Electronics
Emerson Electric
Tyco
Power-One
Schneider Group
|                         |  |                                        |  |                                                                                                             |  |                                                                                           
|Motor Drives             |  | FREDs
IGBTs
Modules
MOSFETs
Thyristors |  | Industrial transportation
Robotics
Process control equipment
Machine tools
Electric vehicles                |  | Emerson Electric
Eurotherm
Rockwell International
Siemens
Still                           
|                         |  |                                        |  |                                                                                                             |  |                                                                                           
|Medical Electronics      |  | IGBTs
MOSFETs
Thyristors               |  | Defibrillators
Medical imaging devices
Laser power supplies                                                 |  | Philips
Guidant
Medtronic                                                                 

We also sell our power semiconductor chips and DCB substrates to other
power semiconductor companies for use in their modules. These customers include
Infineon, International Rectifier, Powersem and Tyco.

Sales and Marketing

We sell our products through a worldwide selling organization that
includes direct sales personnel, independent representatives and distributors
managed through our Santa Clara, California, Lampertheim, Germany and Chippenham, UK offices.
As of March 31, 2002, we employed 37 people in sales and marketing and customer
support and service and used 15 sales representative organizations and six
distributors in North America and 38 sales representative organizations and
distributors in the rest of the world. Sales to distributors accounted for
approximately 42% of net revenues in fiscal year 2000, 43% of net revenues in
fiscal year 2001 and 41% of net revenues in fiscal year 2002.

In fiscal year 2002, North American sales represented approximately 32.9%,
and international sales represented approximately 67.1%, of our net revenues.
Of our international sales in fiscal year 2002, approximately 77.9% were
derived from sales in Europe and the Middle East and approximately 22.1% were
derived from sales in Asia. No single end customer accounted for more than 10%
of our net revenues in fiscal year 2002. For financial information about
geographic areas for each of our last three fiscal years, see our Audited
Consolidated Financial Statements, Note 13, Segment and Geographic Information
provided elsewhere in this Annual Report on Form 10-K. We market our products
through advertisements, technical articles and press releases that appear
regularly in a variety of trade publications, as well as through the
dissemination of brochures, data sheets and technical manuals. Additionally, we
participate in industry trade shows on a regular basis. We also have a presence
on the Internet through a worldwide web page that enables engineers to access
and download technical information and data sheets.

Research and Development

We believe that we successfully compete in the power semiconductor market
because of our ability to design, develop and introduce to the market on a
timely basis new products offering technological improvements. We are a pioneer
in technology with respect to higher power IGBTs, IGBT modules and DCB
substrates. While the time from initiation of design to volume production of
new power semiconductors products often takes 18 months or longer, our power
semiconductors have a product lifetime exceeding an average of 10 years. Our
research and development expenses were approximately $4.7 million in fiscal
year 2000, $6.1 million in fiscal year 2001 and $5.7 million in fiscal year
2002. As of March 31, 2002, we employed 73 people in engineering and research
and development activities.

7.



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We are engaged in ongoing research and development efforts focused on
enhancements to existing products and the development of new products.
Currently, we are pursuing research and development projects with respect to:



| |  |  | increasing the voltage operating range of our MOS and bipolar products;
| | - |  | -----------------------------------------------------------------------
|
| |  |  | developing new gallium arsenide products;                              
|
| |  |  | developing higher power IGBT modules;                                  
|
| |  |  | developing a complete range of high voltage, bipolar MOS products;     
|
| |  |  | improving our multiple die module assembly technology; and             
|
| |  |  | expanding our line of power management ICs products.                   

Research and development activities are conducted in collaboration with
manufacturing activities to help expedite new products from the development
phase to manufacturing and to more quickly implement new process technologies.

Our research and development efforts also include participation in
technology collaborations with universities and research institutions. These
technology collaborations allow research and development activities that would
otherwise require potentially cost prohibitive capital expenditures since the
necessary capital equipment is often available at research institutes and
universities. Through these technology collaborations, we believe we are able
to maximize our range of research and development activities without diffusing
the focus of our internal research and development work.

Patents

As of March 31, 2002, we held 72 issued patents, of which 42 that were
issued in the U.S. and 30 were issued in international jurisdictions. As of
March 31, 2002, we also held 61 pending patents, of which 28 were pending in
the U.S. and 33 were pending in international jurisdictions. We rely on a
combination of patent rights, copyrights and trade secrets to protect the
proprietary elements of our products. Our policy is to file patent applications
to protect technology, inventions and improvements that are important to our
business. We also seek to protect our trade secrets and proprietary technology,
in part, through confidentiality agreements with employees, consultants and
other parties.

While we believe that our intellectual property rights are valuable, we
also believe that other factors, such as innovative skills, technical
expertise, the ability to adapt quickly to new technologies and evolving
customer requirements, product support and customer relations, are of greater
competitive significance.

Manufacturing and Facilities

The production of our products is a highly complex and precise process. We
manufacture our products in our own manufacturing facilities and by utilizing
external wafer foundries and subcontract assembly facilities. We divide our
manufacturing operations into three key areas, wafer fabrication, assembly and
test.

Wafer Fabrication.

We own an approximately 170,000 square foot manufacturing facility in
Lampertheim, Germany at which we fabricate all of our bipolar products, and an
approximately 100,000 square foot manufacturing facility in Chippenham, England
where we fabricate the majority of our very high power devices. We also
fabricate our 1,600 volt and higher power MOS devices in Lampertheim, Germany
in order to protect our process technologies. We believe that our internal
fabrication capabilities enable us to lower our manufacturing cost with respect
to certain products, bring products to the market more quickly than would be
possible if we were required to rely exclusively

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on external foundries, retain certain proprietary aspects of our process
technology and more quickly introduce new process innovations.

In addition to maintaining our own fabrication facilities, we have
established alliances with selected foundries for wafer fabrication. This
approach allows us to reduce substantial capital spending and manufacturing
overhead expenses, obtain competitive pricing and technologies and expand
manufacturing capacity more rapidly than could be achieved with internal
foundries alone. We retain the flexibility to shift the production of our
products to different or additional foundries for cost or performance reasons.
Our product designs enable the production of our devices at multiple foundries
using well established and cost effective processes.

We relied on external foundries for approximately 44% of our wafer
fabrication requirements in fiscal year 2002, and our utilization of external
foundries is expected to grow. We have arrangements with four external wafer
foundries, two of which provide substantially all of the wafers provided to us
by external foundries. Our principal external foundry is Samsung Electronics
facility located in Kiheung, South Korea. Our relationship with Samsung
Electronics extends over 17 years. We provide our foundries forecasts for wafer
fabrication six months in advance and makes firm purchase commitments one to
two months in advance of delivery. Other than these firm commitments, we do not
have any obligations to order any minimum quantities.

Wafer fabrication of power semiconductors generally employs process
technology and equipment already proven in ICs manufacturing. Power
semiconductors are manufactured using fabrication equipment that is one or more
generations behind the equipment used to fabricate leading edge ICs. Used
fabrication equipment can be obtained at prices substantially less than the
original cost of such equipment or than the cost of current equipment applying
the latest technology. Consequently, the fabrication of power semiconductors is
less capital intensive than the fabrication of ICs.

Assembly.

Packaging or assembly is the sequence of production steps that divide the
wafer into individual chips and enclose the chips in external structures,
termed packages, that make them useable in a circuit. Discrete manufacturing
involves the assembly and packaging of single die devices. Module manufacturing
involves the assembly of multiple devices within a single package. The
resulting packages vary in configuration, but all have leads that are used to
mount the package through holes in the customers printed circuit boards.

Most of our wafers are sent to independent subcontract assembly
facilities. We have equipment at, or manufacturing supply arrangements with,
assembly subcontractors located in Asia and Europe in order to take advantage
of low assembly costs. Approximately 61% of our products are assembled at
external assembly facilities, and the remainder are assembled in our
Lampertheim facility.

Test.

Generally, each die on our wafers is electrically tested for performance
after wafer fabrication. Following assembly, our products are returned to Santa
Clara, California or Lampertheim, Germany for testing and final inspection
prior to shipment to customers. We lease an approximately 20,000 square foot
facility in Santa Clara, which also houses our corporate offices. We test
substantially all of our IGBTs, power MOSFETs and ICs in Santa Clara and tests
our bipolar and custom MOS modules in Lampertheim.

Competition

The power semiconductor industry is intensely competitive and is
characterized by price competition, technological change, limited fabrication
capacity, international competition and manufacturing yield problems. The
competitive factors in the market for our products include:

  
product quality, reliability and performance;

  
product features;

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  
timely delivery of products;

  
price;

  
breadth of product line;

  
design and introduction of new products; and

  
technical support and service.

We believe that we are one of a limited group of companies focused on the
development and marketing of high power, high performance semiconductors
capable of performing all of the basic functions of power semiconductor design
and manufacture. Our primary competitors include Advanced Power Technology,
Fuji, International Rectifier, Infineon, On Semiconductor, Semikron
International, Powerex, STMicroelectronics, Siemens and Toshiba.

Backlog

At March 31, 2002, our backlog of orders was approximately $31.1 million,
as compared with $49.5 million at March 31, 2001. We reasonably expect our
backlog of orders at March 31, 2002 to be filled within the current fiscal
year. Backlog represents firm orders anticipated to be shipped within the next
12 months. Our business and, to a large extent, that of the entire
semiconductor industry is characterized by short term order and shipment
schedules. Because orders constituting our current backlog are subject to
changes in delivery schedules or to cancellation at the option of the purchaser
without significant penalty, backlog is not necessarily an indication of
future revenues.

Employees

At March 31, 2002, we employed 626 employees, of whom 73 were primarily
engaged in engineering and research and development activities, 37 in
marketing, sales and customer support, 476 in manufacturing and 40 in
administration and finance. Of these employees, 70 hold engineering or science
degrees, including 16 Ph.D.s. Certain employees at our Lampertheim facility and
our Chippenham facility are subject to collective bargaining agreements. There
have been no work stoppages at any of our facilities to date. We believe that
our employee relations are good.

Acquisition of Clare, Inc.

On June 10, 2002, we completed our acquisition of Clare, Inc.
In connection with the acquisition, (a) each outstanding share of Clare common
stock was converted into the right to receive 0.49147 of a share of our common
stock, resulting in the issuance of approximately 4.89 million shares of our
common stock, and (b) each option to purchase Clare common stock outstanding
immediately prior to the consummation of the acquisition was converted into an
option to purchase 0.49147 of a share of our common stock. The acquisition was
intended to qualify as a tax-free reorganization.

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RISK FACTORS

In addition to the other information in this Annual Report on Form 10-K,
the following risk factors should be considered carefully in evaluating us and
our business. You should carefully consider the risks described below before
making an investment decision. Additional risks not presently known to us or
that we currently believe are not serious may also impair our business and its
financial condition. The trading price of our common stock could decline at any
time due to any of these risks, and you could lose all or part of your
investment. References to the combined organization in this section entitled
Risk Factors refer to IXYS and Clare, Inc. as a combined entity following the
proposed merger between the two companies, as more fully described under Item
7-Managements Discussion and Analysis of Financial Condition and Results of
Operations-Recent Events.

Our operating results fluctuate significantly because of a number of factors,
many of which are beyond our control.

Our operating results may fluctuate significantly. Some of the factors
that may affect our quarterly and annual results are:



| |  |  | the reduction, rescheduling or cancellation of orders by customers;                                                       
| | - |  | --------------------------------------------------------------------------------------------------------------------------
|
| |  |  | fluctuations in timing and amount of customer requests for product shipments;                                             
|
| |  |  | the cyclical nature of the semiconductor industry;                                                                        
|
| |  |  | fluctuations in our manufacturing yields and significant yield losses;                                                    
|
| |  |  | availability of production capacity;                                                                                      
|
| |  |  | changes in the mix of products that our customers purchase;                                                               
|
| |  |  | competitive pressures on selling prices;                                                                                  
|
| |  |  | the amount and timing of costs associated with product warranties and returns;                                            
|
| |  |  | the amount and timing of investments in research and development;                                                         
|
| |  |  | market acceptance of our products;                                                                                        
|
| |  |  | changes in our product distribution channels and the
timeliness of receipt of distributor resale information;             
|
| |  |  | the impact of vacation schedules and holidays, largely during
the second and third fiscal quarters of our fiscal year; and
|
| |  |  | difficulties in forecasting demand for our products and the
planning and managing of inventory levels.                    

As a result of these factors, many of which are difficult to control or
predict, as well as the other risk factors discussed in this Annual Report on
Form 10-K, we may experience material adverse fluctuations in our future
operating results on a quarterly or annual basis.

The semiconductor industry is cyclical, and an industry downturn could
adversely affect our operating results.

Business conditions in the semiconductor industry have rapidly changed
from periods of strong demand. The industry is characterized by:

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| |  |  | periods of overcapacity and production shortages;                      
| | - |  | -----------------------------------------------------------------------
|
| |  |  | cyclical demand for semiconductors;                                    
|
| |  |  | changes in product mix in response to changes in demand;               
|
| |  |  | variations in manufacturing costs and yields;                          
|
| |  |  | rapid technological change and the introduction of new products;       
|
| |  |  | significant price erosion; and                                         
|
| |  |  | significant expenditures for capital equipment and product development.

These factors could harm our business and cause our operating results to
suffer.

Our ability to grow and sustain growth levels may be adversely affected by the
recent slowdown in the U.S. economy.

Due to the recent decrease in corporate profits, capital spending and
consumer confidence, we have experienced weakness in certain of our end
markets. We market our products to several commercial markets, including
telecommunications infrastructure, medical electronics and industrial motor
drives, which have been affected by the recent slowdown in the U.S. economy. If
the economic slowdown continues, our business, financial condition and results
of operations may be adversely affected.

We may not be able to acquire additional production capacity to meet the
present or future demand for our products.

The semiconductor industry has been characterized by periodic limitations
on production capacity. Our current customer demand exceeds our ability to
manufacture internally or externally products to meet this demand. If we are
unable to increase our production capacity to meet demand, some of our
customers may seek other sources of supply or our future growth may be limited.

We may not be successful in our acquisitions.

We have in the past made, and may in the future make, acquisitions. These
acquisitions involve numerous risks, including:



| |  |  | diversion of managements attention during the acquisition process;                                                                                                           
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |  |  | disruption of IXYS ongoing business;                                                                                                                                         
|
| |  |  | the potential strain on our financial and managerial controls
and reporting systems and procedures;                                                                           
|
| |  |  | unanticipated expenses and potential delays related to
integration of an acquired business;                                                                                   
|
| |  |  | failure to successfully integrate the research and
development, sales and marketing efforts of an acquired company with
our own;                                              
|
| |  |  | failure to retain key personnel of the acquired business;                                                                                                                     
|
| |  |  | the challenges inherent in managing an increased number of
employees and facilities and the need to implement appropriate
systems, policies, benefits and compliance programs;
|
| |  |  | customer dissatisfaction or performance problems with an acquired company;                                                                                                    

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| |  |  | the cost associated with acquisitions and the integration of acquired operations; and     
| | - |  | ------------------------------------------------------------------------------------------
|
| |  |  | assumption of known or unknown liabilities or other unanticipated events or circumstances.

We cannot assure you that we will be able to successfully acquire other
businesses or product lines or integrate them into our operations without
substantial expense, delay in implementation or other operational or financial
problems.

IXYS could be harmed by litigation involving patents and other intellectual
property rights.

As a general matter, the semiconductor industry is characterized by
substantial litigation regarding patent and other intellectual property rights.
Although none of our patents or other intellectual property rights has been
successfully challenged to date, we have been sued on occasion for purported
patent infringement. For example, we have recently been sued by International
Rectifier for purportedly infringing some of its patents covering power
MOSFETs. International Rectifier has asked the court to enjoin us from
continuing infringement and to award treble damages against us for the
infringement of International Rectifiers patents. We have denied infringement
of International Rectifiers patents and have asserted affirmative defenses to
our claims. The U.S. District Court has dismissed our affirmative defenses and
granted International Rectifiers motion for summary adjudication on the issue
of infringement of three International Rectifier patents. Trial on the
remaining issues is scheduled to commence on July 30, 2002. In addition, the
U.S. District Court has issued a permanent injunction against IXYS, effectively
barring us from selling or distributing the allegedly-infringing products.
IXYS has appealed the injunction, and the United States Court of Appeals for
the Federal Circuit has stayed the injunction pending further review. We intend
to appeal the U.S. District Courts rulings, and to contest International
Rectifiers claims vigorously but the outcome of this litigation remains
uncertain. See IXYS Business  Legal Proceedings provided elsewhere in this
Item 1 to the Annual Report on Form 10-K.

Additionally, in the future, we could be accused of infringing the
intellectual property rights of other third parties. We also have certain
indemnification obligations to customers with respect to the infringement of
third party intellectual property rights by our products. No assurance can be
provided that any future infringement claims by third parties or claims for
indemnification by customers or end users of our products resulting from
infringement claims will not be asserted or that assertions of infringement, if
proven to be true, will not harm our business.

In the event of any adverse ruling in any intellectual property
litigation, including the pending litigation with International Rectifier, we
could be required to pay substantial damages, cease the manufacturing, use and
sale of infringing products, discontinue the use of certain processes or obtain
a license from the third party claiming infringement with royalty payment
obligations by us. An adverse decision in the International Rectifier
litigation or any other infringement could materially and adversely affect our
financial condition and results of operations.

Any litigation relating to the intellectual property rights of third
parties, whether or not determined in our favor or settled by us, is costly and
may divert the efforts and attention of our management and technical personnel.

We depend on external foundries to manufacture many of our products.

Forty-four percent of our revenues in fiscal year 2002 came from wafers
manufactured for us by external foundries. Our dependence on external foundries
may grow. We have arrangements with four wafer foundries, two of which produce
substantially all of the wafers that we purchase from external foundries.
Samsung Electronics facility in Kiheung, South Korea is our principal external
foundry.

Our relationships with our external foundries do not guarantee prices,
delivery or lead times, or wafer or product quantities sufficient to satisfy
current or expected demand. These foundries manufacture our products on a
purchase order basis. We provide these foundries with rolling forecasts of our
production requirements; however, the ability of each foundry to provide wafers
to us is limited by the foundrys available capacity. At any given time, these
foundries could choose to prioritize capacity for their own use or other
customers or reduce or eliminate deliveries to us on short notice. Accordingly,
we cannot be certain that these foundries will allocate sufficient capacity to
satisfy our requirements. In addition, we cannot be certain that we will
continue to do business with these or other foundries on terms as favorable as
our current terms. If we are not able to obtain additional foundry capacity

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as required, our relationships with our customers could be harmed and our
revenues would likely be reduced. Moreover, even if we are able to secure
additional foundry capacity, we may be obligated to utilize all of that
capacity or incur penalties. These penalties could be expensive and could harm
our operating results. Other risks associated with our reliance on external
foundries include:



| |  |  | the lack of control over delivery schedules;                                          
| | - |  | --------------------------------------------------------------------------------------
|
| |  |  | the unavailability of, or delays in obtaining access to, key process technologies;    
|
| |  |  | limited control over quality assurance, manufacturing yields and production costs; and
|
| |  |  | potential misappropriation of our intellectual property.                              

Our requirements typically represent a small portion of the total
production of the external foundries that manufacture our wafers and products.
We cannot be certain these external foundries will continue to devote resources
to the production of our wafers and products or continue to advance the process
design technologies on which the manufacturing of our products is based. These
circumstances could harm our ability to deliver our products on time or
increase our costs.

Our success depends on our ability to manufacture our products efficiently.

We manufacture our products in facilities that are owned and operated by
us, as well as in external wafer foundries and independent subcontract assembly
facilities. The fabrication of semiconductors is a highly complex and precise
process, and a substantial percentage of wafers could be rejected or numerous
die on each wafer could be nonfunctional as a result of, among other factors:



| |  |  | minute levels of contaminants in the manufacturing environment;
| | - |  | ---------------------------------------------------------------
|
| |  |  | defects in the masks used to print circuits on a wafer;        
|
| |  |  | manufacturing equipment failure; or                            
|
| |  |  | wafer breakage.                                                

For these and other reasons, we could experience a decrease in
manufacturing yields. Additionally, as we increase our manufacturing output, we
may also experience a decrease in manufacturing yields. As a result, we may not
be able to cost effectively expand our production capacity in a timely manner.

We may not be able to protect our intellectual property rights adequately.

Our ability to compete is affected by our ability to protect our
intellectual property rights. We rely on a combination of patents, trademarks,
copyrights, trade secrets, confidentiality procedures and non-disclosure and
licensing arrangements to protect our intellectual property rights. Despite
these efforts, we cannot be certain that the steps we take to protect our
proprietary information will be adequate to prevent misappropriation of our
technology, or that our competitors will not independently develop technology
that is substantially similar or superior to our technology. More specifically,
we cannot assure you that our pending patent applications or any future
applications will be approved, or that any issued patents will provide us with
competitive advantages or will not be challenged by third parties. Nor can we
assure you that, if challenged, our patents will be found to be valid or
enforceable, or that the patents of others will not have an adverse effect on
our ability to do business. Furthermore, others may independently develop
similar products or processes, duplicate our products or processes or design
their products around any patents that may be issued to us.

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Our international operations expose us to material risks.

During fiscal year 2002, our product sales by region were approximately
32.9% in North America, approximately 52.3% in Europe and the Middle East and
approximately 14.8% in Asia. We expect revenues from foreign markets to
continue to represent a significant portion of total revenues. IXYS maintains
significant operations in Germany and the United Kingdom and contracts with
suppliers and manufacturers in South Korea, Japan and elsewhere in Europe and
Asia. Some of the risks inherent in doing business internationally are:



| |  |  | foreign currency fluctuations;                                                                             
| | - |  | -----------------------------------------------------------------------------------------------------------
|
| |  |  | changes in the laws, regulations or policies of the countries
in which we manufacture or sell our products;
|
| |  |  | trade restrictions;                                                                                        
|
| |  |  | transportation delays; work stoppages; and                                                                 
|
| |  |  | economic or political instability.                                                                         

Our sales of products manufactured in our Lampertheim, Germany facility
and our costs at that facility are denominated in Euros, and sales of products
manufactured in our Chippenham, U.K. facility and our costs at that facility
are primarily denominated in British pounds and Euros. Fluctuations in the
value of the Euro and the British pound against the U.S. dollar could have a
significant impact on our balance sheet and results of operations, including
our net income. We currently do not enter into foreign currency hedging
transactions to control or minimize these risks. Fluctuations in currency
exchange rates could cause our products to become more expensive to customers
in a particular country, leading to a reduction in sales or profitability in
that country. If we expand our international operations or change our pricing
practices to denominate prices in other foreign currencies, we could be exposed
to even greater risks of currency fluctuations.

In addition, the laws of certain foreign countries may not protect our
products or intellectual property rights to the same extent as do U.S. laws
regarding the manufacture and sale of our products in the U.S. Therefore, the
risk of piracy of our technology and products may be greater when we
manufacture or sell our products in these foreign countries.

Our revenues are dependent upon our products being designed into our customers
products.

Some of our new products are incorporated into customers products or
systems at the design stage. The value of any design win largely depends upon
the commercial success of the customers product and on the extent to which the
design of the customers electronic system also accommodates incorporation of
components manufactured by our competitors. In addition, our customers could
subsequently redesign their products or systems so that they no longer require
our products. We may not achieve design wins or our design wins may not result
in future revenues.

Because our products typically have lengthy sales cycles, we may experience
substantial delays between incurring expenses related to research and
development and the generation of revenues.

The time from initiation of design to volume production of new power
semiconductor products often takes 18 months or longer. We first work with
customers to achieve a design win, which may take nine months or
longer. Our customers then complete the design, testing and evaluation process and begin to
ramp up production, a period which may last an additional nine months or
longer. As a result, a significant period of time may elapse between our
research and development efforts and our realization of revenues, if any, from
volume purchasing of our products by our customers.

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Our backlog may not result in future revenues.

Our business is characterized by short term orders and shipment schedules.
Customer orders typically can be cancelled or rescheduled without penalty to
the customer. As a result, our backlog at any particular date is not
necessarily indicative of actual revenues for any succeeding period. A
reduction of backlog during any particular period, or the failure of our
backlog to result in future revenues, could harm our results of operations.

The markets in which we participate are intensely competitive.

Certain of our target markets are intensely competitive. Our ability to
compete successfully in our target markets depends on the following factors:



| |  |  | product quality, reliability and performance;
| | - |  | ---------------------------------------------
|
| |  |  | product features;                            
|
| |  |  | timely delivery of products;                 
|
| |  |  | price;                                       
|
| |  |  | breadth of product line;                     
|
| |  |  | design and introduction of new products; and 
|
| |  |  | technical support and service.               

In addition, our competitors or customers may offer new products based on
new technologies, industry standards or end user or customer requirements,
including products that have the potential to replace, or provide lower cost or
higher performance alternatives to, our products. The introduction of new
products by our competitors or customers could render our existing and future
products obsolete or unmarketable.

Our primary competitors include Advanced Power Technology, Fuji,
International Rectifier, Infineon, On Semiconductor, Semikron International,
Powerex, STMicroelectronics, Siemens and Toshiba. Many of our competitors have
greater financial, technical, marketing and management resources than we have.
Some of these competitors may be able to sell their products at prices below
which it would be profitable for us to sell our products or benefit from
established customer relationships that provide them with a competitive
advantage.

We rely on our distributors and sales representatives to sell many of our
products.

A substantial majority of our products are sold through distributors and
sales representatives. Our distributors and sales representatives could reduce
or discontinue sales of our products. They may not devote the resources
necessary to sell our products in the volumes and within the time frames that
we expect. In addition, we depend upon the continued viability and financial
resources of these distributors and sales representatives, some of which are
small organizations with limited working capital. These distributors and sales
representatives, in turn, depend substantially on general economic conditions
and conditions within the semiconductor industry. We believe that our success
will continue to depend upon these distributors and sales representatives.

At March 31, 2002, no distributor accounted for greater than 10% of our
outstanding receivables. If this or any other distributor or sales
representative experiences financial difficulties, or otherwise becomes unable
or unwilling to promote and sell our products, our business could be harmed.

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Our future success depends on the continued service of management and key
engineering personnel and our ability to identify, hire and retain additional
personnel.

Our success depends, to a significant extent, upon the efforts and
abilities of Nathan Zommer, Ph.D., our president and chief executive officer,
and other members of senior management. The loss of the services of one or more
of our senior management or other key employees could adversely affect our
business. We do not maintain key person life insurance on any of our officers,
employees or consultants. There is intense competition for qualified employees
in the semiconductor industry, particularly for highly skilled design,
applications and test engineers. Competition is especially intense in the
Silicon Valley, where our U.S. design facility is located. We may not be able
to continue to attract and retain engineers or other qualified personnel
necessary for the development of our business or to replace engineers or other
qualified individuals who could leave us at any time in the future. Our
anticipated growth is expected to place increased demands on our resources, and
will likely require the addition of new management and engineering staff as
well as the development of additional expertise by existing management
employees. If we lose the services of or fail to recruit key engineers or other
technical and management personnel, our business could be harmed.

Periods of rapid growth and expansion could continue to place a significant
strain on our resources, including our employee base.

To manage our possible future growth effectively, we will be required to
continue to improve our operational, financial and management systems. In doing
so, we will periodically implement new software and other systems that will
affect our internal operations regionally or globally. Presently, we are
upgrading our enterprise resource planning software to integrate our operations
worldwide. The conversion process is complex and requires, among other things,
that data from our existing system be made compatible with the upgraded system.
During the transition to this upgrade, we could experience delays in ordering
materials, inventory tracking problems and other inefficiencies, which could
cause delays in shipments of products to our customers.

Future growth will also require us to successfully hire, train, motivate
and manage our employees. In addition, our continued growth and the evolution
of our business plan will require significant additional management, technical
and administrative resources. We may not be able to effectively manage the
growth and evolution of our current business.

Our stock price is volatile.

The market price of our common stock has fluctuated significantly to date.
See Item 5  Market for Registrants Common Equity and Related Stockholders
Matters provided elsewhere in this Annual Report on Form 10-K. The future
market price of our common stock may also fluctuate significantly due to:



| |  |  | variations in our actual or expected quarterly operating results;                                                                                                                       
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |  |  | announcements or introductions of new products;                                                                                                                                         
|
| |  |  | technological innovations by our competitors or development setbacks by us;                                                                                                             
|
| |  |  | conditions in the communications and semiconductor markets;                                                                                                                             
|
| |  |  | the commencement or adverse outcome of litigation;                                                                                                                                      
|
| |  |  | changes in analysts estimates of our performance or changes
in analysts forecasts regarding our industry, competitors or
customers;                                                   
|
| |  |  | announcements of merger or acquisition transactions or a
failure to achieve the expected benefits of an acquisition as
rapidly or to the extent anticipated by financial or analysts; or
|
| |  |  | general economic and market conditions.                                                                                                                                                 

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In addition, the stock market in recent years has experienced extreme
price and volume fluctuations that have affected the market prices of many high
technology companies, including semiconductor companies. These fluctuations
have often been unrelated or disproportionate to the operating performance of
companies in our industry, and could harm the market price of our common stock.

Our dependence on independent subcontractors to assemble and test our products
subject us to a number of risks, including an inadequate supply of products and
higher materials costs.

We depend on independent subcontractors for the assembly and testing of
our products. During fiscal year 2002, the majority of our products were
assembled by independent subcontractors. Our reliance on these subcontractors
involves the following significant risks:



| |  |  | reduced control over delivery schedules and quality;                             
| | - |  | ---------------------------------------------------------------------------------
|
| |  |  | the potential lack of adequate capacity during periods of excess demand;         
|
| |  |  | difficulties selecting and integrating new subcontractors;                       
|
| |  |  | limited warranties by subcontractors or other vendors on products supplied to us;
|
| |  |  | potential increases in prices due to capacity shortages and other factors; and   
|
| |  |  | potential misappropriation of our intellectual property.                         

These risks may lead to delayed product delivery or increased costs, which
would harm our profitability and customer relationships.

In addition, we use a limited number of subcontractors to assemble a
significant portion of our products. If one or more of these subcontractors
experiences financial, operational, production or quality assurance
difficulties, we could experience a reduction or interruption in supply.
Although we believe alternative subcontractors are available, our operating
results could temporarily suffer until our engages one or more of those
alternative subcontractors.

Our markets are subject to technological change and our success depends on our
ability to develop and introduce new products.

The markets for our products are characterized by:



| |  |  | changing technologies;                              
| | - |  | ----------------------------------------------------
|
| |  |  | changing customer needs;                            
|
| |  |  | frequent new product introductions and enhancements;
|
| |  |  | increased integration with other functions; and     
|
| |  |  | product obsolescence.                               

To develop new products for our target markets, we must develop, gain
access to and use leading technologies in a cost effective and timely manner
and continue to expand our technical and design expertise. Failure to do so
could cause us to lose our competitive position and seriously impact our future
revenues.

Our operating expenses are relatively fixed, and we may order materials in
advance of anticipated customer demand. Therefore, we have limited ability to
reduce expenses quickly in response to any revenue shortfalls.

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Our operating expenses are relatively fixed, and, therefore, we have
limited ability to reduce expenses quickly in response to any revenue
shortfalls. Consequently, our operating results will be harmed if our revenues
do not meet our revenue projections.

We also typically plan our production and inventory levels based on
internal forecasts of customer demand, which are highly unpredictable and can
fluctuate substantially. From time to time, in response to anticipated long
lead times to obtain inventory and materials from our external suppliers and
foundries, we may order materials or production in advance of anticipated
customer demand. This advance ordering may result in excess inventory levels or
unanticipated inventory write downs if expected orders fail to materialize.

