<PAGE>   1
================================================================================


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

                                    FORM 10-Q


           [X]   QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
                 OF THE SECURITIES EXCHANGE ACT OF 1934

                  FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2000

                                       OR

           [ ]   TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
                 OF THE SECURITIES EXCHANGE ACT OF 1934


                        COMMISSION FILE NUMBER: 000-24923



                             CONEXANT SYSTEMS, INC.
             (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)



             DELAWARE                                    25-1799439
    (State of incorporation)                (I.R.S. Employer Identification No.)


                               4311 JAMBOREE ROAD
                      NEWPORT BEACH, CALIFORNIA 92660-3095
               (Address of principal executive offices) (Zip code)


                                 (949) 483-4600
              (Registrant's telephone number, including area code)


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 [ ]


Registrant's number of shares of common stock outstanding as of July 28, 2000
was 227,829,214.

================================================================================

<PAGE>   2

                             CONEXANT SYSTEMS, INC.

                                      INDEX

<TABLE>
<CAPTION>
                                                                                PAGE
                                                                                ----
<S>                                                                             <C>
PART I. FINANCIAL INFORMATION

Item 1.   Financial Statements (unaudited):

          Consolidated Condensed Balance Sheets - June 30, 2000 and
            September 30, 1999                                                    3

          Consolidated Condensed Statements of Operations - Three Months
            and Nine Months Ended June 30, 2000 and 1999                          4

          Consolidated Condensed Statements of Cash Flows - Nine Months
             Ended June 30, 2000 and 1999                                         5

          Notes to Consolidated Condensed Financial Statements                    6

Item 2.   Management's Discussion and Analysis of Financial Condition
            and Results of Operations                                            13

Item 3.   Quantitative and Qualitative Disclosures About Market Risk             20


PART II. OTHER INFORMATION

Item 1.   Legal Proceedings                                                      21

Item 2.   Changes in Securities                                                  22

Item 6.   Exhibits and Reports on Form 8-K                                       23

          Signatures                                                             24
</TABLE>



                                       2
<PAGE>   3
PART I.  FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS


                             CONEXANT SYSTEMS, INC.
                      CONSOLIDATED CONDENSED BALANCE SHEETS
               (unaudited, in thousands, except per share amounts)


<TABLE>
<CAPTION>
                                                                   June 30,        September 30,
                                                                     2000              1999
                                                                  -----------       -----------
<S>                                                               <C>              <C>
                             ASSETS
Current assets:
  Cash and cash equivalents                                       $   863,290       $   398,516
  Receivables, net of allowances of $6,856 and $9,658
     at June 30, 2000 and September 30, 1999, respectively            339,243           238,940
  Inventories, net                                                    299,187           224,477
  Deferred income taxes                                               121,988            81,860
  Other current assets                                                 83,943            35,381
                                                                  -----------       -----------
          Total current assets                                      1,707,651           979,174

Marketable securities                                                 154,733                --
Property, plant and equipment, net                                    809,490           723,013
Goodwill and intangible assets, net                                 1,456,813            47,824
Other assets                                                          210,583            91,939
                                                                  -----------       -----------
          Total assets                                            $ 4,339,270       $ 1,841,950
                                                                  ===========       ===========

              LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
  Accounts payable                                                $   195,998       $   265,151
  Deferred revenue                                                     39,364            21,027
  Accrued compensation and benefits                                    81,901            48,530
  Other current liabilities                                            36,961            40,013
                                                                  -----------       -----------
          Total current liabilities                                   354,224           374,721

Convertible subordinated notes                                        999,997           350,000
Other long-term liabilities                                            77,894            82,076
Deferred income taxes                                                  92,153                --
                                                                  -----------       -----------
          Total liabilities                                         1,524,268           806,797
                                                                  -----------       -----------

Commitments and contingencies                                              --                --

Shareholders' equity:
  Preferred and junior preferred stock (no par value, 25,000
     shares authorized)                                                    --                --
  Common stock ($1.00 par value, 1,000,000 shares
     authorized; 226,608 and 196,387 outstanding at
     June 30, 2000 and September 30, 1999, respectively)              226,640           196,387
  Additional paid-in capital                                        2,583,217           769,563
  Retained earnings (deficit)                                         (63,780)           70,052
  Accumulated other comprehensive income                               75,633               149
  Treasury stock, at cost                                              (1,543)               --
  Unearned compensation                                                (5,165)             (998)
                                                                  -----------       -----------
          Total shareholders' equity                                2,815,002         1,035,153
                                                                  -----------       -----------
          Total liabilities and shareholders' equity              $ 4,339,270       $ 1,841,950
                                                                  ===========       ===========
</TABLE>


            See notes to consolidated condensed financial statements.



                                       3
<PAGE>   4

                             CONEXANT SYSTEMS, INC.
                 CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
               (unaudited, in thousands, except per share amounts)

<TABLE>
<CAPTION>
                                                 Three Months Ended               Nine Months Ended
                                                      June 30,                           June 30,
                                           -----------------------------      -----------------------------
                                               2000              1999             2000              1999
                                           -----------       -----------      -----------       -----------
<S>                                        <C>               <C>              <C>               <C>
Net revenues                               $   530,474       $   380,330      $ 1,542,165       $   991,940
Cost of goods sold                             282,185           216,114          829,090           619,545
                                           -----------       -----------      -----------       -----------

Gross margin                                   248,289           164,216          713,075           372,395

Operating expenses:
  Research and development                     106,017            77,927          294,589           217,838
  Selling, general and administrative           71,017            51,780          205,209           164,323
  Amortization of intangibles                   55,861             2,059           83,603             6,186
  Purchased in-process
     research and development                   50,462                --          196,362                --
  Special charges - Rockwell-retained
     assets                                         --                --               --            20,000
  Special charges - other                           --                --               --            17,906
                                           -----------       -----------      -----------       -----------
          Total operating expenses             283,357           131,766          779,763           426,253
                                           -----------       -----------      -----------       -----------

Operating income (loss)                        (35,068)           32,450          (66,688)          (53,858)

Other income, net                                2,082             2,389            3,592             2,263
                                           -----------       -----------      -----------       -----------

Income (loss) before provision                 (32,986)           34,839          (63,096)          (51,595)
  (benefit) for income taxes

Provision (benefit) for income taxes            20,335            10,449           70,736           (26,479)
                                           -----------       -----------      -----------       -----------

Net income (loss)                          $   (53,321)      $    24,390      $  (133,832)      $   (25,116)
                                           ===========       ===========      ===========       ===========

Net income (loss) per share:
  Basic                                    $     (0.24)     $      0.13       $     (0.65)
                                           ===========      ===========       ===========
  Diluted                                  $     (0.24)     $      0.12       $     (0.65)
                                           ===========      ===========       ===========

Number of shares used in per share
computation:
  Basic                                        218,249          197,570           206,735
                                           ===========      ===========       ===========
  Diluted                                      218,249          206,404           206,735
                                           ===========      ===========       ===========
</TABLE>



            See notes to consolidated condensed financial statements.



                                       4
<PAGE>   5
                             CONEXANT SYSTEMS, INC.
                 CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
                            (unaudited, in thousands)


<TABLE>
<CAPTION>
                                                             Nine Months Ended June 30,
                                                             --------------------------
                                                                2000           1999
                                                             ---------       ---------
<S>                                                          <C>             <C>
Cash Flows From Operating Activities:
   Net loss                                                  $(133,832)      $ (25,116)

   Adjustments to reconcile net loss to
    net cash provided by operating activities:
      Depreciation                                             140,861         150,933
      Amortization of intangibles                               83,603           6,186
      Purchased in-process research and development            196,362              --
      Special charges -- Rockwell-retained assets                   --          20,000
      Special charges -- other                                      --          17,906
      Deferred income taxes                                       (259)         11,909
      Other non-cash charges                                     5,681          10,407
      Changes in assets and liabilities, net of
        acquisitions:
         Receivables                                           (95,242)        (15,353)
         Inventories                                           (72,452)         10,658
         Accounts payable                                      (68,458)         24,943
         Accrued expenses and other current liabilities         85,335          (9,024)
         Other                                                      41         (25,502)
                                                             ---------       ---------

    Net cash provided by operating activities                  141,640         177,947
                                                             ---------       ---------

Cash Flows From Investing Activities:
   Capital expenditures                                       (232,050)        (75,431)
   Purchase of marketable securities                            (6,011)             --
   Sale of marketable securities                                 9,103              --
   Acquisitions of businesses, net of cash acquired
     of $23,895                                                    717              --
   Investments in and advances to businesses                  (174,623)             --
                                                             ---------       ---------
    Net cash used in investing activities                     (402,864)        (75,431)
                                                             ---------       ---------

Cash Flows From Financing Activities:
   Issuance of convertible subordinated notes                  631,300         340,375
   Payments of short-term debt                                      --         (14,075)
   Net transfers to Rockwell                                        --         (44,670)
   Proceeds from exercise of stock options                      94,698          13,595
                                                             ---------       ---------

    Net cash provided by financing activities                  725,998         295,225
                                                             ---------       ---------

    Net increase in cash and cash equivalents                  464,774         397,741

Cash and cash equivalents at beginning of period               398,516          14,000
                                                             ---------       ---------

Cash and cash equivalents at end of period                   $ 863,290       $ 411,741
                                                             =========       =========
</TABLE>


            See notes to consolidated condensed financial statements.



