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                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                    FORM 10-K
                                 ---------------

                  (Mark One)
            [X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                 SECURITIES EXCHANGE ACT OF 1934 [FEE REQUIRED]
                   For the fiscal year ended December 29, 1996
                                       OR
          [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
                 For the transition period from ...... to ......

                             Commission File 0-21904

                                Cyrix Corporation
             (Exact name of registrant as specified in its charter)

              DELAWARE                                 75-2218250

         (State or other jurisdiction of             (I.R.S. Employer
          incorporation or organization)          Identification Number)

                          2703 North Central Expressway
                              Richardson, TX 75080

                    (Address of principal executive offices)
                                   (Zip Code)


        Registrant's telephone number, including area code: 972-968-8387
           SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:
                                      None
           SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:
                          COMMON STOCK, $.004 PAR VALUE

                                (Title of Class)

     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 Form 10-K or any amendment to this
Form 10-K. [X ]

     The aggregate  market value of the voting stock held by  non-affiliates  of
the  registrant  as of January 31, 1997 was  approximately  $463,312,617.  As of
January 31, 1997, there were 19,577,957  outstanding  shares of the registrant's
Common Stock.

     Portions  of  the   registrant's   Proxy   Statement  to  be  furnished  to
stockholders  in connection  with its 1997 Annual  Meeting of  Stockholders  are
incorporated by reference into Part III of this Form 10-K.



<PAGE>


                                                             PART I


ITEM 1.  BUSINESS

GENERAL

     Cyrix  Corporation  (the "Company" or "Cyrix"),  founded in 1988,  designs,
develops   and  markets  IBM   personal   computer   software-compatible   ("IBM
compatible")  microprocessors  for  the  personal  computer  industry.  The  X86
architecture,  originally developed by Intel Corporation ("Intel"), has been the
leading architecture for IBM compatible personal computer microprocessors. Cyrix
seeks to serve the needs of the personal computer  marketplace as an alternative
source  for  X86   microprocessors   of   original   design   with   competitive
price/performance characteristics.

     Advanced  processors  such as those designed and sold by the Company impact
the  functionality,  performance,  reliability  and  cost  of  today's  personal
computers.  The  demand  for  increased  performance  from  microprocessor-based
personal  computers and the  proliferation of  sophisticated,  advanced software
applications  are  forcing   manufacturers   of  personal   computers  to  bring
increasingly  complex,  faster,  smaller and less  expensive  products to market
rapidly.  Their  ability  to do so is  largely  dependent  upon  the  designers,
developers  and  manufacturers  of  microprocessors  (such as  Cyrix)  and other
complex integrated circuits.

PRODUCT DESIGN

     The Company's  design system is based on a methodology that refines product
specifications  through an architectural  modeling process. The modeling process
consists  of  a  behavioral   modeling   process  to  produce   detailed  design
specifications  and a logic design  process to create  schematic  specifications
from the detailed design specifications. The schematic specifications become the
basis for the final stages of the design  process,  integrated  circuit  design,
chip simulation and layout.

     The Cyrix design system involves integration of industry standard and Cyrix
proprietary  hardware and software  components.  The proprietary  components are
used throughout the design process  primarily for simulation and testing for IBM
compatibility. The use of these proprietary tools throughout the process and the
refinement of  specifications  based on their output have enabled the Company to
design and develop products that are IBM compatible.

PRODUCTS

     The  Company  competes  primarily  in  the  microprocessor  segment  of the
semiconductor  market. A microprocessor is a single  integrated  circuit that is
responsible for the control of data flowing through the personal  computer,  the
manipulation of data as specified by software running the personal  computer and
the  coordination of all hardware  functions  within the system.  As a result of
these functions,  the  microprocessor  is the primary  component that determines
whether a personal computer is IBM compatible.  In 1992, the Company  introduced
microprocessors that were, to the Company's knowledge, the first microprocessors
that were both 486  instruction-set  compatible  and 386 socket  compatible.  In
1993,  the  Company  introduced  its  single-chip  486  microprocessor  upgrades
designed for 386DX and 386SX  desktop  personal  computers  and  introduced  the
Cx486DX(TM) and Cx486DX2(TM)  microprocessors,  its first 486 socket  compatible
microprocessors  with math coprocessing  functionality on the chip. In 1995, the
Company  introduced  its  5x86(TM)  and  6x86(TM)  microprocessors  designed for
portable and desktop computers.  The 5x86  microprocessors  provide system-level
performance   similar  to  systems   containing   Intel's  entry  level  Pentium
processors.  The 6x86  microprocessors  deliver performance in desktop computers
which  the  Company  believes  to  be  competitive  with  most  of  the  leading
performance processors currently in the market.



<PAGE>


     During fiscal 1997, the Company plans to introduce two new product designs,
the  MediaGX(TM)  and the M2  processors.  These new  products  are  expected to
provide the majority of the Company's revenue in the second half of fiscal 1997.
Although the Company  plans to sell  significant  quantities of 6x86 products in
the first half of 1997, declining sales prices,  continued pressure to introduce
higher speed products and new  functionality  provided by  competitive  products
make it necessary for the Company to produce and sell significant  quantities of
the next  generation  MediaGX and M2 products to achieve  sales  growth.  The M2
processor is a socket seven  compatible  design that will compete with other x86
processors. As with any new product design, market acceptance depends on whether
the product  offers  features  that are  attractive to the market and at a price
that offers a clear price  advantage to the  Company's  customers  when compared
with  competitive  products.  Based on these  factors,  there is a risk that the
Company's engineering resources will not be able to design in such features in a
timely  fashion  and that it cannot  build such next  generation  processors  in
enough  quantity  or at a cost that is  competitive  with other  products in the
market.  In addition,  the  Company's  MediaGX  product  utilizes a  proprietary
motherboard  and  chipset.  Therefore,  the Company  must work more closely with
suppliers of the  motherboards,  chip sets,  software vendors and OEMs to ensure
that the final product will deliver the performance and  functionality  that the
OEM  customer  desires.  Growth in  revenue  during  1997 can occur  only if the
Company  successfully  overcomes  the risks  inherent in these new  products and
develops  sales of such  products  sufficient  to replace  the  declines in 6x86
revenue expected in the latter half of the year.

     Since all of the  Company's  products are used in personal  computers,  the
Company's  business is closely tied to the performance of the personal  computer
industry.  Further,  the outlook for the  Company's  microprocessor  products is
highly  dependent on the timing of new product  introductions by the Company and
its competitors and other microprocessor market conditions.  Intel currently has
a dominant  microprocessor  market  share,  dictates the  performance  standards
required to compete in the  microprocessor  market and  influences  product life
cycles through frequent product  introductions,  product  enhancements and price
competition.  In addition to its dominant  microprocessor market share, Intel is
also beginning to dominate the entire personal computer  platform.  For example,
Intel has obtained a dominant  market share in sales of 64-bit or  Pentium-class
core  logic  chip  sets  and has  emerged  as the  world's  largest  motherboard
manufacturer.  In fiscal 1995,  Intel  purchased  an equity  interest in Phoenix
Technologies  Ltd., a company which has approximately 30% of the market for BIOS
(basic input/output system) software, which translates signals from the personal
computer's  operating system software to interface with the computer's  hardware
devices.  Further,  Intel manufactures  personal computers,  incorporating Intel
microprocessors,  chip sets,  motherboards and other Intel-designed  components,
for resale by third-party  original equipment  manufacturers  ("OEM") under such
OEMs' names.

     To compete with Intel at higher levels of  integration  as required by many
personal computer OEMs and dealers,  Cyrix is dependent upon the  infrastructure
of   third-party   designers  and   manufacturers   of  core  logic  chip  sets,
motherboards, BIOS software and other components of personal computers. As Intel
has become the dominant  competitor in these  segments of the personal  computer
industry,  third-party  designers  and  manufacturers  of core  logic chip sets,
motherboards,   BIOS  software  and  other   components  to  support   non-Intel
microprocessors  have lost market share to Intel,  which owns the microprocessor
designs and enjoys significantly greater financial, technical, manufacturing and
marketing  resources than such parties.  Further,  as Intel expanded its role in
designing and setting  standards for personal  computer  systems,  many personal
computer  OEMs reduced  their system  development  expenditures  and now require
processor  technologies  to  be  provided  at  various  levels  of  integration.
Therefore,  to compete with Intel and deliver the higher  levels of  integration
required  by many OEMs and dealers in 1997 and  beyond,  the  Company  maintains
close  relationships with third-party  designers and manufacturers of core logic
chip  sets,   motherboards,   BIOS  software  and  other   components,   expends
considerable  resources on its chip set and system design capabilities and sells
a  portion  of  the  Company's   processors  at  higher  levels  of  integration
incorporated  into modules,  boards and systems.  There can be no assurance that
the infrastructure  which supports non-Intel personal computer platforms will be
competitive with Intel or continue to support the Company's products.



<PAGE>


MANUFACTURING

     The  Company's  manufacturing  strategy  is to develop  relationships  with
qualified   semiconductor   manufacturers  which  offer  leading   complementary
metal-oxide semiconductor ("CMOS") process technologies. The Company has focused
its resources on product design, market development and customer support, rather
than on developing process technologies and operating manufacturing facilities.

     Microprocessor  manufacturing  cost per unit is primarily a function of die
size (since the potential  number of good die per wafer  increases  with reduced
die size),  number of mask layers,  and the yield of acceptable  die produced on
each wafer.  Other  contributing  factors  include number of fabrication  steps,
costs and sophistication of the manufacturing  equipment,  package type, process
complexity,  and  cleanliness.  The manufacture of the Company's  microprocessor
products is a complex process and involves a number of precise steps,  including
wafer  fabrication,  assembly and burn-in and final test which are  performed by
the Company.

     The wafers  fabricated by semiconductor  manufacturers and purchased by the
Company are sent to assembly subcontractors in the United States, Canada, Japan,
Korea,  Hong Kong and other locations where each silicon wafer is separated into
individual die. Functional die are then connected to external leads by extremely
fine wire and are assembled into plastic or ceramic  packages.  High temperature
burn-in and circuit testing are performed by the Company to verify that outgoing
production meets Cyrix quality standards and specifications.

     RELATIONSHIP WITH INTERNATIONAL  BUSINESS MACHINES CORPORATION ("IBM"). The
Company currently has two manufacturing agreements with IBM. The Company entered
the first of such agreements  (the  "Original"  agreement) on April 8, 1994. The
original agreement provides for IBM's  Microelectronics  division to manufacture
specified  quantities  of wafers of  Cyrix-designed  products  for sale to Cyrix
through  December 1999 at defined  prices.  Cyrix is  responsible  for the total
production  costs (including  equipment  costs) of such specified  quantities of
products irrespective of the number of products actually ordered by the Company.
Cyrix made a capital equipment investment of approximately $88 million in an IBM
manufacturing  facility  pursuant to the  agreement.  The  depreciation  expense
associated with such capital  equipment,  which Cyrix owns, is reimbursed to the
Company by IBM on a monthly basis.  In the event of expiration or termination of
this  agreement  by either  party,  IBM has the option to purchase  this capital
equipment  from  Cyrix at its then net book  value,  if any.  Also,  Cyrix  made
prepayments  for product  purchases of  approximately  $30 million during fiscal
1994,  $30 million  during  fiscal 1995 and $10 million on January 1, 1996.  Two
additional product  prepayments of $10 million each were to be due on January 1,
1997 and January 1, 1998; however, Cyrix reached agreement with IBM to defer the
January  1, 1997  prepayment  until  April 1,  1997.  Such  prepayments  will be
credited to Cyrix as it purchases  wafers from IBM at defined  prices during the
period from July 1, 1995 through  December  31,  1999.  In addition to supplying
microprocessors  to Cyrix, IBM has the right to manufacture an equivalent amount
of wafers of  Cyrix-designed  products for use  internally  or to sell on an OEM
basis.

     The Company entered into a second agreement (the "Foundry"  agreement) with
IBM on May 17, 1996. The foundry agreement  specifies that IBM  Microelectronics
division manufacture additional quantities of wafers of Cyrix-designed  products
for sale to Cyrix through December 1997 at defined prices. The foundry agreement
originally provided that the Company purchase wafers totaling  approximately $45
million during the second half of 1996. Although the foundry agreement specified
significant  penalties  if the Company did not  purchase  the entire  commitment
under  the  foundry  agreement,  the  Company  negotiated  a  reduction  in  the
commitment due to the lower than expected sales volume in 1996 without incurring
significant  penalties.  The Company may  continue to purchase  wafers under the
foundry  agreement  in fiscal  1997.  At the end of fiscal  1996 the Company had
outstanding  purchase  commitments  for the second half of 1997;  however,  such
commitments  could be canceled  without  penalty within the terms of the foundry
agreement.



<PAGE>


     RELATIONSHIP WITH SGS-THOMSON  MICROELECTRONICS,  INC. ("SGS"). The Company
began purchasing  wafers from SGS in 1990 and entered into an agreement with SGS
on January 11, 1994.  The  agreement  between  Cyrix and SGS  provides  that SGS
commit its best efforts to  manufacture  wafers of  Cyrix-designed  products for
sale to Cyrix through December 1997 up to specified maximum quantities of wafers
per year at agreed upon prices.

     Also pursuant to the January 11, 1994 agreement,  as amended, Cyrix granted
SGS a license  to  manufacture  and sell  under its own name  specified  maximum
quantities   per   year   of   certain   current   and   future   Cyrix-designed
microprocessors.   Further,   Cyrix   granted  SGS  the  right  to  use  certain
Cyrix-designed chips as part of the SGS libraries to design application specific
integrated  circuits in which such  Cyrix-designed  chips would represent only a
portion of the functionality of such products ("ASIC products").  SGS is able to
manufacture  and  sell  such  ASIC  products  under  its own  name in  unlimited
quantities,  with Cyrix receiving a royalty based on SGS's quarterly net revenue
derived from the sale of such ASIC products, if any. The agreement also provides
the terms under which ASIC product rights based on other Cyrix-designed products
may be granted to SGS by Cyrix in the future. Further, the agreement gives Cyrix
the right to sell  SGS-designed  ASIC  products,  if any, under its own name. To
date,  SGS  has  not  manufactured  and  sold  any  ASIC  products  in  which  a
Cyrix-designed chip is a portion of the functionality of such product.

     PROCESS  TECHNOLOGY.  The Company's  products are  manufactured  using CMOS
process technology.  CMOS technology is generally  reliable,  cost-effective and
capable of producing high volumes of processors and has the additional advantage
of providing high  performance  products which operate at low power. The Company
currently uses 0.35 micron,  five-level  metal  processes for its 6x86 products.
The  Company's  primary  competitors,  Intel and Advanced  Micro  Devices,  Inc.
("AMD"), own fabrication facilities and have access to process technologies that
have historically been more advanced than those available to Cyrix. Their access
to these technologies  potentially  results in improved product  performance and
decreased manufacturing costs as compared to the Company.

     The  Company's  reliance  on  third-party  manufacturers  involves  several
material risks, including the possible  unavailability of or delays in obtaining
access to necessary process  technologies,  the absence of controllable  product
delivery schedules,  manufacturing  yields and production costs and the possible
breakdown in the relationship with the third-party manufacturers.  Additionally,
all of the  production  wafers  that the Company  purchased  in fiscal 1996 were
purchased from IBM.  Although the Company  intends to continue its  relationship
with SGS and to pursue relationships with other third-party  manufacturers,  the
Company may continue to purchase all of its wafers from IBM during  fiscal 1997.
Any disruption in the  relationship  with IBM or IBM's ability to deliver wafers
to the Company could have a severe impact on the Company's results of operations
in fiscal 1997 and beyond.