Regulations may adversely affect our ability to sell our products.

Power semiconductors with operating voltages above 40 volts are subject to
regulations intended to address the safety, reliability and quality of the
products. These regulations relate to processes, design, materials and
assembly. For example, in the United States some high voltage products are
required to pass Underwriters Laboratory recognition for voltage isolation and
fire hazard tests. Sales of power semiconductors outside of the United States
are subject to international regulatory requirements that vary from country to
country. The process of obtaining and maintaining required regulatory
clearances can be lengthy, expensive and uncertain. The time required to obtain
approval for sale internationally may be longer than that required for U.S.
approval, and the requirements may differ.

In addition, approximately 15% of our revenues in fiscal year 2002 were
derived from the sale of products included in medical devices that are subject
to extensive regulation by numerous governmental authorities in the United
States and internationally, including the U.S. Food and Drug Administration, or
FDA. The FDA and certain foreign regulatory authorities impose numerous
requirements for medical device manufacturers to meet, including adherence to
Good Manufacturing Practices, or GMP, regulations and similar regulations in
other countries, which include testing, control and documentation requirements.
Ongoing compliance with GMP and other applicable regulatory requirements is
monitored through periodic inspections by federal and state agencies, including
the FDA, and by comparable agencies in other countries. Our failure to comply
with applicable regulatory requirements could prevent our products from being
included in approved medical devices.

Our business could also be harmed by delays in receiving or the failure to
receive required approvals or clearances, the loss of previously obtained
approvals or clearances or the failure to comply with existing or future
regulatory requirements.

Business interruptions may damage our facilities or those of our suppliers.

Our operations are vulnerable to interruption by fire, earthquake and
other natural disasters, as well as power loss, telecommunications failure and
other events beyond our control. We do not have a detailed disaster recovery
plan and does not have backup generators. Our corporate headquarters in
California is located near major earthquake fault lines and has experienced
earthquakes in the past. California also has recently been subject to shortages
of electrical power and is subject to power outages. If power outages occur,
our ability to conduct administrative matters and test our products could be
seriously impaired, which could harm our business, financial condition and
results of operations. We cannot be sure that the insurance we maintain against
general business interruptions will be adequate to cover all our losses.

In addition, some of our suppliers are located in California and are
subject to the same earthquake and power outage risks. A fire, major earthquake
or other natural disaster near one or more of our facilities or those of our
major suppliers could disrupt our operations and those of our suppliers, which
could in turn limit the supply of our products and harm our business.

We may be affected by environmental laws and regulations.

We are subject to a variety of laws, rules and regulations in the United
States and in Germany related to the use, storage, handling, discharge and
disposal of certain chemicals and gases used in our manufacturing process.

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Any of those regulations could require us to acquire expensive equipment
or to incur substantial other expenses to comply with them. If we incur
substantial additional expenses, product costs could significantly increase.
Our failure to comply with present or future environmental laws, rules and
regulations could result in fines, suspension of production or cessation of
operations.

We face the risk of financial exposure to product liability claims alleging
that the use of devices that incorporate our products resulted in adverse
effects.

Approximately 15% of our net revenues in fiscal year 2002 were derived
from sales of products used in medical devices such as defibrillators. Product
liability risks may exist even for those medical devices that have received
regulatory approval for commercial sale. We do not currently carry product
liability insurance, and any defects in our products used in these devices
could result in significant recall or product liability costs to us.

ABB AG and Nathan Zommer, Ph.D. own a controlling interest in our common stock.

ABB AG and Nathan Zommer, Ph.D., our president and chief executive
officer, collectively beneficially own, as of June 19, 2002, and
assuming the issuance of the approximately 4.89 million shares of IXYS common stock to be issued in
connection with our acquisition of Clare, Inc., approximately 42.4%
of the outstanding
shares of our common stock. As a result, ABB AG and Dr. Zommer, acting together,
could exercise significant control over all matters requiring stockholder
approval, including the election of the board of directors. These concentrated
holdings could result in a delay of, or serve as a deterrent to, possible
changes in control of IXYS, which may reduce the market price of our common
stock. See Item 12  Security Ownership of Certain Beneficial Owners and
Management provided elsewhere in this Annual Report on Form 10-K.

The anti-takeover provisions of our amended and restated certificate of
incorporation and of the Delaware General Corporation Law may delay, defer or
prevent a change of control.

Our board of directors has the authority to issue up to 5,000,000 shares
of preferred stock and to determine the price, rights, preferences and
privileges and restrictions, including voting rights, of those shares without
any further vote or action by our stockholders. The rights of the holders of
common stock will be subject to, and may be harmed by, the rights of the
holders of any shares of preferred stock that may be issued in the future. The
issuance of preferred stock may delay, defer or prevent a change in control
because the terms of any issued preferred stock could potentially prohibit our
consummation of any merger, reorganization, sale of substantially all of our
assets, liquidation or other extraordinary corporate transaction, without the
approval of the holders of the outstanding shares of preferred stock. In
addition, the issuance of preferred stock could have a dilutive effect on our
stockholders.

Our stockholders must give substantial advance notice prior to the
relevant meeting to nominate a candidate for director or present a proposal to
our stockholders at a meeting. These notice requirements could inhibit a
takeover by delaying stockholder action. The Delaware anti-takeover law
restricts business combinations with some stockholders once the stockholder
acquires 15% or more of our common stock. The Delaware statute makes it more
difficult for us to be acquired without the consent of our board of directors
and management.

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ITEM 2.  PROPERTIES

IXYS administrative, marketing, development and manufacturing facilities
are located in Santa Clara, California, Lampertheim, Germany and Chippenham,
England. The Santa Clara facility consists of approximately 20,000 square feet
under a lease that expires January 31, 2004. We have an option to extend the
lease for five years. The base rent under this lease is approximately $330,000
per year. The Lampertheim facility, which we own, consists of approximately
170,000 square feet. The Chippenham facility consists of approximately 100,000
square feet under a lease that expires December 19, 2022. The base rent under this lease
is approximately $327,000 per year. We believe that our current facilities will
be adequate through at least fiscal year 2003 and that suitable additional
space will be available in the future as needed on commercially reasonably
terms.

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ITEM 3.  LEGAL PROCEEDINGS

On June 22, 2000, International Rectifier Corporation filed an action for
patent infringement against us in the United States District Court for the
Central District of California, alleging that certain of our products sold in
the United States infringe U.S. patents owned by International Rectifier.
International Rectifiers complaint against us contend that our alleged
infringement of International Rectifiers patents has been and continues to be
willful and deliberate. The complaint seeks to enjoin us from further
infringement and requests an award of actual monetary damages on sales of
products that are claimed to infringe International Rectifiers patents.
International Rectifier also seeks to have the damages trebled.

We answered the complaint, denying any infringement and asserting that the
International Rectifier patents are invalid and unenforceable for, among other
reasons, failure of International Rectifier to properly disclose known prior
art during its prosecution of the patents in suit. We also contended that
International Rectifiers claims are barred by reason of the doctrines of
estoppel and laches. Trial in this case had been originally scheduled for June 12,
2001; however, the U.S. District Court has repeatedly continued the trial
date, which is currently set for July 30, 2002.

The U.S. District Court has also granted motions for summary adjudication
dismissing all of our affirmative defenses and decided that certain of our
power MOSFETs and IGBTs infringe certain claims of each of International
Rectifiers U.S. patents 4,959,699, 5,008,725 and/or 5,130,767. Furthermore,
on May 21, 2002, the U.S. District Court entered a permanent injunction, which
became effective June 5, 2002, barring us from making, using, offering to sell
or selling in, or importing into, the United States, MOSFETs (including IGBTs)
covered by the subject patents. On motion by us, the United States Court of
Appeals for the Federal Circuit stayed the injunction, pending further review.

International Rectifier also contends that our importation into the United
States of certain IXYS-designed MOSFET products manufactured for us by Samsung
Electronics Co., Ltd. (Samsung) is in violation of a consent decree and
injunction entered against Samsung in another lawsuit to which we were not a
party (the Samsung Injunction). In February 2001, International Rectifier
served Samsung and us with a Post-Judgment Ex Parte Application for Order to
Show Cause Re Contempt seeking, among other things, an enforcement of the
Samsung Injunction enjoining our importation into the United States of the
allegedly-infringing products, and an appropriate fine. We responded by filing
a motion requesting clarification of the Samsung Injunction, or if the Samsung
Injunction is construed to cover our products, modification of the Samsung
Injunction to exclude IXYS devices. Argument concerning the Order to Show
Cause was held in May 2001, at which time the U.S. District Court remarked that
we were bound by the Samsung Injunction, and that we and Samsung were
attempting to subvert the Samsung Injunction by having us take delivery outside
the United States of the allegedly-infringing products. At that time, the U.S.
District Court deferred a decision as to whether we and Samsung were in
contempt. In March 2002, no decision having been reached on its earlier
motion, we renewed and amended our motion to clarify, modify or vacate the
Samsung Injunction as to IXYS devices. On March 19, 2002, the U.S. District
Court adopted and entered Interim Findings of Fact and Conclusions of Law that
decided, among other things, that we were bound by, and IXYS devices are not
excepted from, the Samsung Injunction. On April 1, 2002, the U.S. District
Court denied our renewed motion to clarify, modify or vacate the Samsung
Injunction. We immediately appealed each of these rulings to the Court of
Appeals for the Federal Circuit and requested a stay of the Samsung Injunction
as to IXYS devices pending outcome of these appeals. The Court of Appeals for
the Federal Circuit granted the motion to stay the Samsung Injunction pending
further review, and on June 12, 2002, entered a ruling on the merits of the
request for stay of injunction, granting our motion to stay pending appeal.

It remains our intent to continue to contest the claims of International
Rectifier vigorously. Furthermore, we expect to appeal any ruling of contempt.
While we believe our defenses to the various claims and our arguments on
appeal are meritorious, there can be no assurance of a favorable outcome. In
the event of an adverse outcome, damages or injunctions awarded by the U.S.
District Court could be materially adverse to our financial condition and
results of operations.

In response to International Rectifiers claims, Samsung contends that we
are contractually obligated under the terms of our wafer supply agreement with
Samsung to defend it against the contempt claims made by International
Rectifier and indemnify and hold Samsung harmless in connection with such
claims. We are

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considering Samsungs request in light of the terms of the wafer supply
agreement between us and Samsung. While we believe that neither IXYS nor
Samsung is or could be in violation of the injunction for various reasons we
believe to be meritorious, including an express reservation as to our designed
parts in the consent decree, there can be no assurance of a favorable outcome.
In the event of an adverse ruling against us on the ultimate issue of contempt,
or if we are obligated to defend and indemnify Samsung, any damages awarded or
injunction entered by the U.S. District Court could be materially adverse to
our financial condition and results of operations.

In November 2000, we filed a lawsuit for patent infringement against
International Rectifier GmbH in the County Court of Mannheim, Germany. The
lawsuit charged International Rectifier with infringing at least two of our
German patents. These patents cover key design features of our proprietary
integrated power module technology, which the lawsuit alleged International
Rectifier had been infringing in products sold in Germany. The lawsuit sought
damages and an injunction prohibiting the continued infringement by
International Rectifier.

On March 23, 2001, a public hearing took place in Mannheim, Germany, and
International Rectifier did not deny making use of the above patents. On April
27, 2001, the County Court of Mannheim rendered a judgment in our favor that
enjoined International Rectifier from marketing, utilizing, importing or
possessing two of our German patents, and imposed a fine of up to (EUR) 256,000
to the state or imprisonment of International Rectifiers managing director for
each violation of the injunction. In addition, International Rectifier was
ordered to disclose to us information about its previous sales activity, offers
of sales, advertisements, production costs and profits concerning the infringed
patents. International Rectifier was also ordered to pay attorney fees and past
and future damages and unjustified enrichment resulting from International
Rectifiers infringing practices, as calculated by the information to be
provided to us by International Rectifier. International Rectifier appealed the
judgment to the Court of Appeals in Karlsruhe. Subsequent to a hearing on this appeal in March, the Court of Appeals in Karlsruhe ruled in our favor
and the judgment entered by the County Court of Mannheim is now final.
Notwithstanding this appeal, IXYS had
begun enforcing the judgment of the County Court of Mannheim; in order to do so
IXYS was required to pay (EUR) 532,000 as a form of bond to be held by the
County Court of Mannheim. In lieu of the bond, the court accepted a
bank guarantee. Although International Rectifier has a right to
appeal the ruling of the Appeals Court in Karlsruhe, the bond may be returned
to IXYS and IXYS may continue to enforce the judgment of the County Court of
Mannheim. International Rectifier has also begun to disclose information to
IXYS pursuant to the judgment for purposes of calculating our damages award.

On February 8, 2001, we filed a lawsuit against International Rectifier
Italia S.p.A. in the Civil Court of Monza, Italy, for patent infringement of at
least two of our European patents, which correspond to the German patents
involved in the above-described legal proceeding in Germany. The lawsuit seeks
the seizure of semiconductor modules produced by International Rectifier that
infringe on our patents and an injunction against further production of such
modules by International Rectifier in Italy. At a hearing on March 8, 2001, the
judge rejected International Rectifiers arguments that the Monza tribunal was
not competent to hear the case and nominated an expert to comment on the
technical details of the alleged patent infringement. Following the scheduled
submission of technical writs by the parties in May 2001, the expert submitted
written comments in June 2001. On June 27, 2001, the Civil Court of Monza
rendered a preliminary injunction in our favor with respect to certain claims
of infringement by International Rectifier S.p.A. Under the terms of this
preliminary injunction, we are permitted to seize, and International Rectifier
S.p.A. is prohibited from distributing, certain of the allegedly infringing
semiconductor modules. The injunction is an interlocutory measure that remains
in effect until there has been a judgment on the merits. Hearings on the merits
of the law suit were held on December 12, 2001, January 24 2002 and February
21, 2002. It could be as long as several years before a judgment on the merits
is rendered.

While we believe our claims against International Rectifier in the Civil
Court of Monza, Italy are meritorious, there can be no assurance of a
favorable outcome. We do not believe that an adverse ruling by the Civil
Court of Monza would have a significant negative impact on our results of
operations, financial performance or liquidity.

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

None.

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PART  II




ITEM 5.  MARKET FOR REGISTRANTS COMMON EQUITY AND RELATED STOCKHOLDERS MATTERS

IXYS common stock has been trading on The Nasdaq National Market under
the symbol SYXI since August 21, 2000. Prior to August 21, 2000, our common
stock traded on The Nasdaq SmallCap Market. The following table presents, for
the periods indicated, the high and low sale prices per share of our common
stock as reported by The Nasdaq National Market since August 21, 2000, and for
all periods prior to that date the high and low sale prices per share of our
common stock as reported by The Nasdaq SmallCap Market:

|                                  |                |  |      |       |     |  |   |       | 
|--------------------------------- | -------------- |  | ---- | ----- | --- |  | - | ----- | 
|                                  |                |  | High |       | Low
|                                  |                |  |      |       |    
|Fiscal year ending March 31, 2002 |                |  |      |       |     |  |   |      
|                                  | First Quarter  |  | $    | 19.45 |     |  | $ | 10.20 | 
|                                  | Second Quarter |  | $    | 15.30 |     |  | $ | 4.27  | 
|                                  | Third Quarter  |  | $    | 8.20  |     |  | $ | 5.13  | 
|                                  | Fourth Quarter |  | $    | 12.55 |     |  | $ | 7.25  | 
|Fiscal year ending March 31, 2001 |                |  |      |       |     |  |   |      
|                                  | First Quarter  |  | $    | 34.50 |     |  | $ | 4.66  | 
|                                  | Second Quarter |  | $    | 45.38 |     |  | $ | 20.50 | 
|                                  | Third Quarter  |  | $    | 29.75 |     |  | $ | 11.00 | 
|                                  | Fourth Quarter |  | $    | 27.75 |     |  | $ | 11.53 | 

IXYS completed a two-for-one stock split of its common stock on August 10,
2000. Share prices have been adjusted to give effect to the stock split.

Dividends

To date, IXYS has never declared or paid cash dividends.

Securities Authorized for Issuance under IXYS Equity Compensation Plans

|                                                           |  |                         |           |                      |  |                          |      |  |  |                         |           | 
|---------------------------------------------------------- |  | ----------------------- | --------- | -------------------- |  | ------------------------ | ---- |  |  | ----------------------- | --------- | 
|                                                           |  | (a)                     |           | (b)                  |  | (c)                     
|                                                           |  |                         |           |                      |  |                         
|                                                           |  |                         |           |                      |  |                          |      |  |  | Number of securities   
|                                                           |  |                         |           |                      |  |                          |      |  |  | remaining available for
|                                                           |  | Number of securities to |           | Weighted-average     |  | issuance under equity   
|                                                           |  | be issued upon exercise |           | exercise price of    |  | compensation plans      
|                                                           |  | of outstanding options, |           | outstanding options, |  | (excluding securities   
|Plan Category                                              |  | warrants and rights     |           | warrants and rights  |  | reflected in column (a))
|                                                           |  |                         |           |                      |  |                         
|Equity compensation
plans approved by
security holders     |  |                         | 3,758,845 |                      |  | $                        | 5.05 |  |  |                         | 2,749,276 | 
|Equity compensation
plans not approved
by security holders |  |                         |          |                      |  |                          |     |  |  |                         |          | 
|                                                           |  |                         |           |                      |  |                          |      |  |  |                         |           | 
|Total                                                      |  |                         | 3,758,845 |                      |  | $                        | 5.05 |  |  |                         | 2,749,276 | 
|                                                           |  |                         |           |                      |  |                          |      |  |  |                         |           | 

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ITEM 6.  SELECTED FINANCIAL DATA

The following selected consolidated financial information should be read
in conjunction with our Consolidated Financial Statements and related notes and
Managements Discussion and Analysis of Financial Condition and Results of
Operations included elsewhere in this Annual Report on Form 10-K. The
consolidated statements of operations data for the years ended March 31, 2002,
2001 and 2000 and the balance sheet data as of March 31, 2002 and 2001 are
derived from our consolidated financial statements included elsewhere in this
Annual Report on Form 10-K. The statements of operations data for the years
ended March 31, 1999 and 1998 and the balance sheet data as of March 31, 2000,
1999 and 1998 are derived from our consolidated financial statements that are
not included in this Annual Report on Form 10-K. Historical results are not
necessarily indicative of results to be expected in any future period.

|                                                |                                                                    |                         |        |                                          |        |      |         |        |        |      |        |        |        |   |        |        |        |   |        |        |        | 
|----------------------------------------------- | ------------------------------------------------------------------ | ----------------------- | ------ | ---------------------------------------- | ------ | ---- | ------- | ------ | ------ | ---- | ------ | ------ | ------ | - | ------ | ------ | ------ | - | ------ | ------ | ------ | 
|                                                |                                                                    |                         |        | Year Ended March 31,                    
|                                                |                                                                    |                         |        |                                         
|                                                |                                                                    |                         |        | 2002                                     |        | 2001 |         | 2000   |        | 1999 |        | 1998  
|                                                |                                                                    |                         |        |                                          |        |      |         |        |        |      |        |       
|                                                |                                                                    |                         |        | (in thousands, except per share amounts)
|Statement of Operations Data:                   |                                                                    |                         |        |                                          |        |      |         |        |        |      |        |        |        |   |        |        |        |   |        |       
|Net revenues                                    |                                                                    | $                       | 82,821 |                                          |        | $    | 111,389 |        |        | $    | 76,627 |        |        | $ | 66,523 |        |        | $ | 56,856 |       
|Cost of goods sold                              |                                                                    |                         | 56,918 |                                          |        |      | 69,967  |        |        |      | 49,290 |        |        |   | 44,939 |        |        |   | 38,048 |       
|                                                |                                                                    |                         |        |                                          |        |      |         |        |        |      |        |        |        |   |        |        |        |   |        |       
|                                                |                                                                    | Gross profit            |        |                                          | 25,903 |      |         |        | 41,422 |      |        |        | 27,337 |   |        |        | 21,584 |   |        |        | 18,808 | 
|                                                |                                                                    |                         |        |                                          |        |      |         |        |        |      |        |        |        |   |        |        |        |   |        |       
|Operating expenses:                             |                                                                    |                         |        |                                          |        |      |         |        |        |      |        |        |        |   |        |        |        |   |        |       
|                                                | Research, development and engineering                              |                         |        | 5,728                                    |        |      |         | 6,081  |        |      |        | 4,668  |        |   |        | 4,196  |        |   |        | 3,329  |       
|                                                | Selling, general and administrative                                |                         |        | 12,884                                   |        |      |         | 13,959 |        |      |        | 11,450 |        |   |        | 9,855  |        |   |        | 8,384  |       
|                                                | Writeoff of goodwill and in process research and development       |                         |        |                                         |        |      |         |       |        |      |        |       |        |   |        | 10,401 |        |   |        |       |       
|                                                |                                                                    |                         |        |                                          |        |      |         |        |        |      |        |        |        |   |        |        |        |   |        |       
|Total operating expenses                        |                                                                    |                         | 18,612 |                                          |        |      | 20,040  |        |        |      | 16,118 |        |        |   | 24,452 |        |        |   | 11,713 |       
|                                                |                                                                    |                         |        |                                          |        |      |         |        |        |      |        |        |        |   |        |        |        |   |        |       
|                                                |                                                                    | Operating income (loss) |        |                                          | 7,291  |      |         |        | 21,382 |      |        |        | 11,219 |   |        |        | (2,868 | ) |        |        | 7,095  | 
|                                                |                                                                    |                         |        |                                          |        |      |         |        |        |      |        |        |        |   |        |        |        |   |        |       
|Interest
income (expense), net                  |                                                                    |                         | 1,318  |                                          |        |      | 1,030   |        |        |      | (417   | )      |        |   | (993   | )      |        |   | (431   | )     
|Gain (loss) on foreign currency transactions    |                                                                    |                         | (46    | )                                        |        |      | 119     |        |        |      | 184    |        |        |   | 37     |        |        |   | 183    |       
|Other (expense) income, net                     |                                                                    |                         | (5,441 | )                                        |        |      | (623    | )(1)   |        |      | (199   | )      |        |   | 669    |        |        |   | 3,466  | (2)   
|                                                |                                                                    |                         |        |                                          |        |      |         |        |        |      |        |        |        |   |        |        |        |   |        |       
|Income (loss) before provision for income taxes |                                                                    |                         | 3,122  |                                          |        |      | 21,908  |        |        |      | 10,787 |        |        |   | (3,155 | )      |        |   | 10,313 |       
|Provision for income taxes                      |                                                                    |                         | (1,184 | )                                        |        |      | (8,321  | )      |        |      | (3,888 | )      |        |   | (2,083 | )      |        |   | (4,229 | )     
|                                                |                                                                    |                         |        |                                          |        |      |         |        |        |      |        |        |        |   |        |        |        |   |        |       
|                                                | Net income (loss)                                                  |                         | $      | 1,938                                    |        |      | $       | 13,587 |        |      | $      | 6,899  |        |   | $      | (5,238 | )      |   | $      | 6,084  |       
|                                                |                                                                    |                         |        |                                          |        |      |         |        |        |      |        |        |        |   |        |        |        |   |        |        |       
|                                                | Net income (loss) per share  basic(3)                             |                         | $      | 0.07                                     |        |      | $       | 0.54   |        |      | $      | 0.29   |        |   | $      | (0.28  | )      |   | $      | 0.80   |       
|                                                |                                                                    |                         |        |                                          |        |      |         |        |        |      |        |        |        |   |        |        |        |   |        |        |       
|                                                | Weighted average shares used in per share calculation  basic(3)   |                         |        | 26,745                                   |        |      |         | 25,239 |        |      |        | 23,970 |        |   |        | 18,746 |        |   |        | 7,576  |       
|                                                |                                                                    |                         |        |                                          |        |      |         |        |        |      |        |        |        |   |        |        |        |   |        |       
|                                                | Net income (loss) per share  diluted(3)                           |                         | $      | 0.07                                     |        |      | $       | 0.49   |        |      | $      | 0.28   |        |   | $      | (0.28  | )      |   | $      | 0.26   |       
|                                                |                                                                    |                         |        |                                          |        |      |         |        |        |      |        |        |        |   |        |        |        |   |        |       
|                                                | Weighted average shares used in per share calculation  diluted(3) |                         |        | 29,004                                   |        |      |         | 27,774 |        |      |        | 24,826 |        |   |        | 18,746 |        |   |        | 23,352 |       
|                                                |                                                                    |                         |        |                                          |        |      |         |        |        |      |        |        |        |   |        |        |        |   |        |       

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|                         |                               |  |                      |       |      |  |      |       |      |  |      |       |   |  |   |       |   |  |   |       |  
|------------------------ | ----------------------------- |  | -------------------- | ----- | ---- |  | ---- | ----- | ---- |  | ---- | ----- | - |  | - | ----- | - |  | - | ----- | -
|                         |                               |  | Year Ended March 31,
|                         |                               |  |                     
|                         |                               |  | 2002                 |       | 2001 |  | 2000 |       | 1999 |  | 1998
|                         |                               |  |                      |       |      |  |      |       |      |  |     
|                         |                               |  | (in thousands)      
|Selected Operating Data: |                               |  |                      |       |      |  |      |       |      |  |      |       |   |  |   |       |   |  |   |      
|                         | Gross profit margin           |  |                      | 31.3  | %    |  |      | 37.2  | %    |  |      | 35.7  | % |  |   | 32.4  | % |  |   | 33.1  | %
|                         | Depreciation and amortization |  | $                    | 5,835 |      |  | $    | 3,409 |      |  | $    | 3,352 |   |  | $ | 2,614 |   |  | $ | 1,525 |  

|                    |                                      |  |                |         |      |  |      |         |      |  |      |        |  |  |   |        |  |  |   |         |    
|------------------- | ------------------------------------ |  | -------------- | ------- | ---- |  | ---- | ------- | ---- |  | ---- | ------ |  |  | - | ------ |  |  | - | ------- | ---
|                    |                                      |  | March 31,     
|                    |                                      |  |               
|                    |                                      |  | 2002           |         | 2001 |  | 2000 |         | 1999 |  | 1998
|                    |                                      |  |                |         |      |  |      |         |      |  |     
|                    |                                      |  | (in thousands)
|Balance Sheet Data: |                                      |  |                |         |      |  |      |         |      |  |      |        |  |  |   |        |  |  |   |        
|                    | Cash and cash equivalents            |  | $              | 32,111  |      |  | $    | 44,795  |      |  | $    | 9,455  |  |  | $ | 7,087  |  |  | $ | 9,644   |    
|                    | Working capital                      |  |                | 81,399  |      |  |      | 82,007  |      |  |      | 30,345 |  |  |   | 24,409 |  |  |   | 13,834  |    
|                    | Total assets                         |  |                | 124,560 |      |  |      | 127,414 |      |  |      | 63,045 |  |  |   | 57,100 |  |  |   | 54,340  |    
|                    | Total long-term obligations          |  |                | 12,261  |      |  |      | 8,307   |      |  |      | 12,182 |  |  |   | 13,794 |  |  |   | 40,807  | (4)
|                    | Total stockholders equity (deficit) |  |                | 95,219  |      |  |      | 92,724  |      |  |      | 30,897 |  |  |   | 25,720 |  |  |   | (11,956 | )  



---

|(1) |  | Includes a $2.5 million
net gain, which was comprised of a one-time payment
for a technology license.                                                                                                                                                                                                                                       
|--- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|   
|   
|   
|(2) |  | Includes $3.7 million of income from a settlement of patent litigation.                                                                                                                                                                                                                                                                     
|   
|   
|   
|   
|(3) |  | Shares used in per share calculation in fiscal years 1997 through 1999
have been restated to reflect IXYS shares outstanding as a result of the
Paradigm merger, as described in the IXYS Annual Report on Form 10-K for
the period ended March 31, 2001. In the Paradigm merger, each outstanding
share was converted into 0.057842 shares.
|   
|   
|   
|   
|(4) |  | Includes mandatory redeemable convertible preferred stock with par value
of $0.01 per share at the amounts of $28,256 for fiscal year 1998.                                                                                                                                                                                                 

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ITEM 7.  MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS

Overview

We are a leading company in the design, development, manufacture and
marketing of high power, high performance power semiconductors. Our power
semiconductors improve system efficiency and reliability by converting
electricity at relatively high voltage and current levels into the finely
regulated power required by electronic products. We focus on the market for
power semiconductors that are capable of processing greater than 500 watts of
power.

We were founded in 1983. In 1989, we acquired from ABB our semiconductor
operation in Lampertheim, Germany, now called IXYS Semiconductor GmbH. This
acquisition provided us with a strong foothold in Europe.

In 1995, we reincorporated in Delaware. Also in 1995, ABB converted
approximately $10.5 million in debt owed to it by us into our capital stock. In
January 1998, we purchased the Lampertheim facility, which had previously been
leased from ABB.

In September 1998, IXYS Corporation merged with Paradigm Technology, a
Delaware corporation that designed and marketed SRAM products, in a transaction
accounted for as a reverse merger. In the merger, Paradigm issued its common
stock in exchange for all outstanding shares of our capital stock. At the
conclusion of the merger, IXYS stockholders held approximately 96% of the
combined company, and the historic accounting records of IXYS became those of
the combined company. Accordingly, Paradigm formally changed its name to IXYS
Corporation.

In May 2000, we acquired Directed Energy, which gave us added scientific
expertise and additional products related to laser diode drives, high voltage
pulse generators and modulators. In connection with this acquisition, we issued
250,370 shares of our common stock to the former shareholders of Directed
Energy.

On June 10, 2002, we completed the acquisition of Clare, Inc., a provider
of high-voltage analog and mixed-signal semiconductor integrated packages and
discrete components for use in electronic communications, computer, and
industrial equipment. In connection with this acquisition, we issued
approximately 4.89 million shares of IXYS common stock to the holders of
outstanding shares of Clare common stock and assumed options to purchase
approximately 1.0 million shares of IXYS common stock. The
acquisition will be accounted for under the purchase method of
accounting.

The semiconductor industry is cyclical and has from time to time
experienced depressed business conditions. The semiconductor industry has
historically experienced a decrease in average selling prices of products over
time. From 1996 through 1998, the semiconductor industry experienced worldwide
overcapacity, which caused prices to erode and was accompanied by a slowdown in
the demand for semiconductors. Additionally, a number of factors can result in
quarter to quarter fluctuations in operating results, including: the reduction,
rescheduling or cancellation of orders by customers; fluctuations in the timing
and amount of customer requests for product shipments; fluctuations in the
manufacturing yields and significant yield losses; and availability of
production capacity.

In fiscal year 2002, North American sales represented approximately 32.9%,
and international sales represented approximately 67.1%, of our net revenues.
Of our international sales, approximately 77.9% were derived from sales in
Europe and the Middle East and approximately 22.1% were derived from sales in
Asia. No single end customer accounted for more than 10% of our net revenues in
fiscal year 2002. We do not hedge our foreign currency transactions.
Accordingly, although many of our sales and expenses occur in the same
currency, translation of foreign currencies into U.S. dollars may negatively
impact us.

We relied on external foundries for approximately 44% of our wafer
fabrication requirements in fiscal year 2002, and our utilization of external
foundries is expected to grow. We have arrangements with four external wafer
foundries, two of which produce substantially all of the wafers provided to us
by external foundries. Our principal external foundry is Samsung Electronics
facility located in Kiheung, South Korea. Our relationship with Samsung
Electronics extends over 18 years. We provide our foundries forecasts for wafer
fabrication six months in advance and make firm purchase commitments one to two
months in advance of delivery. Other than these firm commitments, we do not
have any obligations to order any minimum quantities.