                                       5
<PAGE>   6
                             CONEXANT SYSTEMS, INC.
              NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
                                   (UNAUDITED)


1.  BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES

On December 31, 1998, Conexant Systems, Inc. (formerly named Rockwell
Semiconductor Systems, Inc.) (the "Company" or "Conexant"), became an
independent, separately traded, publicly-held company when Rockwell
International Corporation ("Rockwell") spun off its semiconductor systems
business ("Semiconductor Systems") by means of a distribution (the
"Distribution") of all the outstanding shares of common stock of the Company to
the shareholders of Rockwell in a tax-free spin-off. In the Distribution, each
Rockwell shareholder of record on December 11, 1998 received one share of
Conexant common stock, along with an associated preferred share purchase right,
for every two shares of Rockwell common stock (prior to the effect of Conexant's
October 1999 stock split).

The unaudited consolidated condensed financial statements through the date of
the Distribution present the historical financial position, results of
operations, and cash flows of Semiconductor Systems, as it was spun off, and
exclude the assets, liabilities, and results of operations of non-semiconductor
businesses retained by Rockwell. The financial statements prior to the
Distribution are not necessarily indicative of what the financial position,
results of operations, or cash flows would have been had Conexant been an
independent public company during such periods. Financial data included in the
accompanying unaudited consolidated condensed financial statements for periods
subsequent to the Distribution have been prepared on a basis that reflects the
historical assets, liabilities, and operations of the business contributed to
Conexant by Rockwell.

Prior to the Distribution, Rockwell provided certain management services that
were allocated based on sales in proportion to total Rockwell sales. Rockwell
continues to provide certain services to the Company (primarily research and
development activities) under the terms of a transition agreement. Costs for
these services and programs are billed to Conexant based on actual usage and are
included in Conexant's unaudited consolidated condensed statements of
operations. Management believes that the methods of billing these costs are
reasonable and that the costs charged to Conexant are approximately those which
would have been incurred on a stand-alone basis.

In the opinion of management, the accompanying consolidated condensed financial
statements contain all adjustments, consisting of adjustments of a normal
recurring nature, as well as the fiscal 2000 charge for purchased in-process
research and development and the fiscal 1999 special charges (see Note 2),
necessary to present fairly the financial position, results of operations, and
cash flows of Conexant. The results of operations for interim periods are not
necessarily indicative of the results that may be expected for a full year.
These statements should be read in conjunction with the consolidated financial
statements and notes thereto included in the Company's Annual Report on Form
10-K for the fiscal year ended September 30, 1999.

FISCAL PERIODS

For presentation purposes, references made to the periods ended June 30, 1999
relate to the actual fiscal 1999 periods ended July 2, 1999, as previously
reported.

STOCK SPLIT

Common share and per common share amounts for all periods presented have been
restated to reflect the two-for-one stock split (in the form of a dividend)
effected on October 29, 1999 for shareholders of record as of September 24,
1999.

RECLASSIFICATIONS

Certain prior year amounts have been reclassified to conform with the current
period presentation.

RECENT ACCOUNTING STANDARDS

In June 1998, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 133 ("SFAS 133"), "Accounting for Derivative
Instruments and Hedging Activities" which establishes accounting and reporting
standards for derivative instruments, including certain derivative instruments
embedded in other


                                       6
<PAGE>   7
contracts, and for hedging activities. SFAS 133 requires that an entity
recognize all derivatives as either assets or liabilities in the statement of
financial position and measure those instruments at fair value. Derivatives that
are not hedges must be adjusted to fair value through earnings. If the
derivative is a hedge, depending on the nature of the hedge, changes in fair
value of derivatives will either offset against the change in fair value of the
hedged assets, liabilities, or firm commitments through earnings, or be
recognized in other comprehensive income until the hedged item is recognized in
earnings. The change in a derivative's fair value related to the ineffective
portion of a hedge, if any, will generally be immediately recognized in
earnings. Implementation of SFAS 133 is required as of the beginning of fiscal
year 2001 and is not expected to have a material effect on the Company's
financial position or results of operations.

In December 1999, the United States Securities and Exchange Commission issued
Staff Accounting Bulletin No. 101 ("SAB 101"), "Revenue Recognition in Financial
Statements." SAB 101 provides guidance on applying generally accepted accounting
principles to revenue recognition issues in financial statements. The Company
will be required to adopt SAB 101 no later than the fourth quarter of fiscal
year 2001. The Company is in the process of evaluating the effect, if any, that
the adoption of SAB 101 will have on its consolidated results of operations and
financial position.


2.  SPECIAL CHARGES

ROCKWELL-RETAINED ASSETS: Prior to the Distribution, the Company distributed its
wafer fabrication facilities in Colorado Springs, Colorado (and the related tax
benefit) to Rockwell. The transition agreement with Rockwell provided for the
lease of the Colorado Springs facilities by Conexant through April 30, 1999,
pursuant to a triple-net lease under which Conexant paid all costs of the
facilities. In the first fiscal quarter of 1999, Conexant recorded a special
charge for an additional asset impairment of $20 million for the Colorado
Springs wafer fabrication facilities as a result of Rockwell's decision to
further write-down the facilities, which were retained by Rockwell as part of
the spin-off. This non-cash charge was required to be reported in the Company's
last fiscal quarter as a subsidiary of Rockwell.

OTHER: In the fourth quarter of fiscal 1998, Conexant restructured its business
and recorded special charges of $147 million. In the first quarter of fiscal
1999, Conexant recorded additional special charges of $18 million. The
additional charges include $17 million relating to the Voluntary Early
Retirement Program ("VERP") and $1 million relating to decommissioning
equipment, activities at foreign subsidiaries, and contract cancellations at the
Colorado Springs wafer fabrication facilities. The restructuring actions are
complete.


3.  COMPREHENSIVE INCOME (LOSS)

Comprehensive income (loss) for the three months and nine months ended June 30,
2000 and 1999 is as follows:


<TABLE>
<CAPTION>
                                                      Three months ended             Nine months ended
                                                            June 30,                       June 30,
                                                   -------------------------       -------------------------
                                                      2000            1999            2000            1999
                                                   ---------       ---------       ---------       ---------
<S>                                                <C>             <C>             <C>             <C>
Net income (loss)                                  $ (53,321)      $  24,390       $(133,832)      $ (25,116)

Other comprehensive income:
  Foreign currency translation adjustments              (144)         (1,995)            143          (1,346)
  Unrealized gains on marketable securities           (6,520)             --         121,881           3,020
  Less: realized gains included in net income             --          (3,020)             --          (3,020)
  Income taxes                                         2,490           1,161         (46,540)             --
                                                   ---------       ---------       ---------       ---------
    Other comprehensive income                        (4,174)         (3,854)         75,484          (1,346)
                                                   ---------       ---------       ---------       ---------
Comprehensive income (loss)                        $ (57,495)      $  20,536       $ (58,348)      $ (26,462)
                                                   =========       =========       =========       =========
</TABLE>



                                       7
<PAGE>   8

Accumulated other comprehensive income consists of the following:

<TABLE>
<CAPTION>
                                                          As of
                                               --------------------------
                                               June 30,      September 30,
                                                 2000            1999
                                               ---------     ------------
<S>                                            <C>           <C>
Unrealized gains on marketable securities      $ 121,881       $      --
Foreign currency translation adjustments             292             149
Income taxes                                     (46,540)             --
                                               ---------       ---------
Accumulated other comprehensive income         $  75,633       $     149
                                               =========       =========
</TABLE>


4.  NET INCOME (LOSS) PER SHARE

Prior to the December 31, 1998 spin-off of Conexant from Rockwell, Conexant was
not an independent company. Consequently, for periods prior to the spin-off, net
income (loss) per share is not presented and pro forma net loss per share
(computed as if the spin-off had occurred on October 1, 1998) is shown below.
The number of pro forma weighted average shares outstanding used in the
computation of pro forma net loss per share for the nine months ended June 30,
1999 was based upon the weighted average number of Rockwell shares and share
equivalents outstanding during the period, adjusted for the distribution ratio
of one share of the Company's common stock for every two shares of Rockwell
common stock and for the effect of Conexant's October 1999 two-for-one stock
split. These pro forma results are not indicative of future results. Pro forma
basic and diluted loss per share for the nine months ended June 30, 1999 is as
follows (in thousands, except per share data):

<TABLE>
<CAPTION>
                                                 Nine months ended
                                                   June 30, 1999
                                                  -----------------
<S>                                               <C>
Net loss                                            $ (25,116)
Pro forma basic and diluted net loss per share      $   (0.13)
Pro forma basic and diluted weighted
   average common shares outstanding                  190,466
</TABLE>


The following table sets forth the computation of basic and diluted earnings per
share (in thousands, except per share data):