RESEARCH AND DEVELOPMENT

     The Company  emphasizes  research and development and believes that it must
continually  invest in the  development  of new  products to take  advantage  of
market trends and be competitive.  Rapid technological  change and intense price
competition place a premium on new product  development  efforts.  The Company's
continued  ability to  compete in the  microprocessor  market  will  depend to a
significant  degree  on its  ability  to  continue  to  develop  technologically
advanced  products.  The  Company's  research  and  development  activities  are
directed  toward  (i)  the  design  of  high  performance  microprocessors  with
multimedia  functionality,  (ii)  designing  microprocessors  that use  advanced
process  technologies,  (iii) cost  reduction and  performance  improvements  in
existing  and  future  products,  (iv) the  design of core  logic  chip sets and
personal computer platforms and (v) enhancing the Company's design systems.



<PAGE>


     In fiscal years 1996, 1995 and 1994, the Company's research and development
expenses were $32.4 million, $29.1 million and $24.8 million, respectively. Such
research and development  expenses are charged to operations as incurred.  Cyrix
believes that  technological  leadership is essential to its success and expects
that  it  will  continue  to  expend  substantial   resources  on  research  and
development.  However,  there  can  be  no  assurance  that  such  research  and
development  efforts will result in the design and  development  of  competitive
products in a timely manner.

INTELLECTUAL PROPERTY AND LICENSES

     The Company has expended and will continue to expend considerable resources
to protect its intellectual property by filing patent applications,  in both the
United  States and foreign  countries.  As of December  31,  1996,  Cyrix had 42
United States patents, and an additional 141 (excluding 44 foreign) patents were
pending. The Company is committed to protecting its intellectual property rights
through patents, mask-work registrations, copyrights, trademarks, non-disclosure
agreements and litigation where appropriate.  However, there can be no assurance
that the Company will be able to protect its intellectual property.

     As described  above,  the Company has supply  agreements  with SGS and IBM,
pursuant  to  which  both SGS and IBM have  the  right to  manufacture  and sell
certain current and future Cyrix-designed products, including the Company's 6x86
microprocessors.  In return,  SGS and IBM have  agreed to  manufacture  and sell
wafers of  Cyrix-designed  products  to the  Company  at  defined  prices and in
certain quantities.  To obtain additional  manufacturing  capacity,  the Company
could be required to license more of its intellectual  property,  product rights
and  proprietary  technology.  In addition,  Cyrix  licensed  Texas  Instruments
Incorporated  ("TI") to  manufacture  and sell certain  Cyrix-designed  products
under the TI name pursuant to an agreement  effective February 21, 1991 ("the TI
Agreement").  From  December  1993  to  November  1994,  TI and  Cyrix  were  in
litigation  regarding  certain  disputes that had arisen under the TI Agreement,
including  a dispute  as to which  Cyrix  products  were  licensed  under the TI
Agreement.  Such  disputes  were  settled in November  1994,  and TI was granted
licenses to certain  Cyrix-designed 486 products and the option to take licenses
under certain future Cyrix patents.  However, TI does not have product rights or
licenses  to  manufacture  the  Company's   5x86,  6x86  or  future   generation
microprocessors.

     From  time  to  time,   Cyrix  has  been  notified  that  it  may  infringe
intellectual  property rights of others. If any such claims are asserted against
the Company,  the Company may seek to obtain a license  under the  third-party's
intellectual  property rights. The Company could decide,  however,  to resort to
litigation  to  challenge  such  claims.  Such  challenges  could  be  extremely
expensive and time consuming and could materially adversely affect the Company's
business,  financial  condition and results of  operations.  No assurance can be
given that all necessary  licenses can be obtained on  reasonable  terms or that
litigation can be avoided. See "Legal Proceedings."

MARKETING AND SALES

     DISTRIBUTION CHANNELS. The Company markets and sells its products primarily
to OEMs of  personal  computers  and  distributors  who  service  small OEMs and
personal computer integrators. The Company believes that a direct sales force is
the most effective way of interacting  with large OEMs and has organized its own
customer support teams  consisting of a service oriented sales force,  technical
design  consultants and a sales support team. The technical  design  consultants
work with OEMs  beginning in the early stages of the design  process to simplify
the  incorporation  of Cyrix products into personal  computers,  while providing
technical  know-how to work through various  engineering  issues.  Cyrix's sales
support staff is trained in the  operation and design of the Company's  products
and works  with the direct  sales  force and  technical  design  consultants  in
support of the customer  base.  Cyrix also sells its products  through a limited
number of  distributors  and  representatives  in an  effort  to access  certain
domestic and international markets.



<PAGE>


     The  Company  has both  exclusive  and  non-exclusive  agreements  with its
distributors.  These  distributors  typically  maintain  an  inventory  of Cyrix
products.  The Company,  pursuant to its agreements  with certain  distributors,
provides  protection to the  distributors  for their inventory of Cyrix products
against price  reductions as well as products that are  slow-moving or have been
discontinued by the Company. Certain of these agreements, which generally may be
canceled by either party upon notice,  provide for the return of Cyrix  products
to the Company if the agreement is terminated.  With respect to these contracts,
the Company  records  revenue  from the sale of products  to  distributors  when
shipments are made and invoiced to the  distributor,  and the Company  maintains
reserves for estimated product returns and price allowances.

     SALES ORGANIZATION.  In addition to the Company's domestic sales staff, the
Company  maintains an international  sales staff in the United Kingdom,  Taiwan,
Hong Kong, Singapore and Japan to support the Company's  international marketing
and sales  efforts.  In fiscal 1996,  1995,  and 1994,  the  Company's  sales to
international  customers were 54%, 66% and 52% respectively,  of its net product
sales.  The  Company's  international  sales  operations  subject the Company to
political  and  economic  risks  including  expropriation,   currency  controls,
exchange  fluctuations,  and  changes  in rates  and  exemptions  for  taxes and
tariffs.  To date, the Company has not experienced any material  adverse effects
associated with such risks.

     WARRANTY POLICY. Depending upon the customer, the Company offers warranties
for all of its  products,  the terms of which the Company  believes are standard
for the industry. Under such warranties, the Company may be obligated to replace
defective  products  or  products  that do not  perform to  applicable  industry
standards or refund the purchase price of any such products.  To date,  warranty
claims have been  immaterial;  however,  there can be no  assurance  that future
warranty  claims  will not  have a  material  adverse  effect  on the  Company's
business and results of operations.

BACKLOG

     The Company's business, and to a large extent that of a significant portion
of the semiconductor industry, is characterized by short-term order and shipment
schedules. Orders are subject to changes in quantities and delivery schedules or
to cancellation at the option of the purchaser without significant  penalty. The
Company   believes   that  only  a  small   portion  of  its  order  backlog  is
noncancellable  and that the dollar amount  associated  with the  noncancellable
portion is immaterial. In light of current industry practice and experience, the
Company does not believe that backlog as of any particular date is indicative of
future results.

COMPETITION

     The  microprocessor  business is  characterized  by short  product  cycles,
intense  price  competition  and rapid  advances  in product  design and process
technology  resulting in rapidly  occurring product  obsolescence.  Intel is the
dominant company in the IBM compatible  microprocessor  market. Intel's dominant
market position has to date allowed it to set IBM compatible  processor industry
performance  standards and thus dictate the type of product the market  requires
from  Intel's  competitors.  In prior  years,  Intel  responded  to the entry of
competition  into the IBM  compatible  microprocessor  market with an aggressive
product   proliferation   program   for  its  486   instruction-set   family  of
microprocessors.  In 1995, Intel  successfully  employed a similar strategy with
its Pentium family of microprocessors. Intel also has a strategy to maintain its
dominant  market  position  through  aggressive   investments  in  manufacturing
capacity  and research and  development.  During 1996,  Intel spent an estimated
$1.8  billion  on  research  and  development  and $3 billion  on  property  and
equipment.  It also has  consolidated  its dominant market  position  through an
intensive  advertising campaign designed to strengthen brand loyalty to Intel by
the  personal  computer  end-user.  In addition to its  dominant  microprocessor
market  share,  Intel  is also  beginning  to  dominate  the  personal  computer
platform.  For example,  Intel has obtained a dominant  market share in sales of
64-bit or Pentium-

<PAGE>


class core  logic chip sets,  has  emerged as the  world's  largest  motherboard
manufacturer,  has purchased an equity interest in Phoenix  Technologies Ltd., a
company  which  has  approximately  30% of the  market  for BIOS  software,  and
manufactures personal computers, incorporating Intel microprocessors, chip sets,
motherboards and other Intel-designed components, for resale by third-party OEMs
under such OEMs'  names.  The Company does not have the  financial  resources to
compete  with  Intel on such a large  scale.  As long as Intel  remains  in this
dominant  position,  its product  introduction  timing and product  pricing will
materially affect the Company's operating results.

     Other competitors in the IBM compatible  microprocessor market include AMD,
IBM, SGS and TI. Under a technology exchange agreement and patent  cross-license
agreement between AMD and Intel, AMD historically competed in the microprocessor
market with products which use  intellectual  property  developed by Intel.  But
during 1995, AMD acquired Nexgen,  Inc. and has incorporated  their designs into
their  current  generation of products.  In recent  years,  IBM, SGS and TI have
entered the market  using  Cyrix's  microprocessor  designs and may compete with
their own designs in the future.  The  Company  may also face  competition  from
manufacturers  of  processors  that are not currently  IBM  compatible,  such as
manufacturers of IBM's,  Motorola's and Apple's Power PC system processors.  The
Company  believes that other  semiconductor  manufacturers  may enter the market
resulting in even greater competition.  Further, the rapid pace of technological
change in the industry  means that  companies  other than Cyrix could  develop a
design or process  that  radically  advances  microprocessor  standards  using a
proprietary or patent-protected design or process.

     The  Company's  ability  to  compete in the  advanced  processor  market is
dependent  on its  timely  introduction  of  products  that are  competitive  in
performance,  features and offer pricing advantages when compared to competitive
products. During fiscal 1996, the Company was not able to gain market acceptance
for its 6x86 processors when priced  similarly to Intel's  products.  Therefore,
the  Company's  revenues  declined  significantly  during the first three fiscal
quarters  of 1996  compared  to the same  periods of fiscal 1995 and the Company
incurred a net loss for the year.  In order to gain  market  acceptance  for its
6x86  product,  the  Company  found it  necessary  to price such  products  at a
discount to  competitive  Intel  products.  Continued  market  acceptance of the
Company's  products  may  require  it to  continue  to price its  products  at a
discount to competitive  products  marketed by Intel.  However,  there can be no
assurances that the Company can  successfully  supply products with  competitive
performance and price in adequate  commercial  volumes or that  manufacturers of
personal computers will design the Company's products into computers or purchase
the  Company's  products in sufficient  volumes to maintain or increase  Cyrix's
quarterly revenues.

     In the recent past Intel and other competitors have increased the frequency
of product  introductions  and  enhancements  and have used price  decreases  to
protect or improve their market share.  The Company expects that Intel,  AMD and
other   competitors   will  continue  to  improve  the   performance   of  their
microprocessor  products  and use price  decreases  to protect or improve  their
market  share.  There  can be no  assurance  that  the  Company  will be able to
successfully improve the performance of its microprocessors at the rate required
to remain competitive with the leading  performance  processors in the market or
compete against price decreases,  since Intel and several of the Company's other
competitors have substantially greater financial,  technical,  manufacturing and
marketing resources than the Company.

     OEMs generally select  processors for inclusion in their personal  computer
products based on the processors' price/performance characteristics, feature mix
and projected market  acceptance with respect to the market segments targeted by
such OEMs. In addition, OEMs consider the ability of processor vendors to supply
adequate  volumes of processors which meet their  performance  requirements in a
timely and reliable manner. Even after a Cyrix product has been designed into an
OEM's personal computer,  a "design win," the Company still faces competition to
keep its products in the OEM's  design.  Generally,  an OEM can qualify  another
source  for any of the  Company's  products  because  SGS,  IBM and TI each have
licenses to manufacture certain Cyrix-designed products. As the Company does not
have exclusive  rights to the products it designs,  revenue and gross margin for
such products could be reduced.



<PAGE>


     To date, the Company has been unable to sell significant  quantities of its
microprocessors  to most large OEMs such as Compaq,  Packard  Bell,  Gateway and
Dell.  Since the Company  intends to introduce  two new products in fiscal 1997,
the  MediaGX  and the M2,  the  Company's  revenues  and  income  will be highly
dependent  upon gaining market  acceptance  for such  products.  There can be no
assurance  that the Company will be able to convince its OEM customers to design
such new products into their designs.  Any delay in the  introduction  or market
acceptance  of the  Company's  MediaGX  and M2  products  could  have a material
adverse effect on the Company's results of operations.

     To compete with Intel at higher levels of  integration  as required by many
personal computer OEMs and dealers,  Cyrix is dependent upon the  infrastructure
of   third-party   designers  and   manufacturers   of  core  logic  chip  sets,
motherboards,  BIOS software, and other components of personal computers.  Since
Intel has emerged as a competitor  in these  segments of the  personal  computer
industry,  third-party  designers  and  manufacturers  of core  logic chip sets,
motherboards,   BIOS  software  and  other   components  to  support   non-Intel
microprocessors  have lost market  share and many  personal  computer  OEMs have
reduced   their  system   development   expenditures   by  requiring   processor
technologies to be provided at various levels of integration. In order to ensure
that the non-Intel related infrastructure will continue to support the Company's
products,  Cyrix strives to form close relationships with third-party  designers
and manufacturers of core logic chip sets, motherboards, BIOS software and other
components, and expends considerable resources on its chip set and system design
capabilities.  Nevertheless,  there can be no assurance that the  infrastructure
which  supports  non-Intel  personal  computer  platforms  will  continue  to be
competitive with Intel or continue to support the Company's products.

EMPLOYEES

     As of December 31, 1996, the Company had a total of 391 employees, of which
357 were based in the United  States,  11 were based in Europe and 23 were based
in Asia. Of the  Company's  391  employees as of such date,  107 were engaged in
marketing,  sales and related  customer  support  services,  176 were engaged in
research and development,  56 were engaged in manufacturing  and 52 were engaged
in administration and finance.

     The Company believes that attracting and retaining  competent employees and
motivating  them to meet  corporate  objectives  are  essential  elements of its
success.  Since its  inception  in 1988,  the Company has  implemented  policies
designed  to create a  favorable  working  environment  for its  employees.  For
example,  the Company has a stock option plan, a stock  purchase  plan, a profit
sharing  program  and a 401(k)  plan  matching  program,  all with  broad  based
eligibility  and  participation,   and  the  Company  funds  competitive  health
insurance   policies.   As  competent  employees  are  in  high  demand  in  the
semiconductor  industry,  at times the Company has difficulty hiring experienced
personnel at a pace consistent with the Company's objectives.  While the Company
intends to use whatever  forms of  compensation,  benefits and other  incentives
that are necessary and cost effective to attract and retain qualified personnel,
there can be no assurance that the Company will be able to do so.

     None of the Company's employees are represented by a labor union. Cyrix has
not experienced any work stoppages and considers relations with its employees to
be good.



<PAGE>


ITEM 2.  PROPERTIES

     The Company's  headquarters  are located in Richardson,  Texas. The Company
owns two buildings  that give it a total of 172,000 square feet for research and
development,  sales and marketing,  administration and finance, as well as final
test  operations.  Cyrix bought one building in 1992 for $3.6 million  which was
financed by the former owner of the building. The Company constructed its second
building  during 1996 at a cost of $5.5 million.  Both  buildings are located at
its Richardson, Texas headquarters. Cyrix also leases office space for a systems
design center in Longmont, Colorado. In addition, Cyrix leases offices for sales
and marketing operations in Yokohama,  Japan; Taipei,  Taiwan;  Swindon,  United
Kingdom;  and Singapore.  The Company believes that its existing facilities will
be adequate to meet its requirements through 1997.