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Critical Accounting Policies

Our financial statements and accompanying notes are prepared in accordance
with generally accepted accounting principles in the United States. Preparing
financial statements requires management to make estimates and assumptions that
affect the reported amounts of assets, liabilities, revenue, and expenses.
These estimates and assumptions are affected by managements application of
accounting policies. Critical accounting policies for IXYS include inventories,
valuation of plant, equipment and intangible assets, revenue recognition and
other independent subcontractors, accounting for legal contingencies, and
accounting for income taxes.

Inventories.Inventories are recorded at the lower of standard cost,
which approximates actual cost on a first-in-first-out basis, or market value.
We regularly review inventory quantities on hand and record a provision for
excess and obsolete inventory based primarily on our estimated forecast and
demand requirements for the next twelve to eighteen months. Actual demand and
market conditions may be different from those projected by our management. This
could have a material effect on our operating results and financial position.

Valuation of Plant, Equipment, and Intangible Assets.We evaluate the
recoverability of our plant and equipment and intangible assets in accordance
with Statement of Financial Accounting Standards No. 121, or SFAS No. 121,
Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets
to be Disposed of When Certain Events or Circumstances Indicate that the
Carrying Amount Might Not be Recoverable. This standard requires recognition
of impairment of long-lived assets other than goodwill in the event the carrying value of such
assets exceeds the future undiscounted cash flows attributable to such assets.
Impairment evaluations involve management estimates of the useful lives of
assets and future cash flows from such assets. Actual useful lives and cash
flows could be different from those estimated by our management. This could
have a material effect on our operating results and financial position.

Revenue Recognition.We recognize revenue from product sales upon
shipment provided that we have received a customer executed purchase order, the
price is fixed, title has transferred, collection of resulting receivables is
reasonably assured, there are no customer acceptance requirements, and there
are no remaining significant obligations. Reserves for sales returns and
allowances are recorded at the time of shipment. Specifically, our management
must make estimates of potential future product returns and allowance
for so called ship and debit
transactions related to current period product revenue. Our management analyzes
historical returns discounts and ship and debit transactions, current economic
trends and changes in customer demand and acceptance of our products when
evaluating the adequacy of the sales returns and other allowances. Significant
management judgments and estimates must be made and used in connection with
establishing the sales returns and other allowances in any accounting period.
Material differences may result in the amount and timing of our revenue for any
period if management made different judgments or utilized different estimates.
Our warranty reserve is established based on our best estimate, based on
historical experience, of the amounts necessary to repair or replace our
product during the warrant period, which is generally one year. While we
believe that our warranty reserve is adequate and the judgment applied is
appropriate, such amounts estimated to repair or replace our product could
differ materially from what will actually transpire in the future.

Legal Contingencies.We are subject to various legal proceedings and
claims, the outcomes of which are subject to significant uncertainty. SFAS 5,
Accounting for Contingencies, requires that an estimated loss from a loss
contingency should be accrued by a charge to income if it is probable that an
asset has been impaired or a liability has been incurred and the amount of the
loss can be reasonably estimated. Disclosure of a contingency is required if
there is at least a reasonable possibility that a loss has been incurred. We
evaluate, among other factors, the degree of probability of an unfavorable
outcome and the ability to make a reasonable estimate of the amount of loss.
Changes in these factors could materially impact our financial position or our
results of operations.

Income Taxes.As part of the process of preparing our consolidated
financial statements we are required to estimate our income taxes in each of
the jurisdictions in which we operate. This process involves us estimating our
actual current exposure together with assessing temporary differences resulting
from differing treatment of items, such as pensions or capital leases, for tax
and accounting purposes. These differences result in differed tax assets and
liabilities, which are included within our consolidated balance sheet. We must
then assess the likelihood that our deferred tax assets will be recovered from
future taxable income and to the extent we believe that recovery is not likely,
we must establish a valuation allowance. To the extent we establish a valuation
allowance or increase this allowance in a period, we must include an expense
within the tax provision in the statement of operations.

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Significant management judgment is required in determining our provision
for income taxes, our deferred tax assets and liabilities and any valuation
allowance recorded against our net deferred tax assets. In the event that
actual results differ from these estimates or we adjust these estimates in
future periods we may need to establish an additional valuation allowance which
could materially impact our financial position and results of operations.

Results of Operations

Net Revenues.Net revenues for fiscal year 2002 were $82.8 million, a
25.6% decrease from net revenues of $111.4 million in fiscal year 2001.
International net revenues were $55.6 million for fiscal year 2002, or 67.1% of
net revenues, as compared to $66.8 million for fiscal year 2001, or 60.0% of
net revenues.

The decrease in net revenues for fiscal year 2002 from fiscal year 2001 is
primarily related to an approximately 18.1% decrease in units shipped in fiscal
year 2002 as compared to fiscal year 2001 and an approximately 14.9% decrease in
average selling prices across our product lines. We believe that the decrease in
unit sales volume was largely attributable to decreased demand for power
conversion systems for communications infrastructure applications.

Net revenues for fiscal year 2001 were $111.4 million, a 45.4% increase
from net revenues of $76.6 million in fiscal year 2000. International net
revenues were $66.8 million for fiscal year 2001, or 60.0% of net revenues, as
compared to $47.6 million for fiscal year 2000, or 62.2% of net revenues.

The increase in net revenues for fiscal year 2001 from fiscal year 2000 is
primarily related to an approximately 60.1% increase in units shipped in fiscal
year 2001 as compared to fiscal year 2000, offset by approximately 9.2%
decrease in average selling prices across our product line. We believe that the increase in unit sales volume was largely attributable
to increased demand for power conversion systems for communications
infrastructure applications.

Gross Profit.Gross profit was $25.9 million, or 31.3% of net revenues in
fiscal year 2002, as compared to $41.4 million, or 37.2% of net revenues, in
fiscal year 2001. The decrease in margins was primarily due to a 14.9% decrease
in average selling price as well as a change in the mix of product sold.

Gross profit was $41.4 million, or 37.2% of net revenues in fiscal year
2001, as compared to $27.3 million, or 35.7% of net revenues, in fiscal year
2000. The increase in margins was primarily due to increases in manufacturing
efficiencies.

Research, Development and Engineering.During fiscal year 2002, research,
development and engineering (R&D) expense was $5.7 million, or 6.9% of net
revenues, as compared to $6.1 million, or 5.5% of net revenues, in fiscal year
2001. The dollar decrease was due to a fewer number of research and development
projects. As a percentage of revenues, R&D expense increased as a result of
such expenses decreasing at a relatively slower rate than revenues.

During fiscal year 2001, research, development and engineering (R&D)
expense was $6.1 million, or 5.5% of net revenues, as compared to $4.7 million,
or 6.1% of net revenues, in fiscal year 2000. The dollar increase was due to
higher engineering headcount in fiscal year 2001, as well as an increase in the
number of R&D projects. As a percentage of revenues, R&D expense decreased as a
result of such expense increasing at a relatively slower rate than revenues

Selling, General and Administrative.During fiscal year 2002, selling,
general and administrative (SG&A) expense was $12.9 million, or 15.6% of net
revenues, as compared to $14.0 million, or 12.5% of net revenues, in fiscal
year 2001. The dollar amount decrease, which included a $150,000 reversal of
accruals for contingencies that were resolved, reflects a decrease
in expenses to support a lower revenue level.

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During fiscal year 2001, selling, general and administrative (SG&A)
expense was $14.0 million, or 12.6% of net revenues, as compared to $11.5
million, or 15.0% of net revenues, in fiscal year 2000. The dollar amount
increase reflects an increase in expenses to support a higher revenue level.

Interest Income (Expense).During fiscal year 2002, interest income was
$1.4 million, as compared to of $1.0 million in fiscal year 2001. The increase
is mainly due to interest received from the investment of the net proceeds from
our secondary public offering during the whole fiscal year 2002.

During fiscal year 2001, interest income was $1.0 million, as compared to
interest expense of $(417,000) in fiscal year 2000. The increase is mainly due
to interest received from the investment since October 2000 of the net proceeds from our secondary
public offering.

Other Income (Expense), Net.Other income (expense), net, including gain
on foreign currency transactions, in fiscal year 2002 was $(5.5 million) as
compared to $(504,000) in fiscal year 2001. The increase in other expense is
mainly due to litigation defense costs of $4.6 million.

Other income (expense), net, including gain on foreign currency
transactions, in fiscal year 2001 was $(504,000), as compared to
$(15,000) in
fiscal year 2000 and included net litigation settlements of
$2.5 million offset by litigation defense costs of
$3.2 million.

Provision For Income Taxes.The fiscal year 2002 provision for income
taxes reflects an effective tax rate of 38% in fiscal year 2002, which remained unchanged from fiscal 2001.

The fiscal year 2001 provision for income taxes reflects an effective tax
rate of 38% in fiscal year 2001, as compared to the fiscal year 2000 provision
of 36%.

Liquidity and Capital Resources

Cash and Cash Equivalents.As of March 31, 2002, cash and cash equivalents
were $32.1 million, a decrease of $12.7 million from cash and cash equivalents
of $44.8 million at March 31, 2001, which was an increase of $35.3 million from
cash and cash equivalents of $9.5 million at March 31, 2000. The decrease in
cash and cash equivalents from fiscal years 2001 to 2002 was related
to the acquisition of additional manufacturing equipment and cash
used in the acquisition of Westcode. The increase in cash and cash equivalents from
fiscal years 2000 to 2001 was primarily due to the $45.3 million in net
proceeds received from the sale of our common stock in connection with an
underwritten follow-on public offering in October 2000.

Cash flows from
operating activities.Net cash provided by operating
activities in fiscal year 2002 was $1.2 million, which
represents an
increase of $12,000 from $1.2 million in fiscal year 2001. The increase in net cash
provided by operating activities was primarily attributable to the
liquidation of receivables, in the normal course of business, offset
by decreases in accounts payable and accrued liabilities.

Cash flows from investing activities.Net cash used in investing
activities in fiscal year 2002 was $16.0 million. We invested
$7.5 million for
plant and equipment purchases to increase capacity in order to meet increased
demand. In addition, we invested $8.6 million in the acquisition
of Westcode Semiconductors Limited.

Cash flows from financing activities.During fiscal year 2002, net cash
provided by financing activities was $4.0 million, which was mainly due to
proceeds from capital lease obligations.

There are three lines of credit facilities available to us. We have one
line of credit with a U.S. bank that consists of a $5.0 million commitment
amount which is available through September 2002. The line bears interest at
the banks prime rate (4.5% at March 31, 2002). The line is collateralized by
certain assets and contains certain general and financial covenants. At March 31,
2002, we had drawn $700,000 against such line of credit.

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We have another line of credit with a U.S. bank that consists of a
$100,000 commitment, which is available through September 2002. The line bears
interest at a fixed rate of 9.5%. The line is collateralized by a $100,000
certificate of deposit that we have with the bank. At March 31, 2002, there
were no amounts being drawn against such line of credit.

In Germany, at March 31, 2002, we had a $5.0 million line of credit with a
German bank with no outstanding balance. This line supports a letter of credit
facility.

In July 2000, a German bank issued to us a commitment letter for a (EUR)
3.8 million equipment lease facility. Our existing equipment leases, (EUR) 5.9
million at March 31, 2002, were charged against the facility. The equipment
leases provide financing at varying pricing for periods up to 48 months. In
addition to the rights to the equipment, the bank holds a security interest in
other assets and up to $512,000 deposited with the bank.

In July 2000, in the same commitment letter discussed above, the bank also
committed to issue a credit line to us up to (EUR) 5.1 million for a wafer
fabrication facility in Germany, including leasehold improvements, clean room
construction and fabrication, computer and office equipment. At March 31, 2002,
we had drawn $542,000 under this commitment. The security interest of the bank
under the equipment lease facility also collateralizes this line.

In December 2001, IXYS entered into a term
loan with a Swiss bank in the amount of SFR 200,000. The loan
bears interest of 5.25% and is due in November 2006. Our accounts receivable at March 31, 2002 were $16.7 million, a decrease
of 36.5% as compared to $26.3 million at March 31, 2001. Our inventories at
March 31, 2002 were $46.3 million, an increase of 36.0% as compared to $34.0
million at March 31, 2001. Net plant and equipment at March 31, 2002 were $19.2
million, an increase of 37.8% as compared to $14.0 million at March 31, 2001.

As of March 31,
2002, we had $32.1 million in cash and cash equivalents. We believe that these balances, including interest to be earned thereon, and borrowings available under our credit facilities will be sufficient to fund our working and other capital requirements, including potential investments in other companies and other assets to support the strategic growth of our business, over the next twelve months. In the ordinary course of business, we evaluate opportunities to acquire businesses, products
and technologies and we expect to use our cash to fund these types of activities in the future. In the event additional needs for cash arise, we may raise additional funds from a combination of sources including the potential issuance of debt or equity securities. Additional financing might not be available on terms favorable to us, or at all, particularly in light of the recent decline in the capital markets. If adequate funds were not available or were not available on acceptable terms, our
ability to take advantage of unanticipated opportunities or respond to competitive pressures could be limited.

Disclosures about Contractual Obligations and Commercial Commitments

Details of IXYS contractual obligations and commitments as of March 31, 2002
to make future payments under contracts are set forth below:

|                                   |  |                        |        |        |  |           |       |           |  |         |       |  |  |   |       |       |  |   |   | 
|---------------------------------- |  | ---------------------- | ------ | ------ |  | --------- | ----- | --------- |  | ------- | ----- |  |  | - | ----- | ----- |  | - | - | 
|                                   |  | Payments Due by Period
|                                   |  |                       
|                                   |  |                        |        |        |  | Less than |       |           |  |         |       |  |  |   |       | After
|Contractual Obligations            |  | Total                  |        | 1 year |  | 1-3 years |       | 4-5 years |  | 5 years
|                                   |  |                        |        |        |  |           |       |           |  |        
|Line of Credit                     |  | $                      | 700    |        |  | $         | 700   |           |  | $       |      |  |  | $ |      |       |  | $ |  | 
|Term
Loan                          |  |                        | 118    |        |  |           |      |           |  |         |      |  |  |   | 118   |       |  |   |  | 
|Capital Lease Obligations          |  |                        | 7,840  |        |  |           | 2,673 |           |  |         | 4,590 |  |  |   | 577   |       |  |   |  | 
|Operating Leases                   |  |                        | 2,499  |        |  |           | 691   |           |  |         | 1,453 |  |  |   | 355   |       |  |   |  | 
|Purchase Obligations               |  |                        | 1,680  |        |  |           | 1,680 |           |  |         |      |  |  |   |      |       |  |   |  | 
|                                   |  |                        |        |        |  |           |       |           |  |         |       |  |  |  
|Total Contractual Cash Obligations |  | $                      | 12,837 |        |  |           | 5,744 |           |  |         | 6,043 |  |  |   | 1,050 |       |  |   |  | 
|                                   |  |                        |        |        |  |           |       |           |  |         |       |  |  |  

On September 22, 2000, IXYS Corporation
entered into a guaranty for $5.0 million in favor of
Commerzbank AG to obtain a line of credit granted by
Commerzbank AG to IXYS Semiconductor GmbH. At March 2002, the
line of credit was $5.0 million.

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New Accounting Standards

In July 2001, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standard No. 141, Business Combinations (SFAS No. 141)
and Statement of Financial Accounting Standard No. 142, Goodwill and Other
Intangible Assets (SFAS No. 142). SFAS No. 141 requires the purchase method of
accounting to be used for all business combinations initiated after June 30,
2001. SFAS No. 141 also specifies criteria that intangible assets acquired must
meet to be recognized and reported separately from goodwill. The adoption of
SFAS No. 141 will not have a material effect on our results of operations or
financial position.

SFAS No. 142 requires that goodwill and intangible assets with indefinite
lives no longer be amortized but instead be measured for impairment at least
annually, or when events indicate that an impairment exists. Our adoption date
for SFAS No. 142 was April 1, 2002. As of that date, amortization of goodwill
and other indefinite-lived intangible assets, including those recorded in past
business combinations, ceased. As a result of the elimination of this
amortization, other expense will decrease by approximately $232,000 annually
for goodwill currently recognized.

As required by SFAS No. 142, we will perform impairment tests on goodwill
and other indefinite-lived intangible assets as of the adoption date. We will
perform impairment tests annually and whenever events or circumstances indicate
that the value of goodwill or other indefinite-lived intangible assets might be
impaired. In connection with the SFAS No. 142 transitional goodwill impairment
test, we will utilize the required two-step method for determining goodwill
impairment as of the adoption date. To accomplish this, we will identify our
reporting units and determine the carrying value of each reporting unit by
assigning the assets and liabilities, including the existing goodwill and
intangible assets, to those reporting units as of the adoption date. We will
then have up to six months from the adoption date to determine the fair value
of each reporting unit and compare it to the carrying amount of the reporting
unit. To the extent the carrying amount of a reporting unit exceeds the fair
value of the reporting unit, we will then perform the second step of the
transitional impairment test. If necessary, in the second step, we will compare
the implied fair value of the reporting unit goodwill with the carrying amount
of the reporting unit goodwill, both of which would be measured as of the
adoption date. The implied fair value of goodwill will be determined by
allocating the fair value of the reporting unit to all of the assets
(recognized and unrecognized) and liabilities of the reporting unit in a manner
similar to a purchase price allocation, in accordance with SFAS No. 141. The
residual fair value after this allocation will be the implied fair value of the
reporting unit goodwill. We will record a transitional impairment loss for the
excess of the carrying value of goodwill allocated to the reporting unit over
the implied fair value. SFAS No. 142 requires that this second step be
completed as soon as possible, but no later than the end of the year of
adoption.

In connection with the SFAS No. 142 indefinite-lived intangible asset
impairment test, we will utilize the required one-step method to determine
whether an impairment exists as of the adoption date. The test will consist of
a comparison of the fair values of indefinite-lived intangible assets with the
carrying amounts. If the carrying amount of an indefinite-lived intangible
asset exceeds its fair value, we will recognize an impairment loss in an amount
equal to that excess.

We have not yet determined the impact of the provisions of the impairment
test under SFAS No. 142 on our results of operations and financial position;
however, the possibility exists that we will incur a significant transitional
impairment loss. Any transitional impairment loss will be recognized as the
cumulative effect of a change in accounting principle in our income statement
during the quarter ending September 30, 2002.

In October 2001, FASB issued SFAS No. 144, Accounting for Impairment or
Disposal of Long-Lived Assets, which is effective for fiscal years beginning
after December 15, 2001 and interim periods within those fiscal periods. SFAS
No. 144 addresses financial accounting and reporting for the impairment of
certain long-lived assets and for the disposition of long-lived assets. SFAS
No. 144 supersedes SFAS No. 121 and APB Opinion No. 30; however, SFAS No. 144
retains the requirement of APB Opinion No. 30 to report discontinued operations
separately from continuing operations and extends that reporting to a component
of an entity that has either been disposed of (by sale, abandonment or in a
distribution to owners) or is classified as held for sale. We do not expect the
adoption of SFAS No. 144 to have a material impact on our financial position
and results of operations.

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Selected Quarterly Financial Data (unaudited)

The following supplemental financial information should be read in conjunction
with IXYS financial statements and the related notes thereto, as well as IXYS
Corporation Managements Discussion and Analysis of Financial Condition and
Results of Operations in this Annual Report on Form 10-K. The information
regarding the quarters within the fiscal year ended March 31, 2002 and 2001 has
been derived from IXYS unaudited financial statements incorporated by
reference into this Annual Report on Form 10-K and, in the opinion of the
management of IXYS, reflects all adjustments necessary for a fair presentation
of the financial condition at such date and the results of operations for such
periods. Historical results are not necessarily indicative of the results to
be obtained in the future.

FISCAL YEAR ENDED MARCH 31, 2002

|                                                                   |         |   |                                          |        |             |   |              |        |         |   |        |        |  |   |        |        | 
|------------------------------------------------------------------ | ------- | - | ---------------------------------------- | ------ | ----------- | - | ------------ | ------ | ------- | - | ------ | ------ |  | - | ------ | ------ | 
|                                                                   |         |   | Three Months Ended                      
|                                                                   |         |   |                                         
|                                                                   |         |   | March 31                                 |        | December 31 |   | September 30 |        | June 30
|                                                                   |         |   |                                          |        |             |   |              |        |        
|                                                                   |         |   | (in thousands, except per share amounts)
|Net revenues                                                       |         | $ | 20,395                                   |        |             | $ | 16,082       |        |         | $ | 20,739 |        |  | $ | 25,605 |       
|Gross profit                                                       |         |   | 5,615                                    |        |             |   | 4,950        |        |         |   | 7,033  |        |  |   | 8,306  |       
|Operating income                                                   |         |   | 5,616                                    |        |             |   | 605          |        |         |   | 2,726  |        |  |   | 3,648  |       
|Net income (loss)                                                  |         | $ | (584                                     | )      |             | $ | (105         | )      |         | $ | 1,041  |        |  | $ | 1,586  |       
|Basic net income (loss) per share applicable
to common stockholder |         | $ | (0.02                                    | )      |             | $ | 0.00         |        |         | $ | 0.04   |        |  | $ | 0.06   |       
|Diluted net income per share applicable
to common stockholders     |         | $ | (0.02                                    | )      |             | $ | 0.00         |        |         | $ | 0.04   |        |  | $ | 0.05   |       
|Weighted average shares used in per
share calculation              |         |   |                                          |        |             |   |              |        |         |   |        |        |  |   |        |       
|                                                                   | Basic   |   |                                          | 26,771 |             |   |              | 26,728 |         |   |        | 26,755 |  |   |        | 26,690 | 
|                                                                   | Diluted |   |                                          | 26,771 |             |   |              | 26,728 |         |   |        | 28,837 |  |   |        | 29,180 | 

FISCAL YEAR ENDED MARCH 31, 2001

|                                                              |         |   |                                          |        |             |   |              |        |         |   |        |        |  |   |        |        | 
|------------------------------------------------------------- | ------- | - | ---------------------------------------- | ------ | ----------- | - | ------------ | ------ | ------- | - | ------ | ------ |  | - | ------ | ------ | 
|                                                              |         |   | Three Months Ended                      
|                                                              |         |   |                                         
|                                                              |         |   | March 31                                 |        | December 31 |   | September 30 |        | June 30
|                                                              |         |   |                                          |        |             |   |              |        |        
|                                                              |         |   | (In thousands, except per share amounts)
|Net revenues                                                  |         | $ | 32,008                                   |        |             | $ | 29,188       |        |         | $ | 26,919 |        |  | $ | 23,274 |       
|Gross profit                                                  |         |   | 12,357                                   |        |             |   | 11,197       |        |         |   | 9,648  |        |  |   | 8,221  |       
|Operating income                                              |         |   | 6,720                                    |        |             |   | 5,722        |        |         |   | 4,916  |        |  |   | 4,025  |       
|Net income                                                    |         | $ | 3,817                                    |        |             | $ | 3,388        |        |         | $ | 2,688  |        |  | $ | 3,694  |       
|Basic net income per share applicable
to common stockholder   |         | $ | 0.15                                     |        |             | $ | 0.13         |        |         | $ | 0.11   |        |  | $ | 0.15   |       
|Diluted net income per share
applicable to common stockholder |         | $ | 0.13                                     |        |             | $ | 0.12         |        |         | $ | 0.10   |        |  | $ | 0.14   |       
|Weighted average shares used in per
share calculation         |         |   |                                          |        |             |   |              |        |         |   |        |        |  |   |        |       
|                                                              | Basic   |   |                                          | 26,000 |             |   |              | 25,971 |         |   |        | 24,425 |  |   |        | 23,984 | 
|                                                              | Diluted |   |                                          | 28,436 |             |   |              | 28,708 |         |   |        | 27,461 |  |   |        | 26,407 | 

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ITEM 7A.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We are exposed to the impact of interest rate changes, foreign currency
fluctuations, and change in the market values of our investments.

Interest Rate Risk.

Our exposure to market rate risk for changes in interest rates relates
primarily to our investment portfolio. We have not used derivative financial
instruments in our investment portfolio. We invest our excess cash in debt
instruments of the U.S. Government and its agencies, and in high-quality
corporate issuers and, by policy, limit the amount of credit exposure to any
one issuer. We protect and preserve our invested funds by limiting default,
market and reinvestment risk.

Investments in both fixed rate and floating rate interest-earning
instruments carry a degree of interest rate risk. Fixed rate securities may
have their fair market value adversely impacted due to a rise in interest
rates, while floating rate securities may produce less income than expected if
interest rates fall. Due in part to these factors, our future investment income
may fall short of expectations due to changes in interest rates or we may
suffer losses in principal if forced to sell securities that have declined in
market value due to changes in interest rates.

We are exposed to short-term fluctuations in interest rates as our line of credit in the US has a variable interest rate.
An increase in interest rates would have an adverse impact on our interest expense.
For example, under the current drawing on the line of credit, a 10%
increase in interest rates would increase interest expense by $70,000.

Foreign Currency Risk.

International revenues from our foreign subsidiaries were approximately
52.7% of total revenues in fiscal year 2002. International sales are made
mostly from our German subsidiary and are typically denominated in the euro.
Our German subsidiary also incurs most of its expenses in the local currency.
Our foreign subsidiaries use their respective local currencies as their
functional currency.

Our international business is subject to risks typical of an international
business including, but not limited to, differing economic conditions, changes
in political climate, differing tax structures, other regulations and
restrictions, and foreign exchange rate volatility. Accordingly, our future
results could be materially adversely impacted by changes in these or other
factors.

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ITEM 8.  FINANCIAL STATEMENTS

Our financial statements and supplementary data required by this Item are
set forth at the pages indicated in the accompanying index. The Selected
Quarterly Financial Data has been included at Item 7 Managements Discussion
and Analysis of Financial Condition and Results of Operations.

IXYS CORPORATION

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

|                                                                                                 |  |      |    | 
|------------------------------------------------------------------------------------------------ |  | ---- | -- | 
|                                                                                                 |  | Page
|                                                                                                 |  |     
|Report of Independent Accountants                                                                |  |      | 37 | 
|Consolidated Balance Sheets as of March 31, 2002 and 2001                                        |  |      | 38 | 
|Consolidated Statement of Operations for the years ended March 31, 2002, 2001 and 2000           |  |      | 39 | 
|Consolidated Statement of Comprehensive Income for the years ended March 31, 2002, 2001 and 2000 |  |      | 40 | 
|Consolidated Statement of Stockholders Equity for the years ended March 31, 2002, 2001 and 2000 |  |      | 41 | 
|Consolidated Statements of Cash Flows for the years ended March 31, 2002, 2001 and 2000          |  |      | 42 | 
|Notes to Consolidated Financial Statements                                                       |  |      | 43 | 

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REPORT OF INDEPENDENT ACCOUNTANTS

To the Stockholders and Board of Directors IXYS Corporation

In our opinion, the consolidated financial statements listed in the
accompanying index present fairly, in all material respects, the financial
position of IXYS Corporation and its subsidiaries at March 31, 2002 and 2001,
and the results of their operations and their cash flows for each of the three
years ended March 31, 2002, in conformity with accounting principles generally
accepted in the United States of America. These financial statements are the
responsibility of IXYS management; our responsibility is to express an opinion
on these financial statements based on our
audits. We conducted our audits of these statements in accordance with auditing
standards generally accepted in the United States of America, which 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, assessing the accounting principles used and
significant estimates made by management, and evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.



/s/   PricewaterhouseCoopers LLP


PricewaterhouseCoopers LLP
San Jose, California
May 20, 2002, except for Note 14 as to which the date is
June 12, 2002

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IXYS CORPORATION

CONSOLIDATED BALANCE SHEETS
(in thousands, except per share data)

|                                                      |                                                                                                    |                                                                                                               |        |           |         |      |        |        |         | 
|----------------------------------------------------- | -------------------------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------------------------------- | ------ | --------- | ------- | ---- | ------ | ------ | ------- | 
|                                                      |                                                                                                    |                                                                                                               |        | March 31,
|                                                      |                                                                                                    |                                                                                                               |        |          
|                                                      |                                                                                                    |                                                                                                               |        | 2002      |         | 2001
|                                                      |                                                                                                    |                                                                                                               |        |           |         |     
|ASSETS                                               
|Current assets:                                       |                                                                                                    |                                                                                                               |        |           |         |      |        |       
|                                                      | Cash and cash equivalents                                                                          |                                                                                                               | $      | 32,111    |         |      | $      | 44,795 |        
|                                                      | Restricted cash                                                                                    |                                                                                                               |        | 205       |         |      |        | 387    |        
|                                                      | Accounts receivable, net of allowance for doubtful
accounts of $1,045 in 2002 and $2,823 in 2001   |                                                                                                               |        | 16,697    |         |      |        | 26,303 |        
|                                                      | Inventories                                                                                        |                                                                                                               |        | 46,317    |         |      |        | 34,035 |        
|                                                      | Prepaid expenses                                                                                   |                                                                                                               |        | 596       |         |      |        | 309    |        
|                                                      | Deferred income taxes                                                                              |                                                                                                               |        | 2,553     |         |      |        | 2,561  |        
|                                                      |                                                                                                    |                                                                                                               |        |           |         |      |        |        |        
|                                                      |                                                                                                    | Total current assets                                                                                          |        |           | 98,479  |      |        |        | 108,390 | 
|Plant and equipment, net                              |                                                                                                    |                                                                                                               | 19,238 |           |         |      | 13,960 |       
|Other assets                                          |                                                                                                    |                                                                                                               | 4,828  |           |         |      | 4,749  |       
|Deferred income taxes                                 |                                                                                                    |                                                                                                               | 2,015  |           |         |      | 315    |       
|                                                      |                                                                                                    |                                                                                                               |        |           |         |      |        |        |        
|                                                      |                                                                                                    | Total assets                                                                                                  |        | $         | 124,560 |      |        | $      | 127,414 | 
|                                                      |                                                                                                    |                                                                                                               |        |           |         |      |        |        |        
|LIABILITIES AND STOCKHOLDERS EQUITY                 
|Current liabilities:                                  |                                                                                                    |                                                                                                               |        |           |         |      |        |       
|                                                      | Current portion of capitalized lease obligations                                                   |                                                                                                               | $      | 2,391     |         |      | $      | 1,737  |        
|                                                      | Current portion of notes payable to bank                                                           |                                                                                                               |        | 700       |         |      |        | 754    |        
|                                                      | Accounts payable                                                                                   |                                                                                                               |        | 5,606     |         |      |        | 10,649 |        
|                                                      | Accrued expenses and other liabilities                                                             |                                                                                                               |        | 8,383     |         |      |        | 13,243 |        
|                                                      |                                                                                                    |                                                                                                               |        |           |         |      |        |       
|                                                      |                                                                                                    | Total current liabilities                                                                                     |        |           | 17,080  |      |        |        | 26,383  | 
|Capitalized lease obligations, net of current portion |                                                                                                    |                                                                                                               | 4,770  |           |         |      | 3,425  |       
|Loan
payable                                          |                                                                                                    |                                                                                                               | 118    |           |         |      |       |       
|Pension liabilities                                   |                                                                                                    |                                                                                                               | 7,373  |           |         |      | 4,882  |       
|                                                      |                                                                                                    |                                                                                                               |        |           |         |      |        |       
|                                                      |                                                                                                    | Total liabilities                                                                                             |        |           | 29,341  |      |        |        | 34,690  | 
|                                                      |                                                                                                    |                                                                                                               |        |           |         |      |        |       
|Commitments and contingencies (Note 6)                |                                                                                                    |                                                                                                               |        |           |         |      |        |       
|                                                     
|Stockholders Equity                                   |                                                                                                    |                                                                                                               |        |           |         |      |        |       
|                                                      | Preferred stock, $0.01 par value:                                                                  |                                                                                                               |        |           |         |      |        |        |        
|                                                      |                                                                                                    | Authorized: 5,000,000 shares; none issued and outstanding                                                     |        |           |        |      |        |        |        | 
|                                                      | Common stock, $0.01 par value:                                                                     |                                                                                                               |        |           |         |      |        |        |        
|                                                      |                                                                                                    | Authorized: 80,000,000 shares issued and outstanding: 26,902,192 shares in 2002 and 26,662,132 shares in 2001 |        |           | 268     |      |        |        | 267     | 
|                                                      | Additional paid-in capital                                                                         |                                                                                                               |        | 92,785    |         |      |        | 91,873 |        
|                                                      | Notes receivable from stockholders                                                                 |                                                                                                               |        | (853      | )       |      |        | (823   | )      
|                                                      | Retained earnings                                                                                  |                                                                                                               |        | 5,827     |         |      |        | 3,889  |        
|                                                      | Accumulated other comprehensive loss                                                               |                                                                                                               |        | (2,363    | )       |      |        | (2,482 | )      
|                                                      | Less cost of treasury stock: 75,000 common shares in 2002 and
0 common shares in 2001 respectively |                                                                                                               |        | (445      | )       |      |        |       |        
|                                                      |                                                                                                    |                                                                                                               |        |           |         |      |        |       
|                                                      | Stockholders equity                                                                               |                                                                                                               |        | 95,219    |         |      |        | 92,724 |        
|                                                      |                                                                                                    |                                                                                                               |        |           |         |      |        |        |        
|                                                      |                                                                                                    | Total liabilities and stockholders equity                                                                    |        | $         | 124,560 |      |        | $      | 127,414 | 
|                                                      |                                                                                                    |                                                                                                               |        |           |         |      |        |        |        

The accompanying notes are an integral part of these consolidated financial statements.