<TABLE>
<CAPTION>
                                                      Three months ended              Nine months ended
                                                            June 30,                       June 30,
                                                   --------------------------     ---------------------------
                                                                                                    Pro forma
                                                      2000            1999           2000             1999
                                                   ----------      ----------     ----------       ----------
<S>                                                <C>             <C>            <C>              <C>
Income:
Net income (loss) available to common
  shareholders - basic and diluted                 $  (53,321)     $   24,390     $ (133,832)      $  (25,116)
                                                   ==========      ==========     ==========       ==========
Shares:
Weighted-average shares outstanding - basic           218,249         191,570        206,735          190,466

Effect of dilutive securities:
  Stock options                                            --          12,852             --               --
  Restricted stock                                         --           1,982             --               --
                                                   ----------      ----------     ----------       ----------
Weighted-average shares outstanding - diluted         218,249         206,404        206,735          190,466
                                                   ==========      ==========     ==========       ==========
Net income (loss) per share:
  Basic                                            $    (0.24)     $     0.13     $    (0.65)      $    (0.13)
                                                   ==========      ==========     ==========       ==========
  Diluted                                          $    (0.24)     $     0.12     $    (0.65)      $    (0.13)
                                                   ==========      ==========     ==========       ==========
</TABLE>


For the fiscal 2000 periods, the number of weighted average shares outstanding
includes approximately 2.2 million shares of Conexant common stock which are
required to be issued on a delayed basis as part of an acquisition. The



                                       8
<PAGE>   9
average shares listed below were not included in the computation of diluted
earnings per share, as their effect would have been antidilutive for the periods
presented (in thousands):


<TABLE>
<CAPTION>
                                                                 Three months ended      Nine months
                                                                       June 30,            ended
                                                                 ------------------       June 30,
                                                                  2000         1999         2000
                                                                 ------        ----        ------
<S>                                                              <C>           <C>       <C>
Effect of stock options (under the treasury stock method)        14,360          --        16,708
Restricted stock and other                                          729          --           527
4-1/4% convertible subordinated notes due 2006                   15,153          --        15,153
4% convertible subordinated notes due 2007                        6,019          --         3,232
</TABLE>


5.  INVENTORIES

Inventories, net consist of the following (in thousands):


<TABLE>
<CAPTION>
                                          June 30,     September 30,
                                            2000           1999
                                          --------     -------------
<S>                                       <C>          <C>
Raw materials, parts, and supplies        $ 40,863        $ 29,998
Work-in-process                            203,842         160,781
Finished goods                              54,482          33,698
                                          --------        --------
Inventories, net                          $299,187        $224,477
                                          ========        ========
</TABLE>


6.  CONVERTIBLE SUBORDINATED NOTES

In February 2000, Conexant completed a private offering of $650 million
principal amount of its 4% Convertible Subordinated Notes due 2007 for net
proceeds (after costs of issuance) of approximately $631.3 million. The notes
are general unsecured obligations of Conexant and interest on the notes is
payable in arrears semiannually on each February 1 and August 1. The notes are
convertible, at the option of the holder, into shares of the Company's common
stock at a conversion price of $108 per share, subject to certain adjustments.
The notes may be redeemed, at Conexant's option, on or after February 6, 2003 at
a declining premium to par.


7.  CONTINGENT LIABILITIES

On October 14, 1997, Brent Townshend ("Townshend") filed suit against Rockwell
and Conexant in the Superior Court of California for San Mateo County seeking an
injunction to halt the sale of products containing Conexant's K56Flex(TM)
chipsets and requesting unspecified damages, claiming that Conexant had engaged
in unfair competition, misappropriation of trade secrets, breach of contract and
breach of confidence by using technical information allegedly disclosed in
confidence by Mr. Townshend to accelerate its development of 56 Kbps modem
technology. In January 1999, Townshend dismissed his State Court action and
re-filed the same claims and three new claims for patent infringement in the
U.S. District Court for the Northern District of California. In the Federal
action, Townshend alleges that each of his patents (the "Townshend Patents")
covers certain aspects of the V.90 standard and are infringed by Conexant's 56
Kbps products. In the Federal action, Townshend seeks injunctive relief,
compensatory damages, restitution and exemplary and punitive damages. Townshend
and 3Com Corporation had publicly announced that 3Com was the exclusive licensee
for the Townshend Patents and acted as Townshend's agent in sublicensing the
Townshend Patents to third parties. More recently, Townshend and 3Com publicly
announced that Townshend has reacquired exclusive control over the licensing and
enforcement of the patents as well as other ownership rights, while 3Com
retained a non-exclusive license to practice the Townshend inventions. Conexant
has filed its answer to Townshend and counterclaims against Townshend and claims
against 3Com. On a hearing on a Motion to Dismiss filed by Townshend and 3Com,
the claims against 3Com have been dismissed, and a portion of the counterclaims
against Townshend were likewise dismissed. Conexant is vigorously defending its
position that it independently developed the 56 Kbps modem technology using
entirely its own skills and public domain information and will vigorously
contest the infringement claims and the validity of the asserted patents.



                                       9
<PAGE>   10
Various other lawsuits, claims and proceedings have been or may be instituted or
asserted against Rockwell or Conexant or their respective subsidiaries,
including those pertaining to product liability, intellectual property,
environmental, safety and health, and employment matters. In connection with the
Distribution, Conexant assumed responsibility for all contingent liabilities and
current and future litigation (including environmental and intellectual property
proceedings) against Rockwell or its subsidiaries in respect of Semiconductor
Systems.

The outcome of litigation cannot be predicted with certainty and some lawsuits,
claims or proceedings may be disposed of unfavorably to Conexant. Many
intellectual property disputes have a risk of injunctive relief and there can be
no assurance that a license will be granted. Injunctive relief could have a
material adverse effect on the financial condition or results of operations of
Conexant. Based on its evaluation of matters which are pending or asserted and
taking into account Conexant's reserves for such matters, management of Conexant
believes the disposition of such matters will not have a material adverse effect
on the financial condition or results of operations of Conexant.


8.  ACQUISITIONS

In June 2000, Conexant acquired HotRail, Inc. ("HotRail"), an Internet
infrastructure semiconductor company developing advanced, integrated
complementary metal-oxide semiconductor ("CMOS") technologies for high-speed
switching, interconnect and scalable processing for networking systems.
Consideration for the acquisition consisted of 5.9 million shares of Conexant
common stock and options to purchase an additional 1.3 million shares. The total
value of such consideration was approximately $349.8 million. In addition,
Conexant may issue up to an additional 652,000 shares, initially held back for
the payment of contingent indemnification obligations, upon the expiration of an
escrow period in fiscal 2001.

In May 2000, Conexant acquired Philsar Semiconductor Inc. ("Philsar"), a
developer of radio-frequency ("RF") semiconductor solutions for personal
wireless connectivity, including emerging standards such as Bluetooth, and RF
components for third-generation ("3G") digital cellular handsets. To effect the
acquisition of Philsar by Conexant, all of the then-outstanding capital stock of
Philsar was exchanged for an instrument which provides for approximately 2.2
million shares of Conexant common stock to be issued on a delayed basis. As
additional consideration for the acquisition, Conexant converted the outstanding
Philsar stock options into options to purchase an additional 525,000 shares of
Conexant common stock. The total value of such consideration was approximately
$107.4 million. Conexant may also be required to issue up to an additional
248,000 shares of common stock initially held in escrow for the payment of
contingent indemnification obligations, upon the expiration of an escrow period
in fiscal 2001.

In March 2000, Conexant completed its acquisition of Maker Communications, Inc.
("Maker"), a fabless semiconductor company that develops and markets
high-performance programmable network processors, software solutions, and
development tools. Consideration for the acquisition of Maker consisted of 12.7
million shares of Conexant common stock and options to purchase an additional
1.6 million shares of Conexant common stock, based upon an exchange ratio of
0.66 of a share of Conexant common stock for each share of Maker common stock.
The total value of the consideration for the acquisition of Maker was
approximately $979.6 million.

In January 2000, Conexant acquired Microcosm Communications Limited
("Microcosm"), a technology leader in the field of high-speed integrated
circuits for fiber optic communications located in Bristol, England.
Consideration for the acquisition consisted of 1.5 million shares of Conexant
common stock, options to purchase an additional 94,000 shares, and approximately
$3.1 million in cash. The total value of such consideration was approximately
$103.8 million. Additional consideration of up to $18 million, initially held
back for the payment of contingent indemnification obligations, may become
payable in April 2001. The shareholders and optionholders of Microcosm could
also receive additional consideration of up to $51.4 million, payable in the
form of shares of common stock and stock options, if certain performance and
technology goals are achieved.

During fiscal 2000, Conexant also completed the acquisitions of four other
businesses--Sierra Imaging, Inc., Applied Telecom, Inc., Istari Design Inc., and
the wireless broadband unit of Oak Technology, Inc.--each engaged in the
development and sale of semiconductors and related software products for
communications and imaging applications. Aggregate consideration for these
acquisitions consisted of $9.7 million in cash, 1.4 million shares of



                                       10
<PAGE>   11
Conexant common stock, and options to purchase approximately 0.3 million shares
of Conexant common stock. The aggregate value of such consideration was
approximately $88.1 million. Certain of the acquisitions include provisions
under which the former shareholders could receive additional consideration of up
to $15.0 million, payable in a combination of Conexant common stock and cash, if
certain performance and technology goals are achieved. Conexant may be required
to issue up to an additional 0.1 million shares of common stock initially held
back for the payment of contingent indemnification obligations, upon the
expiration of an escrow period in fiscal 2001.