ITEM 3.  LEGAL PROCEEDINGS

CURRENT LITIGATION

     See Note 5 to the Consolidated  Financial  Statements  included in Part II,
Item 8, for a description  of certain  settlements  of litigation  during fiscal
1996.

POTENTIAL FUTURE LITIGATION

     The Company  believes  that Intel has a strategy of  protecting  its market
share by filing intellectual  property lawsuits against its competitors and that
Intel may assert additional patent infringement or intellectual  property claims
against the Company.  Potential additional Intel litigation would likely involve
different patents with new combination or system claims. In addition, new patent
applications are continually  being filed by Intel and by others.  Since pending
United States patent  applications are confidential until patents are issued, it
is  impossible to ascertain all potential  patent  infringement  claims.  If the
Company is alleged to infringe one or more patents, it may seek a license to the
patent.  However,  there can be no assurance that a license will be available on
reasonable  terms.  In such event,  the  Company  may be forced to litigate  the
matter.  The damages and legal and other  expenses of any  resulting  litigation
could have a material adverse effect on future operations.

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

     There were no matters  submitted to a vote of security  holders  during the
fourth quarter of 1996.



<PAGE>


                                     PART II

ITEM 5.  MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

     The Company's  common stock is quoted on the Nasdaq National Market tier of
the Nasdaq Stock Market under the symbol: CYRX.

     The  following  table  sets  forth the range of high and low last  reported
sales prices for the Company's  common stock as reported by the Nasdaq  National
Market for each quarter of fiscal 1996 and fiscal 1995. At February 7, 1997, the
number of record holders of the Company's common stock was approximately 660.

                                    1996                        1995
                         -------------------------   -------------------------
                             HIGH          LOW           HIGH          LOW
                         -----------   -----------   -----------   -----------
   1st Quarter              $29.13        $18.88        $26.00        $17.00
   2nd Quarter              $36.38        $13.94        $28.00        $20.25
   3rd Quarter              $18.56        $12.25        $48.19        $22.25
   4th Quarter              $22.38        $14.88        $42.50        $22.50

The  Company  has not paid cash  dividends  on its common  stock and  intends to
continue a policy of retaining any earnings for reinvestment in its business.

ITEM 6.  SELECTED FINANCIAL DATA

     The Company has a 52/53 week fiscal year that ends on or about  December 31
and a 13/14 week  fiscal  quarter  that ends on or about  March 31,  June 30 and
September  30. The  information  in this  Report has been  labeled as though all
fiscal years ended  December 31 and fiscal  quarters ended March 31, June 30 and
September  30. Set forth  below is selected  financial  data for the Company for
each of the last five fiscal years.

<TABLE>
<CAPTION>
(Amounts in Thousands, Except Per Share                                   Year Ended December 31,
Amounts)
                                                ----------------------------------------------------------------------------
Operating Data                                     1996            1995            1994            1993            1992
                                                ------------    ------------    ------------   -------------   -------------

<S>                                                <C>             <C>             <C>             <C>              <C>    
Net revenues.......................                $183,825        $228,012        $246,098        $125,108         $72,898
Gross margin.......................                  52,372          85,949         125,377          76,100          44,895
Income (loss) from operations......                (33,101)          17,735          55,764          29,855          13,190
Net income (loss)..................                (25,862)          15,612          37,577          19,615           8,413
Net income (loss) per common and common
      equivalent share.............                  (1.33)            0.78            1.88            1.06            0.49

Balance Sheet Data

Total assets.......................                $299,342        $268,785        $196,134        $114,728         $50,270
Long-term debt and capitalized lease
      obligations, including current
      maturities...................                 139,231          82,378          22,797           7,856           5,508
Total liabilities..................                 176,416         122,792          70,406          30,742          18,805
Total stockholders' equity.........                 122,926         145,993         125,728          83,986          31,465
</TABLE>

Approximately  47%  of net  product  revenue  (net  revenues  excluding  royalty
revenue)  in fiscal  1992 was  derived  from sales of  microprocessors  with the
remaining 53% of net product revenue attributable to sales of the Company's math
coprocessor products.  In 1993, sales of microprocessor  products reached 75% of
net product  revenues.  Since 1993,  microprocessor  sales have represented more
than 90% of the Company's net product revenue.


<PAGE>


The  selected  financial  data  for  each  of the  past  five  years  may not be
indicative of the Company's future financial  condition or results of operations
due to (1) the risk that the Company  will not be able to  successfully  develop
and introduce on a timely basis  price-competitive  microprocessor products that
embody new  features,  meet  evolving  industry  standards  and  achieve  market
acceptance and (2) the risk that the Company will not be able to obtain capacity
to meet its manufacturing requirements, will not be able to obtain products with
acceptable yields or will not have access to necessary process  technologies due
to the Company's reliance on third-party manufacturers.

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

RESULTS OF OPERATIONS

The  following  table sets forth items from Cyrix's  Consolidated  Statements of
Income as percentages of net revenues:
<TABLE>
<CAPTION>

                                                                     FISCAL YEAR ENDED DECEMBER 31,
                                                               --------------------------------------------
                                                                   1996           1995            1994
                                                               -------------   ------------    ------------

<S>                                                               <C>             <C>            <C>   
           Net product sales.................................      96.3%           92.2%          100.0%
           Royalty revenue...................................       3.7             7.8             --
                                                               -------------   ------------    ------------
           Net revenues......................................     100.0           100.0           100.0
           Cost of sales.....................................      71.5            62.3            49.1
                                                               -------------   ------------    ------------
           Gross margin......................................      28.5            37.7            50.9
           Marketing, general and administrative.............      28.9            17.1            18.2
           Research and development..........................      17.6            12.8            10.1
                                                               -------------   ------------    ------------
           Income (loss) from operations.....................     (18.0)            7.8            22.6
           Net interest income (expense).....................      (4.0)           (1.8)            0.5
           Income from litigation settlement.................       1.1             4.4             0.2
                                                               -------------   ------------    ------------
           Income (loss) before provision for income taxes
                and extraordinary item.......................     (20.9)           10.4            23.3
           Provision (benefit) for income taxes..............      (7.5)            3.6             8.0
                                                               -------------   ------------    ------------
           Net income (loss) before extraordinary item.......     (13.4)            6.8            15.3
           Extraordinary loss from early extinguishment of
                debt, net of tax benefit.....................      (0.6)             --             --
                                                               -------------   ------------    ------------
           Net income (loss).................................     (14.0)%           6.8%           15.3%
                                                               -------------   ------------    ------------
</TABLE>

NET REVENUES.  Net product sales  decreased  approximately  15.8% in fiscal 1996
compared  to fiscal  1995 due to the  Company's  difficulty  in  gaining  market
acceptance of the Company's 6x86 products during the first three fiscal quarters
of 1996.  Unit shipments  declined 48% in fiscal 1996 compared with shipments in
1995.  6x86 products  accounted for 65% of unit shipments in fiscal 1996. 41% of
fiscal 1996 product  revenue was  recognized in the fourth  quarter of the year.
The increased  product sales volume resulted from price decreases enacted at the
end of the third quarter that improved the attractiveness of the 6x86 product.

Net product  sales  decreased  approximately  14.5% in fiscal  1995  compared to
fiscal 1994 as a 35% increase in unit volume was more than offset by significant
erosion of the average  selling  prices for 486  microprocessors.  During fiscal
1995, most OEMs of desktop personal  computers  transitioned from the 486 family
of  microprocessors to the next generation of  microprocessors,  such as Intel's
Pentium  microprocessors.  The Company did not have  available  for sale a large
enough  volume of products with  performance  competitive  with Intel's  Pentium
microprocessors to offset the declining demand for and average selling prices of
486   microprocessors.   During   fiscal   1994,   sales  of  486DX  and  486DX2
microprocessors represented over 75% of the Company's net product sales with the
remaining sales attributable to 486DLC and 486SLC microprocessors.



<PAGE>


Sales to  international  customers were 54%, 66% and 52% of net product sales in
fiscal years 1996, 1995 and 1994, respectively. Sales to international customers
are made primarily to customers in Europe, Taiwan, Korea and Japan.

Royalty revenue of $6.7 million and $17.7 million was recognized in fiscal years
1996 and 1995,  respectively.  No royalty  revenue was recognized in fiscal year
1994 due to a contractual dispute with Texas Instruments Incorporated ("TI"). In
fiscal year 1995,  royalty revenue  included a $15 million  payment  received in
settlement  of the  contractual  dispute  with  TI.  The  payment  was for  past
royalties  and a fully  paid-up  license  on the  Company's  486DLC  and  486SLC
microprocessors.

GROSS MARGINS.  The Company's gross margins as a percentage of net product sales
for fiscal 1996, 1995 and 1994 were 26%, 32% and 51%, respectively.  Declines in
unit  quantities  produced  and sold  resulted in higher  product  costs since a
portion  of  the  Company's  costs  of  goods   manufactured  are  fixed  costs.
Additionally,  some of the wafers used to produce the Company's  products in the
second half of 1996 were obtained under the foundry agreement with IBM which has
a significantly higher wafer cost than the original agreement with IBM.

During fiscal 1995,  average  selling  prices and gross margins of the Company's
486DX2  products  declined  during  each  quarter  as the market  continued  its
transition to higher  performance  products and the Company  priced its products
aggressively to compete in the low end of the  microprocessor  market.  Further,
during the fourth quarter of fiscal 1995,  the average  selling prices of 486DX2
microprocessors fell below the Company's cost to purchase these products causing
the Company to write off substantially all of its 486 inventory,  which exceeded
$10 million.  The Company did not have  available for sale a large enough volume
of products in fiscal 1995 with  performance  competitive  with Intel's  Pentium
microprocessors  to offset the declining  demand for and average  selling prices
and gross margins of 486 microprocessors.

During  fiscal 1994,  the average  selling  prices of the  Company's  486DLC and
486SLC  microprocessors  and  math  coprocessors  decreased  significantly  when
compared to fiscal 1993 due to price competition and the shift in the x86 market
to higher  performance  products.  During fiscal 1994,  approximately 75% of the
Company's  revenues were generated through sales of its 486DX 33 MHz, 40 MHz and
50 MHz products as well as 486DX2 25/50 MHz and 33/66 MHz products.  The Company
priced its 486DX and 486DX2  products  aggressively in fiscal 1994 to compete in
the low end of the microprocessor market.

Gross margins in fiscal 1997 will be heavily  dependent upon obtaining wafers at
costs that are favorable to the Company. Gross margins, as well as sales, during
the  early  part  of the  year  will  result  primarily  from  the  sale of 6x86
processors.  Should selling prices of such 6x86 processors fall at a faster rate
than  the  Company  expects,  margins  generated  by the  6x86  product  will be
impacted.  In the second half of fiscal  1997,  the Company  expects most of its
sales  and  gross  margins  to be  derived  from its  MediaGX  and M2  products.
Additionally,  the  Company  may  obtain a portion  of the  wafers for these new
products from qualified  sources other than IBM. The amount of margin  generated
from  these  products,  if any,  will be  dependent  upon the cost of the wafers
received from alternative sources.

MARKETING,  GENERAL AND  ADMINISTRATIVE.  Marketing,  general and administrative
expenses for fiscal 1996,  1995 and 1994 were $53.1  million,  $39.1 million and
$44.9 million, respectively.  Marketing, general and administrative expenses for
fiscal 1996  increased  compared to the same period of fiscal 1995 primarily due
to an increase in sales and  marketing  expenses  associated  with the Company's
efforts to gain market acceptance of its 6x86 processors.  In order to speed the
market  acceptance  of the 6x86  processor,  the Company  expended  considerable
resources  in  qualifying  platforms  for the  6x86  processors  and  sold  some
processors at higher levels of integration  (i.e. - on  motherboards  and in IBM
compatible  systems).   Such  efforts  required  the  Company  to  increase  its
marketing,  general and administrative  expenses  significantly.  Legal expenses
increased  to $3.6  million in fiscal 1996  compared  to $2.8  million in fiscal
1995.



<PAGE>


Marketing,  general  and  administrative  expenses  for  fiscal  1995  decreased
compared to the same period of fiscal 1994 primarily due to a reduction in legal
expenses to $2.8 million from $7.7 million when comparing the same periods.

Legal  expenses  for fiscal 1997 and beyond  could  continue  to be  significant
despite the fact that the Company has reached settlements in most of the matters
that were  outstanding  during fiscal 1996 since the Company could be subject to
additional  future  litigation.  See Item 3. Legal Proceedings and Note 5 to the
Consolidated Financial Statements in Part II, Item 8.

RESEARCH AND DEVELOPMENT. The Company's research and development expenses during
fiscal 1996, 1995 and 1994 were $32.4 million,  $29.1 million and $24.8 million,
respectively.  The increase in research and development expenses for fiscal 1996
and 1995 was attributable to the expansion of the Company's  engineering  staff,
design  equipment  and  prototype  expenses  to support the  development  of new
microprocessor  designs.  The  Company  intends to  increase  its  research  and
development  expenses in fiscal 1997 in an effort to enhance  existing  products
and develop new technologically advanced products.

NET INTEREST INCOME  (EXPENSE).  Interest income declined in fiscal 1996 to $2.1
million  compared with $2.7 million for fiscal year 1995 but increased  over the
$1.9 million  interest  income  recorded in fiscal 1994. The decline in interest
income for fiscal 1996 is primarily due to lower interest rates.

Interest  expense for fiscal 1996  increased to $9.5 million  compared with $6.7
million  in fiscal  1995 and $721  thousand  in fiscal  1994.  The  increase  in
interest  expense  during  fiscal 1996 was due  primarily to the issuance of the
5.5%  convertible  subordinated  notes  which,  in turn,  caused  the  Company's
outstanding debt to increase significantly. When comparing fiscal 1995 to fiscal
1994, interest expense increased primarily due to long-term debt and capitalized
lease obligations incurred to purchase equipment under the IBM agreement.

LITIGATION  SETTLEMENTS.  Other  income for fiscal 1996  included two $1 million
settlement  payments  from  Intel  related  to  certain  microprocessor  actions
described in Note 5 to the Consolidated  Financial Statements.  Other income for
fiscal 1995 included a one-time  settlement of $10 million from Intel related to
litigation  concerning the Company's  microprocessor  products.  In addition, as
described  previously,  the Company  resolved a  contractual  dispute with TI in
November  1994 and  recognized  $17.7  million in royalty  income from TI during
fiscal 1995. Other income for fiscal 1994 included a one-time settlement payment
of $500 thousand from Intel related to litigation  concerning the Company's math
coprocessor products.

The final outcome of any issue currently  subject to dispute or potential future
litigation  could have a material effect on the Company's  results of operations
during fiscal 1997 and beyond.

PROVISION  (BENEFIT)  FOR INCOME TAXES.  The  effective  rate used to record the
Company's  fiscal 1996 income tax benefit was 35.6% compared to effective income
tax rates of 34.3% in fiscal 1995 and 34.5% in fiscal 1994.

OTHER FACTORS AFFECTING RESULTS OF OPERATIONS

RELIANCE ON THIRD-PARTY MANUFACTURERS.  During fiscal 1996, all of the Company's
products were  manufactured and sold to the Company by IBM. See Manufacturing in
Part I, Item 1 for descriptions of the Company's relationships with IBM and SGS.
The  Company's  reliance on  third-party  manufacturers  creates  risks that the
Company will not be able to obtain capacity to meet its sales requirements, will
not be able to obtain products with acceptable yields or will not have access to
necessary process  technologies.  Further,  the Company has licensed some of its
intellectual  property to SGS and IBM to obtain  access to  specified  levels of
manufacturing capacity, and the Company could be required to license more of its
intellectual  property and product rights and  proprietary  technology to obtain
additional  manufacturing capacity. If the Company were to experience difficulty
in  obtaining  wafers  with  acceptable  yields and at prices  favorable  to the
Company  from  its  third-party  manufacturers,  such  difficulty  could  have a
material adverse effect on the Company's revenues and operating results.