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IXYS CORPORATION

CONSOLIDATED STATEMENT OF OPERATIONS
(in thousands, except per share data)

|                                                              |                                              |                          |        |                      |        |      |         |        |        |   |        |        |        | 
|------------------------------------------------------------- | -------------------------------------------- | ------------------------ | ------ | -------------------- | ------ | ---- | ------- | ------ | ------ | - | ------ | ------ | ------ | 
|                                                              |                                              |                          |        | Year Ended March 31,
|                                                              |                                              |                          |        |                     
|                                                              |                                              |                          |        | 2002                 |        | 2001 |         | 2000  
|                                                              |                                              |                          |        |                      |        |      |         |       
|Net revenues                                                  |                                              | $                        | 82,821 |                      |        | $    | 111,389 |        |        | $ | 76,627 |       
|Cost of goods sold                                            |                                              |                          | 56,918 |                      |        |      | 69,967  |        |        |   | 49,290 |       
|                                                              |                                              |                          |        |                      |        |      |         |        |        |   |        |       
|                                                              |                                              | Gross profit             |        |                      | 25,903 |      |         |        | 41,422 |   |        |        | 27,337 | 
|                                                              |                                              |                          |        |                      |        |      |         |        |        |   |        |       
|Operating expenses:                                           |                                              |                          |        |                      |        |      |         |        |        |   |        |       
|                                                              | Research, development and engineering        |                          |        | 5,728                |        |      |         | 6,081  |        |   |        | 4,668  |       
|                                                              | Selling, general and administrative          |                          |        | 12,884               |        |      |         | 13,959 |        |   |        | 11,450 |       
|                                                              |                                              |                          |        |                      |        |      |         |        |        |   |        |       
|                                                              |                                              | Total operating expenses |        |                      | 18,612 |      |         |        | 20,040 |   |        |        | 16,118 | 
|                                                              |                                              |                          |        |                      |        |      |         |        |        |   |        |       
|                                                              | Operating income                             |                          |        | 7,291                |        |      |         | 21,382 |        |   |        | 11,219 |       
|Interest income                                               |                                              |                          | 1,509  |                      |        |      | 1,504   |        |        |   |       |       
|Interest expense                                              |                                              |                          | (191   | )                    |        |      | (474    | )      |        |   | (417   | )     
|Other
income (expense):                                       |                                              |                         
|                                                              | Gain (loss) on foreign currency transactions |                          |        | (46                  | )      |      |         | 119    |        |   |        | 184    |       
|                                                              | Litigation
defense costs                     |                          |        | (4,635               | )      |      |         | (3,258 | )      |   |        |       |       
|                                                              | Litigation
settlements                       |                          |        |                     |        |      |         | 2,520  |        |   |        |       |       
|                                                              | Other
income (expense)                       |                          |        | (806                 | )      |      |         | 115    |        |   |        | (199   | )     
|                                                              |                                              |                          |        |                      |        |      |         |        |        |   |        |       
|Income before income tax provision                            |                                              |                          | 3,122  |                      |        |      | 21,908  |        |        |   | 10,787 |       
|Provision for income tax                                      |                                              |                          | (1,184 | )                    |        |      | (8,321  | )      |        |   | (3,888 | )     
|                                                              |                                              |                          |        |                      |        |      |         |        |        |   |        |       
|Net income                                                    |                                              | $                        | 1,938  |                      |        | $    | 13,587  |        |        | $ | 6,899  |       
|                                                              |                                              |                          |        |                      |        |      |         |        |        |   |        |       
|Net
income per sharebasic                                    |                                              | $                        | 0.07   |                      |        | $    | 0.54    |        |        | $ | 0.29   |       
|                                                              |                                              |                          |        |                      |        |      |         |        |        |   |        |       
|Weighted average shares used in per share
calculationbasic   |                                              |                          | 26,745 |                      |        |      | 25,239  |        |        |   | 23,970 |       
|                                                              |                                              |                          |        |                      |        |      |         |        |        |   |        |       
|Net
income per sharediluted                                  |                                              | $                        | 0.07   |                      |        | $    | 0.49    |        |        | $ | 0.28   |       
|                                                              |                                              |                          |        |                      |        |      |         |        |        |   |        |       
|Weighted average shares used in per share
calculationdiluted |                                              |                          | 29,004 |                      |        |      | 27,774  |        |        |   | 24,826 |       
|                                                              |                                              |                          |        |                      |        |      |         |        |        |   |        |       

The accompanying notes are an integral part of these consolidated financial statements.

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IXYS CORPORATION

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
(in thousands)

|                                         |                      |   |                      |       |      |   |        |        |  |   |        |       | 
|---------------------------------------- | -------------------- | - | -------------------- | ----- | ---- | - | ------ | ------ |  | - | ------ | ----- | 
|                                         |                      |   | Year Ended March 31,
|                                         |                      |   |                     
|                                         |                      |   | 2002                 |       | 2001 |   | 2000  
|                                         |                      |   |                      |       |      |   |       
|Net income                               |                      | $ | 1,938                |       |      | $ | 13,587 |        |  | $ | 6,899  |      
|Other
comprehensive  income (loss):      |                      |   |                      |       |      |   |        |        |  |   |        |      
|Foreign currency translation adjustments |                      |   | 119                  |       |      |   | (494   | )      |  |   | (1,824 | )    
|                                         |                      |   |                      |       |      |   |        |        |  |   |        |      
|                                         | Comprehensive income |   | $                    | 2,057 |      |   | $      | 13,093 |  |   | $      | 5,075 | 
|                                         |                      |   |                      |       |      |   |        |        |  |   |        |      

The accompanying notes are an integral part of these consolidated financial statements.

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IXYS CORPORATION

CONSOLIDATED STATEMENT OF STOCKHOLDERS EQUITY
(in thousands)

|                                                                                                     |  |        |        |        |  |         |     |              |  |            |        |            |  |              |      |            |  |              |         |   |  |   |        |   |  |   |        |  
|---------------------------------------------------------------------------------------------------- |  | ------ | ------ | ------ |  | ------- | --- | ------------ |  | ---------- | ------ | ---------- |  | ------------ | ---- | ---------- |  | ------------ | ------- | - |  | - | ------ | - |  | - | ------ | -
|                                                                                                     |  |        |        |        |  |         |     |              |  |            |        |            |  | Notes        |      | Retained   |  | Accumulated  |         |   |  |  
|                                                                                                     |  |        |        |        |  |         |     |              |  | Additional |        | Receivable |  | Earnings/    |      | Other      |  | Total       
|                                                                                                     |  |        |        |        |  |         |     |              |  | Paid-In    |        | from       |  | (Accumulated |      | Comprehen- |  | Stockholders
|                                                                                                     |  | Shares |        | Amount |  | Capital |     | Stockholders |  | Deficit)   |        | sive Loss  |  | Equity      
|                                                                                                     |  |        |        |        |  |         |     |              |  |            |        |            |  |             
|Balances, March 31, 1999                                                                             |  |        | 23,974 |        |  | $       | 240 |              |  | $          | 43,177 |            |  | $            | (936 | )          |  | $            | (16,597 | ) |  | $ | (164   | ) |  | $ | 25,720 |  
|Exercise of stock options                                                                            |  |        | 50     |        |  |         |    |              |  |            | 27     |            |  |              |     |            |  |              |        |   |  |   |       |   |  |   | 27     |  
|Exercise of warrants                                                                                 |  |        | 24     |        |  |         |    |              |  |            |       |            |  |              |     |            |  |              |        |   |  |   |       |   |  |   |       |  
|Payment of notes receivable
from stockholders                                                        |  |        |       |        |  |         |    |              |  |            |       |            |  |              | 75   |            |  |              |        |   |  |   |       |   |  |   | 75     |  
|Foreign currency
translations adjustment                                                             |  |        |       |        |  |         |    |              |  |            |       |            |  |              |     |            |  |              |        |   |  |   | (1,824 | ) |  |   | (1,824 | )
|Net income                                                                                           |  |        |       |        |  |         |    |              |  |            |       |            |  |              |     |            |  |              | 6,899   |   |  |   |       |   |  |   | 6,899  |  
|                                                                                                     |  |        |        |        |  |         |     |              |  |            |        |            |  |              |      |            |  |              |         |   |  |   |        |   |  |   |        |  
|Balances, March 31, 2000                                                                             |  |        | 24,048 |        |  |         | 240 |              |  |            | 43,204 |            |  |              | (861 | )          |  |              | (9,698  | ) |  |   | (1,988 | ) |  |   | 30,897 |  
|Exercise of stock options                                                                            |  |        | 213    |        |  |         | 2   |              |  |            | 406    |            |  |              |     |            |  |              |        |   |  |   |       |   |  |   | 408    |  
|Issuance of common stock
for the acquisition of
Directed Energy                                      |  |        | 250    |        |  |         | 3   |              |  |            | 2,797  |            |  |              |     |            |  |              |        |   |  |   |       |   |  |   | 2,800  |  
|Issuance of common stock
under the Employee Stock
Purchase Plan                                      |  |        | 55     |        |  |         | 1   |              |  |            | 237    |            |  |              |     |            |  |              |        |   |  |   |       |   |  |   | 238    |  
|Exercise
of warrants                                                                                 |  |        | 96     |        |  |         | 1   |              |  |            | (1     | )          |  |              |     |            |  |              |        |   |  |   |       |   |  |   |       |  
|Payment
on notes receivable from stockholders                                                        |  |        |       |        |  |         |    |              |  |            |       |            |  |              | 38   |            |  |              |        |   |  |   |       |   |  |   | 38     |  
|Foreign currency
translation adjustments                                                             |  |        |       |        |  |         |    |              |  |            |       |            |  |              |     |            |  |              |        |   |  |   | (494   | ) |  |   | (494   | )
|Issuance of Common Stock
from secondary offering at
$24.50 per share, net of
issuance cost of $1,070 |  |        | 2,000  |        |  |         | 20  |              |  |            | 45,230 |            |  |              |     |            |  |              |        |   |  |   |       |   |  |   | 42,250 |  
|Net income                                                                                           |  |        |       |        |  |         |    |              |  |            |       |            |  |              |     |            |  |              | 13,587  |   |  |   |       |   |  |   | 13,587 |  
|                                                                                                     |  |        |        |        |  |         |     |              |  |            |        |            |  |              |      |            |  |              |         |   |  |   |        |   |  |   |        |  
|Balances, March 31, 2001                                                                             |  |        | 26,662 |        |  |         | 267 |              |  |            | 91,873 |            |  |              | (823 | )          |  |              | 3,889   |   |  |   | (2,482 | ) |  |   | 92,724 |  
|Exercise of stock options                                                                            |  |        | 196    |        |  |         | 2   |              |  |            | 598    |            |  |              |     |            |  |              |        |   |  |   |       |   |  |   | 600    |  
|Issuance of common stock
under the Employee Stock
Purchase Plan                                      |  |        | 44     |        |  |         |    |              |  |            | 313    |            |  |              |     |            |  |              |        |   |  |   |       |   |  |   | 313    |  
|Repurchase of common stock                                                                           |  |        | (75    | )      |  |         | (1  | )            |  |            | (444   | )          |  |              |     |            |  |              |        |   |  |   |       |   |  |   | (445   | )
|Issuance of notes receivable                                                                         |  |        |       |        |  |         |    |              |  |            |       |            |  |              | (30  | )          |  |              |        |   |  |   |       |   |  |   | (30    | )
|Foreign currency
translation adjustments                                                             |  |        |       |        |  |         |    |              |  |            |       |            |  |              |     |            |  |              |        |   |  |   | 119    |   |  |   | 119    |  
|Net income                                                                                           |  |        |       |        |  |         |    |              |  |            |       |            |  |              |     |            |  |              | 1,938   |   |  |   |       |   |  |   | 1,938  |  
|                                                                                                     |  |        |        |        |  |         |     |              |  |            |        |            |  |              |      |            |  |              |         |   |  |   |        |   |  |   |        |  
|Balances, March 31, 2002                                                                             |  |        | 26,827 |        |  | $       | 268 |              |  | $          | 92,340 |            |  | $            | (853 | )          |  | $            | 5,827   |   |  | $ | (2,363 | ) |  | $ | 95,219 |  
|                                                                                                     |  |        |        |        |  |         |     |              |  |            |        |            |  |              |      |            |  |              |         |   |  |   |        |   |  |   |        |  

The accompanying notes are an integral part of these consolidated financial statements.

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IXYS CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)

|                                                                     |                                                                                   |                                                     |                                           |        |                      |       |        |        |         |       |       |        |        |       | 
|-------------------------------------------------------------------- | --------------------------------------------------------------------------------- | --------------------------------------------------- | ----------------------------------------- | ------ | -------------------- | ----- | ------ | ------ | ------- | ----- | ----- | ------ | ------ | ----- | 
|                                                                     |                                                                                   |                                                     |                                           |        | Year Ended March 31,
|                                                                     |                                                                                   |                                                     |                                           |        |                     
|                                                                     |                                                                                   |                                                     |                                           |        | 2002                 |       | 2001   |        | 2000   
|                                                                     |                                                                                   |                                                     |                                           |        |                      |       |        |        |        
|Cash flows from operating activities:                                |                                                                                   |                                                     |                                           |        |                      |       |        |        |         |       |       |       
|                                                                     | Net income                                                                        |                                                     | $                                         | 1,938  |                      |       | $      | 13,587 |         |       | $     | 6,899  |       
|                                                                     | Adjustments to reconcile net income to net cash provided by
operating activities: |                                                     |                                           |        |                      |       |        |        |         |       |       |        |       
|                                                                     |                                                                                   | Depreciation and amortization                       |                                           |        | 5,835                |       |        |        | 3,409   |       |       |        | 3,352  |      
|                                                                     |                                                                                   | Provision
for accounts receivable reserves          |                                           |        | 7,029                |       |        |        | 6,101   |       |       |        | 852    |      
|                                                                     |                                                                                   | Provision for excess and obsolete inventories       |                                           |        | 790                  |       |        |        | 1,854   |       |       |        | (668   | )    
|                                                                     |                                                                                   | (Gain) loss on disposal of fixed assets             |                                           |        | 287                  |       |        |        | (8      | )     |       |        | 12     |      
|                                                                     |                                                                                   | (Loss) gain on foreign currency transactions        |                                           |        | (355                 | )     |        |        | [63     | ]     |       |        | (929   | )    
|                                                                     |                                                                                   | Deferred income taxes                               |                                           |        | 861                  |       |        |        | (466    | )     |       |        | 247    |      
|                                                                     | Changes in operating assets and liabilities                                       |                                                     |                                           |        |                      |       |        |        |         |       |       |        |       
|                                                                     |                                                                                   | Accounts receivable                                 |                                           |        | 6,445                |       |        |        | (15,996 | )     |       |        | (6,779 | )    
|                                                                     |                                                                                   | Inventories                                         |                                           |        | (8,574               | )     |        |        | (14,992 | )     |       |        | (1,699 | )    
|                                                                     |                                                                                   | Prepaid expenses and other current assets           |                                           |        | (71                  | )     |        |        | 257     |       |       |        | 567    | )    
|                                                                     |                                                                                   | Other assets                                        |                                           |        | 251                  |       |        |        | (972    | )     |       |        | (73    | )    
|                                                                     |                                                                                   | Accounts payable                                    |                                           |        | (7,356               | )     |        |        | 5,348   |       |       |        | 566    |      
|                                                                     |                                                                                   | Accrued expenses and other liabilities              |                                           |        | (5,603               | )     |        |        | 2,805   |       |       |        | 3,915  |      
|                                                                     |                                                                                   | Pension liabilities                                 |                                           |        | (252                 | )     |        |        | 373     |       |       |        |       |      
|                                                                     |                                                                                   |                                                     |                                           |        |                      |       |        |        |         |       |       |        |       
|                                                                     |                                                                                   |                                                     | Net
cash provided by operating activities |        |                      | 1,225 |        |        |         | 1,237 |       |        |        | 5,128 | 
|                                                                     |                                                                                   |                                                     |                                           |        |                      |       |        |        |         |       |       |        |       
|Cash flows used in investing activities:                             |                                                                                   |                                                     |                                           |        |                      |       |        |        |         |       |       |       
|                                                                     | Purchases of plant and equipment                                                  |                                                     |                                           | (7,502 | )                    |       |        | (4,262 | )       |       |       | (1,775 | )     
|                                                                     | Acquisition
of Directed Energy Inc., net of cash acquired                         |                                                     |                                           |       |                      |       |        | 135    |         |       |       |       |       
|                                                                     | Acquisition of Westcode Semiconductor, Inc., net of cash acquired                 |                                                     |                                           | (8,529 | )                    |       |        |       |         |       |       |       |       
|                                                                     | Proceeds from sale of plant and equipment                                         |                                                     |                                           | 6      |                      |       |        | 163    |         |       |       | 42     |       
|                                                                     |                                                                                   |                                                     |                                           |        |                      |       |        |        |         |       |       |        |       
|                                                                     |                                                                                   | Net cash used in investing activities               |                                           |        | (16,025              | )     |        |        | (3,964  | )     |       |        | (1,733 | )    
|                                                                     |                                                                                   |                                                     |                                           |        |                      |       |        |        |         |       |       |        |       
|Cash flows from financing activities:                                |                                                                                   |                                                     |                                           |        |                      |       |        |        |         |       |       |       
|                                                                     | Proceeds from capital lease obligations                                           |                                                     |                                           | 4,249  |                      |       |        | 1,044  |         |       |       | 402    |       
|                                                                     | Restricted cash decrease (increase)                                               |                                                     |                                           | 182    |                      |       |        | (83    | )       |       |       | 1,089  |       
|                                                                     | Principal payments on capital lease obligations                                   |                                                     |                                           | (2,734 | )                    |       |        | (2,017 | )       |       |       | (214   | )     
|                                                                     | Repayment of notes payable to bank                                                |                                                     |                                           | (54    | )                    |       |        | (6,379 | )       |       |       | (1,418 | )     
|                                                                     | Proceeds from secondary offering                                                  |                                                     |                                           |       |                      |       |        | 45,250 |         |       |       |       |       
|                                                                     | Proceeds from notes receivables                                                   |                                                     |                                           | 99     |                      |       |        | 38     |         |       |       | 75     |       
|                                                                     | Proceeds from issuance of common stock under the employee
stock purchase plan     |                                                     |                                           | 313    |                      |       |        | 238    |         |       |       |       |       
|                                                                     | Proceeds from exercise of stock options                                           |                                                     |                                           | 600    |                      |       |        | 408    |         |       |       | 28     |       
|                                                                     | Purchase of treasury stock                                                        |                                                     |                                           | (445   | )                    |       |        |       |         |       |       |       |       
|                                                                     |                                                                                   |                                                     |                                           |        |                      |       |        |        |         |       |       |        |       
|                                                                     |                                                                                   | Net cash provided by (used in) financing activities |                                           |        | 2,210                |       |        |        | 38,499  |       |       |        | (38    | )    
|                                                                     | Effect of foreign exchange rate fluctuations on cash and cash equivalents         |                                                     |                                           | (94    | )                    |       |        | (432   | )       |       |       | (989   | )     
|                                                                     |                                                                                   |                                                     |                                           |        |                      |       |        |        |         |       |       |        |       
|Net increase (decrease) in cash and cash equivalents                 |                                                                                   |                                                     | (12,684                                   | )      |                      |       | 35,340 |        |         |       | 2,368 |       
|Cash and cash equivalents at beginning of year                       |                                                                                   |                                                     | 44,795                                    |        |                      |       | 9,455  |        |         |       | 7,087 |       
|                                                                     |                                                                                   |                                                     |                                           |        |                      |       |        |        |         |       |       |        |       
|Cash and cash equivalents at end of year                             |                                                                                   | $                                                   | 32,111                                    |        |                      | $     | 44,795 |        |         | $     | 9,455 |       
|                                                                     |                                                                                   |                                                     |                                           |        |                      |       |        |        |         |       |       |        |       
|Supplemental Disclosures of Cash Flow Information:                   |                                                                                   |                                                     |                                           |        |                      |       |        |        |         |       |       |       
|                                                                     | Cash paid during the period for interest                                          |                                                     | $                                         | 191    |                      |       | $      | 388    |         |       | $     | 467    |       
|                                                                     | Cash paid during the period for income taxes                                      |                                                     |                                           | 3,694  |                      |       |        | 6,704  |         |       |       | 2,701  |       
|Supplemental Schedule of Noncash Investing and Financing Activities: |                                                                                   |                                                     |                                           |        |                      |       |        |        |         |       |       |       
|                                                                     | Purchase of fixed assets under capital lease                                      |                                                     |                                           | 621    |                      |       |        | 3,277  |         |       |       | 1,296  |       
|                                                                     | Conversion of mandatorily convertible preferred stock                             |                                                     |                                           |       |                      |       |        |       |         |       |       |       |       
|                                                                     | Common stock issued for Paradigm assets                                           |                                                     |                                           |       |                      |       |        |       |         |       |       |       |       
|                                                                     | Common stock issued for Directed Energy, net assets                               |                                                     |                                           |       |                      |       |        | 2,800  |         |       |       |       |       

The accompanying notes are an integral part of these consolidated financial statements.

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IXYS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1.  FORMATION AND BUSINESS OF IXYS:

IXYS Corporation
(IXYS or the Registrant) designs, develops and markets power semiconductors,
digital and analog Integrated Circuits (ICs), and high speed, high density
Static Random Access Memory (SRAM). Power semiconductors are used primarily in
controlling energy in motor drives, power conversion (including uninterruptible
power supplies (UPS) and switch mode power supplies (SMPS)) and medical
electronics. IXYS power semiconductors convert electricity at relatively high
voltage and current levels to create efficient power as required by a specific
application. IXYS target market includes segments of the power semiconductor
market that require medium to high power semiconductors, with a particular
emphasis on higher power semiconductors. IXYS sells power semiconductors,
including power MOSFETs, insulated gate bipolar transistors (IGBTs), thyristors
(silicon controlled rectifiers or SCRs) and rectifiers, including fast
recovery epitaxial diodes (FREDs). SRAM products are for uses in
telecommunication devices, workstations and high performance PCs to OEMs and
distributors in the United States, Europe and the Far East.

2.   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

Principles of Consolidation:

The consolidated financial statements include the accounts of IXYS and its
wholly owned subsidiaries after elimination of all significant intercompany
balances and transactions.

Use of Estimates:

The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could materially differ from IXYS estimates.

Foreign Currency Translation:

The local currency is considered to be the functional currency of IXYS
wholly owned subsidiaries, IXYS Semiconductor GmbH (IXYS GmbH), IXYS CH GmbH
(IXYS CH), IXYS Berlin GmbH (IXYS Berlin) and Westcode Semiconductors
Limited (Westcode). Accordingly, assets and liabilities are translated at the
exchange rate in effect at year-end and revenues and expenses are translated at
average rates during the year. Adjustments resulting from the translation of
the accounts of IXYS GmbH, IXYS CH, IXYS Berlin and Westcode into U.S. dollars
are included in accumulated other comprehensive loss, a separate component of
stockholders equity. Foreign currency transaction gains and losses are
included as a component of non-operating income and expense.

Cash Equivalents:

IXYS considers all highly liquid investments with original or remaining
maturities of three months or less at the time of purchase to be cash
equivalents.

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IXYS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Reclassifications:

Certain reclassifications have been made to the prior years consolidated
financial statements to conform to the current years presentation. Such
reclassifications had no effect on previously reported results of operations or
retained earnings.

Inventories:

Inventories, consisting primarily of bipolar devices, transistors, diodes
and integrated circuits for furnished goods and wafers, are stated at the lower of cost or market value. Cost
is determined on a standard cost basis which approximates actual costs
determined on a first-in, first-out (FIFO) method.

Plant and Equipment:

Plant and equipment, including equipment under capital leases, is stated
at cost less accumulated depreciation and amortization. Depreciation or
amortization is computed using the straight-line method over estimated useful
lives of three to five years for equipment and twenty years for buildings. Upon
disposal, the assets and related accumulated depreciation are removed from
IXYS accounts and the resulting gains or losses are reflected in the
statements of operations. IXYS policy is to regularly review the carrying
value of specialized assets to evaluate the remaining life and recoverability
of such equipment in light of current market conditions.

Impairment of Long
Lived Assets

IXYS reviews long
lived assets for impairment whenever events or
changes in circumstances indicate that the carrying amount of an asset may not
be recoverable, or whenever management has committed to a plan to dispose of
the assets. Such assets are carried at the lower of depreciated cost or fair
market value as estimated by management based on appraisals, current market
value, and comparable sales value, as appropriate. Recoverability of an asset
is measured by comparison of its carrying amount to future
undiscounted net cash flows that
the asset is expected to generate. If such assets are considered to be
impaired, the impairment recognized is measured by the amount by which the
carrying amount of the assets exceeds the projected discounted future cash
flows arising from the assets.

Revenue Recognition:

Revenue from power semiconductor product sales is recognized upon
shipment, provided that a customer signed purchase order was
received, the price is fixed, title has transferred, collection of
resulting receivables is reasonably assured, and there are no
remaining significant obligations. Reserves for sales returns and
allowances, including allowances for so called ship and
debit transactions, are recorded at
the time of shipment, based on historical returns discounts, current
economic trends and changes in customer demand. Reserves for
warranties are recorded at the time of shipment for amounts necessary
to replace or repair products during the warranty period, which is
generally one year.

Advertising:

IXYS expenses advertising as the costs are incurred. Advertising expense
for the years ended March 31, 2002, 2001 and 2000 was $299,000, $379,000 and
$392,000, respectively.

Research and Development:

Research and development costs are charged to operations as incurred.

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IXYS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Income Taxes:

IXYS provision for income taxes is comprised of its current tax liability
and the change in deferred tax assets and liabilities. 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 differences are expected to
reverse.

Other Income and Expense

Other income and expense primarily consists of legal expenses, gains and
losses on foreign currency transactions and gains and losses on sales of fixed
assets.

Net Income Per Share:

Basic earnings per share is computed by dividing net income by the
weighted- average number of common shares outstanding for the period. Diluted
earnings per share reflects the potential dilution from the exercise or
conversion of options or other securities into common stock. Diluted net income
per share for fiscal years 2002, 2001 and 2000 do not include the effect of
207,800, 178,300, and 704,894 common equivalent shares, respectively, because their effect
would have been anti-dilutive.

Recent Accounting Pronouncements:

In July 2001, the
Financial Accounting Standards Board (FASB) issued Statement of
Financial Accounting Standard (SFAS) No. 141, Business Combinations (SFAS No. 141)
and Statement of Financial Accounting Standard No. 142, Goodwill and Other
Intangible Assets (SFAS No. 142). SFAS No. 141 requires the purchase method of
accounting to be used for all business combinations initiated after June 30,
2001. SFAS No. 141 also specifies criteria that intangible assets acquired must
meet to be recognized and reported separately from goodwill. The adoption of
SFAS No. 141 will not have a material effect on IXYS results of operations or
financial position.

SFAS No. 142 requires that goodwill and intangible assets with indefinite
lives no longer be amortized but instead be measured for impairment at least
annually, or when events indicate that an impairment exists. IXYS adoption
date will be April 1, 2002. As of that date, amortization of goodwill and other
indefinite-lived intangible assets, including those recorded in past business
combinations, will cease. As a result of the elimination of this amortization,
other expense will decrease by approximately $232,000 annually for goodwill
currently recognized.

As required by SFAS No. 142, IXYS will perform impairment tests on
goodwill and other indefinite-lived intangible assets as of the adoption date.
Thereafter, IXYS will perform impairment tests annually and whenever events or
circumstances indicate that the value of goodwill or other indefinite-lived
intangible assets might be impaired. In connection with the SFAS No. 142
transitional goodwill impairment test, IXYS will utilize the required two-step
method for determining goodwill impairment as of the adoption date. To
accomplish this, it will identify its reporting units and determine the
carrying value of each reporting unit by assigning the assets and liabilities,
including the existing goodwill and intangible assets, to those reporting units
as of the adoption date. IXYS will then have up to six months from the adoption
date to determine the fair value of each reporting unit and compare it to the
carrying amount of the reporting unit. To the extent the carrying amount of a
reporting unit exceeds the fair value of the reporting unit, IXYS will then
perform the second step of the transitional impairment test. If necessary, in
the second step, IXYS will compare the implied fair value of the reporting unit
goodwill with the carrying amount of the reporting unit goodwill, both of which
would be measured as of the adoption date. The implied fair value of goodwill
will be determined by allocating the fair value of the reporting unit to all of
the assets (recognized and unrecognized) and liabilities of the reporting unit
in a manner similar to a purchase price allocation, in accordance with SFAS No.
141. The residual fair value after this allocation will be the implied fair
value of the reporting unit goodwill. IXYS will record a transitional
impairment loss for the excess of the carrying value of goodwill allocated to
the reporting unit over the implied fair value. SFAS No. 142 requires that this
second step be completed as soon as possible, but no later than the end of the
year of adoption.

In connection with the SFAS No. 142 indefinite-lived intangible asset
impairment test, IXYS will utilize the required one-step method to determine
whether an impairment exists as of the adoption date. The test will consist of
a comparison of the fair values of indefinite-lived intangible assets with the
carrying amounts. If the carrying

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IXYS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

amount of an indefinite-lived intangible asset exceeds its fair value,
IXYS will recognize an impairment loss in an amount equal to that excess.