The acquisitions have each been recorded under the purchase method of
accounting. The value of the consideration for each acquisition has been
allocated among the assets and liabilities acquired, including identified
intangible assets and in-process research and development ("IPRD"), based upon
estimated fair values. The excess of the value of the consideration over the net
assets acquired is allocated to goodwill. In connection with four of the
transactions, an aggregate of $196.4 million was allocated to IPRD, and expensed
immediately upon completion of the acquisitions, because the technological
feasibility of products under development had not been established and no future
alternative uses existed.

The fiscal 2000 acquisitions are summarized below (in thousands):

<TABLE>
<CAPTION>
                                       Shares of                                    Goodwill and
                                     common stock  Total value of                    identified
Transaction                             issued      consideration       IPRD         intangibles
-----------                          ------------  --------------     --------      -------------
<S>                                  <C>           <C>                <C>           <C>
Maker                                   12,651        $979,591        $118,500        $894,148
HotRail                                  5,866         349,843          26,100         345,743
Philsar                                  2,227         107,366          24,362          78,279
Microcosm                                1,523         103,827          27,400          86,798
Other fiscal 2000 acquisitions           1,416          88,104              --          87,754
</TABLE>

Consideration for the fiscal 2000 acquisitions consisted of Conexant common
stock issued and stock options assumed (aggregate value $1.6 billion) and cash
of $12.8 million. In connection with the acquisitions, Conexant recorded net
deferred tax liabilities of approximately $105.2 million.

The results of operations of the acquired companies are included in the
consolidated financial statements from the dates of acquisition. The pro forma
statement of operations data below assumes that each of the companies had been
acquired at the beginning of fiscal 1999. This pro forma data includes
amortization of goodwill and identified intangibles from that date. However, the
impact of the charges for IPRD has been excluded. This pro forma data is
presented for informational purposes only, and is not necessarily indicative of
the results of future operations nor of the results that would have been
achieved had the acquisitions taken place at the beginning of fiscal 1999.


<TABLE>
<CAPTION>
                                                     Nine months ended
(in thousands, except per share data)                    June 30,
                                              -------------------------------
                                                  2000              1999
                                              -----------         -----------
<S>                                           <C>                 <C>
Net revenues                                  $ 1,560,394         $ 1,015,907

Net loss                                         (101,360)           (245,614)

Net loss per share - basic and diluted        $     (0.45)        $     (1.15)
</TABLE>

In addition to the transactions discussed above, during fiscal 2000, Conexant
entered into strategic agreements with vendors under which Conexant will receive
foundry capacity to support its future growth. As part of the agreements,
Conexant made advance payments of $114.6 million in fiscal 2000 and will advance
at least $75 million in fiscal 2001.


9.  GOODWILL AND INTANGIBLE ASSETS, NET

Goodwill is recorded when the consideration paid for acquisitions exceeds the
fair value of the net tangible and intangible assets acquired. Goodwill and
other intangible assets are amortized on a straight-line basis over the periods
indicated below. Reviews are regularly performed to determine whether facts or
circumstances exist which



                                       11
<PAGE>   12
indicate that the carrying value of the asset is impaired. The Company assesses
the recoverability of its assets by comparing the projected undiscounted net
cash flows associated with those assets against their respective carrying
amounts. Impairment, if any, is based on the excess of the carrying amount over
the fair value of those assets. No impairment has been indicated to date.

Goodwill and intangible assets consist of the following (dollars in thousands):


<TABLE>
<CAPTION>
                                Life in         June 30,          September 30,
                                 years            2000                1999
                                -------        -----------        ------------
<S>                             <C>            <C>                <C>
Goodwill                         3 - 10        $ 1,220,924         $    20,316
Developed technology            5 - 8.5            294,559              40,346
Other intangible assets          2 - 10             50,374              12,603
                                               -----------         -----------
                                                 1,565,857              73,265
Accumulated amortization                          (109,044)            (25,441)
                                               -----------         -----------
                                               $ 1,456,813         $    47,824
                                               ===========         ===========
</TABLE>


10.  SUPPLEMENTAL CASH FLOW DISCLOSURES

Cash paid for interest, net of amounts capitalized, was $13.2 million and $1.7
million for the nine months ended June 30, 2000 and June 30, 1999, respectively.
Cash paid for income taxes for the nine months ended June 30, 2000 and June 30,
1999 was $19.7 million and $0.7 million, respectively. In periods prior to the
Distribution, all interest and income tax payments were made by Rockwell.

Significant noncash transactions during the nine months ended June 30, 2000, in
addition to the acquisitions described in Note 8, include income tax benefits of
approximately $166.2 million resulting from employee stock transactions which
were credited to additional capital. During the nine months ended June 30, 1999,
Conexant transferred its wafer fabrication facilities in Colorado Springs,
Colorado (and the related tax benefit) with a book value of approximately $59
million to Rockwell as well as certain other tax benefits of $25 million related
to a litigation matter.


11.  SUBSEQUENT EVENTS

In July 2000, Conexant agreed to acquire Novanet Semiconductor Ltd. ("Novanet"),
a fabless designer of high-speed physical layer networking solutions located in
Ra'anana, Israel. Consideration for the acquisition will be approximately 2.4
million shares of Conexant common stock (valued at approximately $108.5 million)
including the assumption of certain stock options. In addition, the shareholders
of Novanet may be entitled to receive additional consideration of up to $35.0
million if certain performance and technology development goals are achieved.
The acquisition of Novanet is expected to close during the fourth quarter of
fiscal 2000 and will be recorded using the purchase method of accounting.

Also in July 2000, Conexant agreed to acquire NetPlane Systems, Inc.
("NetPlane"), a leading supplier of carrier-class networking software for
Internet infrastructure equipment located in Dedham, Massachusetts.
Consideration for the acquisition will be approximately 2.0 million shares of
Conexant common stock (valued at approximately $90.8 million) including the
assumption of certain stock options. In addition, the shareholders of NetPlane
may be entitled to receive up to an additional 0.7 million shares of common
stock if certain performance goals are achieved. The acquisition of NetPlane is
expected to close during the fourth quarter of fiscal 2000 and will be recorded
using the purchase method of accounting.

In July 2000, Conexant amended its credit facility to increase the maximum
amount of available borrowings to $475.0 million, to release the security
interest of the lenders in Conexant's assets, and to extend the term to July
2003. The credit facility is secured by the capital stock of Conexant's
significant subsidiaries. Covenants previously contained in the credit facility
were also amended to allow Conexant greater flexibility in business
acquisitions, capital expenditures, and other transactions.



                                       12
<PAGE>   13

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
        RESULTS OF OPERATIONS

This information should be read in conjunction with the unaudited consolidated
condensed financial statements and the notes thereto included in this Quarterly
Report, and the audited consolidated financial statements and notes thereto and
Management's Discussion and Analysis of Financial Condition and Results of
Operations contained in the Company's Annual Report on Form 10-K for the year
ended September 30, 1999.

The results of operations for the periods prior to the January 1, 1999 spin-off
from Rockwell reflect the Company's operations as a subsidiary of Rockwell. The
results of operations subsequent to that date reflect the Company's operations
as a stand-alone entity. The results of operations for periods when the Company
was a subsidiary of Rockwell may not be indicative of the results of operations
of the Company had it been a stand-alone entity during such periods.

RESULTS OF OPERATIONS

NET REVENUES

The following table summarizes the net revenues of the Company's five product
platforms (dollars in thousands):

<TABLE>
<CAPTION>
                               Three months ended June 30,               Nine months ended June 30,
                             --------------------------------       -----------------------------------
                               2000       Change       1999            2000         Change       1999
                             --------     -------    --------       ----------      ------     --------
<S>                          <C>          <C>        <C>            <C>             <C>        <C>
Personal Computing           $183,956       19%      $154,416       $  553,342        21%      $456,249
Network Access                155,267       88%        82,601          399,038       133%       171,350
Wireless Communications        92,599       32%        70,047          291,575        69%       172,360
Digital Infotainment           71,032       48%        47,868          211,298        63%       129,956
Personal Imaging               27,620        9%        25,398           86,912        40%        62,025
                             --------                --------       ----------                 --------

Totals                       $530,474       39%      $380,330       $1,542,165        55%      $991,940
                             ========                ========       ==========                 ========

Revenue mix:

Personal Computing                 35%                     41%              36%                      46%
Network Access                     29%                     22%              26%                      17%
Wireless Communications            18%                     18%              19%                      18%
Digital Infotainment               13%                     12%              14%                      13%
Personal Imaging                    5%                      7%               5%                       6%
</TABLE>

Net revenues for the third quarter and first nine months of fiscal 2000 compared
to fiscal 1999 included revenue growth in each of the Company's product
platforms. The "expansion platforms" (which exclude Personal Computing) continue
to be the Company's fastest-growing platforms, with aggregate revenue growth of
53% and 85% for the third quarter and first nine months of fiscal 2000,
respectively, compared with the year-earlier periods.