<PAGE>


PRODUCT  TRANSITIONS.  Once  current  microprocessor  products  have been in the
marketplace for a period of time and begin to be replaced by higher  performance
microprocessors (whether of the Company's or a competitor's design), the Company
expects the price of such earlier generation  microprocessors to decline and net
sales  and  gross  margins  of such  microprocessors  to  decrease.  In order to
continue to maintain its then current gross margin and levels of revenue growth,
if  any,  the  Company  will  therefore  be  required  to  design,  develop  and
successfully  commercialize next generation  microprocessors in a timely manner.
Although the Company is committed to its product development efforts,  there can
be no assurance that the Company will be able to introduce new products  quickly
enough to avoid  adverse  revenue  transition  patterns  during  future  product
transitions.

During  fiscal 1997,  the Company  expects to  introduce  its MediaGX and its M2
products.  Once such introductions are made and these products are designed into
personal  computers,  the  Company  expects  prices  and  margins  for its  6x86
processors  to  decline.  However,  if the  MediaGX and M2 products do not offer
performance,  features and pricing attractive to the personal computer industry,
the Company may build excess inventory or experience net losses similar to those
incurred in fiscal 1996. Additionally,  Intel and several of the Company's other
competitors have substantially greater financial,  technical,  manufacturing and
marketing  resources than the Company and they may introduce new  microprocessor
designs  with  features  or  performance  that  exceed  those  contained  in the
Company's new products.  If the Company  experiences a delay in transitioning to
its  MediaGX  and M2  processors,  the  period of time and the  impact on profit
margins during this product  transition  will be dependent upon several  factors
including,  but not limited to, the following:  Cyrix may experience performance
difficulties with the new product designs; Cyrix may not be able to successfully
ramp  production  of new products at IBM or other  qualified  foundries  without
yield problems or other performance issues; and personal computer  manufacturers
may not design the  Company's  new  products  into their  notebook  and  desktop
computers in a timely manner or purchase the  Company's  products in the volumes
and at the prices  necessary to offset the  declining  market,  average  selling
prices and profit margins of the Company's 6x86 processors.  Further, Intel, AMD
and other competitors could  significantly  decrease the price of products which
compete with the Company's products to protect or gain market share.

The  Company  must  order  wafers  and build  inventory  in  advance  of product
shipments.  There is a risk  that the  Company  will  forecast  incorrectly  and
produce  excess  inventories  as product  life  cycles  become  shorter and more
difficult to predict and price changes and  transitions  to new products  become
more rapid.  This inventory risk is heightened  because the Company's  customers
place orders with short lead times and minimal, if any, cancellation  penalties.
To the extent the Company produces excess  inventories,  the Company's  earnings
could be adversely affected.

GENERAL.  The markets for the Company's  products are  characterized by a highly
competitive  and rapidly  changing  environment in which  operating  results are
subject  to  the  effects  of  frequent  product  introductions,   manufacturing
technology  innovations  and rapid  fluctuations  in product  demand.  While the
Company  attempts to identify and respond to these  changes as soon as possible,
prediction of and reaction to such events is an ongoing challenge.



<PAGE>


The Company's  future  results of operations  and financial  condition  could be
impacted by the following factors, among others: trends in the personal computer
market,  introduction  of new products by  competitors,  delay in the  Company's
introduction  of higher  performance  products,  chip set,  motherboard and BIOS
infrastructure  support for the  Company's  products,  market  acceptance of new
products introduced by the Company,  intense price competition,  interruption in
the supply of low-cost microprocessor  products from third-party  manufacturers,
intellectual   property   disputes  and  adverse  changes  in  general  economic
conditions in any of the countries in which the Company does business.

Due to the factors  noted above and  elsewhere in  Management's  Discussion  and
Analysis of Financial Condition and Results of Operations,  the Company's future
earnings and stock price may be subject to significant volatility,  particularly
on a quarterly  basis.  Past  financial  performance  should not be considered a
reliable indicator of future performance and investors should not use historical
trends to  anticipate  results or trends in future  periods.  Any  shortfall  in
revenue or earnings from the levels  anticipated  by securities  analysts  could
have an immediate and  significant  effect on the trading price of the Company's
common stock in any given period.  Also,  the Company  participates  in a highly
dynamic  industry  which often  contributes  to the  volatility of the Company's
common stock price.

LIQUIDITY AND CAPITAL RESOURCES

Cash, cash  equivalents and investments  totaled $87.7 million and $44.3 million
at  December  31,  1996 and 1995,  respectively.  Sources of cash in fiscal 1996
included  proceeds from issuance of the Company's 5.5% convertible  subordinated
notes due June 1, 2001 and utilization of product  prepayments.  Uses of cash in
fiscal 1996  consisted  primarily  of funds  utilized by  operating  activities,
repayments of long-term debt and capitalized  lease obligations and purchases of
investments.

The Company's primary sources of cash in fiscal 1995 consisted of funds provided
from  operations,  proceeds from redemption of investments and proceeds from the
issuance of debt to finance capital equipment  purchases.  The Company's primary
uses of cash in fiscal 1995 consisted of capital equipment purchases and product
prepayments  pursuant to the Company's  agreement with IBM (see Manufacturing in
Part I,  Item 1 for  terms  of the  agreement  between  IBM  and  the  Company),
principal payments on long-term debt and capitalized lease obligations and funds
used to increase accounts receivable and decrease accounts payable.

Expenditures  for  capital  equipment  purchases  decreased  in fiscal 1996 when
compared  to fiscal 1995 since the Company  purchased  substantially  all of the
equipment  required by the agreement  with IBM in fiscal 1995. The Company plans
to purchase  additional  capital equipment in fiscal 1997 in order to expand its
manufacturing  capacity  and to support its  planned  research  and  development
activities.  Such purchases will require the Company to use its existing working
capital or to obtain additional  financing.  Due to the highly capital intensive
nature of the semiconductor  industry,  capital  expenditures are expected to be
significant in fiscal 1997 and beyond.

The Company's  long-term debt and capitalized lease  obligations  outstanding at
December 31, 1996 totaled  $139.2  million.  Approximately  $3.1 million of such
debt is scheduled for payment during fiscal 1997. These debt agreements  contain
provisions  regarding  the  maintenance  of certain net income per quarter,  net
worth, working capital and other financial ratios.

The Company's  current capital plan and estimated  working capital  requirements
are based on various product mix, selling price and unit demand  assumptions and
are,  therefore,  subject to revision due to future  market  conditions.  If the
Company is successful  in achieving  its business  plan during fiscal 1997,  the
Company  believes that cash flows from  operations,  current cash and investment
balances and  anticipated  available  equipment  financing will be sufficient to
fund  operations,  capital  investments  and research and  development  projects
currently planned. The

<PAGE>


Company's ability to achieve its business plan in fiscal 1997 is dependent upon,
among other factors  previously  discussed,  continued  favorable pricing of the
Company's 6x86 products and successful introduction and market acceptance of the
Company's  MediaGX  and  M2  processors.   If  the  Company's  cash  flows  from
operations,  current  cash and  investment  balances and  anticipated  available
equipment  financing are not sufficient to fund operations,  capital investments
and research and development projects currently planned, the Company may attempt
to  sell  additional   equity   securities  or  issue  debt  to  meet  any  such
requirements.

The Company's  success  during fiscal 1997 is dependent upon getting its MediaGX
and M2 processors into production and achieving  market  acceptance of these new
products.  The Company's revenue in 1996 was generated primarily by sales of its
6x86 products. Although the Company plans to sell significant quantities of 6x86
products in the first half of 1997,  declining sales prices,  continued pressure
to introduce higher speed products and new functionality provided by competitive
products  make it  necessary  for the  Company to produce  and sell  significant
quantities  of the next  generation  MediaGX and M2  products  to achieve  sales
growth.  The M2 processor is a socket seven compatible  design that will compete
with other x86  processors.  As with any new product design,  market  acceptance
depends on whether the product offers features that are attractive to the market
and  at a  price  that  offers  a  clear  price  advantage  when  compared  with
competitive products.  Based on these factors,  there is a risk that the Company
cannot build such next  generation  processors  in enough  quantity or at a cost
that is  competitive  with  other  products  in the  market.  In  addition,  the
Company's  MediaGX  product  utilizes a  proprietary  motherboard  and  chipset.
Therefore,   the  Company  must  work  more   closely  with   suppliers  of  the
motherboards,  chip sets,  software  vendors  and OEMs to ensure  that the final
product will deliver the  performance  and  functionality  that the OEM customer
desires.   Growth  in  revenue  during  1997  can  occur  only  if  the  Company
successfully  overcomes  the risks  inherent in these new  products and develops
sales of such  products  sufficient  to replace  the  declines  in 6x86  revenue
expected in the latter half of the year.

"SAFE HARBOR"  STATEMENT UNDER THE PRIVATE  SECURITIES  LITIGATION REFORM ACT OF
1995

This report contains forward looking statements.  The forward looking statements
with respect to the introduction,  availability,  cost,  features,  performance,
customer acceptance and revenue  contribution of future products,  including the
MediaGX  and the M2,  are  subject  to  engineering,  manufacturing  and  market
acceptance risks.  Engineering  difficulties such as the failure to properly and
timely  design or debug  such  products  could  delay the  introduction  of such
products  or  adversely  impact  their   performance  or  customer   acceptance.
Manufacturing  difficulties  such as the  failure to obtain  required  capacity,
technical  problems  with the  manufacture  of  these  complex  products  or the
inability  to provide  products at  competitive  cost to the Company  could also
delay the introduction of these products or adversely affect their availability,
cost, features,  performance or customer  acceptance.  Finally, the inability to
achieve sufficient  customer design wins for the products could adversely affect
the  Company's  ability to market them in  quantities  sufficient to achieve its
revenue goals.


<PAGE>


ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY FINANCIAL DATA

INDEX TO CONSOLIDATED  FINANCIAL  STATEMENTS,  SUPPLEMENTARY  FINANCIAL DATA AND
FINANCIAL STATEMENT SCHEDULES

<TABLE>
<CAPTION>

Financial Statements:

<S>                                                                                                            <C>
      Report of Independent Auditors.................................................................           19
      Consolidated Balance Sheets as of December 31, 1996 and 1995...................................           20
      Consolidated Statements of Income for the three years ended December 31, 1996..................           22
      Consolidated Statements of Cash Flows for the three years ended December 31, 1996..............           23
      Consolidated Statements of Changes in Stockholders' Equity for the three years ended December
            31, 1996.................................................................................           24
      Notes to Consolidated Financial Statements.....................................................           25

Supplementary Financial Data.........................................................................           38

Financial Statement Schedule:

      For the three years ended December 31, 1996:
      Schedule II - Valuation and Qualifying Accounts................................................          S-1

</TABLE>

       All other schedules and financial statements are omitted because they are
       not  applicable  or the required  information  is shown in the  financial
       statements or notes thereto.



<PAGE>


                         REPORT OF INDEPENDENT AUDITORS



Board of Directors
Cyrix Corporation

            We have  audited the  accompanying  consolidated  balance  sheets of
Cyrix  Corporation  and  Subsidiaries  as of December 31, 1996 and 1995, and the
related consolidated  statements of income, changes in stockholders' equity, and
cash flows for each of the three fiscal  years in the period ended  December 31,
1996. Our audits also included the financial  statement  schedule  listed in the
Index  at  Item  14(a).   These  financial   statements  and  schedule  are  the
responsibility of the Company's management.  Our responsibility is to express an
opinion on these financial statements based on our audits.

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

         In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the consolidated financial position of
Cyrix  Corporation  and  Subsidiaries  at December  31,  1996 and 1995,  and the
consolidated  results of their  operations  and their cash flows for each of the
three fiscal years in the period ended  December 31, 1996,  in  conformity  with
generally  accepted  accounting  principles.  Also, in our opinion,  the related
financial  statement  schedule,   when  considered  in  relation  to  the  basic
consolidated  financial  statements  taken as a whole,  presents  fairly  in all
material respects the information set forth therein.

                                                      ERNST & YOUNG LLP

Dallas, Texas
January 16, 1997


<PAGE>


                       CYRIX CORPORATION AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS

                                     ASSETS
                                 (IN THOUSANDS)


<TABLE>
<CAPTION>
                                                                                              DECEMBER 31,
                                                                                  -------------------------------------
                                                                                       1996                 1995
                                                                                  ----------------     ----------------

Current assets:
<S>                                                                                  <C>                  <C>         
      Cash and cash equivalents.........................................             $     65,712         $     44,334
      Investments.......................................................                   22,035                   --
      Trade accounts receivable, net of valuation allowances of
         $4,236 at December 31, 1996 and $4,500 at
           December 31, 1995 (Note 1)...................................                   27,791               44,727
      Inventories (Note 1)..............................................                   24,432               12,273
      Deferred taxes (Note 3)...........................................                    4,783               10,845
      Prepayment for product purchases..................................                   20,471               13,333
      Income taxes receivable...........................................                   21,033                3,089
      Other ............................................................                    1,184                  377
                                                                                  ----------------     ----------------
Total current assets....................................................                  187,441              128,978

Property and equipment (Note 1):
      Land .............................................................                    4,964                4,964
      Buildings and improvements........................................                   11,154                5,634
      Machinery and equipment...........................................                  132,359              125,050
                                                                                  ----------------     ----------------
                                                                                          148,477              135,648
      Accumulated depreciation..........................................                   62,892               37,341
                                                                                  ----------------     ----------------
                                                                                           85,585               98,307

Prepayment for product purchases, less current portion..................                   22,465               40,698
Other assets............................................................                    3,851                  802
                                                                                  ----------------     ----------------
Total assets............................................................             $    299,342          $   268,785
                                                                                  ----------------     ----------------
</TABLE>


<PAGE>


                       CYRIX CORPORATION AND SUBSIDIARIES
                     CONSOLIDATED BALANCE SHEETS (CONTINUED)

                      LIABILITIES AND STOCKHOLDERS' EQUITY
                                 (IN THOUSANDS)


<TABLE>
<CAPTION>
                                                                                                  DECEMBER 31,
                                                                                     ---------------------------------------
                                                                                           1996                  1995
                                                                                     -----------------     -----------------

    Current liabilities:
<S>                                                                                      <C>                   <C>         
         Accounts payable...................................................             $     17,504          $     15,239
         Accrued salaries and benefits......................................                    5,454                 3,469
         Deferred income and distributor reserves (Note 1)..................                    2,610                15,526
         Income taxes payable (Note 3)......................................                      377                   536
         Current maturities of long-term debt and capitalized lease
              obligations (Note 2)..........................................                    3,075                20,053
         Other accrued expenses.............................................                    8,034                 5,497
                                                                                     -----------------     -----------------
    Total current liabilities...............................................                   37,054                60,320

    Long-term debt and capitalized lease obligations (Note 2)...............                  136,156                62,325
    Deferred income taxes (Note 3)..........................................                    3,206                   147

    Commitments and contingencies (Notes 2 and 5)

    Stockholders' equity (Note 4):
         Common stock, $.004 par value;  authorized 60,000 shares, issued 20,228
              shares at December 31, 1996 and December 31, 1995 ............                       81                    81
         Additional capital.................................................                   49,040                46,256
         Retained earnings..................................................                   73,850                99,712
         Less treasury stock, at cost,  717 shares at December 31, 1996
              and 991 shares at December 31, 1995...........................                     (45)                  (56)
                                                                                     -----------------     -----------------
    Total stockholders' equity..............................................                  122,926               145,993
                                                                                     -----------------     -----------------
    Total liabilities and stockholders' equity..............................             $    299,342          $    268,785
                                                                                     -----------------     -----------------

</TABLE>
















                             SEE ACCOMPANYING NOTES.