IXYS has not yet determined the impact of the provisions of the impairment
test under SFAS No. 142 on its results of operations and financial position;
management does expect the adoption of SFAS No. 142 to have a
material impact on its financial position and results of operations.

In October 2001, FASB issued SFAS No. 144, Accounting for Impairment or
Disposal of Long-Lived Assets, which is effective for fiscal years beginning
after December 15, 2001 and interim periods within those fiscal periods. SFAS
No. 144 addresses financial accounting and reporting for the impairment of
certain long-lived assets and for long-lived assets to be disposed of. SFAS No.
144 supersedes SFAS No. 121 Accounting for the Impairment
of long-lived Assets and Long-Lived Assets to be Disposed of
and Accounting Principles Board (APB) Opinion No. 30; however, SFAS No. 144
retains the requirement of APB Opinion No. 30 to report discontinued operations
separately from continuing operations and extends that reporting to a component
of an entity that has either been disposed of (by sale, abandonment or in a
distribution to owners) or is classified as held for sale. IXYS does not expect
the adoption of SFAS No. 144 to have a material impact on its financial
position and results of operations.

Comprehensive Income:

IXYS adopted SFAS No. 130, Accounting for Comprehensive Income, during
the fiscal year ended 1998. This statement establishes standards for reporting
and display of comprehensive income and its components (including revenues,
expenses, gains and losses) in a full set of general-purpose financial
statements. IXYS change in the cumulative translation adjustment represent the
only component of comprehensive income which is excluded from net income for
2002 and prior years.

Business Risks:

Dependence on Third Parties for Wafer Fabrication and Assembly:

IXYS manufactures approximately 56% of its wafers, an integral component
of its products, in its wholly owned facility in Germany. There can be no assurance
that material disruptions in supply will not occur in the future. In such
event, IXYS may have to identify and secure additional foundry capacity and may
be unable to identify or secure additional foundry capacity from another
manufacturer, particularly at the levels that IXYS currently anticipates such
foundries to provide. Even if such capacity is available from another
manufacturer, the qualification process could take six months or longer. If
IXYS were unable to qualify alternative manufacturing sources for existing or
new products in a timely manner or if such sources were unable to produce
semiconductor devices with acceptable manufacturing yields and at acceptable
prices, IXYS business, financial condition and results of operations would be
materially and adversely affected.

Dependence on Suppliers:

IXYS purchases silicon wafers from three vendors with whom IXYS does not
have long term supply agreements. Any of these suppliers could eliminate or
terminate IXYS supply of wafers at any time. IXYS reliance on a limited
number of suppliers involves several risks, including potential inability to
obtain an adequate supply of silicon wafers and reduced control over the price,
timely delivery, reliability and quality of the silicon wafers. There can be no
assurance that problems will not occur in the future with suppliers.

Concentration of Credit Risk:

IXYS invests its excess cash primarily in short-term time deposit accounts
with a major German bank and money market accounts with a U.S. bank.
Additionally, IXYS invests in commercial paper with financial institutions
that management believes to be creditworthy. These securities mature
within ninety days or less and bear minimal credit risk. IXYS has not
experienced any losses on such investments.

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IXYS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

IXYS sells its products primarily to distributors and original equipment
manufacturers. IXYS performs ongoing credit evaluations of its customers and
generally does not require collateral. An allowance for potential credit losses
is maintained by IXYS and such losses have not been material.

At March 31, 2002, no customer accounted for greater than 10% of accounts
receivable. At March 31, 2001, one customer accounted for 13% of accounts
receivable.

Financial instruments that potentially subject IXYS to concentrations of
credit risks comprise principally cash, investments and trade accounts
receivable. IXYS invests its excess cash in accordance with its investment
policy that has been approved by the Board of Directors and is reviewed
periodically to minimize credit risk. The policy authorizes the investment of
excess cash in government securities, tax exempt municipal securities,
Eurodollar notes and bonds, time deposits, certificates of deposit, commercial
paper rated Aa or better and other specific money market accounts and corporate
instruments of similar liquidity and credit quality.

Fair Value of Financial Instruments:

Carrying amounts of certain of IXYS financial instruments including cash
and cash equivalents, accounts receivable and accounts payable approximate fair
value due to their short maturities. Based on borrowing rates currently
available to IXYS for loans with similar terms, the carrying value of
notes and loans payable to bank and notes receivable from shareholders approximate fair value.

Stock-Based Compensation Plans:

IXYS accounts for stock-based compensation using the intrinsic value
method prescribed in Accounting Principles Board (APB) Opinion No. 25,
Accounting for Stock Issued to Employees. Under APB No. 25, compensation cost
is measured as the excess, if any, of the quoted market price of IXYS stock at
the date of grant over the exercise price of the option granted. Compensation
cost for stock options, if any, is recognized ratably over the vesting period.
IXYS policy is to grant options with an exercise price equal to the quoted
market price of IXYS stock on the grant date. Accordingly, no compensation has
been recognized for its stock option plans. IXYS provides additional pro forma
disclosures as required under SFAS No. 123, Accounting for Stock-Based
Compensation.

3.  ACQUISITIONS

Westcode Semiconductors Limited

On January 22, 2002, IXYS completed the acquisition of Westcode
Semiconductor Limited (Westcode), a power semiconductor manufacturer based in
the United Kingdom. Westcode manufactures high voltage power semiconductors.
The primary reason for IXYS acquiring Westcode was to provide IXYS with access
to higher voltage market segments especially in Europe and to acquire a skilled
manufacturing workforce. The acquisition has been accounted for as a purchase
with a total cost of $9,260,000, which consisted of cash
consideration of $9,000,000
and $260,000 of direct transaction costs. In connection with the acquisition, IXYS
has also assumed liabilities of $6,039,000. Westcodes results of operations are
included in the financial statements from the date of acquisition.
Intangible assets acquired were not material. The assets
and liabilities acquired were recorded based on their fair values as of the
date of acquisition.

The total purchase price and the purchase price allocation of the Westcode
acquisition were as follows (in thousands):

|                            |  |   |       | 
|--------------------------- |  | - | ----- | 
|Cash consideration          |  | $ | 9,000 | 
|Direct costs of acquisition |  |   | 260   | 
|                            |  |   |       | 
|Total purchase price        |  | $ | 9,260 | 
|                            |  |   |       | 

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IXYS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Net assets, at fair
value, acquired are as follows (in thousands):

|                                                                |                                                |                            |   |        |   |   |        |   |        |  
|--------------------------------------------------------------- | ---------------------------------------------- | -------------------------- | - | ------ | - | - | ------ | - | ------ | -
|Tangible assets acquired:                                       |                                                |                            |   |        |   |   |        |  
|                                                                | Current assets                                 |                            | $ | 10,691 |   |   |        |   |       
|                                                                | Property, plant and equipment                  |                            |   | 5,742  |   |   |        |   |       
|                                                                |                                                |                            |   |        |   |   |        |  
|                                                                |                                                | Total tangible assets:     |   |        |   |   |        | $ | 16,433 |  
|Prepaid expenses and deferred tax assets                        |                                                |                            |   |        |   |   | 2,529  |  
|Liabilities assumed:                                            |                                                |                            |   |        |   |   |        |  
|                                                                | Accounts payable and other current liabilities |                            |   | (4,899 | ) |   |        |   |       
|                                                                | Pension liabilities                            |                            |   | (2,583 | ) |   |        |   |       
|                                                                |                                                |                            |   |        |   |   |        |  
|                                                                |                                                | Total liabilities assumed: |   |        |   |   |        |   | (7,482 | )
|                                                                |                                                |                            |   |        |   |   |        |  
|Net
assets acquired, at fair value                              |                                                |                            |   |        |   |   | 11,480 |  
|Purchase Price                                                  |                                                |                            |   |        |   |   | 9,260  |  
|                                                                |                                                |                            |   |        |   |   |        |  
|Excess
of fair value of net assets acquired over purchase price |                                                |                            |   |        |   | $ | 2,220  |  
|                                                                |                                                |                            |   |        |   |   |        |  

The excess of fair value of net assets acquired over costs has been allocated to
proportionately reduce the fair values of plant and equipment and to recognize
deferred taxes as follows (in thousands):

|                                                                            |  |            |       |       |  |            |       |               |  |           |        |   |  |               |       | 
|--------------------------------------------------------------------------- |  | ---------- | ----- | ----- |  | ---------- | ----- | ------------- |  | --------- | ------ | - |  | ------------- | ----- | 
|                                                                            |  |            |       |       |  |            |       |               |  |           |        |   |  | Book value of
|                                                                            |  |            |       |       |  | As % of    |       | Proportionate |  | plant and
|                                                                            |  | Fair Value |       | Total |  | allocation |       | equipment    
|                                                                            |  |            |       |       |  |            |       |              
|Technical machinery and equipment                                           |  | $          | 5,505 |       |  |            | 95.9  | %             |  | $         | (1,982 | ) |  | $             | 3,523 | 
|Transportation equipment and other                                          |  |            | 237   |       |  |            | 4.1   | %             |  |           | (85    | ) |  |               | 152   | 
|                                                                            |  |            |       |       |  |            |       |               |  |           |        |   |  |               |       | 
|Total plant and equipment                                                   |  | $          | 5,742 |       |  |            | 100.0 | %             |  |           | (2,067 | ) |  | $             | 3,675 | 
|                                                                            |  |            |       |       |  |            |       |               |  |           |        |   |  |               |       | 
|Recognition
of a deferred taxes:                                            |  |            |       |       |  |            |       |               |  |           | (153   | ) |  |               |       | 
|                                                                            |  |            |       |       |  |            |       |               |  |           |        |   |  |               |       | 
|Total allocation of excess of fair value of net assets acquired over costs: |  |            |       |       |  |            |       |               |  | $         | (2,220 | ) |  |               |       | 
|                                                                            |  |            |       |       |  |            |       |               |  |           |        |   |  |               |       | 

Pro
Forma Disclosure (in thousands, except per share data):

The following
unaudited proforma combined amounts give effect to the
acquisitions of Westcode as if the acquisitions had occurred on March 31, 2000
and March 31, 2001. On a proforma basis, the results of operations of Westcode
for the years ended December 31, 2000 and December 31, 2001 are consolidated
with IXYS results for the years ended March 31, 2001 and March 31, 2002. The
proforma amounts do not purport to be indicative of what would have occurred
had the acquisitions been made as of the beginning of each period or of results
which may occur in the future.

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IXYS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

|                                       |         |   |                      |        |      |   |         |        | 
|-------------------------------------- | ------- | - | -------------------- | ------ | ---- | - | ------- | ------ | 
|                                       |         |   | Year ended March 31,
|                                       |         |   |                     
|                                       |         |   | 2002                 |        | 2001
|                                       |         |   |                      |        |     
|                                       |         |   | (unaudited)         
|Revenue                                |         | $ | 109,719              |        |      | $ | 141,023 |       
|Net income                             |         |   | 1,187                |        |      |   | 13,450  |       
|Net income per share  basic           |         |   | 0.04                 |        |      |   | 0.53    |       
|Net income per share  diluted         |         |   | 0.04                 |        |      |   | 0.48    |       
|Shares used in per share calculations:
|                                       | Basic   |   |                      | 26,745 |      |   |         | 25,239 | 
|                                       | Diluted |   |                      | 29,004 |      |   |         | 27,774 | 

Directed Energy, Inc.:

On May 16, 2000, IXYS completed the acquisition of Directed Energy, Inc.
in a stock-for-stock acquisition. In connection with the acquisition, IXYS
issued 250,370 shares of IXYS common stock in exchange for all the issued and
outstanding capital stock of Directed Energy, Inc. The shares issued in the
transaction reflect a total purchase price of $2.8 million.

The acquisition was accounted for using the purchase method of accounting,
and accordingly, the recognized purchase price of $2.8 million was allocated to
the tangible and identifiable intangible assets acquired and liabilities
assumed on the basis of their fair values on the acquisition date of May 16,
2000. The purchase price in excess of the fair value of identified tangible and
intangible assets and liabilities assumed in the amount of $2.32 million was
allocated to goodwill and it is being amortized over its estimated useful life
of 10 years. The effects of the acquisition on IXYS financial statements are
not material.

4.  BALANCE SHEET DETAILS

Accounts
Receivable Movement (in thousands):

|                                |                           |  |              |       |              |  |             |        |               |  |   |     |   |  |   |       | 
|------------------------------- | ------------------------- |  | ------------ | ----- | ------------ |  | ----------- | ------ | ------------- |  | - | --- | - |  | - | ----- | 
|                                |                           |  | Balance at   |       |              |  |             |        |               |  |   |     |   |  |  
|                                |                           |  | beginning of |       | Additions /  |  | Translation |        | Balance at   
|                                |                           |  | period       |       | (Deductions) |  | adjustments |        | end of period
|                                |                           |  |              |       |              |  |             |        |              
|Allowance for doubtful accounts |                           |  |              |       |              |  |             |        |               |  |   |     |   |  |   |      
|                                | Year ended March 31, 2002 |  | $            | 2,823 |              |  | $           | (1,776 | )             |  | $ | (2  | ) |  | $ | 1,045 | 
|                                | Year ended March 31, 2001 |  | $            | 1,427 |              |  | $           | 1,416  |               |  | $ | (20 | ) |  | $ | 2,823 | 
|                                | Year ended March 31, 2000 |  | $            | 600   |              |  | $           | 852    |               |  | $ | (25 | ) |  | $ | 1,427 | 

Inventories:

Inventories consist of the following (in thousands):

|                |  |           |        |      |  |   |        | 
|--------------- |  | --------- | ------ | ---- |  | - | ------ | 
|                |  | March 31,
|                |  |          
|                |  | 2002      |        | 2001
|                |  |           |        |     
|Raw materials   |  | $         | 5,494  |      |  | $ | 3,888  | 
|Work in process |  |           | 32,299 |      |  |   | 21,114 | 
|Finished goods  |  |           | 8,524  |      |  |   | 9,033  | 
|                |  |           |        |      |  |   |        | 
|                |  | $         | 46,317 |      |  | $ | 34,035 | 
|                |  |           |        |      |  |   |        | 

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IXYS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Plant and Equipment:

Plant and equipment consists of the following (in thousands):

|                                                   |  |           |         |      |  |   |         |  
|-------------------------------------------------- |  | --------- | ------- | ---- |  | - | ------- | -
|                                                   |  | March 31,
|                                                   |  |          
|                                                   |  | 2002      |         | 2001
|                                                   |  |           |         |     
|Buildings                                          |  | $         | 4,297   |      |  | $ | 4,806   |  
|Equipment owned                                    |  |           | 26,275  |      |  |   | 17,876  |  
|Equipment capital leases                           |  |           | 13,542  |      |  |   | 10,801  |  
|Leasehold improvements                             |  |           | 70      |      |  |   | 129     |  
|                                                   |  |           |         |      |  |   |         |  
|                                                   |  |           | 44,184  |      |  |   | 33,612  |  
|Accumulated depreciationowned plant and equipment |  |           | (16,748 | )    |  |   | (13,189 | )
|Accumulated amortizationcapital leases            |  |           | (8,198  | )    |  |   | (6,463  | )
|                                                   |  |           |         |      |  |   |         |  
|                                                   |  | $         | 19,238  |      |  | $ | 13,960  |  
|                                                   |  |           |         |      |  |   |         |  

Depreciation and amortization expense for fiscal years ended March 31,
2002, 2001 and 2000 amounted to $5,835,000, $3,409,000 and $3,352,000,
respectively.

Other Assets:

Other assets consists of the following (in thousands):

|         |  |           |       |      |  |   |       | 
|-------- |  | --------- | ----- | ---- |  | - | ----- | 
|         |  | March 31,
|         |  |          
|         |  | 2002      |       | 2001
|         |  |           |       |     
|Loans    |  | $         | 2,760 |      |  | $ | 1,871 | 
|Goodwill |  |           | 1,896 |      |  |   | 2,127 | 
|Other    |  |           | 172   |      |  |   | 751   | 
|         |  |           |       |      |  |   |       | 
|         |  | $         | 4,828 |      |  | $ | 4,749 | 
|         |  |           |       |      |  |   |       | 

Accrued Expenses and Other Liabilities:

Accrued expenses and other liabilities consist of the following (in
thousands):

|                                 |  |           |       |      |  |   |        | 
|-------------------------------- |  | --------- | ----- | ---- |  | - | ------ | 
|                                 |  | March 31,
|                                 |  |          
|                                 |  | 2002      |       | 2001
|                                 |  |           |       |     
|Accrued compensation             |  | $         | 2,376 |      |  | $ | 2,465  | 
|Warranty                         |  |           | 600   |      |  |   | 692    | 
|Income taxes                     |  |           | 1,717 |      |  |   | 5,500  | 
|Other
accrued goods and services |  |           | 3,690 |      |  |   | 4,586  | 
|                                 |  |           |       |      |  |   |        | 
|                                 |  | $         | 8,383 |      |  | $ | 13,243 | 
|                                 |  |           |       |      |  |   |        | 

5.  BORROWING ARRANGEMENTS:

IXYS entered into a loan and security agreement with a U.S. bank to borrow
up to an aggregate amount not to exceed $5.0 million. The loan bears interest
at the banks prime rate 4.5% at March 31, 2002, payable monthly, and matures
in September 2002. The loan is collateralized by certain assets and contains
certain general and financial

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IXYS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

covenants, including a requirement that IXYS remain solvent and able to
pay its debts as they become due. At March 31, 2002, IXYS has drawn $700,000
against the loan. IXYS has another line of credit with a U.S. bank that
consists of a $100,000 commitment, which is available through
September 2002.
The line bears interest at a fixed rate of 9.5%. The line is collateralized by
a $100,000 certificate of deposit that we have with the bank. At March 31,
2002, there were no amounts being drawn down against such line of credit.

In Germany, at March 31, 2001, IXYS had a $5.0 million line of credit with
a German bank with no outstanding balance. This line supports a letter of
credit facility. In July 2000, a German bank issued to IXYS a commitment letter
for a DM 7.5 million equipment lease facility. IXYS existing equipment leases,
DM 3.0 million at March 31, 2002, were charged against the facility. The
equipment leases provide financing at varying pricing for periods up to 48
months. In addition to the rights to the equipment, the bank holds a security
interest in other assets and up to DM 1.0 million deposited with the bank.

In July 2000, in the same commitment letter discussed above, the bank also
committed to issue a credit line to IXYS up to DM 9.9 million for a wafer
fabrication facility in Germany, including leasehold improvements, clean room
construction and fabrication, computer and office equipment. At
March 31, 2002,
IXYS had drawn DM 676,000 under this commitment. The security interest of the
bank under the equipment lease facility also collateralizes this line.

In December 2001,
IXYS entered into a term loan with a Swiss bank in the amount of
SFR 200,000. The loan bears interest of 5.25% and is due in
November 2006.

6.  COMMITMENTS AND CONTINGENCIES:

Commitments:

IXYS leases certain equipment under capital lease arrangements expiring
through fiscal year 2002 at interest rates of 6.5% to 10.2%.

IXYS rents certain of its facilities under operating leases which expire
in 2004. IXYS is responsible for insurance and property taxes.

Future minimum lease payment under capital and operating leases are (in
thousands):

|                             |      |   |               |       |                 |   |       |     | 
|---------------------------- | ---- | - | ------------- | ----- | --------------- | - | ----- | --- | 
|                             |      |   | CapitalLeases |       | OperatingLeases
|                             |      |   |               |       |                
|Fiscal year ending March 31, |      |   |               |       |                 |   |       |    
|                             | 2003 |   | $             | 2,673 |                 |   | $     | 691 | 
|                             | 2004 |   |               | 2,449 |                 |   |       | 723 | 
|                             | 2005 |   |               | 1,654 |                 |   |       | 375 | 
|                             | 2006 |   |               | 487   |                 |   |       | 355 | 
|Thereafter                   |      |   | 577           |       |                 |   | 355   |    
|                             |      |   |               |       |                 |   |       |    
|Total minimum payments       |      |   | 7,840         |       |                 | $ | 2,499 |    
|                             |      |   |               |       |                 |   |       |    
|Less: interest               |      |   | 679           |       |                 |   |       |    
|                             |      |   |               |       |                 |   |       |    
|                             |      |   | 7,161         |       |                 |   |       |    
|Less: current portion        |      |   | (2,391        | )     |                 |   |       |    
|                             |      |   |               |       |                 |   |       |    
|Long-term lease obligation   |      | $ | 4,770         |       |                 |   |       |    
|                             |      |   |               |       |                 |   |       |    

Rent expense for fiscal
years ended March 31, 2002, 2001 and 2000
amounted to $438,000, $378,000 and $388,000, respectively.

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IXYS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

As of March 31, 2002, 2001 and 2000, IXYS had cash deposits with a
financial institution of $205,000, $387,000 and $304,000, respectively, which
were restricted as to use and represent compensating balances for current or
future discounted acceptances and letters of credit which is included
in restricted cash on the Company's balance sheets.

As of March 31, 2002, IXYS is committed to purchase $1.68 million of
inventory from a supplier of IXYS.

On September 22, 2000, IXYS Corporation entered into a guaranty for $5.0
million in favor of Commerzbank AG to obtain a line of credit granted by
Commerzbank AG to IXYS Semiconductor GmbH. At March 31, 2002, the line of
credit was $5.0 million.

Legal Proceedings

On June 22, 2000, International Rectifier Corporation filed an action for
patent infringement against IXYS in the United States District Court for the
Central District of California, alleging that certain of IXYS products sold in
the United States infringe U.S. patents owned by International Rectifier.
International Rectifiers complaint against IXYS contends that IXYS alleged
infringement of International Rectifiers patents has been and continues to be
willful and deliberate. The complaint seeks to enjoin IXYS from further
infringement and requests an award of actual monetary damages on sales of
products that are claimed to infringe International Rectifiers patents.
International Rectifier also seeks to have the damages trebled.

IXYS answered the complaint, denying any infringement and asserting that
the International Rectifier patents are invalid and unenforceable for, among
other reasons, failure of International Rectifier to properly disclose known
prior art during its prosecution of the patents in suit. IXYS also contended
that International Rectifiers claims are barred by reason of the doctrines of
estoppel and laches. Trial in this case had been originally scheduled for June 12,
2001; however, the U.S. District Court has repeatedly continued the trial
date, which is currently set for July 30, 2002.

The U.S. District Court has also granted motions for summary adjudication
dismissing all of IXYS affirmative defenses and decided that certain of IXYS
power MOSFETs and IGBTs infringe certain claims of each of International
Rectifiers U.S. patents 4,959,699, 5,008,725 and/or 5,130,767.

International Rectifier also contends that IXYS importation into the
United States of certain IXYS-designed MOSFET products manufactured for IXYS by
Samsung Electronics Co., Ltd. (Samsung) is in violation of a consent decree
and injunction entered against Samsung in another lawsuit to which IXYS was not
a party (the Samsung Injunction). In February 2001, International Rectifier
served Samsung and IXYS with a Post-Judgment Ex Parte Application for Order to
Show Cause Re Contempt seeking, among other things, an enforcement of the
Samsung Injunction enjoining IXYS importation into the United States of the
allegedly-infringing products, and an appropriate fine. IXYS responded by
filing a motion requesting clarification of the Samsung Injunction, or if the
Samsung Injunction is construed to cover IXYS products, modification of the
Samsung Injunction to exclude IXYS devices. Argument concerning the Order to
Show Cause was held in May 2001, at which time the U.S. District Court remarked
that IXYS was bound by the Samsung Injunction, and that IXYS and Samsung were
attempting to subvert the Samsung Injunction by having IXYS take delivery
outside the United States of the allegedly-infringing products. At that time,
the U.S. District Court deferred a decision as to whether IXYS and Samsung were
in contempt. In March 2002, no decision having been reached on its earlier
motion, IXYS renewed and amended its motion to clarify, modify or vacate the
Samsung Injunction as to IXYS devices. On March 19, 2002, the U.S. District
Court adopted and entered Interim Findings of Fact and Conclusions of Law that
decided, among other things, that IXYS is bound by, and IXYS devices are not
excepted from, the Samsung Injunction. On April 1, 2002, the U.S. District
Court denied IXYS renewed motion to clarify, modify or vacate the Samsung
Injunction. IXYS immediately appealed each of these rulings to the Court of
Appeals for the Federal Circuit and requested a stay of

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IXYS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

the Samsung Injunction as to IXYS devices pending outcome of these
appeals.

It remains IXYS intent to continue to contest the claims of International
Rectifier vigorously. Furthermore, IXYS expects to appeal any ruling of
contempt. While IXYS believes its defenses to the various claims and its
arguments on appeal are meritorious, there can be no assurance of a favorable
outcome. In the event of an adverse outcome, damages or injunctions awarded by
the U.S. District Court could be materially adverse to IXYS financial
condition and results of operations.

In response to International Rectifiers claims, Samsung contends that
IXYS is contractually obligated under the terms of IXYS wafer supply agreement
with Samsung to defend it against the contempt claims made by International
Rectifier and indemnify and hold Samsung harmless in connection with such
claims. IXYS is considering Samsungs request in light of the terms of the
wafer supply agreement between IXYS and Samsung. While IXYS believes that
neither it nor Samsung are or could be in violation of the injunction for
various reasons IXYS believes to be meritorious, including an express
reservation as to IXYS designed parts in the consent decree, there can be no
assurance of a favorable outcome. In the event of an adverse ruling against
IXYS on the ultimate issue of contempt, or if IXYS is obligated to defend and
indemnify Samsung, any damages awarded or injunction entered by the U.S.
District Court could be materially adverse to IXYS financial condition and
results of operations.

In November 2000, IXYS filed a lawsuit for patent infringement against
International Rectifier GmbH in the County Court of Mannheim, Germany. The
lawsuit charged International Rectifier with infringing at least two of IXYS
German patents. These patents cover key design features of IXYS proprietary
integrated power module technology, which the lawsuit alleged International
Rectifier had been infringing in products sold in Germany. The lawsuit sought
damages and an injunction prohibiting the continued infringement by
International Rectifier.

On March 23, 2001, a public hearing took place in Mannheim, Germany, and
International Rectifier did not deny making use of the above patents. On April 27,
2001, the County Court of Mannheim rendered a judgment in IXYS favor that
enjoined International Rectifier from marketing, utilizing, importing or
possessing two of IXYS German patents, and imposed a fine of up to (EUR)
256,000 to the state or imprisonment of International Rectifiers managing
director for each violation of the injunction. In addition, International
Rectifier was ordered to disclose to IXYS information about its previous sales
activity, offers of sales, advertisements, production costs and profits
concerning the infringed patents. International Rectifier was also ordered to
pay attorney fees and past and future damages and unjustified enrichment
resulting from International Rectifiers infringing practices, as calculated by
the information to be provided to IXYS by International Rectifier.
International Rectifier appealed the judgment to the Court of Appeals in
Karlsruhe. Subsequent to a hearing on this appeal in March, the Court of Appeals
in Karlsruhe ruled in favor of IXYS and the judgment entered by the
County Court of Mannheim is now final. Notwithstanding this appeal, IXYS had
begun enforcing the judgment of the County Court of Mannheim; in order to do so
IXYS was required to pay (EUR) 532,000 as a form of bond to be held by the
County Court of Mannheim. In lieu of the bond, the court accepted a
bank guarantee. Although International Rectifier has a right to
appeal the ruling of the Appeals Court in Karlsruhe, the bond may be returned
to IXYS and IXYS may continue to enforce the judgment of the County Court of
Mannheim. International Rectifier has also begun to disclose information to
IXYS pursuant to the judgment for purposes of calculating our damages award.

On February 8, 2001, IXYS filed a lawsuit against International Rectifier
Italia S.p.A. in the Civil Court of Monza, Italy, for patent infringement of at
least two of IXYS European patents, which correspond to the German patents
involved in the above-described legal proceeding in Germany. The lawsuit seeks
the seizure of semiconductor modules produced by International Rectifier that
infringe on IXYS patents and an injunction against further production of such
modules by International Rectifier in Italy. At a hearing on March 8, 2001, the
judge rejected International Rectifiers arguments that the Monza tribunal was
not competent to hear the case and nominated an expert to comment on the
technical details of the alleged patent infringement. Following the scheduled
submission of technical writs by the parties in May 2001, the expert submitted
written comments in June 2001. On June 27, 2001, the Civil Court of Monza
rendered a preliminary injunction in IXYS favor with respect to certain

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

claims of infringement by International Rectifier S.p.A. Under the terms
of this preliminary injunction, IXYS is permitted to seize, and International
Rectifier S.p.A. is prohibited from distributing, certain of the allegedly
infringing semiconductor modules. The injunction is an interlocutory measure
that remains in effect until there has been a judgment on the merits. Hearings
on the merits of the law suit were held on December 12, 2001, January 24 2002
and February 21, 2002. It could be as long as several years before a judgment
on the merits is rendered.

While IXYS believes its claims against International Rectifier in the
Civil Court of Monza, Italy are meritorious, there can be no assurance of a
favorable outcome. IXYS does not believe that an adverse ruling by the Civil
Court of Monza would have a significant negative impact on the results of
operations, financial performance or liquidity of IXYS.

7.  COMMON STOCK:

A two-for-one split of IXYS common stock was effected on August 10, 2000
and was applicable to stockholders of record on July 20, 2000. Reference to
share and per share data in the accompanying consolidated financial statements
give effect to the stock split.

Warrants:

IXYS has outstanding
warrants exercisable for 266 shares of IXYS common stock, with an
exercise price of $225.00 per share, all of which expire in June,
2002.

Stock Purchase and Stock Option Plans:

IXYS has the 1999 Non-Employee Directors Equity Incentive Plan and the
1999 Equity Incentive Plan (the Plans) under which incentive stock options
may be granted not less than 85% of fair market value at the time of grant. The
options once granted expire ten years from the date of grant. The Board of
Directors has the full power to determine the provisions of each option issued
under the Plans. The 1994 Stock Option Plan was terminated in May 1999.