In the Company's Personal Computing platform, the growth in net revenues
reflects continued solid demand in sales of dial-up modems, with revenues for
the fiscal third quarter increasing 19% year-over-year. Sales of the Company's
V.90 software modem portfolio, which accounted for approximately one-third of
total PC dial-up modem shipments, increased almost 200% from their year-earlier
levels. The Company also achieved strong growth in sales of embedded modems,
enabling communications in a variety of devices including gaming consoles, web
browsers, and personal digital assistants.

Revenue growth in the Company's Network Access platform for the third quarter
and first nine months of fiscal 2000 came from each of the three Network Access
businesses--multi-service access, WAN transport, and broadband access--as demand
continued to be fueled by the ongoing global network infrastructure upgrade in
support of the increase in Internet traffic. The WAN transport portfolio had
significant growth as the result of the



                                       13
<PAGE>   14
strong demand for SONET transceivers, network processors and ATM physical-layer
solutions, T/E framers, and line interface units. In the multi-service access
business, shipments of the AnyPort multi-service access product family enjoyed
strong growth as networking original equipment manufacturers ("OEMs") continued
their deployment of multi-service IP gateways. In the Company's broadband access
portfolio, including symmetrical and asymmetrical digital subscriber line
products, unit shipments for the first nine months of fiscal 2000 increased more
than 200% over the fiscal 1999 period due to continued strong demand from a
broad customer base of DSL access multiplexer and integrated access device OEMs.

Within the Wireless Communications platform, revenue growth for the third
quarter and first nine months of fiscal 2000 compared to the fiscal 1999 periods
was principally driven by the digital cellular portion of the Company's wireless
business. The Company continued to benefit from strong end market demand for GSM
digital cellular handsets, with significant year over year unit shipment growth
in GSM power amplifiers and GSM radio frequency subsystems. Conexant's GSM
system initiative also contributed to the growth in revenues for the third
fiscal quarter and first nine months compared to the year-earlier periods.
However, sales of the Company's CDMA products were adversely affected by a
slowdown in demand for CDMA handsets in the Korean market. In June 2000, the
Korean government imposed a ban on the country's service providers prohibiting
the subsidization of new digital cellular handsets, thereby curtailing domestic
demand for new and replacement units. The Korean government's action is likely
to affect the Company's sales in the Korean market in the near term.

In the Digital Infotainment platform, the increased revenues for the third
quarter and first nine months of fiscal 2000 over the fiscal 1999 periods
reflect strong demand for the Company's video processing solutions, satellite
tuners and demodulators, and back-channel telephony solutions. Shipments of
satellite tuners and demodulators increased over 250% and shipments of PCI and
side-port video decoders (for "TV in the PC" applications) increased over 70%
for the first nine months of fiscal 2000 compared to the year-earlier period.

Net revenues for Personal Imaging for third quarter and first nine months of
fiscal 2000 compared to same periods of fiscal 1999 reflect continued strong
demand for fax modems and facsimile engines from leading office equipment OEMs,
and increased penetration of the expanding multifunction peripheral market.
However, sales of fax products for the third quarter of fiscal 2000 were
adversely affected by external packaging capacity constraints which the Company
experienced during the quarter. Revenues for the fiscal 2000 third quarter also
reflect increased shipments of CMOS imaging solutions for PC camera
applications. In the fiscal 1999 periods, revenues were affected by the economic
recession in the Asia-Pacific markets during that period.

During the third quarter of fiscal 2000, revenues in the Digital Infotainment
and Personal Imaging platforms were affected by delays in the fulfillment of
certain customer orders resulting from a temporary shortage of outside device
assembly and packaging capacity. The assembly and packaging capacity shortage
was principally the result of the lead time necessary to qualify new vendors as
compliant with applicable production quality standards. While the Company
believes it has qualified an adequate number of device assembly and packaging
vendors to satisfy its current requirements, the Company may need to qualify
additional vendors in the future to support its continued sales growth. Should
the Company experience further delays in the availability of qualified outside
device assembly and packaging capacity, the Company's revenues may be adversely
affected.


GROSS MARGIN

<TABLE>
<CAPTION>
                                Three months ended June 30,       Nine months ended June 30,
                              ------------------------------    ------------------------------
                                2000       Change     1999        2000      Change      1999
                              --------     ------   --------    --------    ------    --------
<S>                           <C>          <C>      <C>         <C>         <C>       <C>
Gross margin                  $248,289      51%     $164,216    $713,075      91%     $372,395
Percent of revenues                 47%                   43%         46%                   38%
</TABLE>

The gross margins achieved in the third quarter and first nine months of fiscal
2000 principally reflect the continued shift in the Company's product mix toward
higher-margin products. The gross margin improvement for the first nine months
of fiscal 2000 also reflects the higher factory utilization at the Company's
wafer fabrication facilities which resulted from increased unit sales volume.
Gross margins for the first nine months of fiscal 1999 were adversely affected
by unusually high inventory costs which resulted from low manufacturing capacity
utilization during the preceding four months.



                                       14
<PAGE>   15

RESEARCH AND DEVELOPMENT

<TABLE>
<CAPTION>
                                Three months ended June 30,       Nine months ended June 30,
                              ------------------------------    ------------------------------
                                2000      Change      1999        2000      Change      1999
                              --------    ------     -------    --------    ------    --------
<S>                           <C>         <C>        <C>        <C>         <C>       <C>
Research and development      $106,017      36%      $77,927    $294,589      35%     $217,838
Percent of revenues                 20%                   20%         19%                   22%
</TABLE>

The Company has increased the focus of its research and development efforts in
the areas of Internet infrastructure, wireless communications, and broadband
access. The increase in research and development expenses for the third quarter
and first nine months of fiscal 2000 compared with the prior year periods
principally reflects the higher headcount and related costs resulting from the
Company's increased investment in those areas. Subsequent to June 1999, the
Company's recruiting programs have increased its engineering team by over 700
engineers, including almost 300 engineers joining the Company through the
successful acquisition of eight businesses during fiscal 2000. The fiscal 1999
periods reflect certain cost-cutting actions taken in the fourth quarter of
fiscal 1998, including headcount reductions, design center closures, and certain
project cancellations.

SELLING, GENERAL, AND ADMINISTRATIVE

<TABLE>
<CAPTION>
                                Three months ended June 30,       Nine months ended June 30,
                               -----------------------------    ------------------------------
                                 2000     Change      1999       2000       Change      1999
                               -------    ------     -------    --------    ------    --------
<S>                            <C>        <C>        <C>        <C>         <C>       <C>
Selling, general, and
   administrative              $71,017      37%      $51,780    $205,209      25%     $164,323
Percent of revenues                 13%                   14%         13%                   17%
</TABLE>

The change reflects the Company's continued development of its sales, marketing,
and business support functions since the spin-off from Rockwell at the end of
the fiscal 1999 first quarter. In particular, the Company has invested in the
expansion of its sales and marketing organizations, increasing its worldwide
sales organization to over 280 personnel to support its recent and anticipated
future sales growth. The higher fiscal 2000 selling, general and administrative
costs also reflect the continued development of infrastructure for a variety of
corporate functions, including the Company's information systems, human
resources, and finance teams. These factors were partially offset by lower
spending in fiscal 2000 for co-op advertising programs.

AMORTIZATION OF INTANGIBLES

<TABLE>
<CAPTION>
                                Three months ended June 30,        Nine months ended June 30,
                               -----------------------------     -----------------------------
                                 2000      Change      1999       2000       Change      1999
                               -------     ------     ------     -------     ------     ------
<S>                            <C>         <C>        <C>        <C>         <C>        <C>
Amortization of intangibles    $55,861       nm       $2,059     $83,603       nm       $6,186
</TABLE>


nm = not meaningful

The higher amortization expense in the fiscal 2000 periods resulted from the
eight business acquisitions completed during the first nine months of fiscal
2000. In connection with these acquisitions, an aggregate of nearly $1.5 billion
was allocated to identifiable intangible assets and goodwill. Such assets are
being amortized over their estimated lives, principally five years.
Consequently, amortization expense for the fourth quarter of fiscal 2000 will
exceed $75.0 million as the most recent acquisitions are included in the full
fiscal quarter. The Company has recently announced agreements to acquire two
additional companies, and may make other business acquisitions in the future.
The completion of any such business acquisitions will result in further
increases in the level of amortization expense.

PURCHASED IN-PROCESS RESEARCH AND DEVELOPMENT: In connection with its fiscal
2000 business acquisitions, Conexant recorded charges totaling $196.4 million
for the fair value of purchased in-process research and development ("IPRD").
The fair values allocated to the intangible assets acquired, including the IPRD,
were based upon independent appraisals.

The fair value of the IPRD for each of the acquisitions was determined using the
income approach. Under the income approach, expected future after-tax cash flows
from each of the projects or product families ("projects") under development are
estimated and discounted to their net present value at an appropriate
risk-adjusted rate of return. Each project was analyzed to determine the
technological innovations included in the project; the existence and utilization
of core technology; the complexity, cost and time to complete the remaining
development efforts; the existence of any alternative future use or current
technological feasibility; and the stage of completion in



                                       15
<PAGE>   16
development. Future cash flows for each project were estimated based on
forecasted revenues and costs, taking into account the expected life cycles of
the products and the underlying technology, relevant market sizes and industry
trends.