<PAGE>


                       CYRIX CORPORATION AND SUBSIDIARIES
                        CONSOLIDATED STATEMENTS OF INCOME
                      (IN THOUSANDS, EXCEPT PER SHARE DATA)



<TABLE>
<CAPTION>
                                                                               FISCAL YEAR ENDED DECEMBER 31,

                                                                  ----------------------------------------------------------
                                                                       1996                 1995                 1994
                                                                  ----------------     ----------------     ----------------

<S>                                                                  <C>                  <C>                  <C>         
Net product sales...........................................         $    177,101         $    210,294         $    246,098
Royalty revenue (Note 1) ...................................                6,724               17,718                   --
                                                                  ----------------     ----------------     ----------------
Net revenues................................................              183,825              228,012              246,098

Cost of sales...............................................              131,453              142,063              120,721
                                                                  ----------------     ----------------     ----------------
                                                                           52,372               85,949              125,377

Expenses:
     Marketing, general and administrative..................               53,102               39,099               44,858
     Research and development...............................               32,371               29,115               24,755
                                                                  ----------------     ----------------     ----------------
                                                                           85,473               68,214               69,613
                                                                  ----------------     ----------------     ----------------

Income (loss) from operations...............................             (33,101)               17,735               55,764
Other income and expense:
     Income from litigation settlement......................                2,000               10,000                  500
     Interest income........................................                2,113                2,752                1,855
     Interest expense.......................................              (9,511)              (6,711)                (721)
                                                                  ----------------     ----------------     ----------------
                                                                          (5,398)                6,041                1,634
                                                                  ----------------     ----------------     ----------------

Income (loss) before provision for income taxes and
  extraordinary item........................................             (38,499)               23,776               57,398
Provision (benefit) for income taxes (Note 3)...............             (13,699)                8,164               19,821
                                                                  ----------------     ----------------     ----------------

Net income (loss) before extraordinary item.................             (24,800)               15,612               37,577

Extraordinary loss from early extinguishment of debt, net
  of income tax benefit of $598.............................              (1,062)                   --                   --
                                                                  ----------------     ----------------     ----------------

Net income (loss) ..........................................        $    (25,862)         $     15,612         $     37,577
                                                                  ----------------     ----------------     ----------------

Net income (loss) per common and common equivalent share:

  Net income (loss) before extraordinary item...............        $      (1.27)       $          .78       $         1.88
  Extraordinary item........................................               (0.06)                   --                   --
                                                                  ----------------     ----------------     ----------------
  Net income (loss) per common and
       common equivalent share..............................        $      (1.32)       $          .78       $         1.88
                                                                  ----------------     ----------------     ----------------

Weighted average common and common equivalent shares
  outstanding...............................................               19,408               19,985               19,986
                                                                  ----------------     ----------------     ----------------
</TABLE>




                             SEE ACCOMPANYING NOTES.



<PAGE>


                       CYRIX CORPORATION AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (IN THOUSANDS)
<TABLE>
<CAPTION>
                                                                                      FISCAL YEAR ENDED DECEMBER 31,

                                                                         ----------------------------------------------------------
                                                                              1996                  1995                 1994
                                                                         ----------------      ---------------      ---------------
OPERATING ACTIVITIES
<S>                                                                        <C>                   <C>                  <C>         
Net income (loss) .................................................        $    (25,862)         $     15,612         $     37,577
Adjustments to reconcile net income (loss) to net cash provided
  (used) by operating activities:
  Depreciation and amortization....................................               27,094               19,417                9,045
  Provision for doubtful accounts and OEM customer returns.........               16,089                9,362                8,999
  Deferred income taxes and other noncash charges..................                9,121              (3,447)              (3,130)
  Changes in operating assets and liabilities:
     Receivables...................................................                  847             (12,094)             (22,699)
     Inventories...................................................             (12,159)                6,203              (8,315)
     Income taxes receivable.......................................             (17,944)              (3,089)                   --
     Other current assets..........................................                (807)              (3,229)                1,198
     Accounts payable..............................................                2,265             (11,941)               14,271
     Deferred litigation settlement................................                   --              (5,000)                5,000
     Accrued expenses..............................................                4,522                  454                1,880
     Income taxes payable..........................................                (159)              (2,108)                1,532
     Deferred income and distributor reserves......................             (12,916)               11,253                2,039
     Other assets..................................................              (3,049)                3,173                (549)
                                                                         ----------------      ---------------      ---------------

Net cash provided (used) by operating activities...................             (12,958)               24,566               46,848

INVESTING ACTIVITIES
Prepayment for product purchases...................................             (10,000)             (32,367)             (30,000)
Reduction in prepayment for product purchases......................               21,095                8,336                   --
Purchases of property and equipment................................             (12,634)             (79,677)             (23,986)
Purchases of investments...........................................             (22,035)                   --             (32,234)
Proceeds from redemption of investments............................                   --               16,178               30,147
                                                                         ----------------      ---------------      ---------------

Net cash used in investing activities..............................             (23,574)             (87,530)             (56,073)

FINANCING ACTIVITIES
Proceeds from issuance of 5.5% convertible subordinated notes......              126,500                   --                   --
Proceeds from issuance of long-term debt...........................                6,941               72,553               13,876
Repayments of long-term debt and capitalized lease obligations.....             (78,326)             (12,972)              (1,751)
Proceeds from issuance of treasury stock...........................                2,308                2,964                2,321
Tax benefit from stock options exercised and disqualifying
  dispositions.....................................................                  487                1,691                1,854
Repurchases of stock...............................................                   --                  (2)                 (10)
                                                                         ----------------      ---------------      ---------------

Net cash provided by financing activities..........................               57,910               64,234               16,290
                                                                         ----------------      ---------------      ---------------

Net increase in cash and cash equivalents..........................               21,378                1,270                7,065
Cash and cash equivalents at beginning of fiscal year..............               44,334               43,064               35,999
                                                                         ----------------      ---------------      ---------------

Cash and cash equivalents at end of fiscal year....................         $     65,712         $     44,334          $    43,064
                                                                         ----------------      ---------------      ---------------

FINANCING AND INVESTING ACTIVITIES NOT AFFECTING CASH
Capital lease obligations incurred.................................         $      1,739         $        --           $     2,817
                                                                                   
</TABLE>

                             SEE ACCOMPANYING NOTES.


<PAGE>


                       CYRIX CORPORATION AND SUBSIDIARIES
           CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
                        (IN THOUSANDS, EXCEPT SHARE DATA)


<TABLE>
<CAPTION>


                                           COMMON STOCK         ADDITIONAL         TREASURY STOCK          RETAINED
                                     -------------------------                --------------------------
                                       SHARES        AMOUNT       CAPITAL       SHARES        AMOUNT       EARNINGS        TOTAL
                                     ------------  -----------  ------------  ------------  ------------  ------------  ------------


<S>                                   <C>             <C>         <C>           <C>           <C>           <C>           <C>      
Balance at December  31, 1993         19,378,870      $    78     $  37,435     1,032,789     $     (50)    $  46,523     $  83,986

     Issuance of common stock on
       exercise of stock options         474,434            2         2,319            --            --            --         2,321
     Common stock repurchases                 --           --            --        62,833          (10)            --          (10)
     Tax benefit of stock options 
       exercised and disqualifying
       dispositions                           --           --         1,854            --            --            --         1,854
     Net income                               --           --            --            --            --        37,577        37,577
                                     ------------  -----------  ------------  ------------  ------------  ------------  ------------

Balance at December  31, 1994         19,853,304           80        41,608     1,095,622          (60)        84,100       125,728

     Issuance of common stock and
       treasury stock on exercise of
       stock options                     374,574            1         2,957     (154,128)             6            --         2,964
     Common stock repurchases                 --           --            --        49,168           (2)            --           (2)
     Tax benefit of stock options
       exercised and disqualifying
       dispositions                           --           --         1,691            --            --            --         1,691
     Net income                               --           --            --            --            --        15,612        15,612
                                     ------------  -----------  ------------  ------------  ------------  ------------  ------------

Balance at December  31, 1995         20,227,878           81        46,256       990,662          (56)        99,712       145,993

     Issuance of treasury stock on
       exercise of stock options
       of stock options                       --           --         2,297     (273,384)            11            --         2,308
     Tax benefit of stock options
       exercised and disqualifying
       dispositions                           --           --           487            --            --            --           487
     Net loss                                 --           --            --            --            --      (25,862)      (25,862)
                                     ------------  -----------  ------------  ------------  ------------  ------------  ------------

Balance at December 31, 1996          20,227,878   $       81     $  49,040       717,278      $   (45)    $   73,850    $  122,926
                                     ------------  -----------  ------------  ------------  ------------  ------------  ------------

</TABLE>


                             SEE ACCOMPANYING NOTES.


<PAGE>


                       CYRIX CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                DECEMBER 31, 1996

1.       SIGNIFICANT ACCOUNTING POLICIES

DESCRIPTION OF THE BUSINESS

Cyrix  Corporation  ("the  Company")  is  engaged  principally  in  the  design,
development  and  marketing  of  high-performance  advanced  processors  for IBM
compatible  personal  computers  which it sells  principally  through its direct
sales force,  independent  representatives  and  distributors.  Manufacturing of
products is performed primarily through third parties.

PRINCIPLES OF CONSOLIDATION

The consolidated  financial  statements  include the accounts of the Company and
its  wholly  owned  subsidiaries.  All  significant  intercompany  accounts  and
transactions have been eliminated.

FISCAL YEAR

The Company's  fiscal year ends on a Sunday on or about December 31. Fiscal year
1996, a 52-week year, ended December 29, 1996.  Fiscal years 1995 and 1994 ended
December 31, 1995, and January 1, 1995, respectively. The accompanying financial
statements have been labeled as though the Company's accounting periods ended on
the respective calendar year-end.

RECLASSIFICATIONS

Certain  reclassifications of the financial statements for prior years have been
made to conform to the 1996 presentation.

INVESTMENTS

Investments are carried at cost, which approximates  market. The Company invests
primarily  in bankers'  acceptances,  commercial  paper,  municipal  bond funds,
government agency securities,  corporate obligations and money market funds. All
investments are classified as  available-for-sale  and no realized or unrealized
gains or losses have been incurred with respect to such investments due to their
nature.  The Company considers all highly liquid  investments with insignificant
interest  rate risk and original  maturities  of three months or less to be cash
equivalents.

INVENTORIES

Inventories are stated at the lower of standard cost, which approximates  actual
cost,  determined on a first-in,  first-out  basis,  or market.  Inventories are
stated  net of lower of cost or  market  allowances  of $5.3  million  and $14.7
million as of December 31, 1996 and 1995,  respectively.  Inventories consist of
the following at December 31:

(In thousands)                          1996               1995
                                   ----------------   ----------------

Raw materials.................        $      9,576       $      1,330
Work-in-process...............              14,204              6,482
Finished goods................                 652              4,461
                                   ----------------   ----------------
                                      $     24,432       $     12,273
                                   ----------------   ----------------



<PAGE>


PROPERTY AND EQUIPMENT

Property and  equipment  are stated at cost.  Provisions  for  depreciation  are
calculated using the straight-line method over the estimated useful lives of the
related  assets or the term of the lease,  if  shorter,  for  assets  recognized
pursuant to capitalized leases.

REVENUE RECOGNITION

Sales are recognized  upon shipment to  distributors  and to original  equipment
manufacturer ("OEM") customers.  Sales and receivables are reduced for estimated
uncollectible  accounts,  estimated  returns from OEM  customers  and  estimated
future price  allowances to be granted to OEM customers.  Sales to  distributors
are made under distributor  agreements which provide the distributors  rights of
return and price  protection  on unsold  merchandise  held by the  distributors.
Accordingly,  sales are reduced for  estimated  returns  from  distributors  and
estimated  future price  reductions of unsold  merchandise held by distributors.
Provisions for warranty are made at the time of sale.

ROYALTY REVENUE

Royalty revenue based on the sale by third-party  licensees of licensed products
is recognized by the Company upon fulfillment of its contractual obligations and
determination  of a royalty amount based on units sold.  Royalty revenue of $6.7
million was recognized in fiscal 1996.  Total royalty revenue for fiscal 1995 of
$17.7  million  included a $15  million  payment  received  in  settlement  of a
contractual dispute with Texas Instruments  Incorporated ("TI"). The $15 million
payment was for past  royalties  and a fully  paid-up  license on the  Company's
486DLC and 486SLC microprocessors. No royalty revenue was recognized in 1994.

VALUATION ALLOWANCES

Valuation  allowances  related to net product  sales consist of the following at
December 31:
<TABLE>
<CAPTION>

(In thousands)                                               1996                1995
                                                        ----------------    ----------------

<S>                                                        <C>                 <C>         
Allowance for uncollectible accounts................       $      1,661        $      1,155
Allowance for returns from and price allowances to
  be granted to OEM customers.......................              2,575               3,345
                                                        ----------------    ----------------
Valuation reserves related to net receivables.......              4,236               4,500
Deferred income and estimated gross profits related
  to returns from and price allowances to be
  granted to distributors...........................              2,610              15,526
                                                        ----------------    ----------------
                                                           $      6,846        $     20,026
                                                        ----------------    ----------------
</TABLE>


Management estimates the allowance for uncollectible  accounts  receivable.  The
Company  performs  ongoing  credit  evaluations  of its  customers  and requires
advanced payments or secures  transactions  when deemed  necessary.  The Company
also requires many of its  international  customers to provide letters of credit
and purchases credit insurance for the majority of its international sales in an
effort to limit the amount of credit risk associated with the Company's accounts
receivable. Therefore, the Company's credit losses have been within management's
estimates.



<PAGE>


ACCOUNTING FOR STOCK OPTIONS

The Company  grants stock  options for a fixed number of shares to employees and
directors  with an  exercise  price equal to the fair value of the shares at the
date of grant.  The Company  accounts for stock option grants in accordance with
APB  Opinion  No. 25,  ACCOUNTING  FOR STOCK  ISSUED TO  EMPLOYEES,  because the
alternative fair value  accounting  method provided for under FASB Statement No.
123,  "Accounting for Stock-based  Compensation,"  requires the use of valuation
models  that were not  developed  for use in  valuing  employee  stock  options.
Accordingly,  the  Company  does not  recognize  compensation  expense for stock
option grants.

NET INCOME (LOSS) PER COMMON AND COMMON EQUIVALENT SHARE

Net  income  (loss) per common and  common  equivalent  share were  computed  by
dividing net income  (loss) by the weighted  average  number of shares of common
stock and common stock equivalents  outstanding during each period. Common stock
options are considered common stock equivalents.  The dilutive effects of common
stock equivalents are calculated using the treasury stock method.  Fully diluted
net income per share, for applicable years, is substantially the same as primary
net income per share.

ESTIMATES

Preparation  of financial  statements  in  conformity  with  generally  accepted
accounting principles requires management to make estimates and assumptions that
affect the amounts reported in the financial  statements and accompanying notes.
Actual  results  could  differ  from  the  assumptions  used  by  management  in
preparation of the financial statements.