Stock option activity under the Plans is summarized below (in thousands,
except share data):

|                         |  |           |            |           |  |                     |           |       |          |       |              |  |  |          |        |   |  |   |       | 
|------------------------ |  | --------- | ---------- | --------- |  | ------------------- | --------- | ----- | -------- | ----- | ------------ |  |  | -------- | ------ | - |  | - | ----- | 
|                         |  |           |            |           |  | Options Outstanding |           |       | Weighted
|                         |  | Shares    |            |           |  | Average            
|                         |  | Available |            | Number    |  |                     |           |       |          |       |              |  |  | Exercise
|                         |  | for Grant |            | of Shares |  | Exercise Price      |           | Total |          | Price
|                         |  |           |            |           |  |                     |           |       |          |      
|Balances, March 31, 1999 |  |           | 30,762     |           |  |                     | 704,894   |       |          | $     | 0.01-$3.81   |  |  | $        | 2,021  |   |  | $ | 2.87  | 
|New authorized           |  |           | 4,500,000  |           |  |                     |          |       |          |       |             |  |  |          |       |   |  |   |      | 
|Options granted          |  |           | (2,790,000 | )         |  |                     | 2,790,000 |       |          | $     | 2.13-$3.63   |  |  |          | 8,674  |   |  | $ | 3.11  | 
|Options exercised        |  |           |           |           |  |                     | (51,034   | )     |          | $     | 0.01-$1.30   |  |  |          | (32    | ) |  | $ | 0.63  | 
|Options canceled         |  |           | 150,000    |           |  |                     | (150,000  | )     |          | $     | 2.13         |  |  |          | (318   | ) |  | $ | 2.12  | 
|                         |  |           |            |           |  |                     |           |       |          |       |              |  |  |          |        |   |  |   |       | 
|Balances, March 31, 2000 |  |           | 1,890,762  |           |  |                     | 3,293,860 |       |          | $     | 0.01-$3.81   |  |  | $        | 10,345 |   |  | $ | 3.14  | 
|New authorized           |  |           | 830,467    |           |  |                     |           |       |          |       |              |  |  |          |        |   |  |   |       | 
|Options granted          |  |           | (178,300   | )         |  |                     | 178,300   |       |          | $     | 19.00-$29.50 |  |  |          | 4,308  |   |  | $ | 24.16 | 
|Options exercised        |  |           |           |           |  |                     | (213,342  | )     |          | $     | 0.01-$4.44   |  |  |          | (408   | ) |  | $ | 1.91  | 

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

|                         |  |           |           |           |  |                     |           |       |          |       |               |  |  |          |        |   |  |   |       | 
|------------------------ |  | --------- | --------- | --------- |  | ------------------- | --------- | ----- | -------- | ----- | ------------- |  |  | -------- | ------ | - |  | - | ----- | 
|                         |  |           |           |           |  | Options Outstanding |           |       | Weighted
|                         |  | Shares    |           |           |  |                     | Average  
|                         |  | Available |           | Number    |  |                     |           |       |          |       |               |  |  | Exercise
|                         |  | for Grant |           | of Shares |  | Exercise Price      |           | Total |          | Price
|                         |  |           |           |           |  |                     |           |       |          |      
|Options canceled         |  |           | 73,420    |           |  |                     | (73,420   | )     |          | $     | 0.01-$3.63    |  |  |          | (222   | ) |  | $ | 3.02  | 
|                         |  |           |           |           |  |                     |           |       |          |       |               |  |  |          |        |   |  |   |       | 
|Balances, March 31, 2001 |  |           | 2,616,349 |           |  |                     | 3,185,398 |       |          | $     | 0.01-$29.50   |  |  | $        | 14,023 |   |  | $ | 4.40  | 
|                         |  |           |           |           |  |                     |           |       |          |       |               |  |  |          |        |   |  |   |       | 
|New authorized           |  |           | 901,621   |           |  |                     |          |       |          |       |              |  |  |          |       |   |  |   |      | 
|Options granted          |  |           | (782,800  | )         |  |                     | 782,800   |       |          | $     | 6.60-$15.48   |  |  |          | 4,878  |   |  | $ | 7.14  | 
|Options exercised        |  |           |           |           |  |                     | (195,513  | )     |          | $     | 0.0085-$3.625 |  |  |          | (600   | ) |  | $ | 3.12  | 
|Options canceled         |  |           | 14,106    |           |  |                     | (14,106   | )     |          | $     | 19.00         |  |  |          | (268   | ) |  | $ | 19.00 | 
|                         |  |           |           |           |  |                     |           |       |          |       |               |  |  |          |        |   |  |   |       | 
|Balances, March 31, 2002 |  |           | 2,749,276 |           |  |                     | 3,758,579 |       |          |       |               |  |  | $        | 18,033 |   |  | $ | 4.84  | 
|                         |  |           |           |           |  |                     |           |       |          |       |               |  |  |          |        |   |  |   |       | 

The following table summarizes information about stock options outstanding
at March 31, 2002:

| |  |                     |             |                     |  |        |           |             |  |          |     |          |  |          |       |         |  |          |           |  |  |   |       | 
| |  | ------------------- | ----------- | ------------------- |  | ------ | --------- | ----------- |  | -------- | --- | -------- |  | -------- | ----- | ------- |  | -------- | --------- |  |  | - | ----- | 
| |  | Options Outstanding |             | Options Exercisable
| |  |                     |             |                    
| |  |                     |             |                     |  |        |           |             |  | Weighted |     | Weighted |  |          |       |         |  | Weighted
| |  |                     |             |                     |  |        |           |             |  | Average  |     | Average  |  | Number   |       | Average
| |  |                     |             |                     |  | Number |           | Contractual |  | Exercise |     | of       |  | Exercise
| |  | Exercise Price      |             | of Shares           |  | Life   |           | Price       |  | Shares   |     | Price   
| |  |                     |             |                     |  |        |           |             |  |          |     |         
| |  | $                   | 0.01-0.01   |                     |  |        | 3,470     |             |  |          | 1.6 |          |  | $        | 0.01  |         |  |          | 3,470     |  |  | $ | 0.01  | 
| |  |                     | 0.08-0.08   |                     |  |        | 232       |             |  |          | 6.4 |          |  |          | 0.08  |         |  |          | 232       |  |  |   | 0.08  | 
| |  |                     | 1.69-2.34   |                     |  |        | 1,037,253 |             |  |          | 7.5 |          |  |          | 2.18  |         |  |          | 671,733   |  |  |   | 2.18  | 
| |  |                     | 3.46-4.00   |                     |  |        | 1,857,024 |             |  |          | 7.3 |          |  |          | 3.65  |         |  |          | 882,024   |  |  |   | 3.65  | 
| |  |                     | 6.60-7.26   |                     |  |        | 652,800   |             |  |          | 9.6 |          |  |          | 6.76  |         |  |          | 0         |  |  |   |       | 
| |  |                     | 15.48-20.90 |                     |  |        | 123,800   |             |  |          | 8.8 |          |  |          | 18.45 |         |  |          | 17,915    |  |  | $ | 19.08 | 
| |  |                     | 29.50-29.50 |                     |  |        | 84,000    |             |  |          | 8.3 |          |  |          | 29.50 |         |  |          | 23,100    |  |  | $ | 29.50 | 
| |  |                     |             |                     |  |        |           |             |  |          |     |          |  |          |       |         |  |          |           |  |  |   |       | 
| |  |                     | 0.01-29.50  |                     |  |        | 3,758,579 |             |  |          | 7.8 |          |  | $        | 4.84  |         |  |          | 1,598,474 |  |  | $ | 3.57  | 
| |  |                     |             |                     |  |        |           |             |  |          |     |          |  |          |       |         |  |          |           |  |  |   |       | 

Expired options in fiscal year 2000 represents options under
IXYS pre-merger 1989 Stock Option Plan, which was assumed by Paradigm in connection with
the Paradigm merger.

Had compensation cost for the Plans been determined based on the fair
value at the grant date for awards in fiscal years 2002, 2001 and 2000
consistent with the provisions of SFAS No. 123, IXYS net income and net income
per share for fiscal years 2002, 2001 and 2000 would have decreased to the
pro forma amounts indicated below (in thousands, except per share amounts):

|                                             |  |                      |       |      |  |      |        |  |  |   |       | 
|-------------------------------------------- |  | -------------------- | ----- | ---- |  | ---- | ------ |  |  | - | ----- | 
|                                             |  | Year Ended March 31,
|                                             |  |                     
|                                             |  | 2002                 |       | 2001 |  | 2000
|                                             |  |                      |       |      |  |     
|Net income  as reported                     |  | $                    | 1,938 |      |  | $    | 13,587 |  |  | $ | 6,899 | 
|                                             |  |                      |       |      |  |      |        |  |  |   |       | 
|Net income  pro forma                       |  | $                    | 182   |      |  | $    | 12,106 |  |  | $ | 6,146 | 
|                                             |  |                      |       |      |  |      |        |  |  |   |       | 
|Net
income per share  basic  as reported   |  | $                    | 0.07  |      |  | $    | 0.54   |  |  | $ | 0.29  | 
|                                             |  |                      |       |      |  |      |        |  |  |   |       | 
|Net
income per share  basic  pro forma     |  | $                    | 0.01  |      |  | $    | 0.48   |  |  | $ | 0.26  | 
|                                             |  |                      |       |      |  |      |        |  |  |   |       | 
|Net
income per share  diluted  as reported |  | $                    | 0.07  |      |  | $    | 0.49   |  |  | $ | 0.28  | 
|                                             |  |                      |       |      |  |      |        |  |  |   |       | 
|Net
income per share  diluted  pro forma   |  | $                    | 0.01  |      |  | $    | 0.44   |  |  | $ | 0.25  | 
|                                             |  |                      |       |      |  |      |        |  |  |   |       | 

In future years, annual compensation expense will vary relative to the
vesting of options granted in those future years.

The fair value of option grants has been estimated on the date of grant
using the Black-Scholes option pricing model with the following weighted
average assumptions:

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

|                        |  |                      |     |                |  |                |     |   |  |  |    |  
|----------------------- |  | -------------------- | --- | -------------- |  | -------------- | --- | - |  |  | -- | -
|                        |  | Year Ended March 31,
|                        |  |                     
|                        |  | 2002                 |     | 2001           |  | 2000          
|                        |  |                      |     |                |  |               
|Risk-free interest rate |  | 3.60% to 4.69%       |     | 5.35% to 5.99% |  | 5.95% to 6.65%
|Expected term           |  | 4 years              |     | 4 years        |  | 4 years       
|Volatility              |  |                      | 103 | %              |  |                | 142 | % |  |  | 91 | %
|Dividend yield          |  |                      | 0   | %              |  |                | 0   | % |  |  | 0  | %

No dividend yield is assumed as IXYS has not paid dividends and has no
plans to do so.

The weighted average expected life was calculated based on the vesting
period and the expected life at the date of the grant. The risk free interest
rate was calculated based on rates prevailing during grant periods and the
expected life of the options at the date of grants. The weighted average fair
values of options granted to employees during the fiscal years ended March 31,
2002, 2001 and 2000 were $7.14, $24.16 and $6.68, respectively.

IXYS has sold 3,908,095 shares of common stock to certain members of IXYS
management under a restricted stock purchase agreement subject to IXYS right
of repurchase, which lapses ratably over five years. The shares were purchased
through recourse promissory notes at a purchase price of $0.22 per share.
Interest is due on the notes at a rate of 5.79% per annum, with the balance
outstanding due in full September 2005. At March 31, 2002, 2001 and 2000, zero
shares, zero shares and zero shares of common stock were subject to IXYS right
of repurchase, respectively.

In May 1999, IXYS approved the 1999 Employee Stock Purchase Plan
(Purchase Plan) and terminated all prior Paradigm employee stock purchase
plans. There are 500,000 shares of common stock reserved for issuance under the
Purchase Plan. During the year ended March 31, 2002, there were 44,547 purchases made under the
Purchase Plan.

8.  EMPLOYEE SAVINGS AND RETIREMENT PLAN:

IXYS has a 401(k) plan, known as the IXYS Corporation and Subsidiary
Employee Savings and Retirement Plan. Eligibility to participate in the plan
is subject to certain minimum service requirements. Employees may voluntarily
contribute up to 20% of yearly compensation and IXYS may make matching
contributions as determined by the Board of Directors in a resolution on or
before the end of the fiscal year. Employees are 100% vested immediately. For
the years ended March 31, 2002, 2001 and 2000, IXYS contributed $168,000,
$168,000 and $129,000, respectively.

9.  RELATED PARTY TRANSACTIONS:

ABB is a principal stockholder of IXYS. In fiscal year 2002, 2001 and 2000
IXYS generated revenues of $808,000, $707,000 and $653,000, respectively from
sales of products to ABB and to ABBs affiliates for use as components in their
products.

10.  PENSION PLANS:

Employees of IXYS GmbH participate in a number of employee retirement
plans, including a defined benefit pension plan, the benefits for which will be
paid out of the general assets of IXYS GmbH, as well as other government
sponsored retirement plans to which IXYS GmbH and eligible employees are
required to contribute.

In addition to providing income at retirement, many of these plans also
provide survivor, termination and disability benefits. The defined benefits
pension plan covers substantially all employees and benefits are based on years
of service and the employees compensation.

Pension expense for the defined benefit pension plan was as follows (in
thousands):

Net Period Pension Cost:

The net periodic pension expense for 2002, 2001 and 2000 included the
following components:

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

|                                              |  |                      |      |      |  |      |     |   |  |   |     |  
|--------------------------------------------- |  | -------------------- | ---- | ---- |  | ---- | --- | - |  | - | --- | -
|                                              |  | Year Ended March 31,
|                                              |  |                     
|                                              |  | 2002                 |      | 2001 |  | 2000
|                                              |  |                      |      |      |  |     
|                                              |  | (in thousands)      
|Service cost                                  |  | $                    | 214  |      |  | $    | 99  |   |  | $ | 107 |  
|Interest cost on projected benefit obligation |  |                      | 424  |      |  |      | 286 |   |  |   | 279 |  
|Expected return on plan assets                |  |                      | 46   |      |  |      | (30 | ) |  |   | (28 | )
|Amortization of prior service cost            |  |                      |     |      |  |      | 1   |   |  |   | 1   |  
|Recognized actuarial loss                     |  |                      | (280 | )    |  |      | 5   |   |  |   | 12  |  
|                                              |  |                      |      |      |  |      |     |   |  |   |     |  
|Net periodic pension expense                  |  | $                    | 404  |      |  | $    | 361 |   |  | $ | 371 |  
|                                              |  |                      |      |      |  |      |     |   |  |   |     |  

Funded Status:

|                             |                                                        |  |                |        |      |  |   |       |  
|---------------------------- | ------------------------------------------------------ |  | -------------- | ------ | ---- |  | - | ----- | -
|                             |                                                        |  | Year Ended    
|                             |                                                        |  | March 31,     
|                             |                                                        |  |               
|                             |                                                        |  | 2002           |        | 2001
|                             |                                                        |  |                |        |     
|                             |                                                        |  | (in thousands)
|Change in benefit obligation |                                                        |  |                |        |      |  |   |      
|                             | Benefit obligation at the beginning of year            |  | $              | 5,365  |      |  | $ | 5,417 |  
|                             | Additional benefit obligation acquired during the year |  |                | 13,648 |      |  |   |      |  
|                             | Service cost                                           |  |                | 214    |      |  |   | 94    |  
|                             | Interest cost                                          |  |                | 424    |      |  |   | 286   |  
|                             | Plan participants contribution                         |  |                | 23     |      |  |   |      |  
|                             | Actuarial loss (gain)                                  |  |                | (259   | )    |  |   | (25   | )
|                             | Benefits paid                                          |  |                | (252   | )    |  |   | (167  | )
|                             | Foreign currency translation adjustment                |  |                | 449    |      |  |   | (240  | )
|                             |                                                        |  |                |        |      |  |   |       |  
|                             | Benefit obligation at the end of the year              |  | $              | 19,612 |      |  | $ | 5,365 |  
|                             |                                                        |  |                |        |      |  |   |       |  

|                      |                                                        |  |                |        |      |  |   |     |  
|--------------------- | ------------------------------------------------------ |  | -------------- | ------ | ---- |  | - | --- | -
|                      |                                                        |  | Year Ended    
|                      |                                                        |  | March 31,     
|                      |                                                        |  |               
|                      |                                                        |  | 2002           |        | 2001
|                      |                                                        |  |                |        |     
|                      |                                                        |  | (in thousands)
|Change in plan assets |                                                        |  |                |        |      |  |   |    
|                      | Fair value of plan assets at the beginning of the year |  | $              | 580    |      |  | $ | 560 |  
|                      | Additional plan assets acquired during the year        |  |                | 11,077 |      |  |   |    |  
|                      | Actual return on plan assets                           |  |                | 298    |      |  |   | 28  |  
|                      | Employer contribution                                  |  |                | 94     |      |  |   | 46  |  
|                      | Plan participant contribution                          |  |                | 23     |      |  |   |    |  
|                      | Benefits paid                                          |  |                | (91    | )    |  |   | (27 | )
|                      | Foreign currency translation adjustment                |  |                | (6     | )    |  |   | (27 | )
|                      |                                                        |  |                |        |      |  |   |     |  
|                      | Fair value of plan assets at the end of the year       |  | $              | 11,975 |      |  | $ | 580 |  
|                      |                                                        |  |                |        |      |  |   |     |  

|               |                                                   |  |                |        |      |  |   |        |  
|-------------- | ------------------------------------------------- |  | -------------- | ------ | ---- |  | - | ------ | -
|               |                                                   |  | Year Ended    
|               |                                                   |  | March 31,     
|               |                                                   |  |               
|               |                                                   |  | 2002           |        | 2001
|               |                                                   |  |                |        |     
|               |                                                   |  | (in thousands)
|Status of plan |                                                   |  |                |        |      |  |   |       
|               | Plan obligations in excess of plan assets         |  | $              | (7,637 | )    |  | $ | (4,785 | )
|               | Unrecognized net obligation (asset) at transition |  |                |       |      |  |   | 10     |  
|               | Net (gains)/losses                                |  |                | 264    |      |  |   | (107   | )
|               |                                                   |  |                |        |      |  |   |        |  
|               | Accrued benefit                                   |  | $              | (7,373 | )    |  | $ | (4,882 | )
|               |                                                   |  |                |        |      |  |   |        |  

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IXYS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

|                                |                                                       |  |                      |        |      |  |   |        |  
|------------------------------- | ----------------------------------------------------- |  | -------------------- | ------ | ---- |  | - | ------ | -
|                                |                                                       |  | Year Ended March 31,
|                                |                                                       |  |                     
|                                |                                                       |  | 2002                 |        | 2001
|                                |                                                       |  |                      |        |     
|                                |                                                       |  | (in thousands)      
|Reconciliation of funded status |                                                       |  |                      |        |      |  |   |       
|                                | Accrued pension cost at March 31                      |  | $                    | (4,882 | )    |  | $ | (4,855 | )
|                                | Additional
pension liability acquired during the year |  |                      | (2,574 | )    |  |   |       |  
|                                | Net period pension cost                               |  |                      | (404   | )    |  |   | (361   | )
|                                | Cash contribution                                     |  |                      | 58     |      |  |   | 187    |  
|                                | Foreign currency translation adjustment               |  |                      | 177    |      |  |   | 147    |  
|                                | Benefits paid                                         |  |                      | 252    |      |  |   |       |  
|                                |                                                       |  |                      |        |      |  |   |        |  
|                                | Accrued pension cost at March 31                      |  | $                    | (7,373 | )    |  | $ | (4,882 | )
|                                |                                                       |  |                      |        |      |  |   |        |  

|            |                                             |  |                      |           |      |  |  |   |  
|----------- | ------------------------------------------- |  | -------------------- | --------- | ---- |  |  | - | -
|            |                                             |  | Year Ended March 31,
|            |                                             |  |                     
|            |                                             |  | 2002                 |           | 2001
|            |                                             |  |                      |           |     
|            |                                             |  | (in thousands)      
|Assumptions |                                             |  |                      |           |      |  |  |  
|            | Discount rate                               |  |                      | 6.00-6.10 | %    |  |  | 6 | %
|            | Expected long-term rate of return on assets |  |                      | 5.03-7.50 | %    |  |  | 5 | %
|            | Salary scale                                |  |                      | 3.00-3.50 | %    |  |  | 3 | %

11.  INCOME TAXES:

Income (loss) before income tax provision consists of the following (in
thousands):

|              |  |                      |        |      |  |      |        |  |  |   |        | 
|------------- |  | -------------------- | ------ | ---- |  | ---- | ------ |  |  | - | ------ | 
|              |  | Year Ended March 31,
|              |  |                     
|              |  | 2002                 |        | 2001 |  | 2000
|              |  |                      |        |      |  |     
|Domestic      |  | $                    | 4,764  |      |  | $    | 20,086 |  |  | $ | 9,149  | 
|International |  |                      | (1,642 | )    |  |      | 1,822  |  |  |   | 1,638  | 
|              |  |                      |        |      |  |      |        |  |  |   |        | 
|              |  | $                    | 3,122  |      |  | $    | 21,908 |  |  | $ | 10,787 | 
|              |  |                      |        |      |  |      |        |  |  |   |        | 

IXYS provision for income taxes consists of the following (in thousands):

|          |         |                            |     |                      |       |      |       |       |       |  |       |       |       | 
|--------- | ------- | -------------------------- | --- | -------------------- | ----- | ---- | ----- | ----- | ----- |  | ----- | ----- | ----- | 
|          |         |                            |     | Year Ended March 31,
|          |         |                            |     |                     
|          |         |                            |     | 2002                 |       | 2001 |       | 2000 
|          |         |                            |     |                      |       |      |       |      
|Current:  |         |                            |     |                      |       |      |       |       |       |  |       |      
|          | Federal |                            | $   | 429                  |       |      | $     | 6,200 |       |  | $     | 2,867 |      
|          | State   |                            |     | 87                   |       |      |       | 1,270 |       |  |       | 643   |      
|          | Foreign |                            |     | (193                 | )     |      |       | 777   |       |  |       | 672   |      
|          |         |                            |     |                      |       |      |       |       |       |  |       |       |      
|          |         |                            | 323 |                      |       |      | 8,247 |       |       |  | 4,182 |      
|          |         |                            |     |                      |       |      |       |       |       |  |       |       |      
|Deferred: |         |                            |     |                      |       |      |       |       |       |  |       |      
|          | Federal |                            |     | 1,103                |       |      |       |      |       |  |       | (220  | )    
|          | State   |                            |     | 176                  |       |      |       | 132   |       |  |       | (74   | )    
|          | Foreign |                            |     | (418                 | )     |      |       | (58   | )     |  |       |      |      
|          |         |                            |     |                      |       |      |       |       |       |  |       |       |      
|          |         |                            | 861 |                      |       |      | 74    |       |       |  | (294  | )    
|          |         |                            |     |                      |       |      |       |       |       |  |       |       |      
|          |         | Total income tax provision |     | $                    | 1,184 |      |       | $     | 8,321 |  |       | $     | 3,888 | 
|          |         |                            |     |                      |       |      |       |       |       |  |       |       |      

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IXYS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

IXYS effective tax rate differs from the statutory federal income tax
rate for the years ended March 31, 2002, 2001 and 2000 as shown in the
following table:

|                                            |  |      |    |      |  |      |    |   |  |  |    |  
|------------------------------------------- |  | ---- | -- | ---- |  | ---- | -- | - |  |  | -- | -
|                                            |  | 2002 |    | 2001 |  | 2000
|                                            |  |      |    |      |  |     
|Statutory federal income tax (benefit) rate |  |      | 35 | %    |  |      | 35 | % |  |  | 34 | %
|State taxes, net of federal tax benefit     |  |      | 4  |      |  |      | 4  |   |  |  | 4  |  
|Foreign taxes at higher rates               |  |      | 0  |      |  |      |   |   |  |  | 1  |  
|Other                                       |  |      | (1 | )    |  |      | (1 | ) |  |  | (3 | )
|                                            |  |      |    |      |  |      |    |   |  |  |    |  
|Effective tax rate                          |  |      | 38 | %    |  |      | 38 | % |  |  | 36 | %
|                                            |  |      |    |      |  |      |    |   |  |  |    |  

The components of net deferred income tax assets are as follows (in
thousands):

|                     |                                    |                                      |  |       |       |      |  |     |       | 
|-------------------- | ---------------------------------- | ------------------------------------ |  | ----- | ----- | ---- |  | --- | ----- | 
|                     |                                    |                                      |  | 2002  |       | 2001
|                     |                                    |                                      |  |       |       |     
|Deferred tax assets: |                                    |                                      |  |       |       |      |  |    
|                     | Reserves                           |                                      |  | $     | 869   |      |  | $   | 1,889 | 
|                     | Other liabilities and accruals     |                                      |  | 1,684 |       |      |  | 672 |      
|                     |                                    |                                      |  |       |       |      |  |     |      
|                     |                                    | Total
short term deferred tax assets |  |       | 2,553 |      |  |     | 2,561 | 
|                     | Depreciable assets                 |                                      |  | (320  | )     |      |  | 315 |      
|                     | Net
operating loss carried forward |                                      |  | 2,335 |       |      |  |    |      
|                     |                                    |                                      |  |       |       |      |  |     |      
|                     |                                    | Net deferred tax asset               |  | $     | 4,568 |      |  | $   | 2,876 | 
|                     |                                    |                                      |  |       |       |      |  |     |      

As of March 31,
2002, the Company had net operating loss carryforwards of
approximately $921,000 in Germany and $6,900,000 in the UK available
to reduce its future foreign taxable income. These foreign net
operating losses can be carried forward indefinitely. Under the
foreign tax regulations the amounts of and benefits from net
operating loss carryforwards may be impaired or limited in certain
circumstances. Currently management has determined that no valuation
allowance is required against its deferred tax assets as it is more
likely than not that the deferred tax assets can be realized.

12.  COMPUTATION OF NET INCOME PER SHARE:

Basic and diluted earnings per share are calculated as follows (in
thousands, except per share amounts):

|         |                                                          |  |                      |        |      |  |      |        |  |  |   |        | 
|-------- | -------------------------------------------------------- |  | -------------------- | ------ | ---- |  | ---- | ------ |  |  | - | ------ | 
|         |                                                          |  | Year Ended March 31,
|         |                                                          |  |                     
|         |                                                          |  | 2002                 |        | 2001 |  | 2000
|         |                                                          |  |                      |        |      |  |     
|Basic:   |                                                          |  |                      |        |      |  |      |        |  |  |   |       
|         | Weighted-average shares                                  |  |                      | 26,745 |      |  |      | 25,239 |  |  |   | 23,970 | 
|         |                                                          |  |                      |        |      |  |      |        |  |  |   |        | 
|         | Net income                                               |  | $                    | 1,938  |      |  | $    | 13,587 |  |  | $ | 6,899  | 
|         |                                                          |  |                      |        |      |  |      |        |  |  |   |        | 
|         | Net income per share                                     |  | $                    | 0.07   |      |  | $    | 0.54   |  |  | $ | 0.29   | 
|         |                                                          |  |                      |        |      |  |      |        |  |  |   |        | 
|Diluted: |                                                          |  |                      |        |      |  |      |        |  |  |   |       
|         | Weighted-average shares                                  |  |                      | 26,745 |      |  |      | 25,239 |  |  |   | 23,970 | 
|         | Common equivalent shares from stock
options and warrants |  |                      | 2,259  |      |  |      | 2,535  |  |  |   | 856    | 
|         |                                                          |  |                      |        |      |  |      |        |  |  |   |        | 
|         | Shares used in per share calculation                     |  |                      | 29,004 |      |  |      | 27,774 |  |  |   | 24,826 | 
|         |                                                          |  |                      |        |      |  |      |        |  |  |   |        | 
|         | Net income                                               |  | $                    | 1,938  |      |  | $    | 13,587 |  |  | $ | 6,899  | 
|         |                                                          |  |                      |        |      |  |      |        |  |  |   |        | 
|         | Net income per share                                     |  | $                    | 0.07   |      |  | $    | 0.49   |  |  | $ | 0.28   | 
|         |                                                          |  |                      |        |      |  |      |        |  |  |   |        | 

59.



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IXYS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

13.  SEGMENT AND GEOGRAPHIC INFORMATION:

IXYS operates in a single industry segment comprising power semiconductors
used primarily in controlling energy in motor drives, power conversion
(including uninterruptible power supplies (UPS) and switch mode power supplies
(SMPS)) and medical electronics. IXYS sales by major geographic area (based on
destination) were as follows:

|                           |       |   |                      |        |      |   |        |         |  |   |        |        | 
|-------------------------- | ----- | - | -------------------- | ------ | ---- | - | ------ | ------- |  | - | ------ | ------ | 
|                           |       |   | Year Ended March 31,
|                           |       |   |                     
|                           |       |   | 2002                 |        | 2001 |   | 2000  
|                           |       |   |                      |        |      |   |       
|North America              |       | $ | 27,224               |        |      | $ | 44,634 |         |  | $ | 28,987 |       
|Europe and the Middle East |       |   | 43,291               |        |      |   | 46,488 |         |  |   | 36,463 |       
|Japan                      |       |   | 1,284                |        |      |   | 861    |         |  |   | 569    |       
|Asia Pacific               |       |   | 11,022               |        |      |   | 19,406 |         |  |   | 10,608 |       
|                           |       |   |                      |        |      |   |        |         |  |   |        |       
|                           | Total |   | $                    | 82,821 |      |   | $      | 111,389 |  |   | $      | 76,627 | 
|                           |       |   |                      |        |      |   |        |         |  |   |        |       

For the financial year ended March 31, 2001, a single
customer contributed 11% of IXYS sales.
There was no single end customer providing more than 10% of IXYS sales for
years ended March 31, 2002 and 2000.

IXYS foreign operations consist of those of its subsidiaries, IXYS GmbH
and IXYS Berlin in Germany and IXYS CH in Switzerland. Sales and net income of
IXYS CH, which was established in fiscal year 2002, were not significant and
are combined with German operations. The following table summarizes the sales,
income and long-lived assets of IXYS U.S. and Foreign operations (in thousands):

|            |           |   |                      |        |      |   |         |        |  |   |        |        | 
|----------- | --------- | - | -------------------- | ------ | ---- | - | ------- | ------ |  | - | ------ | ------ | 
|            |           |   | Year Ended March 31,
|            |           |   |                     
|            |           |   | 2002                 |        | 2001 |   | 2000   
|            |           |   |                      |        |      |   |        
|Sales:      |           |   |                      |        |      |   |         |        |  |   |        |       
|            | Foreign   |   | $                    | 55,597 |      |   | $       | 49,172 |  |   | $      | 38,272 | 
|            | IXYS U.S. |   |                      | 27,224 |      |   |         | 62,217 |  |   |        | 38,355 | 
|            |           |   |                      |        |      |   |         |        |  |   |        |        | 
|            |           | $ | 82,821               |        |      | $ | 111,389 |        |  | $ | 76,627 |       
|Net Income: |           |   |                      |        |      |   |         |        |  |   |        |       
|            | Foreign   |   | $                    | (311   | )    |   | $       | 4,514  |  |   | $      | 925    | 
|            | IXYS U.S. |   |                      | 2,249  |      |   |         | 9,073  |  |   |        | 5,974  | 
|            |           |   |                      |        |      |   |         |        |  |   |        |        | 
|            |           | $ | 1,938                |        |      | $ | 13,587  |        |  | $ | 6,899  |       

|                   |                |   |           |        |      |   |        |        | 
|------------------ | -------------- | - | --------- | ------ | ---- | - | ------ | ------ | 
|                   |                |   | March 31,
|                   |                |   |          
|                   |                |   | 2002      |        | 2001
|                   |                |   |           |        |     
|Long Lived Assets: |                |   |           |        |      |   |        |       
|                   | Germany        |   | $         | 13,550 |      |   | $      | 11,945 | 
|                   | Switzerland    |   |           | 2,543  |      |   |        | 2,395  | 
|                   | IXYS U.S.      |   |           | 4,869  |      |   |        | 2,242  | 
|                   | United
Kingdom |   |           | 1,208  |      |   |        |       | 
|                   |                |   |           |        |      |   |        |        | 
|                   |                | $ | 22,170    |        |      | $ | 16,582 |       

14.  SUBSEQUENT EVENTS

On June 10, 2002, IXYS completed its acquisition of Clare, Inc. (Clare).
In connection with the acquisition, (a) each outstanding share of Clare common
stock was converted into the right to receive 0.49147 of a share of IXYS common
stock, resulting in the issuance of approximately 4.89 million shares of IXYS
common stock, and (b) each option to purchase Clare common stock outstanding
immediately prior to the consummation of the acquisition was converted into an
option to purchase 0.49147 of a share of IXYS common stock. The acquisition was
intended to qualify as a tax-free reorganization and will be accounted for under the purchase method of accounting.

