<PAGE>

                                                                   EXHIBIT 10.78

                          CATALYST SEMICONDUCTOR, INC.
                               Severance Agreement

This Severance Agreement ("Agreement") is made effective as of this 8th day of
November, 2001 between Sorin Georgescu ("Employee") and Catalyst Semiconductor,
Inc. ("Corporation").

                                   WITNESSETH

WHEREAS, Employee is employed by the Corporation.

WHEREAS, the Corporation and Employee mutually desire to enter into a severance
agreement with respect to Employee's employment by the Corporation.

NOW, THEREFORE, in consideration of the mutual convents hereinafter contained,
the Corporation and Employee agree as follows:

1)      INVOLUNTARY TERMINATION. If Employee's employment is terminated as a
        result of Involuntary Termination other than for cause, at any time
        prior to April 30, 2003, Employee will be entitled to consideration as
        defined below.

2)      SEVERANCE BENEFITS FOR TERMINATION FOLLOWING A CHANGE OF CONTROL.

        a)      Employee shall be entitled to fifty percent (50%) of his annual
                base salary payable in six equal monthly installments,
                commencing one month after the termination date.

        b)      All outstanding unvested stock options shall immediately vest as
                of the date of termination and shall remain exercisable for a
                period of three years after said date.

        c)      In addition, as of the termination date, Employee shall be
                entitled to receive any unpaid salary and accrued vacation.

        d)      Change of control is defined as any sale of substantially all of
                the Company's assets, a sale of a majority of its shares or a
                merger or consolidation where the existing shareholders do not
                control at least 50% of the total voting power after the event.

3)      SEVERANCE BENEFITS FOR TERMINATION APART FROM A CHANGE OF CONTROL.

        a)      Employee will be entitled to twenty-five percent (25%) of his
                annual base salary as of the termination date. Such payment
                shall be paid in six equal monthly amounts commencing one month
                after the termination date.

        b)      All outstanding vested options as of this date shall remain
                exercisable for a period of one year after termination date.


<PAGE>

        c)      In addition, as of the termination date, Employee shall be
                entitled to receive any unpaid salary and accrued vacation pay.

4)      CONFIDENTIAL INFORMATION. Employee shall continue to maintain the
        confidentiality of all confidential and proprietary information of the
        Corporation and shall continue to comply with the terms and conditions
        of the Confidentiality Agreement(s) between Employee and Corporation.

5)      NON-DISPARAGEMENT. Employee agrees not to disparage the Corporation or
        any of its officers, directors, employees, products, vendors or
        customers.

6)      RELEASE OF CLAIMS. Both parties agree that the foregoing consideration
        represents settlement in full of all outstanding obligations owed by
        Corporation to the Employee. Employee and his respective heirs,
        executors, assigns and agents hereby fully and forever releases
        Corporation and its officers, directors, employees, assigns and agents
        from any claim, duty, obligation or cause of action relating to any
        matters, known or unknown, arising from any omissions, acts or facts
        that have occurred up until the termination date, including without
        limitation:

        a)      Any claims relating to Employee's employment relationship with
                the Corporation.

        b)      Any claims relating to Employee's receipt of options and/or
                purchase or sales of shares of stock of the Corporation.

        c)      Any claims for violation of state, federal or municipal law.

7)      CONFIDENTIALITY. The parties agree to use their best efforts to maintain
        in confidence the existence, contents and terms of this Agreement except
        as disclosure may be required by law.

8)      TAX CONSEQUENCES. The Corporation makes no representations or warranties
        with respect to the tax consequences of any consideration received by
        Employee under the terms of this Agreement. Employee agrees that he is
        solely responsible for payment, if any, of local, state or federal taxes
        on all consideration received. Employee further agrees to indemnify the
        Corporation for any claims due to his failure to pay any such taxes.

9)      ENTIRE AGREEMENT. This Agreement represents the entire agreement and
        understanding between the Corporation and Employee concerning Employee's
        relationship with the Corporation and supersedes any prior written or
        oral agreements concerning Employee relationship with and compensation
        from the Corporation and may not be changed except in written form
        signed by both parties.



                                       2
<PAGE>

10)     GOVERNING LAW; JURISDICTION. This Agreement shall be governed by the
        laws of the State of California. Any disputes shall be resolved by
        binding arbitration by JAMSENDISPUTE in Santa Clara County, to which
        binding arbitration both parties consent.

11)     NO LEGAL REPRESENTATION. Employee is advised to seek his own legal
        advice in this matter and acknowledges that Orrick, Herrington &
        Sutcliffe LLP is acting solely as counsel for the Corporation and not
        for Employee.

IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
        first written above.


CATALYST SEMICONDUCTOR, INC.            EMPLOYEE


By: /s/ Radu Vanco                       /s/ Sorin Georgescu
   --------------------------------     ----------------------------------------
        Radu Vanco                           In his individual capacity
        President & CEO                      Sorin Georgescu



                                       3