The projects were then classified as developed technology, IPRD completed, IPRD
to-be-completed, or future development. The estimated future cash flows for each
were discounted to approximate fair value. Discount rates were derived from a
weighted average cost of capital analysis, adjusted upward to reflect additional
risks inherent in the development process, including the probability of
achieving technological success and market acceptance. The IPRD charge includes
only the fair value of IPRD completed. The fair value assigned to developed
technology is included in identifiable intangible assets, and the fair values
assigned to IPRD to-be-completed and future development are included in
goodwill. The Company believes the amounts determined for IPRD, as well as
developed technology, are representative of fair values and do not exceed the
amounts an independent party would pay for these projects. Failure to deliver
new projects to the market timely, or to achieve expected market acceptance or
revenue and expense forecasts could have a significant impact on the financial
results and operations of the acquired businesses.

The total charge for IPRD resulting from the acquisition of Maker (which
Conexant agreed to acquire in December 1999) was $118.5 million. Maker is a
fabless semiconductor company that develops and markets high-performance
programmable network processors, software solutions, and development tools
targeting markets requiring high-intensity communications processing. IPRD
projects relating to seven product families were identified and valued. The
projects are directed toward the development of high-performance programmable
communications processors and applications software. Maker's IPRD projects
ranged from 55% to 92% complete and averaged approximately 75% complete, with
aggregate estimated costs to complete all of the projects of $5.7 million. The
IPRD projects principally are expected to be completed within 12 months of the
acquisition date. The average discount rates used were 30% for IPRD projects and
20% for developed technology, which reflect the specific risks associated with
each of the intangible assets. The weighted average cost of capital was
estimated at 18%.

The total charge for IPRD for the Microcosm acquisition (completed in January
2000) was $27.4 million. Microcosm is a technology leader in the field of
high-speed integrated circuits for fiber optic communications. IPRD projects
relating to four product families were identified and valued. The projects are
directed toward the development of high-performance programmable communications
processors. Microcosm's IPRD projects ranged from 77% to 90% complete and
averaged approximately 84% complete, with total estimated costs to complete all
of the projects of $0.8 million. The IPRD projects are principally expected to
be completed within twelve months of the acquisition date. The average discount
rates used were 35% for IPRD projects and 25% for developed technology, which
reflect the specific risks associated with each of the intangible assets. The
weighted average cost of capital was estimated at 20%.

The total charge for IPRD for the Philsar acquisition (completed in May 2000)
was $24.4 million. Philsar is a developer of RF semiconductor solutions for
personal wireless connectivity, including emerging standards such as Bluetooth,
and RF components for third-generation (3G) digital cellular handsets. IPRD
projects relating to five product families were identified and valued. The
projects are directed toward the development of Bluetooth products including RF
transceivers, a baseband controller, and an integrated single-chip Bluetooth
solution. Philsar's IPRD projects ranged from 41% to 78% complete and averaged
approximately 60% complete, with total estimated costs to complete all of the
projects of $5.4 million. The IPRD projects are principally expected to be
completed within one year of the acquisition date. The average discount rates
used were 30% for IPRD projects and 25% for developed technology, which reflect
the specific risks associated with each of the intangible assets. The weighted
average cost of capital was estimated at 20%.

The total charge for IPRD for the HotRail acquisition (completed in June 2000)
was $26.1 million. HotRail is an Internet infrastructure IC company developing
advanced, integrated CMOS technologies for high-speed switching, interconnect
and scalable processing for networking systems. IPRD projects relating to two
product families were identified and valued. The projects are directed toward
the development of scaleable, high-speed switch fabric systems and the HotRail
Channel parallel CMOS transceiver. HotRail's IPRD projects ranged from 34% to
95% complete and averaged approximately 74% complete, with total estimated costs
to complete all of the projects of $11.7 million. The IPRD projects are
principally expected to be completed within one year of the acquisition date.
The average discount rates used were 34% for IPRD projects and 24% for developed
technology, which reflect the



                                       16
<PAGE>   17
specific risks associated with each of the intangible assets. The weighted
average cost of capital was estimated at 24%.

SPECIAL CHARGES - ROCKWELL-RETAINED ASSETS: In the first quarter of fiscal 1999,
Conexant recorded a special charge for an additional asset impairment of $20
million for the Colorado Springs wafer fabrication facilities as a result of
Rockwell's decision to further write-down the facilities, which were retained by
Rockwell as part of the spin-off. This non-cash charge was required to be
reported in the Company's last fiscal quarter as a subsidiary of Rockwell.

SPECIAL CHARGES - OTHER: In the first fiscal quarter of 1999, Conexant recorded
additional special charges of approximately $18 million. The additional charges
include approximately $17 million relating to a voluntary early retirement
program and $1 million relating to decommissioning equipment, activities at
foreign subsidiaries, and contract cancellations at the Colorado Springs wafer
fabrication facilities.

OTHER INCOME, NET

<TABLE>
<CAPTION>
                                Three months ended June 30,        Nine months ended June 30,
                                ----------------------------      -----------------------------
                                 2000      Change      1999       2000       Change      1999
                                ------     ------     ------      ------     ------     ------
<S>                             <C>        <C>        <C>         <C>        <C>        <C>
Other income, net               $2,082       nm       $2,389      $3,592       nm       $2,263
</TABLE>

Other income, net principally consists of interest income on invested cash
balances, offset by interest expense on the Company's $1 billion principal
amount of convertible subordinated notes. In the fiscal 2000 periods, other
income, net principally reflects net interest income resulting from both higher
interest rates and larger invested cash balances, including a portion of the
proceeds of the $650 million principal amount of 4% Convertible Subordinated
Notes due 2007 issued in February 2000. The fiscal 1999 periods reflect net
interest expense due to lower invested cash balances, offset by gains on the
sale of certain investments.

PROVISION (BENEFIT) FOR INCOME TAXES: For the first nine months of fiscal 2000,
the Company's provision for income taxes was $70.7 million. In the similar
period of fiscal 1999, the Company recorded an income tax benefit of $26.5
million due to a loss from operations. Exclusive of the non-deductible charges
for IPRD and amortization of intangible assets resulting from the Company's
recently-completed acquisitions, the effective tax rate for the first nine
months of fiscal 2000 was approximately 30% of pretax income. This rate reflects
the positive impact of state and federal research and experimentation tax
credits available to the Company. The Company anticipates that its effective tax
rate, exclusive of the non-deductible charges for IPRD and amortization of
intangible assets, will be approximately 30% for fiscal 2000.


LIQUIDITY AND CAPITAL RESOURCES

Cash provided by operating activities was $141.6 million for the nine months
ended June 30, 2000, compared to $177.9 million for the similar period in fiscal
1999. Operating cash flows reflect the Company's net loss of $133.8 million
offset by noncash charges (depreciation and amortization, IPRD, and other) of
$426.2 million, and a net working capital increase of approximately $150.8
million. Before the effect of working capital changes, operating cash flow
increased to $292.4 million for the first nine months of fiscal 2000, compared
to $192.2 million for the fiscal 1999 period.

The fiscal 2000 working capital increase includes a $95.2 million increase in
receivables, principally due to higher quarterly sales. The receivables increase
also reflects the strong sales volume experienced near the end of the fiscal
third quarter. The Company's allowance for doubtful accounts decreased by $2.8
million during the fiscal 2000 period, resulting from the write-off of certain
previously-reserved accounts. The working capital change also included a $72.5
million build-up in inventories, principally reflecting higher inventory levels
in anticipation of increasing shipments of new products and, to a lesser extent,
the impact of lower demand for CDMA products in the Korean market. With industry
wafer fabrication capacity continuing to tighten, the Company also took
advantage of its recently-expanded foundry relationships, drawing on
currently-available wafer fabrication capacity to stage materials for expected
production requirements. The working capital increase also reflects a $68.5
million reduction of accounts payable due to the timing of vendor payments.
These amounts were partially offset by a $85.4 million increase in accrued
expenses and other current liabilities, and other working capital changes.



                                       17
<PAGE>   18
Investing activities used $402.9 million of cash during the first nine months of
fiscal 2000, compared to $75.4 million for the similar period in fiscal 1999.
Capital expenditures totaled $232.1 million during the fiscal 2000 period, as
the Company continued its investment in new process technologies including its
gallium arsenide wafer manufacturing facility in Newbury Park, California, new
silicon-based high performance RF specialty processes in Newport Beach,
California, and the expansion of assembly and test operations in Mexicali,
Mexico. Cash used for the Company's fiscal 2000 business acquisitions was
approximately $0.7 million, net of cash acquired of $23.9 million. In addition,
the Company made investments in, or advances to, businesses totaling $174.6
million, including advances to vendors of $114.6 million and approximately $60.0
million of equity investments, principally in early-stage communications
technology companies. The vendor advances were made pursuant to agreements under
which the Company will receive foundry capacity to support future growth. Cash
used in investing activities during the fiscal 1999 period consisted of routine
capital expenditures of $75.4 million.