The estimated total
purchase price which is preliminary and may be subject to change of the Clare merger is as follows (in thousands):

|                                        |  |   |       
|--------------------------------------- |  | - | ------
|Value of IXYS common stock to be issued |  | $ | 48,891
|Value of IXYS options to be issued      |  |   | 7,393 
|Estimated direct merger costs           |  |   | 4,500 
|                                        |  |   |       
|Total estimated purchase price          |  | $ | 60,784
|                                        |  |   |       

On May 21, 2002,
the U.S. District Court hearing the International Rectifier
litigation entered a permanent injunction, which
became effective June 5, 2002, barring IXYS from making, using, offering to
sell or selling in, or importing into, the United States, MOSFETs (including
IGBTs) covered by the subject patents. On motion by IXYS, the United States
Court of Appeals for the Federal Circuit stayed the injunction, pending further
review.

The Court of Appeals for the Federal Circuit granted the motion to
stay the Samsung Injunction pending further review, and on June 12, 2002,
entered a ruling on the merits of the request for stay of injunction, granting
IXYS motion to stay pending appeal.

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ITEM 9.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE

None.

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PART  III




ITEM 10.  DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

IXYS board of directors is currently comprised of seven directors.
Following the merger with Clare, Inc., as more fully discussed under Item 7. -
Managements Discussion of Financial Condition and Results of Operations -
Recent Events, Larry Mihalchik, the former president and chief executive
officer of Clare, was appointed as a director of IXYS and as President of the
Clare division. The directors and executive officers of IXYS, their ages and
positions at IXYS, as well as certain biographical information of these
individuals, are set forth below. The ages of the individuals are provided as
of March 31, 2002.

|                   |  |     |    |             |  |                                                                                
|------------------ |  | --- | -- | ----------- |  | -------------------------------------------------------------------------------
|Name               |  | Age |    | Position(s)
|                   |  |     |    |            
|Nathan Zommer      |  |     | 54 |             |  | Chairman of the Board, President and Chief
Executive Officer                   
|Arnold P. Agbayani |  |     | 56 |             |  | Senior Vice President, Finance, Chief Financial
Officer, Secretary and Director
|Larry L. Mihalchik |  |     | 55 |             |  | President of Clare Division and Director                                       
|Donald L. Feucht   |  |     | 68 |             |  | Director                                                                       
|Andreas Hartmann   |  |     | 58 |             |  | Director                                                                       
|Samuel Kory        |  |     | 58 |             |  | Director                                                                       
|S. Joon Lee        |  |     | 62 |             |  | Director                                                                       
|Peter H. Ingram    |  |     | 53 |             |  | President of European Operations                                               
|Kevin McDonough    |  |     | 50 |             |  | President of U.S. Operation                                                    

Nathan Zommer. Dr. Zommer, our founder, has served as a Director since
IXYS inception in 1983, and has served as Chairman of the Board, President and
Chief Executive Officer since March 1993. From 1984 to 1993, Dr. Zommer served
as our Executive Vice President. Prior to founding IXYS, Dr. Zommer served in a
variety of positions with Intersil, Hewlett Packard and General Electric,
including as a scientist in the Hewlett Packard Laboratories and Director of
the Power MOS Division for Intersil/General Electric. Dr. Zommer received his
B.S. and M.S. degrees in Physical Chemistry from Tel Aviv University and a
Ph.D. in Electrical Engineering from Carnegie Mellon University.

Arnold P. Agbayani. Mr. Agbayani has served as our Senior Vice President,
Finance, Chief Financial Officer, Secretary and Director since 1993. From 1989
to 1993, he served as our Controller. Prior to joining IXYS, Mr. Agbayani held
various financial positions with National Semiconductor, Fairchild Camera and
Instruments, ATARI and Frito-Lay. Mr. Agbayani received his B.S. in Finance and
an M.B.A. from Roosevelt University of Chicago.

Larry L. Mihalchik. Mr. Mihalchik was appointed as a Director of IXYS and
as President of our Clare Division upon the completion of the acquisition of
Clare, Inc. Mr. Mihalchik served as the President and Chief Executive Officer
of Clare, Inc. from February 1, 2001 until June 10, 2002. From January 2000 to
February 1, 2001, Mr. Mihalchik was Chief Executive Officer and a member of the
Board of Directors of Internet Commerce Services Corporation (iCOMS).
Previously, Mr. Mihalchik served as President and Chief Executive Officer of
Atex Media Solutions, Inc., a developer and integrator of complex publishing
systems. Prior to joining Atex Media Solutions, Mr. Mihalchik served as Senior
Vice President and Chief Financial Officer of M/A COM, a NYSE manufacturer of
electronic components. Mr. Mihalchik received his B.A. in Business
Administration from Westminster College with a concentration in Finance.

Donald L. Feucht. Dr. Feucht has served as Director since July 2000. From
1992 until his retirement in 1998, Dr. Feucht served as Vice President for
Operations for Associated Western Universities. He was employed as a Program
Management Specialist for EG&G Rocky Flats, Inc. from 1990 until 1992. Prior to
1990, Dr. Feucht served in several positions with the National Renewable Energy
Laboratory (NREL), including Deputy Director. Prior to joining NREL, he served
as Professor of Electrical Engineering and Associate Dean at Carnegie-Mellon
University. Dr. Feucht received his B.S. degree in Electrical Engineering from
Valparaiso University and his M.S. and Ph.D. degrees in Electrical Engineering
from Carnegie Mellon University.

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Andreas Hartmann. Mr. Hartmann has served as a Director since November
1998. Since 1990, he has served as Assistant General Counsel and Vice President
of ABB. Mr. Hartmann received his degree in law from Erlangen Nurnberg
University in 1970 and his degree in Law from the Ministry of Justice of the
State of Bavaria in 1973.

Samuel Kory. Mr. Kory has served as a Director since November 1999. In
1988, he founded Samuel Kory Associates, a management consulting firm. Since
founding the firm, Mr. Kory has served as the firms sole proprietor and
principal as well as a consultant for the firm. Mr. Kory received his B.S.M.E.
from Pennsylvania State University in 1965.

S. Joon Lee. Dr. Lee has served as a Director since July 2000. Since 1990,
Mr. Lee has served as President of Omni Electronics. Dr. Lee also served as
President of Adaptive Logic from 1991 until 1996. Dr. Lee received his B.S.,
M.S. and Ph.D. degrees in Electrical Engineering from the University of
Minnesota.

Peter H. Ingram. Mr. Ingram has served as our President of European
Operations since 2000. From 1994 to 2000, he served as our Vice President of
European Operations. From 1989 to 1995, he served as our Director of Wafer Fab
Operations. Mr. Ingram worked with the semiconductor operations of ABB from
1982 until we acquired those operations in 1989. Mr. Ingram received an Honors
degree in Chemistry from the University of Nottingham.

Kevin McDonough. Mr. McDonough has served as our President of U.S.
Operations since 2001. From 1999 to 2000, he served as our Vice President of
U.S. Operations. From 1998 to 1999, he served as our Director of Quality
Assurance and Product Engineering, and from 1990 to 1994, he served as our
Director of Operations and Quality Assurance. From 1995 to 1998, Mr. McDonough
served as Manager of Wafer Fab Foundries for Advanced Micro Devices. Mr.
McDonough received his B.S. in Science from the University of California at
Davis and his M.B.A. from Oregon State University.

64.



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ITEM 11. EXECUTIVE COMPENSATION

The following table presents a summary of the compensation paid by IXYS
during the fiscal years ended March 31, 2002, March 31, 2001 and March 31, 2000
to our President and Chief Executive Officer and to our other executive
officers whose annual salary and bonus exceeded $100,000 for services rendered
to us in all capacities during such years. This compensation table excludes
other compensation in the form of perquisites and other personal benefits to an
executive officer where that compensation constituted less than 10% of his or
her total annual salary and bonus in the fiscal year.

|                                     |  |      |      |           |  |     |         |        |  |            |         |                 |  |              |        |            |  |  |         |  |  |  |        |    
|------------------------------------ |  | ---- | ---- | --------- |  | --- | ------- | ------ |  | ---------- | ------- | --------------- |  | ------------ | ------ | ---------- |  |  | ------- |  |  |  | ------ | ---
|                                     |  |      |      |           |  |     |         |        |  |            |         |                 |  | Other Annual |        | Securities |  |  |         | 
|                                     |  |      |      |           |  |     |         |        |  | Bonus($)   |         | Compensation    |  | Underlying   |        | All other 
|Name and Principal Position          |  | Year |      | Salary($) |  | (1) |         | ($)(2) |  | Options(#) |         | Compensation($)
|                                     |  |      |      |           |  |     |         |        |  |            |         |                
|Nathan Zommer                        |  |      | 2002 |           |  |     | 315,962 |        |  |            | 114,000 |                 |  |              | 15,136 |            |  |  | 160,000 |  |  |  | 30,615 | (3)
|President and Chief                  |  |      | 2001 |           |  |     | 285,000 |        |  |            | 214,000 |                 |  |              | 16,038 |            |  |  | 20,000  |  |  |  | 2,100  |    
|Executive Officer                    |  |      | 2000 |           |  |     | 375,420 |        |  |            | 124,300 |                 |  |              | 15,605 |            |  |  | 240,000 |  |  |  | 2,110  |    
|Arnold P. Agbayani                   |  |      | 2002 |           |  |     | 176,154 |        |  |            | 48,000  |                 |  |              | 15,630 |            |  |  | 95,000  |  |  |  | 19,417 | (5)
|Senior Vice President,               |  |      | 2001 |           |  |     | 160,000 |        |  |            | 118,000 |                 |  |              | 15,583 |            |  |  | 10,000  |  |  |  | 4,330  |    
|Finance, and Chief Financial Officer |  |      | 2000 |           |  |     | 189,190 |        |  |            | 48,000  |                 |  |              | 12,693 |            |  |  | 20,000  |  |  |  | 2,830  |    
|Peter H. Ingram                      |  |      | 2002 |           |  |     | 159,253 |        |  |            | 34,502  |                 |  |              | 4,444  |            |  |  | 10,000  |  |  |  |       |    
|President, European Operations       |  |      | 2001 |           |  |     | 161,466 |        |  |            | 22,240  |                 |  |              | 4,560  |            |  |  |        |  |  |  |       |    
|                                     |  |      | 2000 |           |  |     | 154,578 |        |  |            | 19,294  |                 |  |              | 1,752  |            |  |  | 90,000  |  |  |  |       |    
|Kevin McDonough                      |  |      | 2002 |           |  |     | 146,454 |        |  |            |        |                 |  |              | 7,200  |            |  |  | 50,000  |  |  |  | 7,893  | (6)
|President, U.S. Operations           |  |      | 2001 |           |  |     | 127,000 |        |  |            | 15,000  |                 |  |              | 7,200  |            |  |  |        |  |  |  |       |    
|                                     |  |      | 2000 |           |  |     | 120,346 |        |  |            | 3,000   |                 |  |              |       |            |  |  | 120,000 |  |  |  |       |    



---

|(1) |  | Represents annual bonus earned for performance in the specified fiscal
year.                                                                       
|--- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------
|   
|   
|   
|   
|(2) |  | Represents car allowance.                                                                                                                          
|   
|   
|   
|   
|(3) |  | Includes $2,110 premiums paid for group term life insurance, $17,532 for
tax equalization and 401(k) matching contributions of $10,973.            
|   
|   
|   
|   
|(4) |  | Includes retroactive payments made during fiscal year 2000 attributable to
base salary increases in fiscal year 1999.                              
|   
|   
|   
|   
|(5) |  | Includes $2,830 premiums paid for group term life insurance, $1,000 for
tax planning and preparation paid by IXYS and $15,587 for tax
equalization.
|   
|   
|   
|   
|(6) |  | Includes 401(k) matching contributions of $7,893.                                                                                                  

Option Grants in Last Fiscal Year

The following table presents information for the fiscal year ended March 31,
2002 with respect to each grant of stock options to the executive officers
named in the summary compensation table above.

|                                                                 |  |                 |         |                |  |           |    |            |  |                                      |      |                         |  |          |  |                               |         |  |  |  |           | 
|---------------------------------------------------------------- |  | --------------- | ------- | -------------- |  | --------- | -- | ---------- |  | ------------------------------------ | ---- | ----------------------- |  | -------- |  | ----------------------------- | ------- |  |  |  | --------- | 
|                                                                 |  |                 |         |                |  |           |    |            |  |                                      |      |                         |  |          |  | Potential Realizable Value at
|                                                                 |  | # of Securities |         | % of Total     |  |           |    |            |  |                                      |      | Assumed Annual Rates of
|                                                                 |  | Underlying      |         | Options        |  | Exercise  |    |            |  | Stock Price Appreciation for Term(3)
|                                                                 |  | Options         |         | Granted in     |  | Price Per |    | Expiration |  |                                     
|Name                                                             |  | Granted(1)      |         | Fiscal Year(2) |  | Share($)  |    | Date       |  | 5%                                   |      | 10%                    
|                                                                 |  |                 |         |                |  |           |    |            |  |                                      |      |                        
|Nathan Zommer                                                    |  |                 |         |                |  |           |    |            |  |                                      |      |                         |  |          |  |                               |         |  |  |  |           | 
|President and Chief Executive
Officer                            |  |                 | 160,000 |                |  |           | 23 |            |  |                                      | 7.26 |                         |  | 11-15-11 |  |                               | 731,808 |  |  |  | 1,846,944 | 
|Arnold
P. Agbayani                                               |  |                 |         |                |  |           |    |            |  |                                      |      |                         |  |          |  |                               |         |  |  |  |           | 
|Senior Vice President, Finance,
     and Chief Financial Officer |  |                 | 95,000  |                |  |           | 14 |            |  |                                      | 6.60 |                         |  | 11-15-11 |  |                               | 395,010 |  |  |  | 996,930   | 
|Peter H. Ingram                                                  |  |                 |         |                |  |           |    |            |  |                                      |      |                         |  |          |  |                               |         |  |  |  |           | 
|President, European Operations                                   |  |                 | 10,000  |                |  |           | 2  |            |  |                                      | 6.60 |                         |  | 11-15-11 |  |                               | 41,580  |  |  |  | 104,940   | 
|Kevin McDonough                                                  |  |                 |         |                |  |           |    |            |  |                                      |      |                         |  |          |  |                               |         |  |  |  |           | 
|President, U.S. Operations                                       |  |                 | 50,000  |                |  |           | 7  |            |  |                                      | 6.60 |                         |  | 11-15-11 |  |                               | 207,900 |  |  |  | 524,700   | 

65.



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---

|(1) |  | Options granted to each individual were granted pursuant to the IXYS 1999
Equity Incentive Plan and are subject to the terms of such plan. Exercise
prices for these options are equal to the closing price of IXYS common
stock on the Nasdaq National Market on the date of grant, except Dr.
Zommers options were priced 10% above such closing price.                                                                                                                                                                                                                                      
|--- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|   
|   
|   
|(2) |  | Based on an aggregate of 682,800 options granted to employees and
consultants of IXYS in fiscal year 2002 including the named executive
officers.                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   
|   
|   
|   
|(3) |  | The potential realizable value is calculated based on the term of the
option at its time of grant (10) years and is calculated by assuming that
the stock price on the date of grant appreciates at the indicated annual
rate compounded annually for the entire term of the option and that the
option is exercised and sold on the last day of its term for the
appreciated price. The 5% and 10% assumed rates of appreciation are
derived from the rules of the Securities and Exchange Commission and do
not represent IXYS estimate or projection of the future price of its
common stock.

Aggregated Option Exercises in Last Fiscal Year and Last Fiscal Year-End Option Values

The following table sets forth information with respect to the number of
securities underlying unexercised options held by the named executive officers
as of March 31, 2002 and the value of unexercised in-the-money options as of
March 31, 2002.

|                                                                              |  |           |        |          |  |             |        |                        |  |                          |         |               |  |  |         |  |  |  |           |  |  |  |           | 
|----------------------------------------------------------------------------- |  | --------- | ------ | -------- |  | ----------- | ------ | ---------------------- |  | ------------------------ | ------- | ------------- |  |  | ------- |  |  |  | --------- |  |  |  | --------- | 
|                                                                              |  |           |        |          |  |             |        |                        |  | Number of Securities     |         |               |  |  |         |  |  | 
|                                                                              |  | Number    |        |          |  |             |        | Underlying Unexercised |  | Value of Unexercised In-
|                                                                              |  | of Shares |        |          |  |             |        | Options at March 31,   |  | The Money Options at    
|                                                                              |  | Acquired  |        | Value    |  | 2002(#)     |        | March 31, 2002($)(2)  
|                                                                              |  | on        |        | Realized |  |             |        |                       
|Name                                                                          |  | Exercise  |        | ($)(1)   |  | Exercisable |        | Unexercisable          |  | Exercisable              |         | Unexercisable
|                                                                              |  |           |        |          |  |             |        |                        |  |                          |         |              
|Nathan Zommer
President and Chief Executive Officer                           |  |           | 5,090  |          |  |             | 94,941 |                        |  |                          | 535,606 |               |  |  | 340,520 |  |  |  | 4,778,954 |  |  |  | 2,403,135 | 
|Arnold P. Agbayani
Senior Vice President, Finance and
Chief Financial Officer |  |           |       |          |  |             |       |                        |  |                          | 117,466 |               |  |  | 115,960 |  |  |  | 1,050,961 |  |  |  | 687,077   | 
|Peter H. Ingram
President, European Operations                                |  |           | 14,250 |          |  |             | 72,805 |                        |  |                          | 128,346 |               |  |  | 101,880 |  |  |  | 1,108,858 |  |  |  | 832,867   | 
|Kevin McDonough
President, U.S. Operations                                    |  |           |       |          |  |             |       |                        |  |                          | 128,880 |               |  |  | 169,720 |  |  |  | 1,120,997 |  |  |  | 1,260,124 | 



---

|(1) |  | The value realized is based on the fair market value of IXYS common
stock on the date of exercise minus the exercise price.                
|--- |  | --------------------------------------------------------------------------------------------------------------------------------------------
|   
|   
|   
|   
|(2) |  | The valuations are based on the fair market value of IXYS common stock
on March 31, 2002 of $11.69 minus the exercise price of the options.

Director Compensation

Each of our
non-employee directors except for Mr. Hartmann receives an
annual retainer of $10,000 as well as $1,000 for each meeting of the
board he attends and $600 for each committee meeting he attends.
Additionally, each of our directors except for Mr. Hartmann is
reimbursed for certain expenses in connection with attendance at our
board and committee meetings and is reimbursed for expenses incurred
in preparing their personal income tax returns and estate planning
matters. Mr. Hartmann serves on our board of directors in accord
with a consulting agreement between ABB and us and does not receive
compensation from us for his service. IXYS 1999 Non-Employee Directors Equity
Incentive Plan, effective during fiscal year 2002, provides for the grant of
options to non-employee directors pursuant to a discretionary grant mechanism
administered by our board. These options vest over a period of time, to be
determined in each case by the board, so long as the optionee remains a
non-employee director. Each director currently receives an option to acquire
30,000 shares upon becoming a member of IXYS board of directors. Each director
may also receive a loan from us for up to $100,000, payable in three years from
the date of issuance, for use in exercising his options or paying taxes in
connection with such exercise of options.

Employment Contracts and Change-In-Control Arrangements

IXYS entered into an employment agreement, dated as of January 1, 1995,
with Dr. Nathan Zommer, our Chief Executive Officer. The agreement provides
for, among other things, salaries, bonuses and car allowances as

66.



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determined by our board of directors. Under the terms of the agreement,
IXYS agrees to maintain term life insurance in the amount of $1,000,000. In
addition, the agreement provides that if IXYS terminates Dr. Zommers
employment without cause, Dr. Zommer shall be entitled to receive as severance
his monthly salary, incremented one month per year of service to us, to a
maximum of twelve months. The agreement also provides Dr. Zommer with a paid
annual physical exam and the limited services of a financial advisor.

Dr. Zommers employment agreement was amended on July 1, 1998 to extend
its term to January 31, 2004. In the amended agreement, Dr. Zommers annual
bonus is 40% of his base salary, which was increased to $285,000. In addition,
he is eligible for an incentive bonus of three times his base annual salary in
the event of certain transactions significantly affecting IXYS, including a
reorganization, consolidation, merger and sale of our stock or assets. If his
employment terminates within a year after a change of control event, Dr. Zommer
is entitled to receive severance equal to three times his average annual
compensation, continued benefits for 18 months and accelerated vesting of all
option shares. Effective January 1, 2002, Dr. Zommers base salary was
increased to $400,000.

IXYS entered into an employment agreement, dated as of January 1, 1995,
with Mr. Arnold P. Agbayani, our Chief Financial Officer. The agreement
provides for, among other things, salaries, bonuses and car allowances as
determined by our board of directors. Under the terms of the agreement, IXYS
agrees to maintain term life insurance in the amount of $1,000,000. In
addition, the agreement provides that if IXYS terminates Mr. Agbayanis
employment without cause, Mr. Agbayani shall be entitled to receive as
severance his monthly salary, incremented one month per year of service to us,
to a maximum of twelve months. The agreement also provides Mr. Agbayani with a
paid annual physical exam and the limited services of a financial advisor.

Mr. Agbayanis employment agreement was amended on July 1, 1998 to extend
its term to January 31, 2004. In the amended agreement, Mr. Agbayanis annual
bonus is 30% of his base salary, which was increased to $160,000. In addition,
he is eligible for an incentive bonus of three times his annual base salary in
the event of certain transactions significantly affecting IXYS, including a
reorganization, consolidation, merger and sale of our stock or assets. If his
employment terminates within a year after a change of control event, Mr.
Agbayani is entitled to receive severance equal to three times his average
annual compensation, continued benefits for 18 months and accelerated vesting
of all option shares. Effective January 1, 2002, Mr. Agbayanis base salary was
increased to $220,000.

Compensation Committee Interlocks and Insider Participation

The Securities and Exchange Commission requires disclosure where an
executive officer of a company served or serves as a director or on the
compensation committee of another entity and an executive officer of such other
entity served or serves as a director or on the companys compensation
committee. IXYS does not have any such interlocks. Decisions as to executive
compensation are made by the Compensation Committee. During fiscal year 2002,
the Compensation Committee was comprised entirely of non-employee directors.

67.



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##### Table of Contents






ITEM 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table
presents, as of June 19, 2002, certain information
known to IXYS regarding the beneficial ownership of our common stock by:



| |  |  |  each person who is known by us to be the beneficial owner of
more than five percent of our outstanding shares of common stock;
| |  |  | --------------------------------------------------------------------------------------------------------------------------------
|
| |  |  |  each of the directors of IXYS;                                                                                                
|
| |  |  |  each of the named executive officers; and                                                                                     
|
| |  |  |  directors and executive officers as a group.                                                                                  

Beneficial ownership has been determined in accordance with Rule 13d-3
under the Securities Exchange Act of 1934. Under this rule, certain shares may
be deemed to be beneficially owned by more than one person, if, for example,
persons share the power to vote or the power to dispose of the shares. In
addition, shares are deemed to be beneficially owned by a person if the person
has the right to acquire shares, for example, upon exercise of an option or
warrant, within 60 days of June 19, 2002. In computing the percentage
ownership of any person, the amount of shares is deemed to include the amount
of shares beneficially owned by such person, and only such person, by reason of
such acquisition rights. As a result, the percentage of outstanding shares of
any person as shown in the following table does not necessarily reflect the
persons actual voting power at any particular date.

The percentage of
beneficial ownership for the following table is based on
31,166,765 shares of IXYS common stock which includes the 26,298,578
shares of IXYS common stock outstanding as of June 19, 2002, and
the 4,887,847 shares of IXYS common stock we expect to issue in
connection with the acquisition of Clare, Inc. Unless
otherwise indicated, the address for each listed stockholder is: c/o IXYS
Corporation, 3540 Bassett Street, Santa Clara, California 95054. To our
knowledge, except as otherwise indicated in the footnotes to this table and
pursuant to applicable community property laws, the persons named in the table
have sole voting and investment power with respect to all shares of common
stock.

|                                                                                    |  |           |           |            |  |  |      |  
|----------------------------------------------------------------------------------- |  | --------- | --------- | ---------- |  |  | ---- | -
|                                                                                    |  | Number of |           | Percentage
|Beneficial Owner                                                                    |  | Shares    |           | Ownership 
|                                                                                    |  |           |           |           
|Nathan Zommer(1)                                                                    |  |           | 7,271,259 |            |  |  | 22.9 | %
|Arnold P. Agbayani(2)                                                               |  |           | 648,322   |            |  |  | 2.1  |  
|Peter H. Ingram(3)                                                                  |  |           | 506,330   |            |  |  | 1.6  |  
|Kevin McDonough(4)                                                                  |  |           | 143,909   |            |  |  | *    |  
|Donald L. Feucht(5)                                                                 |  |           | 11,500    |            |  |  | *    |  
|Andreas Hartmann(6)                                                                 |  |           | 0         |            |  |  | *    |  
|Samuel Kory(7)                                                                      |  |           | 18,100    |            |  |  | *    |  
|S. Joon Lee(8)                                                                      |  |           | 11,500    |            |  |  | *    |  
|Larry
L. Mihalchik(9)                                                               |  |           | 63,888    |            |  |  | *    |  
|Entities
Affiliated with ABB(10)
Gottlieb-Daimler Strasse 8
68165 Mannheim, Germany |  |           | 6,090,778 |            |  |  | 19.6 |  
|All
directors and executive officers as a group (9 persons)(11)                     |  |           | 8,674,808 |            |  |  | 26.9 | %



---

|*   |  | Represents less than 1%.                                                                                                                                                                                                                                                                                                                                                                        
|--- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|   
|   
|   
|(1) |  | Includes an aggregate of 12,700 shares held in trusts for Dr. Zommers
children. Also includes 569,301 shares Dr. Zommer has the right to acquire
pursuant to options exercisable within 60 days of June 19,
2002, and 2,948 shares Dr. Zommer has a right to acquire in exchange
for the 6,000 shares of Clare, Inc. common stock Dr. Zommer held
at the time of the acquisition of Clare, Inc.
|   
|   
|   
|   
|(2) |  | Includes 124,576 shares Mr. Agbayani has the right to acquire pursuant to
options exercisable within 60 days of June 19, 2002.                                                                                                                                                                                                                                                                  

68.



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##### Table of Contents



|(3)  |  | Includes 139,176 shares Mr. Ingram has the right to acquire pursuant to
options exercisable within 60 days of June 19, 2002.                                                                                                                                              
|---- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    
|    
|    
|    
|(4)  |  | Includes 141,525 shares Mr. McDonough has the right to acquire pursuant
to options exercisable within 60 days of June 19, 2002.                                                                                                                                           
|    
|    
|    
|    
|(5)  |  | Consists of shares Mr. Feucht has the right to acquire pursuant to
options exercisable within 60 days of June 19, 2002.                                                                                                                                                   
|    
|    
|    
|    
|(6)  |  | Mr. Hartmann is a Vice President of ABB. Mr. Hartmann disclaims
beneficial ownership of the ABB Shares and does not have voting or
investment power with respect to the ABB Shares.                                                                                       
|    
|    
|    
|    
|(7)  |  | Includes 9,850 shares Mr. Kory has the right to acquire pursuant to
options exercisable within 60 days of June 19, 2002.                                                                                                                                                  
|    
|    
|    
|    
|(8)  |  | Consists of shares Mr. Lee has the right to acquire pursuant to options
exercisable within 60 days of June 19, 2002.                                                                                                                                                      
|    
|    
|    
|    
|(9)  |  | Consists of shares
Mr. Mihalchik has the right to acquire pursuant to options
exercisable within 60 days of June 19, 2002.                                                                                                                                                
|    
|    
|    
|    
|(10) |  | Includes 6,041,839 shares held by ABB and 48,939 shares held by ASEA
Brown Boveri Inc. Mr. Hartmann is a Vice President of ABB. Mr. Hartmann
disclaims beneficial ownership of the ABB Shares and does not have voting
or investment power with respect to the ABB Shares.
|    
|    
|    
|    
|(11) |  | See footnotes 1 through 9 above.                                                                                                                                                                                                                                          

69.



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##### Table of Contents






ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

Related Party Transactions

Grants of Common Stock.On September 14, 1995, our board of directors
authorized stock grants, made pursuant to certain stock purchase agreements, to
Dr. Zommer and Messrs. Agbayani and Ingram and Mr. Richard Fassler, the former
Vice President, Sales and Marketing, who left IXYS in January 2000. In
connection with these stock grants, an aggregate of 7,410,134 shares of our
common stock were granted to these individuals. The shares were paid for with
recourse promissory notes in an aggregate principal amount of $832,716 and are
currently fully vested. Messrs. Fassler and Ingram have paid their promissory
notes in full. The note terms provide that between September 15, 2003 and
September 15, 2005, quarterly installments of principal and accrued interest
are due, and all principal of the notes, plus accrued interest, is due and
payable September 15, 2005. The notes bear interest at a rate of 6.25% per
annum compounded annually. In the event that either Dr. Zommer or Mr. Agbayani
sell shares of IXYS common stock currently held by him, a mandatory prepayment
in an amount equal to 30.0% of the net sale proceeds is due from him. In the
event of termination of employment, any unpaid principal and interest become
due and payable. In the event of a change of control, as defined in the notes,
the notes mature within 12 months, provided the change in control occurs before
September 15, 2004.

Business Relationships with Principal Stockholders.ABB is a principal
stockholder of IXYS. In fiscal year 2002, we generated revenues of $777,000
from sales of products to ABB and to ABBs affiliates for use as components in
their products.

Indemnification Agreements of Directors and Executive Officers.IXYS has
entered into indemnity agreements with our executive officers and directors
containing provisions that may require us, among other things, to indemnify
them against certain liabilities that may arise by reason of their status or
services as officers or directors.

Interests of
Mr. Mihalchik.We paid Mr. Mihalchik $279,500 upon completion
of the acquisition of Clare, Inc. as consideration for his agreement not to
compete with the business of the combined organization for three years
following the termination of his employment with the combined
organization. In addition, pursuant to his employment agreement with
Clare, Inc., Mr. Mihalchik received $946,430 from the Clare
Division of IXYS upon consummation of the acquisition of Clare, Inc.
by IXYS.

70.