<PAGE>


2.       LONG-TERM OBLIGATIONS

Long-term debt and  capitalized  lease  obligations  consist of the following at
December 31:
<TABLE>
<CAPTION>

    (In thousands)


                                                                                                  1996              1995
                                                                                              -------------     -------------

    <S>                                                                                       <C>                 <C>         
    5.5%  convertible  subordinated  notes due June 1, 2001  requiring  interest
    payments  semiannually  on June 1 and December 1. The notes are  convertible
    into shares of the Company's  common stock at the conversion rate of 25.1572
    shares per $1,000 principal amount of the notes (equivalent to a conversion 
    price of $39.75 per share)                                                                $    126,500        $       --
                                                                                                                           
    Note  payable,  8.875%,  due in monthly  installments  of $45,686  including
    interest  through  September 1, 2006, with remaining  principal and interest
    payable on October 1, 2006, collateralized by land and buildings located in 
    Richardson, Texas                                                                                5,485                --

    Notes  payable with interest  rates ranging from 8.69% to 11.1% due in  
    installments through 2002 and collateralized by substantially all the 
    assets of the Company                                                                               --            75,482

    Note payable,  7.125%,  due in quarterly  installments of $106,000 including
    interest through October 31, 1998, with remaining principal and interest due
    upon maturity date of November 5,  1998,  collateralized by land located in 
    Richardson,  Texas and any improvements made thereto                                             2,301             2,550

    Note payable,  8.3%, due in equal monthly installments of $45,356 including 
    interest through June 1, 1999, collateralized by specific equipment                              1,225                --

    Note payable,  6.57%,  due in 48 equal  monthly  installments  of $56,745  
    including interest through April 1, 1998, collateralized by specific equipment                     815             1,420

    Note payable,  11.5%,  due in 36 equal  monthly  installments  of $25,589  
    including interest through December 31, 1997, collateralized by 
    specific equipment                                                                                 289               546
                                                                                              -------------     -------------

    Total debt                                                                                     136,615            79,998
    Capitalized lease obligations                                                                    2,616             2,380
                                                                                              -------------     -------------
    Total long-term debt and capitalized lease obligations                                         139,231            82,378
    Less current portion                                                                             3,075            20,053
                                                                                              -------------     -------------
                                                                                              $    136,156      $     62,325
                                                                                              -------------     -------------

</TABLE>


         In May 1996,  the Company  issued  $126.5  million of 5.5%  convertible
subordinated  notes ("notes") due June 1, 2001. The notes are  convertible  into
shares of the Company's  common stock at the  conversion  rate of 25.1572 shares
per $1,000 principal amount of notes (equivalent to a conversion price of $39.75
per share). The notes are subordinated to present and future senior indebtedness
of the Company,  and the notes are  redeemable at the option of the Company,  in
whole or in part, on or after June 1, 1999. The Company used approximately $66.6
million of the net proceeds of the offering to repay outstanding notes payable.



<PAGE>


         The Company has certain land,  buildings and equipment  under financing
agreements  which  contain  restrictive   covenants  including   restriction  on
additional debt and certain other transactions and which include the maintenance
of  certain  net  worth,  net  income per  quarter,  working  capital  and other
financial ratios.

         For each of the next five years and beyond,  long-term debt and capital
lease obligations are payable as follows:

<TABLE>
<CAPTION>
                   (In thousands)                                 LONG-TERM DEBT
                                                                      (PRINCIPAL            CAPITAL
                                                                           ONLY)             LEASES
                                                                 ----------------     --------------

<S>                <C>                                             <C>                 <C>         
                   1997                                            $       1,267       $      2,081
                   1998                                                    2,272              1,547
                   1999                                                       76                594
                   2000                                                       83                 --
                   2001                                                  126,591                 --
                   Thereafter                                              5,101                 --
                                                                 ----------------     --------------
                   Total                                                 135,390              4,222
                   Less amount representing interest                          --                381
                                                                 ----------------     --------------
                   Total present value                              $    135,390       $      3,841
                                                                 ----------------     --------------
</TABLE>

         Interest paid by the Company  related to its notes payable during 1996,
1995 and  1994  amounted  to $8.6  million,  $6.2  million  and  $554  thousand,
respectively.  Of the total payments  under capital leases in fiscal 1996,  1995
and  1994,  $353  thousand,  $244  thousand  and  $230  thousand,  respectively,
represented interest.

         The Company leases office space and equipment under  operating  leases.
Total rent expense for the fiscal years ended December 31, 1996, 1995, and 1994,
was $3.8 million,  $2.0 million and $1.2 million,  respectively.  Minimum rental
commitments under noncancellable operating leases are as follows:

(In thousands)
YEAR                                        OPERATING LEASES
                                            -----------------

1997...............................              $     4,188
1998...............................                    2,826
1999...............................                    1,040
2000...............................                      101
2001...............................                       81
Thereafter.........................                    1,221
                                            -----------------
                                                 $     9,457
                                            -----------------



<PAGE>


3.        INCOME TAXES

 PROVISION (BENEFIT) FOR INCOME TAXES

The provision for income tax expense (benefit) consists of the following:

<TABLE>
<CAPTION>
  (In thousands)                                                        1996           1995            1994
                                                                   -----------------------------------------------
  Federal:
<S>                                                                 <C>              <C>             <C>         
    Current.................................................        $    (23,484)    $     11,095    $     21,025
    Deferred - current......................................                6,062         (5,443)         (2,516)
    Deferred - noncurrent...................................                3,060           1,849           (639)
                                                                   -----------------------------------------------
                                                                         (14,362)           7,501          17,870
  State.....................................................                   --             404           1,385
Foreign....................................................                    65             259             566
                                                                  ------------------------------------------------
Total provision (benefit) for income taxes.................         $    (14,297)    $      8,164    $     19,821
                                                                  ------------------------------------------------
</TABLE>

Included in the tax provisions  reflected  above are $0.5 million,  $1.7 million
and $1.9 million for 1996, 1995, and 1994, respectively, of tax benefits related
to stock options exercised and disqualifying dispositions recorded as credits to
stockholders' equity.

The provision  (benefit) for income taxes  reconciles to the amount  computed by
applying the statutory U.S.  federal rate of 35% to income before  provision for
income taxes as follows:

<TABLE>
<CAPTION>
(In thousands)                                                               1996           1995            1994
                                                                        -----------------------------------------------
<S>                                                                      <C>              <C>             <C>         
Federal income tax at statutory rate.............................        $    (14,056)    $      8,321    $     20,089
Effect of foreign subsidiary transactions........................                  442           (372)           (588)
State taxes, net of federal benefit..............................                   --             263             900
Research and development credits.................................                (683)           (542)         (1,117)
Other, net.......................................................                   --             494             537
                                                                        -----------------------------------------------
Provision (benefit) for income taxes.............................        $    (14,297)    $      8,164    $     19,821
                                                                        -----------------------------------------------
</TABLE>

No federal income tax provision has been made for income taxes on  approximately
$1.3  million  of   cumulative   undistributed   earnings  of  certain   foreign
subsidiaries  because it is the Company's intention to permanently reinvest such
earnings.  If such earnings were distributed,  it is expected that no additional
taxes would be due after giving effect to available tax credits.

The Company made income tax payments of $0.5 million in 1996,  $15.1  million in
1995, and $19.6 million in 1994.



<PAGE>


ANALYSIS OF DEFERRED TAX ASSETS (LIABILITIES)

Significant  components  of the  Company's  deferred  tax  assets  (liabilities)
consist of the following at December 31:
<TABLE>
<CAPTION>

(In thousands)                                                                                1996            1995
                                                                                         -------------------------------
Deferred tax assets - current:
<S>                                                                                         <C>            <C>         
  Allowance for doubtful accounts.....................................................      $        500   $        404
  Other receivable allowances.........................................................             1,024          1,354
  Inventory valuation.................................................................             1,801          3,739
  Deferred income and distributor reserves............................................               759          4,843
  Other current, net..................................................................               699            505
                                                                                         -------------------------------
                                                                                                   4,783         10,845
Deferred tax liability - noncurrent:
  Depreciation........................................................................           (3,349)          (474)
  Other noncurrent, net...............................................................               143            327
                                                                                         -------------------------------
                                                                                                 (3,206)          (147)
                                                                                         -------------------------------
Net deferred tax assets...............................................................      $      1,577   $     10,698
                                                                                         -------------------------------
</TABLE>

At December 31, 1996 and December 31, 1995 no valuation  allowance  was recorded
to offset deferred tax assets.

It is management's  expectation that the deferred tax assets will be recoverable
through the  generation  of future  taxable  income from  ordinary and recurring
operations.  However, if future taxable income is not generated, the majority of
the deferred tax assets would be recoverable by a carryback refund of taxes paid
in the current or prior years.  It is more likely than not that the remainder of
the deferred tax assets will be realized.

4.       STOCKHOLDERS' EQUITY

Stock option  transactions  for the Company's 1988 Incentive  Stock Plan and the
Company's  Non-Employee  Directors Stock Plan during fiscal years 1994, 1995 and
1996 were as follows:

<TABLE>
<CAPTION>

                                                                NUMBER OF SHARES     WEIGHTED AVERAGE         OPTION PRICE
                                                                                      EXERCISE PRICE        RANGE PER SHARE
                                                                ------------------   -----------------   -----------------------

<S>                                                                    <C>                  <C>           <C>        <C>      
        Options outstanding at December 31, 1993                        1,794,374                          $0.16-    $35.75
             Granted                                                      780,800                         $20.00-    $45.25
             Terminated                                                   202,730                          $0.16-    $35.75
             Exercised                                                    435,531                          $0.16-    $27.75
                                                                ------------------
         Options outstanding at December 31, 1994                       1,936,913           $12.57         $0.16-    $45.25
             Granted                                                    1,070,125           $28.53        $20.75-    $39.50
             Terminated                                                   489,730           $28.23         $2.37-    $44.875
             Exercised                                                    435,875            $4.52         $0.64-    $31.00
                                                                ------------------
         Options outstanding at December 31, 1995                       2,081,433           $18.78         $0.16-    $45.25
             Granted                                                    1,577,600           $19.05        $13.00-    $28.375
             Terminated                                                   602,226           $22.77         $2.32-    $45.25
             Exercised                                                    190,800            $5.25         $0.64-    $27.75
                                                                ------------------
         Options outstanding at December 31, 1996                       2,866,007           $18.99         $0.16-    $45.25

</TABLE>



<PAGE>


Price ranges of outstanding and exercisable options as of December 31, 1996 were
as follows:
<TABLE>
<CAPTION>

                                                      OPTIONS OUTSTANDING                            OPTIONS EXERCISABLE
                                      ----------------------------------------------------    -----------------------------------
                                                           WEIGHTED          WEIGHTED                               WEIGHTED
                                         NUMBER OF          AVERAGE          AVERAGE             NUMBER OF          AVERAGE
          RANGE OF EXERCISE PRICES        OPTIONS         CONTRACTUAL     EXERCISE PRICE          OPTIONS        EXERCISE PRICE
                                                             LIFE
          --------------------------- ----------------- ---------------- -----------------    ----------------- -----------------

<S>            <C>        <C>             <C>                  <C>             <C>                  <C>               <C>  
                $0.16-    $14.19            676,197            6 yrs            $6.64               415,702            $3.10
               $17.25-    $30.00          2,006,910            9 yrs           $21.36               681,221           $22.11
               $31.00-    $44.88            182,900            8 yrs           $38.61                69,995           $38.30
                                      ----------------- ---------------- -----------------    ----------------- -----------------

                $0.16-    $44.88          2,866,007            8 yrs           $18.99             1,166,918           $16.31

</TABLE>

1988 INCENTIVE STOCK PLAN

The Company's 1988 Incentive  Stock Plan, as amended ("the Plan"),  provides for
reservation, restriction, and issuance of up to 7,218,334 shares of common stock
to employees,  officers,  directors,  and  consultants of the Company.  The Plan
provides for  issuance of common  stock upon the  exercise of stock  options and
stock purchase rights,  which may be granted under the Plan with exercise prices
not less than the fair  market  value of the common  stock on the date of grant.
The  proceeds  received by the Company  upon the  exercise of stock  options and
stock purchase  rights increase the Company's cash and equity  balances.  Shares
issued are  subject to a  repurchase  option in favor of the Company of unvested
shares upon discontinued  employment.  Shares issued generally vest over and are
fully vested four years from the date of grant. At December 31, 1996, there were
1,170,613 shares available for future grants.

NON-EMPLOYEE DIRECTORS STOCK PLAN

On April 27, 1995 the stockholders approved the  Non-Discretionary  Non-Employee
Directors Stock Plan ("the Non-Employee  Directors Stock Plan"),  which provides
for the  issuance  of up to  200,000  shares  of  common  stock to  non-employee
directors  of the Company.  The plan  provides for issuance of common stock upon
the exercise of stock options, which are granted with an exercise price equal to
the fair market  value of the common  stock on the date of grant and vest over 4
years.  The number of options granted to a non-employee  director under the plan
in any year is dependent on his attendance of board and board committee meetings
during the prior year, with the maximum shares subject to options granted in any
one year to any one director  being  10,000.  At December  31, 1996,  there were
158,750 shares available for future grant.

EMPLOYEE STOCK PURCHASE PLAN

An Employee  Stock  Purchase  Plan ("the  Employee  Stock  Purchase  Plan"),  as
amended,  provides for  reservation  and issuance of up to 500,000 shares of the
Company's  common stock.  Eligible  employees may purchase  common stock through
payroll  deductions,  which may not exceed 10% of an employee's base salary. The
purchase price is the lesser of 85% of the fair market value at the commencement
of the  purchase  period or 85% of the fair market  value on the last day of the
purchase  period.  Each purchase period is six months.  During fiscal 1996, 1995
and 1994, 71,584, 54,867 and 39,903 shares of stock,  respectively,  were issued
to employees  under the Employee Stock  Purchase Plan for an aggregate  purchase
price of $1,198 thousand, $915 thousand and $687 thousand. No shares were issued
under the Employee Stock Purchase Plan prior to fiscal 1994.



<PAGE>


FAIR VALUE OF STOCK OPTIONS

Pro forma information regarding net income and earnings per share is required by
FASB Statement No. 123, "Accounting for Stock-based  Compensation," and has been
determined as if the Company had accounted for its employee  stock options using
the  fair  value  method  of that  Statement.  The  fair  value  for each of the
Company's  options  was  estimated  at the date of grant  using a  Black-Scholes
option pricing model with the following  weighted  average  assumptions for 1996
and 1995: a risk-free  interest rate ranging from 5.8% to 6.4% for 1996 and 5.6%
to 6.7% for  1995  based on a  six-month  weighted  average  of  interest  rates
available on zero-coupon  United States  Government issued securities with terms
equal to the expected life of the options;  dividend yields of zero;  volatility
factors of the expected market price of the Company's common stock of .70; and a
weighted average expected life of the options of 1.2 years.

The Black-Scholes option valuation model was developed for use in estimating the
fair value of traded  options which have no vesting  restrictions  and are fully
transferable.  In addition,  option valuation models require the input of highly
subjective  assumptions  including the expected stock price volatility.  Because
the  Company's  employee  stock  options  have   characteristics   significantly
different  from those of traded  options and because  changes in the  subjective
input assumptions can materially affect the fair value estimate, in management's
opinion,  the  existing  models do not  necessarily  provide a  reliable  single
measure of the fair value of its employee stock options.  Additionally,  because
options vest over several years and additional  option grants are expected,  the
effects of the valuation models are not likely to be  representative  of similar
future calculations.

For purposes of pro forma  disclosures,  the estimated fair value of the options
is amortized to expense over the options'  vesting  period.  The  Company's  pro
forma   information   follows  (in  thousands  except  for  earnings  per  share
information):

                                                     1996            1995
                                                -------------- ---------------
   Pro forma net income (loss)                   $ (31,556)      $  13,368

   Pro forma net income (loss) per common share  $   (1.63)        $  0.67


The  weighted  average  fair value of options  granted in the fiscal years ended
December 31, 1996 and 1995 were $10.92 and $15.71, respectively.