The Company's financing activities provided cash of $726.0 million during the
first nine months of fiscal 2000, including the net proceeds from the sale of
the 4% Convertible Subordinated Notes due 2007 ($631.3 million) and proceeds
from the exercise of stock options ($94.7 million). During the similar period of
fiscal 1999, cash provided by financing activities of $295.2 million consisted
of $340.4 million in net proceeds from the sale of the 4-1/4% Convertible
Subordinated Notes due 2006 and proceeds from the exercise of employee stock
options of $13.6 million, partially offset by the transfer of available cash
balances to Rockwell and repayment of a loan at the Company's Japanese
subsidiary.

In February 2000, Conexant completed the sale of $650 million principal amount
of its 4% Convertible Subordinated Notes for net proceeds (after costs of
issuance) of approximately $631.3 million. The notes are general unsecured
obligations of Conexant and interest on the notes is payable in arrears
semiannually on each February 1 and August 1. The notes are convertible, at the
option of the holder, into shares of the Company's common stock at a conversion
price of $108 per share, subject to certain adjustments. The notes may be
redeemed, at Conexant's option, on or after February 6, 2003 at a declining
premium to par.

In July 2000, Conexant amended its credit facility to increase the amount of
available borrowings thereunder to $475.0 million, to remove the lenders'
security interest in the Company's assets, and various other modifications. The
amended credit facility matures in July 2003.

The Company's principal sources of liquidity are its existing cash reserves,
cash generated from operations, and available borrowings under its $475.0
million credit facility. As of June 30, 2000, there were no borrowings
outstanding under the credit facility. Cash and cash equivalents at June 30,
2000 totaled $863.3 million compared to $398.5 million at September 30, 1999.
Working capital at June 30, 2000 was approximately $1.4 billion compared to
$604.5 million at September 30, 1999.

The Company believes that its existing sources of liquidity, along with cash
expected to be generated from future operations, will be sufficient to fund
operations, research and development efforts, and anticipated capital
expenditures and advances for the foreseeable future. However, the Company
continues to evaluate acquisition opportunities to extend its technology
portfolio and design expertise and to expand its product offerings. The
Company's manufacturing operations are capital intensive, and the Company may
need to increase its capital spending to obtain sufficient manufacturing
capacity to support continued revenue growth. In order to complete any such
acquisitions or increased capital expenditures, the Company may seek to obtain
additional borrowings or issue additional shares of its common stock. There can
be no assurance that such financing will be available on terms favorable to the
Company, or at all.


RECENT ACQUISITIONS

In July 2000, Conexant agreed to acquire Novanet Semiconductor Ltd. ("Novanet"),
a fabless designer of high-speed physical layer networking solutions located in
Ra'anana, Israel. Consideration for the acquisition will be approximately 2.4
million shares of Conexant common stock (valued at approximately $108.5 million)
including the assumption of certain stock options. In addition, the shareholders
of Novanet may be entitled to receive additional consideration of up to $35.0
million if certain performance and technology development goals are achieved.
The acquisition of Novanet is expected to close during the fourth quarter of
fiscal 2000.



                                       18
<PAGE>   19
Also in July 2000, Conexant agreed to acquire NetPlane Systems, Inc.
("NetPlane"), a leading supplier of carrier-class networking software for
Internet infrastructure equipment located in Dedham, Massachusetts.
Consideration for the acquisition will be approximately 2.0 million shares of
Conexant common stock (valued at approximately $90.8 million) including the
assumption of certain stock options. In addition, the shareholders of NetPlane
may be entitled to receive up to an additional 0.7 million shares of common
stock if certain performance goals are achieved. The acquisition of NetPlane is
expected to close during the fourth quarter of fiscal 2000.

The acquisitions will each be recorded under the purchase method of accounting.
Assuming completion of the acquisitions of Novanet and NetPlane, the Company
expects to record additional goodwill and intangible assets, the amount of which
may exceed $190 million. The Company expects to record additional non-deductible
amortization expense in each of the five years following the acquisitions, the
amount of which may exceed $38 million annually. In addition, upon completion of
the acquisitions of Novanet and NetPlane, the Company may record a non-recurring
charge for the value of the IPRD, the amount of which has not been determined.
The purchase price allocation for each of these acquisitions, including the
amount of the charge for IPRD, is preliminary and will be revised upon receipt
of final valuation information. Such revisions to the purchase price allocation
will also affect the amounts of amortization of intangible assets.



CAUTIONARY STATEMENT

This Quarterly Report contains statements relating to future results of the
Company (including certain projections and business trends) that are
"forward-looking statements" as defined in the Private Securities Litigation
Reform Act of 1995. Actual results may differ materially from those projected as
a result of certain risks and uncertainties. These risks and uncertainties
include, but are not limited to: global economic and market conditions,
including the cyclical nature of the semiconductor industry and the markets
addressed by the Company's and its customers' products; demand for, and market
acceptance of, new and existing products; successful development of new
products; the timing of new product introductions; the successful integration of
acquisitions; the availability and extent of utilization of manufacturing
capacity and raw materials; pricing pressures and other competitive factors;
changes in product mix; fluctuations in manufacturing yields; product
obsolescence; the ability to develop and implement new technologies and to
obtain protection of the related intellectual property; the successful
implementation of the Company's diversification strategy; labor relations of the
Company, its customers and suppliers; and the uncertainties of litigation, as
well as other risks and uncertainties including those discussed in the Company's
Annual Report on Form 10-K for the year ended September 30, 1999 or detailed
from time to time in the Company's Securities and Exchange Commission filings.
Reference is made to the "Certain Business Risks" section on pages 10 to 20 of
the Annual Report. These forward-looking statements are made only as of the date
hereof, and the Company undertakes no obligation to update or revise the
forward-looking statements, whether as a result of new information, future
events or otherwise.



                                       19
<PAGE>   20
ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK


The Company's financial instruments include cash and cash equivalents,
marketable securities, and long-term debt. At June 30, 2000, the fair values of
the Company's cash and cash equivalents approximated their carrying value due to
the short maturities of these instruments. The Company's long-term debt consists
of convertible subordinated notes with interest at a fixed rate. Consequently,
the Company does not have significant cash flow exposure on its long-term debt.
However, the fair value of the convertible subordinated notes is subject to
significant fluctuation due to their convertibility into shares of Conexant
common stock.

The Company's marketable debt securities consist of commercial paper, corporate
bonds, and government securities, principally having remaining terms of one year
or less. Such securities are subject to interest rate risk. At June 30, 2000,
there were net unrealized losses of approximately $23,000 on such securities.
Marketable equity securities consist of an equity investment in a semiconductor
company, initially made for the promotion of business and strategic objectives,
which is subject to equity price risk. All of the Company's marketable
securities are classified as available for sale and, as of June 30, 2000,
unrealized gains of $75.3 million (net of related income taxes of $46.6 million)
on these securities are included in other comprehensive income.

The following table shows the fair values of the Company's investments and its
long-term debt as of June 30, 2000 (in thousands):

<TABLE>
<CAPTION>
                                          Carrying Value   Fair Value
                                          --------------   -----------
<S>                                       <C>              <C>
Cash and equivalents                         $863,290      $  863,290
Marketable debt securities                     31,008          31,008
Marketable equity securities (including
    unrealized gains of $121.9 million)       137,293         137,293
Long-term debt                                999,997       1,274,293
</TABLE>


The Company transacts business in various foreign currencies, and the Company
has established a foreign currency hedging program utilizing foreign currency
forward exchange contracts to hedge certain foreign currency transaction
exposures (principally the Japanese yen). Under this program, the Company seeks
to offset foreign currency transaction gains and losses with gains and losses on
the forward contracts, so as to mitigate its overall risk of foreign transaction
gains and losses. The Company does not enter into forward contracts for trading
purposes. At June 30, 2000, the Company held foreign currency forward exchange
contracts (to sell Japanese yen at specified rates) having an aggregate notional
amount of $25.7 million, at a notional weighted average exchange rate of
approximately 103.5 yen to one dollar. The gains and losses relating to these
forward contracts are deferred and included in the measurement of the foreign
currency transaction subject to the hedge. The net unrealized gain/loss on the
forward contracts outstanding at June 30, 2000 was not material to the Company's
consolidated financial statements. Based on the Company's overall currency rate
exposure at June 30, 2000, a 10 percent change in currency rates would not have
had a material effect on the financial position, results of operations or cash
flows of the Company.