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##### Table of Contents






PART  IV




ITEM 14.  EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K



|(a) |  | The following documents are filed as part of this report:
|--- |  | ---------------------------------------------------------



| | (1) |  | Financial Statements
| | --- |  | --------------------

| |  |                                                                                                         |  |      |    | 
| |  | ------------------------------------------------------------------------------------------------------- |  | ---- | -- | 
| |  |                                                                                                         |  | Page
| |  |                                                                                                         |  |     
| |  | Report of PricewaterhouseCoopers LLP, Independent Accountants                                           |  |      | 32 | 
| |  | Consolidated Balance Sheets as of March 31, 2001 and 2000                                               |  |      | 33 | 
| |  | Consolidated Statement of Operations for the years ended
March 31, 2001, 2000 and 1999                  |  |      | 34 | 
| |  | Consolidated Statement of Comprehensive Income (Loss) for
the years ended March 31, 2001, 2000 and 1999 |  |      | 35 | 
| |  | Consolidated Statement of Stockholders Equity for the years
ended March 31, 2001, 2000 and 1999        |  |      | 36 | 
| |  | Consolidated Statements of Cash Flows for the years ended March 31, 2001, 2000 and 1999                 |  |      | 37 | 
| |  | Notes to Consolidated Financial Statements                                                              |  |      | 38 | 



| | (2) |  | Financial statements schedules. The
schedules required pursuant to this item are included elsewhere in
this Annual Report on Form 10-K as part of the Notes to
Consolidated Financial Statements under
Item 8  Financial Statements.
| | --- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | (3) |  | Exhibits.                                                                                                                                                                                                                              

| |  |         |       |               |  |                                                                                                                                                                                                                                                                                                                                                                                                                                            
| |  | ------- | ----- | ------------- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Exhibit |       |              
| |  | No.     |       | Exhibit Title
| |  |         |       |              
| |  |         | 2.1   |               |  | Agreement and Plan of Merger and Reorganization, dated as of April 22, 2002, among IXYS, Teacup Acquisition Corp. and
Clare, Inc. (included as Annex A to the Joint Proxy Statement/Prospectus which forms part of the Registration Statement
on Form S-4 of IXYS Corporation, as amended (333-87758)(the
IXYS S-4) and incorporated herein by reference).                                                                               
| |  |         |       |               |  |                                                                                                                                                                                                                                                                                                                                                                                                                                            
| |  |         | 2.2   |               |  | Agreement and Plan of Merger and Reorganization, dated as of March 6, 1998 and amended April 10, 1998 and May 29, 1998,
among Paradigm Technology, Inc., Paradigm Enterprises, Inc. and IXYS Corporation (filed on July 10, 1998 as Annex A to
the Joint Proxy Statement/ Prospectus forming part of the Registration Statement on Form S-4 of Paradigm Technology,
Inc., as amended (No. 333-57003) and incorporated herein by
reference).
| |  |         |       |               |  |                                                                                                                                                                                                                                                                                                                                                                                                                                            
| |  |         | 3.1   |               |  | Amended and Restated Certificate of Incorporation of the Registrant, as filed with the Secretary of State for the State
of Delaware on March 23, 2001 (filed on June 28, 2001 as Exhibit 3.1 to the Annual Report on Form 10-K (No. 000-14165)
and incorporated herein by reference).                                                                                                                                                      
| |  |         |       |               |  |                                                                                                                                                                                                                                                                                                                                                                                                                                            
| |  |         | 3.2   |               |  | Amended and Restated Bylaws of the Registrant (filed on August 14, 2001 as Exhibit 3.2 to the Quarterly Report on Form
10-Q (No. 000-26124) and incorporated herein by reference).                                                                                                                                                                                                                                                         
| |  |         |       |               |  |                                                                                                                                                                                                                                                                                                                                                                                                                                            
| |  |         | 10.1  |               |  | First Amended Executive Employment Agreement, dated as of July 1, 1998, by and between IXYS and Nathan Zommer (filed on
July 7, 1998 as Exhibit 10.1 to Amendment No. 2 to the Registration Statement on Form S-4 of Paradigm Technology, Inc.,
(No. 333-57003) (Amendment No. 2 to the Paradigm
S-4) and incorporated herein by reference).                                                                                             
| |  |         |       |               |  |                                                                                                                                                                                                                                                                                                                                                                                                                                            
| |  |         | 10.2  |               |  | First Amended Executive Employment Agreement,
dated as of July 1, 1998, by and between IXYS
and Arnold Agbayani (filed on July 7, 1998 as
Exhibit 10.2 to Amendment No. 2 to the Paradigm
S-4 and incorporated herein by reference).                                                                                                                                                                                                       
| |  |         |       |               |  |                                                                                                                                                                                                                                                                                                                                                                                                                                            
| |  |         | 10.3  |               |  | Wafer Foundry Agreement, dated as of June 21, 1995, as amended on March 28, 1996 and March 13, 1998, by and between
IXYS and Samsung Electronics Co. (filed on June 29, 1998 as Exhibit 10.3 to Amendment No. 1 the Registration Statement
on Form S-4 of Paradigm Technology, Inc. (No. 333-57003) (Amendment No. 1 to the Paradigm S-4) and incorporated
herein by reference).                                                         
| |  |         |       |               |  |                                                                                                                                                                                                                                                                                                                                                                                                                                            
| |  |         | 10.4  |               |  | Lampertheim Contractual Purchase Deed and Conveyance, dated as of February 26, 1997 (filed on June 29, 1998 as Exhibit
10.4 to Amendment No. 1 to the Paradigm S-4 and incorporated
herein by reference).                                                                                                                                                                                                                                  
| |  |         |       |               |  |                                                                                                                                                                                                                                                                                                                                                                                                                                            
| |  |         | 10.5  |               |  | Loan Agreement, dated as of February 27, 1997,
by and between IXYS and Commerzbank,
Aktiengesellschaft, Mannheim Branch (filed on
June 29, 1998 as Exhibit 10.5 to Amendment No. 1
to the Paradigm S-4 and incorporated herein by
reference).                                                                                                                                                                                              
| |  |         |       |               |  |                                                                                                                                                                                                                                                                                                                                                                                                                                            
| |  |         | 10.6  |               |  | Loan and Security Agreement, dated as of December 24, 1997, by and between IXYS and Bank of the West (filed on June 29,
1998 as Exhibit 10.6 to Amendment No. 1 to the Paradigm S-4
and incorporated herein by reference).                                                                                                                                                                                                                 
| |  |         |       |               |  |                                                                                                                                                                                                                                                                                                                                                                                                                                            
| |  |         | 10.7  |               |  | Indemnity Agreement, dated November 20, 1999, by and between IXYS and Nathan Zommer (filed on June 28, 2001 as Exhibit
10.7 to the Annual Report on Form 10-K (No. 001-14165) and
incorporated herein by reference).                                                                                                                                                                                                                       
| |  |         |       |               |  |                                                                                                                                                                                                                                                                                                                                                                                                                                            
| |  |         | 10.8  |               |  | Indemnity Agreement, dated November 20, 1999, by and between IXYS and Arnold Agbayani (filed on June 28, 2001 as
Exhibit 10.8 to the Annual Report on Form 10-K
(No. 001-14165) and incorporated herein by reference).                                                                                                                                                                                                                     
| |  |         |       |               |  |                                                                                                                                                                                                                                                                                                                                                                                                                                            
| |  |         | 10.9  |               |  | Indemnity Agreement, dated November 20, 1999, by and between IXYS and Andreas Hartmann (filed on June 28, 2001 as
Exhibit 10.9 to the Annual Report on Form 10-K
(No. 001-14165) and incorporated herein by reference).                                                                                                                                                                                                                    
| |  |         |       |               |  |                                                                                                                                                                                                                                                                                                                                                                                                                                            
| |  |         | 10.10 |               |  | Indemnity Agreement, dated November 20, 1999, by and between IXYS and Samuel Kory (filed on June 28, 2001 as Exhibit
10.10 to the Annual Report on Form 10-K (No. 001-14165) and
incorporated herein by reference).                                                                                                                                                                                                                        
| |  |         | 10.11 |               |  | Indemnity Agreement, dated November 20, 1999, by and between IXYS and Kevin McDonough (filed on June 28, 2001 as
Exhibit 10.11 to the Annual Report on Form 10-K (No. 001-14165) and incorporated herein by reference).                                                                                                                                                                                                                    
| |  |         |       |               |  |                                                                                                                                                                                                                                                                                                                                                                                                                                            
| |  |         | 10.12 |               |  | Indemnity Agreement, dated November 20, 1999, by and between IXYS and Peter Ingram (filed on June 28, 2001 as Exhibit
10.12 to the Annual Report on Form 10-K (No. 001-14165) and incorporated herein by reference).                                                                                                                                                                                                                       
| |  |         |       |               |  |                                                                                                                                                                                                                                                                                                                                                                                                                                            
| |  |         | 10.13 |               |  | Indemnity Agreement, dated August 4, 2000, by and between IXYS and Donald L. Feucht (filed on June 28, 2001 as Exhibit
10.13 to the Annual Report on Form 10-K (No. 001-14165) and incorporated herein by reference).                                                                                                                                                                                                                      
| |  |         |       |               |  |                                                                                                                                                                                                                                                                                                                                                                                                                                            
| |  |         | 10.14 |               |  | Indemnity Agreement, dated August 4, 2000, by and between IXYS and S. Joon Lee (filed on June 28, 2001 as Exhibit 10.14
to the Annual Report on Form 10-K (No. 001-14165) and incorporated herein by reference).                                                                                                                                                                                                                           
| |  |         |       |               |  |                                                                                                                                                                                                                                                                                                                                                                                                                                            
| |  |         | 10.15 |               |  | The Paradigm 1994 Stock Option Plan, as amended (filed on February 16, 1999 as Exhibit 10.2 to the Quarterly Report on
Form 10-Q (No. 000-26124) and incorporated herein by reference).                                                                                                                                                                                                                                                    
| |  |         |       |               |  |                                                                                                                                                                                                                                                                                                                                                                                                                                            
| |  |         | 10.16 |               |  | The IXYS 1999 Equity Incentive Plan (filed on July 8, 1999 as Exhibit 10.10 to the Annual Report on Form 10-K (No.
001-14165) and incorporated herein by reference).                                                                                                                                                                                                                                                                       
| |  |         |       |               |  |                                                                                                                                                                                                                                                                                                                                                                                                                                            
| |  |         | 10.17 |               |  | The IXYS 1999 Employee Stock Purchase Plan (filed on July 8, 1999 as Exhibit 10.11 to the Annual Report on Form 10-K
(No. 001-14165) and incorporated herein by reference).                                                                                                                                                                                                                                                                
| |  |         |       |               |  |                                                                                                                                                                                                                                                                                                                                                                                                                                            
| |  |         | 10.18 |               |  | The IXYS 1999 Non-Employee Directors Equity Incentive Plan (filed on July 8, 1999 as Exhibit 10.12 to the Annual
Report on Form 10-K (No. 001-14165) and incorporated herein by reference).                                                                                                                                                                                                                                               
| |  |         |       |               |  |                                                                                                                                                                                                                                                                                                                                                                                                                                            
| |  |         | 10.19 |               |  | Amendment of Lease by and between Mission West Properties, L.P. and IXYS Corporation, dated as of September 30, 1998
(filed on July 8, 1999 as Exhibit 10.13 to the Annual Report on Form 10-K (No. 001-14165) and incorporated herein by
reference).                                                                                                                                                                                      
| |  |         |       |               |  |                                                                                                                                                                                                                                                                                                                                                                                                                                            
| |  |         | 10.20 |               |  | Registration and Stockholder Rights Agreement, by and between IXYS, Asea Brown Boveri AG, and Asea Brown Boveri, Inc.,
dated September 23, 1998 (filed on November 16, 1998 as Exhibit 10 to the Quarterly Report on Form 10-Q (No. 000-26124)
and incorporated herein by reference).                                                                                                                                                      
| |  |         |       |               |  |                                                                                                                                                                                                                                                                                                                                                                                                                                            
| |  |         | 10.21 |               |  | Amended and Restated Promissory Note, dated September 15, 2000, executed by Nathan Zommer and acknowledged and agreed
to by IXYS Corporation (filed on October 23, 2000 as Exhibit 10.1 to Amendment No. 3 to the Registration Statement on
Form S-3 (No. 333-46028) (Amendment No. 3 to the S-3) and incorporated herein by reference).                                                                                                 
| |  |         |       |               |  |                                                                                                                                                                                                                                                                                                                                                                                                                                            
| |  |         | 10.22 |               |  | Amended and Restated Promissory Note, dated September 15, 2000, executed by Arnold P. Agbayani and acknowledged and
agreed to by IXYS Corporation (filed on October 23, 2000 as Exhibit 10.2 to Amendment No. 3 to the S-3 and incorporated
herein by reference).                                                                                                                                                                          
| |  |         |       |               |  |                                                                                                                                                                                                                                                                                                                                                                                                                                            
| |  |         | 10.23 |               |  | Amended and Restated Pledge Agreement, dated September 15, 2000, by Nathan Zommer and acknowledged and agreed to by
IXYS Corporation (filed on October 23, 2000 as Exhibit 10.3 to Amendment No. 3 to the S-3 and incorporated herein by
reference).                                                                                                                                                                                       
| |  |         |       |               |  |                                                                                                                                                                                                                                                                                                                                                                                                                                            
| |  |         | 10.24 |               |  | Amended and Restated Pledge Agreement, dated
September 15, 2000, executed by Arnold P.
Agbayani and acknowledged and agreed to by IXYS
Corporation (filed on October 23, 2000 as
Exhibit 10.4 to Amendment No. 3 to the S-3 and
incorporated herein by reference).                                                                                                                                                                         
| |  |         |       |               |  |                                                                                                                                                                                                                                                                                                                                                                                                                                            
| |  |         | 10.25 |               |  | Commitment Letter from Commerzbank, Aktiengesellschaft, Mannheim Branch to IXYS Semiconductor GmbH, dated July 28,
2000, with English language translation (filed on October 23, 2000 as Exhibit 10.5 to Amendment No. 3 to the S-3 and
incorporated herein by reference).                                                                                                                                                                 
| |  |         |       |               |  |                                                                                                                                                                                                                                                                                                                                                                                                                                            
| |  |         | 10.26 |               |  | General Business Conditions with regard to
Commitment Letter from Commerzbank,
Aktiengesellschaft, Mannheim Branch to IXYS
Semiconductor GmbH, dated July 28, 2000, with
English language translation (filed on October 23, 2000 as Exhibit 10.6 to Amendment No. 3 to
the S-3 and incorporated herein by reference).                                                                                                                      
| |  |         |       |               |  |                                                                                                                                                                                                                                                                                                                                                                                                                                            
| |  |         | 10.27 |               |  | General Business Conditions with regard to Loan Agreement, dated as of February 27, 1997, by and between IXYS and
Commerzbank, Aktiengesellschaft, Mannheim Branch, with English language translation (filed on October 23, 2000 as
Exhibit 10.7 to Amendment No. 3 to the S-3 and incorporated herein by reference).                                                                                                                      
| |  |         |       |               |  |                                                                                                                                                                                                                                                                                                                                                                                                                                            
| |  |         | 10.28 |               |  | Noncompetition Agreement, by and between IXYS Corporation and Larry Mihalchik, dated May 13, 2002 (filed as Exhibit
10.28 to Amendment No. 1 to the IXYS S-4 and incorporated herein by reference).                                                                                                                                                                                                                                        
| |  |         |       |               |  |                                                                                                                                                                                                                                                                                                                                                                                                                                            
| |  |         | 23.1  |               |  | Consent of
PricewaterhouseCoopers LLP.                                                                                                                                                                                                                                                                                                                                                                                                     



|(b) |  | Reports on Form 8-K
|--- |  | -------------------

On January 11, 2002, we filed a Current Report on Form 8-K to report that
on January 3, 2002, we announced that IXYS had made an offer to acquire for
cash 100% of the equity of Westcode Semiconductors Limited, a UK-based power
semiconductor company. We filed a copy of the press release announcing the
offer as an exhibit to this 8-K report.

On January 24, 2002, we filed a Current Report on Form 8-K to report that
on January 22, 2002, IXYS had acquired, for approximately $9,000,000 in cash,
100% of the equity of Westcode Semiconductors Limited. We filed a copy of the
press release announcing the acquisition as an exhibit to this 8-K report.

On February 5, 2002, we filed a Current Report of Form 8-K to report that
we announced financial results for the three-month period and the nine-month
period ended December 31, 2000. We filed a copy of our press release as an
exhibit to this 8-K report and included condensed consolidated balance sheets
as of December 31, 2001 and March 31, 2001 condensed consolidated statements of
operations for the three months and the nine months ended December 31, 2001 and
2000.



|(c) |  | Exhibits.
|--- |  | ---------

The exhibits required by this item to be filed as exhibits to this Annual
Report on Form 10-K are listed in the Exhibit Index and are incorporated herein
by reference.

71.



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SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed
on its behalf by the undersigned, thereunto duly authorized.

Dated: June 28, 2002

| |  |                  |  |                                                                                   
| |  | ---------------- |  | ----------------------------------------------------------------------------------
| |  | IXYS Corporation
| |  |                  |  |                                                                                   
| |  | By:              |  | /s/   Nathan Zommer

Nathan Zommer
President, Chief Executive Officer and Chairman

72.



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POWER OF ATTORNEY

KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints Nathan Zommer and Arnold P. Agbayani,
and each or any one of them, his true and lawful attorney-in-fact and agent,
with full power of substitution and resubstitution, for him and in his name,
place and stead, in any and all capacities, to sign any and all amendments
(including post-effective amendments) to this Report, and to file the same,
with all exhibits thereto, and other documents in connection therewith, with
the Securities and Exchange Commission, granting unto said attorneys-in-fact
and agents, and each of them, full power and authority to do and perform each
and every act and thing requisite and necessary to be done in connection
therewith, as fully to all intents and purposes as he might or could do in
person, hereby ratifying and confirming all that said attorneys-in-fact and
agents, or any of them, or their or his substitutes or substitute, may lawfully
do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Exchange Act of 1934, 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/   Nathan Zommer
Nathan Zommer           |  | President, Chief Executive Officer and Chairman
(Principal Executive Officer)
and Director                                 |  | June 28, 2002
|                                            |  |                                                                                                                            |  |              
|/s/   Arnold P. Agbayani
Arnold P. Agbayani |  | Senior Vice President,
Finance and Administration and
Chief Financial Officer
(Principal Financial and Accounting Officer) |  | June 28, 2002
|                                           
|/s/   Samuel Kory
Samuel Kory               |  | Director                                                                                                                   |  | June 28, 2002
|                                            |  |                                                                                                                            |  |              
|/s/   Andreas Hartmann
Andreas Hartmann     |  | Director                                                                                                                   |  | June 28, 2002
|                                            |  |                                                                                                                            |  |              
|/s/   Donald L. Feucht
Donald L. Feucht     |  | Director                                                                                                                   |  | June 28, 2002
|                                            |  |                                                                                                                            |  |              
|/s/   S. Joon Lee
S. Joon Lee               |  | Director                                                                                                                   |  | June 28, 2002
|                                            |  |                                                                                                                            |  |              
|/s/   Larry
L. Mihalchik
Larry L. Mihalchik |  | Director                                                                                                                   |  | June 28, 2002

73.



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Exhibit Index

| |  |         |       |               |  |                                                                                                                                                                                                                                                                                                                                                                                                                                            
| |  | ------- | ----- | ------------- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Exhibit |       |              
| |  | No.     |       | Exhibit Title
| |  |         |       |              
| |  |         | 2.1   |               |  | Agreement and Plan of Merger and Reorganization, dated as of April 22, 2002, among IXYS, Teacup Acquisition Corp. and
Clare, Inc. (included as Annex A to the Joint Proxy Statement/Prospectus which forms part of the Registration Statement
on Form S-4 of IXYS Corporation, as amended (333-87758)(the
IXYS S-4) and incorporated herein by reference).                                                                               
| |  |         |       |               |  |                                                                                                                                                                                                                                                                                                                                                                                                                                            
| |  |         | 2.2   |               |  | Agreement and Plan of Merger and Reorganization, dated as of March 6, 1998 and amended April 10, 1998 and May 29, 1998,
among Paradigm Technology, Inc., Paradigm Enterprises, Inc. and IXYS Corporation (filed on July 10, 1998 as Annex A to
the Joint Proxy Statement/ Prospectus forming part of the Registration Statement on Form S-4 of Paradigm Technology,
Inc., as amended (No. 333-57003) and incorporated herein by
reference).
| |  |         |       |               |  |                                                                                                                                                                                                                                                                                                                                                                                                                                            
| |  |         | 3.1   |               |  | Amended and Restated Certificate of Incorporation of the Registrant, as filed with the Secretary of State for the State
of Delaware on March 23, 2001 (filed on June 28, 2001 as Exhibit 3.1 to the Annual Report on Form 10-K (No. 000-14165)
and incorporated herein by reference).                                                                                                                                                      
| |  |         |       |               |  |                                                                                                                                                                                                                                                                                                                                                                                                                                            
| |  |         | 3.2   |               |  | Amended and Restated Bylaws of the Registrant (filed on August 14, 2001 as Exhibit 3.2 to the Quarterly Report on Form
10-Q (No. 000-26124) and incorporated herein by reference).                                                                                                                                                                                                                                                         
| |  |         |       |               |  |                                                                                                                                                                                                                                                                                                                                                                                                                                            
| |  |         | 10.1  |               |  | First Amended Executive Employment Agreement, dated as of July 1, 1998, by and between IXYS and Nathan Zommer (filed on
July 7, 1998 as Exhibit 10.1 to Amendment No. 2 to the Registration Statement on Form S-4 of Paradigm Technology, Inc.,
(No. 333-57003) (Amendment No. 2 to the Paradigm
S-4) and incorporated herein by reference).                                                                                             
| |  |         |       |               |  |                                                                                                                                                                                                                                                                                                                                                                                                                                            
| |  |         | 10.2  |               |  | First Amended Executive Employment Agreement,
dated as of July 1, 1998, by and between IXYS
and Arnold Agbayani (filed on July 7, 1998 as
Exhibit 10.2 to Amendment No. 2 to the Paradigm
S-4 and incorporated herein by reference).                                                                                                                                                                                                       
| |  |         |       |               |  |                                                                                                                                                                                                                                                                                                                                                                                                                                            
| |  |         | 10.3  |               |  | Wafer Foundry Agreement, dated as of June 21, 1995, as amended on March 28, 1996 and March 13, 1998, by and between
IXYS and Samsung Electronics Co. (filed on June 29, 1998 as Exhibit 10.3 to Amendment No. 1 the Registration Statement
on Form S-4 of Paradigm Technology, Inc. (No. 333-57003) (Amendment No. 1 to the Paradigm S-4) and incorporated
herein by reference).                                                         
| |  |         |       |               |  |                                                                                                                                                                                                                                                                                                                                                                                                                                            
| |  |         | 10.4  |               |  | Lampertheim Contractual Purchase Deed and Conveyance, dated as of February 26, 1997 (filed on June 29, 1998 as Exhibit
10.4 to Amendment No. 1 to the Paradigm S-4 and incorporated
herein by reference).                                                                                                                                                                                                                                  
| |  |         |       |               |  |                                                                                                                                                                                                                                                                                                                                                                                                                                            
| |  |         | 10.5  |               |  | Loan Agreement, dated as of February 27, 1997,
by and between IXYS and Commerzbank,
Aktiengesellschaft, Mannheim Branch (filed on
June 29, 1998 as Exhibit 10.5 to Amendment No. 1
to the Paradigm S-4 and incorporated herein by
reference).                                                                                                                                                                                              
| |  |         |       |               |  |                                                                                                                                                                                                                                                                                                                                                                                                                                            
| |  |         | 10.6  |               |  | Loan and Security Agreement, dated as of December 24, 1997, by and between IXYS and Bank of the West (filed on June 29,
1998 as Exhibit 10.6 to Amendment No. 1 to the Paradigm S-4
and incorporated herein by reference).                                                                                                                                                                                                                 
| |  |         |       |               |  |                                                                                                                                                                                                                                                                                                                                                                                                                                            
| |  |         | 10.7  |               |  | Indemnity Agreement, dated November 20, 1999, by and between IXYS and Nathan Zommer (filed on June 28, 2001 as Exhibit
10.7 to the Annual Report on Form 10-K (No. 001-14165) and
incorporated herein by reference).                                                                                                                                                                                                                       
| |  |         |       |               |  |                                                                                                                                                                                                                                                                                                                                                                                                                                            
| |  |         | 10.8  |               |  | Indemnity Agreement, dated November 20, 1999, by and between IXYS and Arnold Agbayani (filed on June 28, 2001 as
Exhibit 10.8 to the Annual Report on Form 10-K
(No. 001-14165) and incorporated herein by reference).                                                                                                                                                                                                                     
| |  |         |       |               |  |                                                                                                                                                                                                                                                                                                                                                                                                                                            
| |  |         | 10.9  |               |  | Indemnity Agreement, dated November 20, 1999, by and between IXYS and Andreas Hartmann (filed on June 28, 2001 as
Exhibit 10.9 to the Annual Report on Form 10-K
(No. 001-14165) and incorporated herein by reference).                                                                                                                                                                                                                    
| |  |         |       |               |  |                                                                                                                                                                                                                                                                                                                                                                                                                                            
| |  |         | 10.10 |               |  | Indemnity Agreement, dated November 20, 1999, by and between IXYS and Samuel Kory (filed on June 28, 2001 as Exhibit
10.10 to the Annual Report on Form 10-K (No. 001-14165) and
incorporated herein by reference).                                                                                                                                                                                                                        

74.



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| |  |         |       |               |  |                                                                                                                                                                                                                                                                                                                                           
| |  | ------- | ----- | ------------- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Exhibit |       |              
| |  | No.     |       | Exhibit Title
| |  |         |       |              
| |  |         | 10.11 |               |  | Indemnity Agreement, dated November 20, 1999, by and between IXYS and Kevin McDonough (filed on June 28, 2001 as
Exhibit 10.11 to the Annual Report on Form 10-K (No. 001-14165) and incorporated herein by reference).                                                                                                                   
| |  |         |       |               |  |                                                                                                                                                                                                                                                                                                                                           
| |  |         | 10.12 |               |  | Indemnity Agreement, dated November 20, 1999, by and between IXYS and Peter Ingram (filed on June 28, 2001 as Exhibit
10.12 to the Annual Report on Form 10-K (No. 001-14165) and incorporated herein by reference).                                                                                                                      
| |  |         |       |               |  |                                                                                                                                                                                                                                                                                                                                           
| |  |         | 10.13 |               |  | Indemnity Agreement, dated August 4, 2000, by and between IXYS and Donald L. Feucht (filed on June 28, 2001 as Exhibit
10.13 to the Annual Report on Form 10-K (No. 001-14165) and incorporated herein by reference).                                                                                                                     
| |  |         |       |               |  |                                                                                                                                                                                                                                                                                                                                           
| |  |         | 10.14 |               |  | Indemnity Agreement, dated August 4, 2000, by and between IXYS and S. Joon Lee (filed on June 28, 2001 as Exhibit 10.14
to the Annual Report on Form 10-K (No. 001-14165) and incorporated herein by reference).                                                                                                                          
| |  |         |       |               |  |                                                                                                                                                                                                                                                                                                                                           
| |  |         | 10.15 |               |  | The Paradigm 1994 Stock Option Plan, as amended (filed on February 16, 1999 as Exhibit 10.2 to the Quarterly Report on
Form 10-Q (No. 000-26124) and incorporated herein by reference).                                                                                                                                                   
| |  |         |       |               |  |                                                                                                                                                                                                                                                                                                                                           
| |  |         | 10.16 |               |  | The IXYS 1999 Equity Incentive Plan (filed on July 8, 1999 as Exhibit 10.10 to the Annual Report on Form 10-K (No.
001-14165) and incorporated herein by reference).                                                                                                                                                                      
| |  |         |       |               |  |                                                                                                                                                                                                                                                                                                                                           
| |  |         | 10.17 |               |  | The IXYS 1999 Employee Stock Purchase Plan (filed on July 8, 1999 as Exhibit 10.11 to the Annual Report on Form 10-K
(No. 001-14165) and incorporated herein by reference).                                                                                                                                                               
| |  |         |       |               |  |                                                                                                                                                                                                                                                                                                                                           
| |  |         | 10.18 |               |  | The IXYS 1999 Non-Employee Directors Equity Incentive Plan (filed on July 8, 1999 as Exhibit 10.12 to the Annual
Report on Form 10-K (No. 001-14165) and incorporated herein by reference).                                                                                                                                              
| |  |         |       |               |  |                                                                                                                                                                                                                                                                                                                                           
| |  |         | 10.19 |               |  | Amendment of Lease by and between Mission West Properties, L.P. and IXYS Corporation, dated as of September 30, 1998
(filed on July 8, 1999 as Exhibit 10.13 to the Annual Report on Form 10-K (No. 001-14165) and incorporated herein by
reference).                                                                                     
| |  |         |       |               |  |                                                                                                                                                                                                                                                                                                                                           
| |  |         | 10.20 |               |  | Registration and Stockholder Rights Agreement, by and between IXYS, Asea Brown Boveri AG, and Asea Brown Boveri, Inc.,
dated September 23, 1998 (filed on November 16, 1998 as Exhibit 10 to the Quarterly Report on Form 10-Q (No. 000-26124)
and incorporated herein by reference).                                                     
| |  |         |       |               |  |                                                                                                                                                                                                                                                                                                                                           
| |  |         | 10.21 |               |  | Amended and Restated Promissory Note, dated September 15, 2000, executed by Nathan Zommer and acknowledged and agreed
to by IXYS Corporation (filed on October 23, 2000 as Exhibit 10.1 to Amendment No. 3 to the Registration Statement on
Form S-3 (No. 333-46028) (Amendment No. 3 to the S-3) and incorporated herein by reference).
| |  |         |       |               |  |                                                                                                                                                                                                                                                                                                                                           
| |  |         | 10.22 |               |  | Amended and Restated Promissory Note, dated September 15, 2000, executed by Arnold P. Agbayani and acknowledged and
agreed to by IXYS Corporation (filed on October 23, 2000 as Exhibit 10.2 to Amendment No. 3 to the S-3 and incorporated
herein by reference).                                                                         
| |  |         |       |               |  |                                                                                                                                                                                                                                                                                                                                           
| |  |         | 10.23 |               |  | Amended and Restated Pledge Agreement, dated September 15, 2000, by Nathan Zommer and acknowledged and agreed to by
IXYS Corporation (filed on October 23, 2000 as Exhibit 10.3 to Amendment No. 3 to the S-3 and incorporated herein by
reference).                                                                                      
| |  |         |       |               |  |                                                                                                                                                                                                                                                                                                                                           
| |  |         | 10.24 |               |  | Amended and Restated Pledge Agreement, dated
September 15, 2000, executed by Arnold P.
Agbayani and acknowledged and agreed to by IXYS
Corporation (filed on October 23, 2000 as
Exhibit 10.4 to Amendment No. 3 to the S-3 and
incorporated herein by reference).                                                                        
| |  |         |       |               |  |                                                                                                                                                                                                                                                                                                                                           
| |  |         | 10.25 |               |  | Commitment Letter from Commerzbank, Aktiengesellschaft, Mannheim Branch to IXYS Semiconductor GmbH, dated July 28,
2000, with English language translation (filed on October 23, 2000 as Exhibit 10.5 to Amendment No. 3 to the S-3 and
incorporated herein by reference).                                                                
| |  |         |       |               |  |                                                                                                                                                                                                                                                                                                                                           
| |  |         | 10.26 |               |  | General Business Conditions with regard to
Commitment Letter from Commerzbank,
Aktiengesellschaft, Mannheim Branch to IXYS
Semiconductor GmbH, dated July 28, 2000, with
English language translation (filed on October 23, 2000 as Exhibit 10.6 to Amendment No. 3 to
the S-3 and incorporated herein by reference).                     
| |  |         |       |               |  |                                                                                                                                                                                                                                                                                                                                           
| |  |         | 10.27 |               |  | General Business Conditions with regard to Loan Agreement, dated as of February 27, 1997, by and between IXYS and
Commerzbank, Aktiengesellschaft, Mannheim Branch, with English language translation (filed on October 23, 2000 as
Exhibit 10.7 to Amendment No. 3 to the S-3 and incorporated herein by reference).                     

75.



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| |  |         |       |               |  |                                                                                                                                                                                                    
| |  | ------- | ----- | ------------- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Exhibit |       |              
| |  | No.     |       | Exhibit Title
| |  |         |       |              
| |  |         | 10.28 |               |  | Noncompetition Agreement, by and between IXYS Corporation and Larry Mihalchik, dated May 13, 2002 (filed as Exhibit
10.28 to Amendment No. 1 to the IXYS S-4 and incorporated herein by reference).
|
|
| |  |         | 23.1  |               |  | Consent of
PricewaterhouseCoopers LLP.                                                                                                                                                             

76.