5.        CONTINGENCIES

MICROPROCESSOR LITIGATION

Since March 1992, the Company and Intel Corporation  ("Intel") have been engaged
in litigation related to certain of the Company's  microprocessor  products.  On
January 21, 1994, the United States  District Court for the Eastern  District of
Texas,  Sherman  Division  ruled  in  favor  of  the  Company  with  respect  to
microprocessor products which were made and sold to the Company by certain Intel
licensees, SGS-Thomson Microelectronics, Inc. ("SGS") and TI. Intel appealed the
ruling on April 8,  1994.  On  December  8, 1994,  the Court of Appeals  for the
Federal  Circuit  affirmed the  district  court's  January 21, 1994  ruling.  On
December 23, 1994, Intel filed a petition for  reconsideration  of that decision
and a motion for rehearing en banc with the Court of Appeals.  In February 1995,
the Court of  Appeals  for the  Federal  Circuit  denied  Intel's  motion  for a
rehearing en banc.



<PAGE>


On January 24, 1994, the United States  District Court for the Eastern  District
of Texas,  Sherman  Division began to try the Company's  allegations  that Intel
violated  certain  antitrust  statutes  and  misused  its  patents  and  Intel's
allegations that the Company infringed certain Intel patents.  Effective January
31,  1994,  the Company and Intel  entered  into a  settlement  agreement  which
provides  for the  dismissal  of the claims  which were to be  litigated  in the
January 24, 1994 trial. Pursuant to the settlement agreement,  Intel granted the
Company a fully  paid-up,  irrevocable  license  under claims 2 and 6 of Intel's
United States patent 4,972,338 ("the Crawford  patent") and certain other system
patents for products sold after January 31, 1994. Intel also  acknowledged  that
products  purchased by the Company from certain  licensees  exhaust Intel device
claims including claim 1 of the Crawford patent.  Further, Intel paid $5 million
to the  Company.  The  Company  and Intel  agreed  that if the  January 21, 1994
ruling,  insofar as it relates to SGS, was reversed after final  adjudication or
was remanded for additional findings and subsequently reversed so that Cyrix did
not have a right to use claims 2 and 6 of the  Crawford  patent based on the SGS
license,  Cyrix  would  return  the $5 million  plus  interest  to Intel.  Cyrix
deferred  recognition as income of the $5 million settlement payment received in
February  1994 until final  resolution  of this issue.  Intel  agreed to pay the
Company an  additional  $5 million if the January 21, 1994 SGS ruling was upheld
after final  adjudication.  As noted previously,  in December 1994, the Court of
Appeals for the Federal  Circuit  upheld the district  court's  January 21, 1994
ruling and later denied  Intel's motion for a rehearing en banc. The time period
during which Intel had the right to appeal the case to the United States Supreme
Court expired  without such appeal,  and the Company  received the additional $5
million settlement payment in the second quarter of 1995. Therefore, the Company
recognized settlement income of $10 million in the second quarter of 1995.

As part of the settlement agreement, the Company and Intel agreed to litigate in
the United  States  District  Court for the Eastern  District of Texas,  Sherman
Division,  whether products manufactured by SGS affiliates under the "have-made"
provision in the  SGS-Intel  license,  sold to SGS, and then sold to the Company
fall within the scope of the SGS license.  On December  30,  1994,  the district
court  ruled that SGS was  licensed  by Intel to  exercise  have-made  rights by
having  third  parties   (including  SGS   affiliates)   manufacture   and  sell
microprocessors  to Cyrix free of claims of patent  infringement by Intel. Intel
appealed the ruling on March 7, 1995. On March 5, 1996, the Court of Appeals for
the Federal Circuit affirmed the district court's December 1994 ruling. On March
18, 1996 Intel filed a petition for a rehearing of that  decision with the Court
of Appeals.  In April 1996, the Court of Appeals  denied Intel's  petition for a
rehearing.  The time period  during which Intel had the right to appeal the case
to the United States Supreme Court expired without such appeal,  and the Company
received  a $1  million  settlement  payment on July 30,  1996.  Therefore,  the
Company recognized settlement income of $1 million in the third quarter of 1996.

Similarly,  the  Company  and Intel  agreed to  litigate  in the  United  States
District Court for the Eastern District of Texas, Sherman Division,  whether IBM
is licensed  under claim 1 of the Crawford  patent when  manufacturing  products
that are primarily designed by the Company. On April 5, 1994, the district court
granted IBM's motion to intervene,  and on December 8, 1994,  the district court
ruled that IBM was licensed by Intel to act as a semiconductor foundry for Cyrix
free of claims of patent  infringement  by Intel.  Intel  appealed the ruling on
March 7, 1995.  On March 5, 1996,  the Court of Appeals for the Federal  Circuit
affirmed the district court's December 1994 ruling. The time period during which
Intel  had the right to  appeal  the case to the  United  States  Supreme  Court
expired without such appeal,  and the Company  received a $1 million  settlement
payment on July 30, 1996. Therefore, the Company recognized settlement income of
$1 million in the third quarter of 1996.

STOCKHOLDERS CLASS ACTION

In December 1994,  eleven class actions were filed in the United States District
Court for the Northern District of Texas, purportedly on behalf of purchasers of
the  Company's  common  stock,  alleging  that the  Company  and  various of its
officers and directors violated sections of the Securities  Exchange Act of 1934
and Rule 10b-5

<PAGE>


promulgated  thereunder,  by issuing false and misleading  statements concerning
the   introduction   and   production  of  the  Company's   Cx486DX2  40/80  MHz
microprocessors.  The complaints also allege that the conduct of the Company and
certain  of  its  officers  and  directors   constituted   fraud  and  negligent
misrepresentation and that certain of such officers and directors sold shares of
the  Company's  common  stock  while  in  possession  of  material   undisclosed
information.

In June 1995,  all of the actions were  consolidated  into one  complaint in the
federal  district  court in Dallas,  Texas.  The  Company  moved to dismiss  the
consolidated  amended  class action  complaint in July 1995. On August 20, 1996,
the United  States  District  Court for the Northern  District of Texas,  Dallas
Division,  entered an order  dismissing  plaintiffs'  complaint  for  failure to
properly  plead a cause of action.  The court,  however,  dismissed  plaintiffs'
complaint  "without  prejudice," and permitted  plaintiffs  leave to amend their
complaint by September 10, 1996 to cure its deficiencies.  No such amendment was
filed and on September 26, 1996,  the U.S.  District  Court in Dallas  entered a
judgment  dismissing the securities class action lawsuit against the Company and
various of its officers.

GATEWAY TRADEMARK LITIGATION

By letter dated May 17, 1996, Gateway 2000, Inc.  ("Gateway") alleged that Cyrix
"is  infringing  valuable  trademark  and trade dress rights of Gateway 2000" in
advertisements  promoting Cyrix's 6x86(TM)  personal  computer systems.  Gateway
asserts that Cyrix's  "reproduction,  copy and colorable  imitation of Gateway's
registered  trademark and trade dress in  connection  with  advertising  Cyrix's
goods is likely to cause  confusion,  mistake or deceive  the public  within the
meaning  of the  Lanham  Act." The  letter  threatens  Cyrix  with  actions  for
trademark  infringement,  false advertising and trade disparagement,  and unfair
competition.  Finally,  the letter suggests that Gateway might assert its rights
in  other  nations  if  the   advertisements   have  been   distributed  on  the
international market.

On May 24,  1996,  Cyrix  filed in the  United  States  District  Court  for the
Northern District of Texas, Dallas Division,  CYRIX CORPORATION V. GATEWAY 2000,
INC.,  seeking a  declaratory  judgment:  (i) that none of  Cyrix's  actions  or
omissions  relating  to its  advertisements  of the  Cyrix  6x86  computers  has
violated any provisions of the Lanham Act; (ii) that none of Cyrix's  actions or
omissions  relating  to its  advertisements  of the  Cyrix  6x86  computers  has
violated  the  common law of the State of Texas or any  provisions  of the Texas
Trademark Act, Texas Business & Commerce Code Sections 16.01 et seq.,  including
but not limited to those provisions  relating to trademark  infringement,  trade
dress  infringement and dilution;  (iii) that Cyrix has not engaged in any false
or  unlawful  advertising;  (iv)  that  Cyrix  has  not  engaged  in any  unfair
competition or trade  disparagement;  (v) that Cyrix's  conduct  relating to its
advertisements  of the Cyrix  6x86  computers  is speech  protected  by the U.S.
Constitution  and the Texas  Constitution  of 1876;  (vi)  that none of  Cyrix's
actions or omissions  relating to its advertisements of the Cyrix 6x86 computers
has violated any state or federal laws;  (vii) that Cyrix's acts are  privileged
and/or  excused by: (a) the defense of fair use;  (b) the defense of opinion and
parody;  and (c) the  defense  of truth;  and  (viii)  that Cyrix is free to use
images of Holstein cows to signify Gateway (even in an unflattering  fashion) in
advertising  of personal  computers  that is not factually  false,  deceptive or
misleading.

Subsequently,  in late June and early July Gateway  filed actions in state court
in New York, New Jersey,  Connecticut,  Massachusetts and California.  The state
court  cases  are   essentially   the  same  and  allege  that  Cyrix   violated
anti-dilution laws, deceptive trade practices laws, trademark infringement laws,
and unfair  competition laws. Cyrix believes that Gateway also made claims under
the Federal  Trademark Act and certain state law claims preempted by the Federal
Copyright law. Gateway requested,  among other relief, preliminary and permanent
injunctions,  as well as actual and punitive damages. In each of the five cases,
Gateway sought actual damages  (typically  asserting such amount is at least one
million dollars) and punitive damages.



<PAGE>


On December 20, 1996,  the Company and Gateway  agreed to a settlement of all of
the  claims  in the state and  federal  court  actions  and the  dismissal  with
prejudice of those actions. The settlement,  the terms of which are confidential
by agreement  between the  parties,  had no material  impact upon the  Company's
results of operations in the current or future years.

OTHER MATTERS

The Company is a defendant in various  other  actions  which arose in the normal
course of business.  In the opinion of management,  the ultimate  disposition of
these other  matters will not have a material  adverse  effect on the  financial
condition or overall trends in the results of operations of the Company.

6.        FOREIGN OPERATIONS

The Company operates in one business segment,  advanced  processors.  Operations
outside the United States include both product testing and sales. Sales entities
are  located  in the United  Kingdom,  Japan,  Singapore,  Taiwan and Hong Kong.
Generally,  revenues  between  geographic  areas are based on prevailing  market
prices or an  approximation  thereof.  Identifiable  assets are those associated
with  geographic  area  operations,  excluding  unallocated  cash and short-term
investments and internal company  investments and receivables.  A summary of the
Company's operations by geographic area is presented below:
<TABLE>
<CAPTION>

  (In thousands)                                                                 ASIA AND       INTERCOMPANY
                                            UNITED STATES        EUROPE          PACIFIC        ELIMINATIONS       CONSOLIDATED
                                            ---------------   --------------   -------------    --------------    ---------------
  FISCAL YEAR ENDED DECEMBER  31, 1996
<S>                                           <C>             <C>               <C>             <C>                 <C>         
  Sales to unaffiliated customers.......      $    183,825    $          --     $        --     $          --       $    183,825
  Inter-area sales to affiliates........            24,761            3,782           4,225          (32,768)                 --
  Income (loss) from operations.........          (33,160)               96            (37)                --           (33,101)
  Identifiable assets...................           296,779            1,793             770                --            299,342

  FISCAL YEAR ENDED DECEMBER  31, 1995
  Sales to unaffiliated customers.......      $    228,012    $          --     $        --     $          --       $    228,012
  Inter-area sales to affiliates........            15,160            4,196           7,493          (26,849)                 --
  Income from operations................            15,795              446             955               539             17,735
  Identifiable assets...................           264,378            1,361           3,046                --            268,785

  FISCAL YEAR ENDED DECEMBER  31, 1994
  Sales to unaffiliated customers.......      $    169,420     $     76,678     $        --     $          --       $    246,098
  Inter-area sales to affiliates........            71,208               --           5,873          (77,081)                 --
  Income from operations................            52,799            2,035             758               172             55,764
  Identifiable assets...................           173,770           17,718           5,185             (539)            196,134
</TABLE>

Gross export sales to  unaffiliated  customers in Asia and the Pacific region by
domestic  operations in fiscal years 1996, 1995 and 1994 were $39 million,  $100
million  and  $53.8  million,   respectively.   Also,   gross  export  sales  to
unaffiliated customers in Europe by domestic operations in fiscal years 1996 and
1995 were $48.6 million and $44.1 million, respectively.



<PAGE>


7.        DISCLOSURES ABOUT FAIR VALUE OF FINANCIAL INSTRUMENTS

The following  methods and  assumptions  were used to estimate the fair value of
each class of financial instruments for which it is practicable to estimate that
value:

CASH AND CASH EQUIVALENTS.  The carrying amount approximates fair value.

INVESTMENTS.  The carrying amount  approximates  fair value because of the short
maturity  and  nature  of  these  instruments.   The  Company  places  its  cash
investments  only in high credit quality  financial  instruments  and limits the
amount  invested in any one  institution or in any one type of  instrument.  The
Company has not experienced any significant losses on its investments.

ACCOUNTS  RECEIVABLE.  The carrying amount, which is net of valuation allowances
for credit losses and returns from and price allowances to be granted to certain
OEM customers, approximates fair value.

ACCOUNTS  PAYABLE.  The carrying amount  approximates  fair value because of the
short-term nature of these instruments.

LONG-TERM DEBT AND CAPITALIZED LEASE OBLIGATIONS,  INCLUDING CURRENT MATURITIES.
The  carrying  value  of the  Company's  long-term  debt and  capitalized  lease
obligations  is $12.7  million and $82.4  million at December 31, 1996 and 1995,
respectively.  The fair  value of the  outstanding  debt and  capitalized  lease
obligations  does not differ  materially  from the carrying  values based upon a
comparison of the weighted  average  interest rates of such borrowings  compared
with the Company's currently available incremental borrowing rate.

5.5%  SUBORDINATED  NOTES DUE JUNE 1, 2001. The fair value of the $126.5 million
of  subordinated  convertible  notes is  approximately  $89.2 million based upon
reported trading activity for January 1, 1997.

8.       RISKS AND UNCERTAINTIES

Cyrix currently obtains all of the wafers it uses in production of the Company's
products from IBM  Microelectronics.  The purchase  agreement with IBM continues
through  December 1999.  Cyrix also has a purchase  agreement  with  SGS-Thomson
Microelectronics, Inc. which continues through December 1997. However, Cyrix did
not purchase  wafers  under the SGS  agreement  during 1996.  Due to the complex
processes involved in fabrication of the wafers, it is possible that the Company
would have  difficulty in locating other supply  sources  capable of fabricating
its wafers if it could no longer purchase its wafers from IBM. Any loss of wafer
capacity  or delay in  obtaining  an  alternative  source of wafers  due to such
problems would have a severe impact on the Company's results of operations.

 From time to time,  Cyrix has been notified  that it may infringe  intellectual
property rights of others.  If any such claims are asserted against the Company,
the Company may seek to obtain a license  under the  third-party's  intellectual
property rights. The Company could decide,  however,  to resort to litigation to
challenge such claims.  Such  challenges  could be extremely  expensive and time
consuming  and  could  materially   adversely  affect  the  Company's  business,
financial  condition and results of  operations.  No assurance can be given that
all necessary  licenses can be obtained on reasonable  terms nor that litigation
can be avoided. The Company's inability to obtain licenses on favorable terms or
avoid  litigation  related to such  licenses  could have a severe  impact on the
future operations of the Company.



<PAGE>



                    SUPPLEMENTARY FINANCIAL DATA (UNAUDITED)

The following  summarizes the unaudited operating results of the Company for the
fiscal years ended December 31, 1996 and 1995.

