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July 21, 1997




Victor Lee
1539 Queenstown Court
Sunnyvale, CA 94087

Dear Victor:

We are happy to make you this offer of employment at VLSI Technology, Inc. under
the following terms and conditions:

1.       Your title will be Vice President, Corporate Controller, reporting to
         me.

2.       Your base compensation will be $6,731 per bi-weekly pay period, which
         equals $175,000 annually.

3.       The Company will recommend to the Board of Directors that you be
         granted a stock option of 20,000 shares of VLSI stock under the
         Company's Stock Option Plan vesting 25% per year over 4 years, at the
         Fair Market Value of the Stock on the day of approval by the Board of
         Directors.

4.       You will be eligible to participate in the 1997 Management Incentive
         Plan. This Plan provides for a bonus which is based upon achievement of
         annual profit and revenue targets for the Company as well as individual
         performance goals. Your management Incentive Bonus target will be 20%
         of your 1997 earnings.

5.       You will receive, within two weeks of your start date, a one-time
         employment bonus of $50,000. Should you voluntarily terminate your
         employment within one year of your start date, you agree to reimburse
         VLSI the entire amount ($50,000). You also agree that the company may
         offset this amount against your final wages to help effect the
         reimbursement. At your one year anniversary date you will receive an
         additional $50,000 and $25,000 at your second anniversary date.

6.       You will be entitled to receive VLSI's benefits made available to all
         VLSI employees to the full extent of your eligibility. This will
         include a competitive life insurance, medical and dental plan.

7.       In accordance with the requirements of the Immigration Reform and
         Control Act of 1986, you will be required to provide verification of
         your identity and legal right to work in the United States. THIS
         DOCUMENTATION MUST BE PRESENTED ON YOUR FIRST DAY OF EMPLOYMENT.

8.       A "Proprietary Information and Inventions Agreement" will be signed and
         accepted upon your first day of work.

9.       This offer is contingent upon successfully passing VLSI's
         pre-employment screen, including a drug and criminal background check.
         Failure to report for the drug screen within 48 hours of acceptance of
         this written offer will result in withdrawal of this offer. Please
         schedule an
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         appointment with Doctors on Duty, 1910 N. Capitol Ave., San Jose, CA at
         95132 (408) 942-0333 for the drug screen. If you reside outside of the
         San Jose, CA area please contact Diane Neu, VLSI Staffing Administrator
         at (408) 434-7753 to arrange for drug screening.

10.      Nothing in the employment process, this employment offer, or your
         future employment should be construed as a guarantee of continued
         employment, but rather, employment with the Company is on an "at will"
         basis. This means that the employment relationship may be terminated at
         any time by either the employee or the Company for any reason not
         expressly prohibited by law. Any written or oral statement to the
         contrary by a supervisor, corporate officer or other agent of the
         Company is invalid and should not be relied upon. The terms and
         conditions of your employment with VLSI may change, but will not effect
         the "at will" employee relationship between yourself and VLSI.

Please sign and date one copy of this letter indicating your acceptance and
start date, and return to me.

Typically, your start date will be on a Monday in order to attend Human
Resources orientation. Orientations are conducted every Monday morning at
8:30a.m. unless otherwise indicated. Please report to 1240 Mckay Drive, San
Jose, CA on the Monday morning that you start work at VLSI.

At orientation you will enroll in our benefits plan(s), which will take effect
immediately upon your date of hire (the first day you report to work at VLSI).
Therefore, it is important that you review the benefit summary and come prepared
to make decisions about which benefit plan(s) you elect to participate in.
Although you will be asked to choose between various benefit options during
orientation, there is a five (5) day "grace period" during which you will be
able to make changes to your benefit plan selections. It is also important to
bring the birthdates of all of your dependents for this process.

We recognize, Victor, that you have great potential and we are confident you
will be a valuable asset to our team. The infusion of a new talent and
enthusiasm is vital to our status as an industry leader and this offer exhibits
our belief in you becoming an important contributor.

Sincerely,

VLSI Technology, Inc.

/s/ Bala Iyer
Chief Financial Officer

THIS OFFER EXPIRES ONE WEEK FROM THE DATE OF THIS LETTER.




ACCEPT:        /s/ VICTOR K. LEE              DATE:   7/26/97
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START DATE:    8/21/97
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