<TABLE>
<CAPTION>
(In thousands)                                                          THREE MONTHS ENDED
                                             --------------------------------------------------------------------------
1996                                            MARCH 31            JUNE 30         SEPTEMBER 30         DECEMBER 31
                                             ---------------    ----------------   ----------------    ----------------

<S>                                            <C>                 <C>                <C>                 <C>         
Net revenues..........................         $     51,606        $     27,055       $     33,106        $     72,058
Gross margin .........................               25,327                 568             11,295              15,182
Income (loss) from operations.........                4,614            (22,198)           (10,648)             (4,869)
Income (loss) before provision
(benefit) for income taxes and
    extraordinary item................                2,964            (23,999)           (10,524)             (6,940)
Net income (loss) ....................                1,956            (16,422)            (6,946)             (4,450)

Net income (loss) per common and 
    common equivalent share:
Net income (loss) before extraordinary
    item..............................                  .10               (.79)              (.36)               (.23)
Extraordinary item ...................                   --               (.06)                 --                  --
                                             ---------------    ----------------   ----------------    ----------------

Net income (loss).....................       $          .10        $      (.85)        $     (.36)      $        (.23)
</TABLE>
                                                                          
<TABLE>
<CAPTION>

                                                                        THREE MONTHS ENDED
                                             --------------------------------------------------------------------------
1995                                            MARCH 31            JUNE 30         SEPTEMBER 30        DECEMBER 31
                                             ---------------    ----------------   ----------------   -----------------

<S>                                            <C>                 <C>                <C>                 <C>         
Net revenues.........................          $     85,144        $     50,238       $     53,572        $     39,058
Gross margin ........................                45,077              19,325             18,590               2,957
Income (loss) from operations........                27,416               2,296              2,264            (14,241)
Income before provision (benefit) for
    income taxes.....................                27,111              11,444                848            (15,628)
Net income (loss)....................                17,485               7,494                557             (9,924)
Net income (loss) per common and common
    equivalent share.................          $        .88        $        .38       $        .03        $      (.49)

</TABLE>

The  Company's  quarterly  operating  results are subject to  fluctuations  as a
result of a number of factors, including general economic conditions, conditions
in the  semiconductor  or personal  computer  industries,  decreases  in average
selling  prices  over  the  life  of any  product,  the  timing  of new  product
introductions  and  related  expenses,  changes  in  demand  for  the  Company's
products,  changes in  product  mix,  manufacturing  capacity  available  to the
Company,  manufacturing  yields,  and the  commencement  of,  developments in or
outcome of litigation.

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

None.



<PAGE>


                                    PART III

ITEM 10.  DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

The  information   set  forth  under  the  headings   "Election  of  Directors,"
"Management of the Company" and  "Compliance  with Section 16(a) of the Exchange
Act" contained in the Company's  definitive Proxy Statement to be filed pursuant
to  Regulation  14A of the  Securities  Exchange Act of 1934,  as amended  ("the
Exchange  Act"),  in  connection  with the  Company's  1997  Annual  Meeting  of
Stockholders is incorporated herein by reference.

ITEM 11.  EXECUTIVE COMPENSATION

The information set forth under the heading "Executive  Compensation"  contained
in the Company's  definitive  Proxy Statement to be filed pursuant to Regulation
14A of the Exchange Act in connection  with the Company's 1997 Annual Meeting of
Stockholders is incorporated herein by reference.

ITEM 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The  information set forth under the headings  "Security  Ownership of Directors
and Executive Officers" and "Principal  Stockholders" contained in the Company's
definitive  Proxy  Statement  to be  filed  pursuant  to  Regulation  14A of the
Exchange  Act  in  connection   with  the  Company's   1997  Annual  Meeting  of
Stockholders is incorporated herein by reference.

ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

The information set forth under the headings "Election of Directors," "Executive
Compensation"  and "Other Matters"  contained in the Company's  definitive Proxy
Statement  to be  filed  pursuant  to  Regulation  14A  of the  Exchange  Act in
connection   with  the  Company's  1997  Annual  Meeting  of   Stockholders   is
incorporated herein by reference.




<PAGE>


                                     PART IV

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

<TABLE>
<CAPTION>

     EXHIBIT
     NUMBER                                                        DESCRIPTION
   -----------       ---------------------------------------------------------------------------------------------------------

<S>                  <C>                                                        
      (a) (1)      - The financial statements filed as part of this Report at Item 8 are listed in the Index to Financial
                     Statements, Supplementary Financial  Data  and  Financial   Statement Schedules on page 18 of this Report.
      (a) (2)      - The  financial  statement  schedule  filed as part of this  Report at Item 8 are  listed in the Index to
                     Financial Statements,  Supplementary Financial Data and Financial Statement Schedules on page 18 of this
                     Report.
      (a) (3)      - The following documents are filed or incorporated by reference as exhibits to this Report:
          3.1      - Restated Certificate of Incorporation filed May 15, 1996. (1)
          3.2      - Bylaws of the  Company as adopted by the Board of  Directors  of the  Company as of  February 12,  1988,
                     together with  Certificate of Amendment of Bylaws of the Company as adopted by the Board of Directors as
                     of  March 16,  1988 and  Certificate  of  Amendment  of Bylaws of the Company as adopted by the Board of
                     Directors as of April 15, 1993. (2)
          3.3      - Certificate  of Amendment of Bylaws of the  Registrant as adopted by the Board of Directors as of August
                     26, 1993. (3)
          3.4      - Certificate  of Amendment of Bylaws of the  Registrant  as adopted by the Board of Directors as of March
                     10, 1994. (4)
          3.5      - Certificate  of Amendment of Bylaws of the  Registrant  as adopted by the Board of Directors as of March
                     24, 1995. (1)
          3.6      - Certificate  of Amendment of Bylaws of the Registrant as adopted by the Board of Directors as of January
                     26, 1996. (1)
          4.1      - Form of Certificate for the Common Stock. (2)
          4.2      - Indenture,  dated as of May 28,  1996  between the  Registrant  and Bank of  Montreal  Trust  Company as
                     Trustee. (1)
          4.3      - Registration Rights Agreement,  dated as of May 28, 1996 between the Registrant and Goldman, Sachs & Co.
                     (1)
         10.1      - License  and   Production   Agreement   entered  into  as  of  January  11,  1994  between   SGS-Thomson
                     Microelectronics,  Inc. and Cyrix Corporation. (PORTIONS HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE
                     COMMISSION IN RELIANCE ON RULE 24B-2 AND THE REGISTRANT'S REQUEST FOR CONFIDENTIAL TREATMENT). (5)
         10.2      - Form of Proprietary Information and Non-competition Agreement (all employees). (2)
         10.3      - Cyrix Corporation 1988 Incentive Stock Plan, as amended and restated as of January 26, 1996. (6)
         10.4      - Cyrix Corporation Profit Sharing Plan. (2)
         10.5      - Cyrix Corporation Executive Cash Compensation Plan. (2)
         10.6      - Cyrix Corporation Employee Stock Purchase Plan, as amended and restated as of January 26, 1995. (7)
         10.7      - Real Estate Note dated September 3,  1996, in the principal amount of $5,500,000 by Cyrix Corporation in
                     favor of Safeco Life Insurance Company.
         10.8      - Promissory Note and Letter Loan Agreement dated November 5, 1993, in the principal  amount of $3,000,000
                     by Cyrix Corporation in favor of Bank One, Texas, National Association. (5)
         10.9      - Settlement  Agreement  effective  January 31, 1994,  between Cyrix  Corporation  and Intel  Corporation.
                     (PORTIONS HAVE BEEN OMITTED AND FILED  SEPARATELY  WITH THE COMMISSION IN RELIANCE ON RULE 24B-2 AND THE
                     REGISTRANT'S REQUEST FOR CONFIDENTIAL TREATMENT). (5)
        10.10      - Agreement  for  Purchase of Products  entered  into as of April  8,  1994  between  IBM  Microelectronics
                     and  Cyrix Corporation.   (PORTIONS   HAVE  BEEN   OMITTED  AND  FILED SEPARATELY  WITH THE  COMMISSION  
                     IN RELIANCE ON RULE 24B-2 AND THE REGISTRANT'S  REQUEST FOR CONFIDENTIAL  TREATMENT).(8)

</TABLE>

<PAGE>


<TABLE>
<CAPTION>

   EXHIBIT
     NUMBER                                                        DESCRIPTION
   -----------       ---------------------------------------------------------------------------------------------------------

<S>     <C>                                                                                                              
        10.11      - Amended and Restated  Agreement  for  Purchase of Products  entered into as of April 8, 1994 between IBM
                     Microelectronics  and Cyrix  Corporation.  (PORTIONS  HAVE BEEN  OMITTED AND FILED  SEPARATELY  WITH THE
                     COMMISSION IN RELIANCE ON  RULE 24B-2 AND THE REGISTRANT'S REQUEST FOR CONFIDENTIAL TREATMENT). (9)
        10.12      - Amendment  dated September 30, 1994 to License and Production  Agreement  entered into as of January 11,
                     1994 between SGS-Thomson Microelectronics,  Inc. and Cyrix Corporation.  (PORTIONS HAVE BEEN OMITTED AND
                     FILED  SEPARATELY  WITH THE  COMMISSION  IN  RELIANCE  ON RULE 24B-2 AND THE  REGISTRANT'S  REQUEST  FOR
                     CONFIDENTIAL TREATMENT). (10)
        10.13      - Secured  Revolving  Credit  Agreement by and among Cyrix  Corporation,  First  Interstate Bank of Texas,
                     N.A.,  National Bank of Canada,  and The Boatmen's  National Bank of St. Louis dated September 23, 1994.
                     (PORTIONS HAVE BEEN OMITTED AND FILED  SEPARATELY  WITH THE COMMISSION IN RELIANCE ON RULE 24B-2 AND THE
                     REGISTRANT'S REQUEST FOR CONFIDENTIAL TREATMENT). (10)
        10.14      - Cyrix Corporation Non-Discretionary Non-Employee Directors Stock Plan (11)
        10.15      - Agreement  for  Purchase  of  Products   (Foundry)   entered  into  as  of  May  17,  1996  between  IBM
                     Microelectronics and Cyrix Corporation. (12)
           11      - Earnings Per Common and Common Equivalent Share.
           21      - Subsidiaries.(13)
           23      - Consent of Ernst & Young LLP.
   ------------------------------------------------------




          (1)      - Filed as an  Exhibit  to the  Company's  Registration  Statement  on Form S-3 (File No.  333-10669)  and
                     incorporated herein by reference.
          (2)      - Filed as an  Exhibit  to the  Company's  Registration  Statement  on Form S-1  (File No.  33-63144)  and
                     incorporated herein by reference.
          (3)      - Filed as an  Exhibit  to the  Company's  Registration  Statement  on Form S-8  (File No.  33-68004)  and
                     incorporated herein by reference
          (4)      - Filed as an  Exhibit  to the  Company's  Registration  Statement  on Form S-8  (File No.  33-87064)  and
                     incorporated herein by reference.
          (5)      - Filed  as an  Exhibit  to the  Company's  Form  10-K for the  fiscal  year  ended  January  2,  1994 and
                     incorporated herein by reference.
          (6)      - Filed as an  Exhibit  to the  Company's  Registration  Statement  on Form S-8 (File No.  333-18579)  and
                     incorporated herein by reference.
          (7)      - Filed as an  Exhibit  to the  Company's  Registration  Statement  on Form S-8  (File No.  33-99492)  and
                     incorporated herein by reference.
          (8)      - Filed as an  Exhibit  to the  Company's  Form  10-Q for the  quarterly  period  ended  April 3, 1994 and
                     incorporated herein by reference.
          (9)      - Filed as an  Exhibit  to the  Company's  Form  10-Q for the  quarterly  period  ended  July 3,  1994 and
                     incorporated herein by reference.
         (10)      - Filed as an  Exhibit to the  Company's  Form 10-Q for the  quarterly  period  ended  October 2, 1994 and
                     incorporated herein by reference.
         (11)      - Filed as an  Exhibit  to the  Company's  Registration  Statement  on Form S-8  (File No.  33-99488)  and
                     incorporated herein by reference.
         (12)      - Filed as an Exhibit to the Company's Form 10-Q for the quarterly period ended June 30, 1996.
         (13)      - Filed as an Exhibit to the Company's Form 10-K/A  Amendment No. 1 for the fiscal year ended December 31,
                     1995.

</TABLE>


<PAGE>


                                                           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.

                                                   CYRIX CORPORATION


                                  By:/s/           JAMES W. SWENT, III
                                                 -----------------------      
                                                   James W. Swent, III
                                                 Office of the President
                                              (principal executive officer)

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 in
the capacities and on the dates indicated.
<TABLE>
<CAPTION>

                       SIGNATURE                                          TITLE                              DATE


<S>                                                         <C>                                        <C> 
/s/          JAMES W. SWENT, III                                 Office of the President               March 10, 1997
   ----------------------------------------------                                              
            (James W. Swent, III)                             (principal executive officer)

                                                            Senior Vice President of Finance
/s/          JAMES W. SWENT, III                                   and Administration                  March 10, 1997
   ----------------------------------------------                                                    
            (James W. Swent, III)                           (principal financial officer and
                                                              principal accounting officer)

/s/            HARVEY B. CASH                                     Chairman of the Board                March 10, 1997
   ----------------------------------------------                                                    
              (Harvey B. Cash)

/s/              L.J. SEVIN                                             Director                       March 10, 1997
   ----------------------------------------------                                                    
                (L.J. Sevin)

/s/           GERALD D. ROGERS                                          Director                       March 10, 1997
   ----------------------------------------------                                                    
             (Gerald D. Rogers)

/s/            GARY A. STIMAC                                           Director                       March 10, 1997
   ----------------------------------------------                                                    
              (Gary A. Stimac)

</TABLE>

<PAGE>

<TABLE>
<CAPTION>

---------------------------------------------------------------------------------------------------------------------------
                                            CYRIX CORPORATION AND SUBSIDIARIES
---------------------------------------------------------------------------------------------------------------------------
                                      SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS

                                                      (IN THOUSANDS)

                                                                             ADDITIONS
                                                         BALANCE AT         CHARGED TO
                                                        BEGINNING OF         COSTS AND                           BALANCE AT END
DESCRIPTION                                              FISCAL YEAR         EXPENSES           DEDUCTIONS       OF FISCAL YEAR
----------------------------------------------------   ----------------   ----------------    ---------------    ----------------

Allowance  for  losses  from  uncollectible  accounts  (deducted  from  accounts
receivable in balance sheet):

<S>                                                       <C>               <C>                <C>                 <C>         
     Fiscal year ended December 31, 1994                  $        585      $         881      $         312       $       1,154
                                                       ----------------   ----------------    ---------------    ----------------

     Fiscal year ended December 31, 1995                  $      1,154      $          99      $          98       $       1,155
                                                       ----------------   ----------------    ---------------    ----------------

     Fiscal year ended December 31, 1996                  $      1,155      $       3,661      $       3,155       $       1,661
                                                       ----------------   ----------------    ---------------    ----------------

Allowance  for  returns  from and price  allowances  to be granted  to  original
equipment  manufacturer  customers (deducted from accounts receivable in balance
sheet):

     Fiscal year ended December 31, 1994                  $      1,494       $      8,118       $      7,209        $      2,403
                                                       ----------------   ----------------    ---------------    ----------------

     Fiscal year ended December 31, 1995                  $      2,403       $      9,263       $      8,321        $      3,345
                                                       ----------------   ----------------    ---------------    ----------------

     Fiscal year ended December 31, 1996                  $      3,345       $     12,428       $     13,198        $      2,575
                                                       ----------------   ----------------    ---------------    ----------------

</TABLE>



<PAGE>