                                       20
<PAGE>   21

                           PART II. OTHER INFORMATION


ITEM 1. LEGAL PROCEEDINGS

On October 14, 1997, Brent Townshend ("Townshend") filed suit against Rockwell
and Conexant in the Superior Court of California for San Mateo County seeking an
injunction to halt the sale of products containing Conexant's K56Flex(TM)
chipsets and requesting unspecified damages, claiming that Conexant had engaged
in unfair competition, misappropriation of trade secrets, breach of contract and
breach of confidence by using technical information allegedly disclosed in
confidence by Mr. Townshend to accelerate its development of 56 Kbps modem
technology. In January 1999, Townshend dismissed his State Court action and
re-filed the same claims and three new claims for patent infringement in the
U.S. District Court for the Northern District of California. In the Federal
action, Townshend alleges that each of his patents (the "Townshend Patents")
covers certain aspects of the V.90 standard and are infringed by Conexant's 56
Kbps products. In the Federal action, Townshend seeks injunctive relief,
compensatory damages, restitution and exemplary and punitive damages. Townshend
and 3Com Corporation had publicly announced that 3Com was the exclusive licensee
for the Townshend Patents and acted as Townshend's agent in sublicensing the
Townshend Patents to third parties. More recently, Townshend and 3Com publicly
announced that Townshend has reacquired exclusive control over the licensing and
enforcement of the patents as well as other ownership rights, while 3Com
retained a non-exclusive license to practice the Townshend inventions. Conexant
has filed its answer to Townshend and counterclaims against Townshend and claims
against 3Com. On a hearing on the Motion to Dismiss filed by Townshend and 3Com,
the claims against 3Com have been dismissed, and a portion of the counterclaims
against Townshend were likewise dismissed. Conexant is vigorously defending its
position that it independently developed the 56 Kbps modem technology using
entirely its own skills and public domain information and will vigorously
contest the infringement claims and the validity of the asserted patents.

On July 29, 1991, Shumpei Yamazaki filed suit against a Japanese subsidiary of
Rockwell in the Tokyo District Court, Twenty-ninth Civil Division for patent
infringement relating to Conexant's facsimile modem chipsets seeking 685 million
yen (approximately $6.3 million based on the exchange rate on July 28, 2000) and
court costs. In October 1998, the District Court rendered its decision
dismissing the suit against Conexant, from which decision Mr. Yamazaki appealed.
On April 12, 1999, Mr. Yamazaki presented his position, as well as additional
causes of action at the first portion of the appellate hearing. Conexant
presented its position to the appellate court on June 16, 1999. The Court will
hear arguments on whether to allow Mr. Yamazaki's new causes of action in
September, 2000. Conexant believes it has meritorious defenses to these claims
and is vigorously defending this action.

On May 30, 1997, Klaus Holtz filed suit against Rockwell in the U.S. District
Court for the Northern District of California for patent infringement relating
to Conexant's modem products utilizing the V.42bis standard for data
compression. On September 30, 1998, the Court barred any alleged damages arising
before May 30, 1997. On December 17, 1998, the Court issued an order construing
the claims of the patent. Conexant filed a motion for Summary Judgment of
Non-Infringement on February 22, 1999. A hearing was held thereon on June 14,
1999. On October 25, 1999, the Court found in favor of the Company and the case
was dismissed. On July 10, 2000 the District Court granted Conexant's motion to
declare the case an exceptional case under 35 U.S.C. 285, and awarded Conexant
$250,000. Holtz filed a notice of appeal to the court of appeals for the Federal
Circuit, challenging the District Court's findings on claim construction,
non-infringement and laches. Conexant believes it has meritorious defenses to
these claims and is vigorously defending its victory on appeal.

Various other lawsuits, claims and proceedings have been or may be instituted or
asserted against Rockwell or Conexant or their respective subsidiaries,
including those pertaining to product liability, intellectual property,
environmental, safety and health, and employment matters. In connection with the
Distribution, Conexant assumed responsibility for all current and future
litigation (including environmental and intellectual property proceedings)
against Rockwell or its subsidiaries in respect of Semiconductor Systems.

The outcome of litigation cannot be predicted with certainty and some lawsuits,
claims or proceedings may be disposed of unfavorably to Conexant. Many
intellectual property disputes have a risk of injunctive relief and there can be
no assurance that a license will be granted. Injunctive relief could have a
material adverse effect on the financial condition or results of operations of
Conexant. Based on its evaluation of matters which are pending or asserted and
taking into account Conexant's reserves for such matters, management of Conexant
believes the



                                       21
<PAGE>   22
disposition of such matters will not have a material adverse effect on the
financial condition or results of operations of Conexant.



ITEM 2. CHANGES IN SECURITIES

In April 2000, the Company issued 121,244 shares of its common stock to the
shareholders of Applied Telecom, Inc. in connection with the acquisition by the
Company of Applied Telecom, Inc. The issuance of shares was pursuant to an
exemption from registration under Section 4(2) of the Securities Act of 1933, as
amended (the "Securities Act"). The holders of such shares have been granted
certain registration rights.

In June 2000, the Company issued 1,000,285 shares of its common stock to the
shareholders of Sierra Imaging, Inc. in connection with the acquisition by the
Company of Sierra Imaging, Inc. The issuance of shares was pursuant to an
exemption from registration under Regulation D of the Securities Act. The
holders of such shares have been granted certain registration rights.

Also in June 2000, the Company issued 6,515,207 shares of its common stock to
the shareholders of HotRail, Inc. in connection with the acquisition by the
Company of HotRail, Inc. The issuance of shares was pursuant to an exemption
from registration under Regulation D of the Securities Act. The holders of such
shares have been granted certain registration rights.

On July 28, 2000, the Company filed a registration statement on Form S-3
(Registration No. 333-42500) with the SEC registering the resale by the holders
thereof of the shares of common stock of the Company issued in the Applied
Telecom, Inc., Sierra Imaging, Inc. and HotRail, Inc. acquisitions described
above. This registration statement was declared effective by the SEC on August
3, 2000.

In May 2000, the Company issued one share of its Series B Voting Preferred Stock
to CIBC Mellon Trust Company, as trustee of the voting trust established under
the Voting Trust and Exchange Agreement, in connection with the acquisition of
Philsar Semiconductor Inc. ("Philsar"). The trustee is holding the share in
trust for the benefit of the holders of exchangeable shares of Philsar issued to
Philsar shareholders in connection with the acquisition. The issuance of the
share was pursuant to an exemption from registration under Section 4(2) of the
Securities Act.

Each outstanding share of common stock, par value $1 per share, of Conexant also
evidences one preferred share purchase right. Each preferred share purchase
right entitles the registered holder to purchase from Conexant one two-hundredth
of a share of Series A Junior Participating Preferred Stock. Pursuant to the
First Amendment to Rights Agreement dated as of December 9, 1999 between
Conexant and ChaseMellon Shareholder Services, L.L.C., as Rights Agent, the
Rights Agreement dated as of November 30, 1998 was amended to increase the
exercise price of each preferred share purchase right to $300, subject to
adjustment.

In addition, the Rights Agreement was amended to provide that in connection with
the issuance or sale of Conexant's common stock following the date the preferred
share purchase rights are no longer attached to the common stock (the
"Distribution Date") and prior to the earlier of (1) the date the preferred
share purchase rights are redeemed and (2) the date the preferred share purchase
rights expire, (a) Conexant will, with respect to common stock issued or sold
pursuant to the exercise of stock options or under any employee plan or
arrangement in existence prior to the Distribution Date, or upon the exercise,
conversion or exchange of securities, notes or debentures (pursuant to the terms
thereof) issued by Conexant and in existence prior to the Distribution Date, and
(b) Conexant may, in any other case, if deemed necessary or appropriate by the
board of directors, issue certificates representing the appropriate number of
preferred share purchase rights in connection with such issuance or sale.
Conexant will not be obligated to issue any of these certificates if, and to the
extent that, Conexant is advised by counsel that the issuance of those
certificates would create a significant risk of material adverse tax
consequences to Conexant or the person to whom such certificate would be issued
or would create a significant risk that the stock options or employee plans or
arrangements would fail to qualify for otherwise available special tax
treatment. In addition, no certificate will be issued if, and to the extent
that, appropriate adjustments otherwise have been made in lieu of the issuance
thereof.



                                       22
<PAGE>   23

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

(a) Exhibits:

<TABLE>
<S>     <C>
 2.1    Agreement and Plan of Merger, dated as of December 18, 1999, among
        Conexant Systems, Inc., Merlot Acquisition Corp. and Maker
        Communications, Inc., filed as Exhibit 2.01 to the Company's
        Registration Statement on Form S-4 (Registration No. 333-96033), is
        incorporated herein by reference.

 2.2    Stock Purchase Agreement, dated as of January 6, 2000, by and among
        Conexant Systems, Inc. and the shareholders and option holders of
        Microcosm Communications Limited, filed as Exhibit 2.2 to the Company's
        Quarterly Report on Form 10-Q for the quarter ended December 31, 1999,
        is incorporated by reference.

 2.3    Reorganization Agreement, dated as of April 11, 2000, by and between
        Conexant, Philsar Semiconductor Inc., and the Shareholders named in
        Schedule A thereto, filed as Exhibit 4.3 to the Company's Registration
        Statement on Form S-3 (Registration No. 333-38890), is incorporated
        herein by reference.

 2.4    Agreement and Plan of Merger and Reorganization dated June 27, 2000, by
        and among Conexant Systems, Inc., Steam Acquisition Corp. and HotRail,
        Inc., filed as Exhibit 2.1 to the Company's Current Report on Form 8-K
        dated June 29, 2000, is incorporated herein by reference.

 3.1    Restated Certificate of Incorporation of Conexant Systems, Inc.

 4.1    Indenture, dated as of February 1, 2000, between the Company and Bank
        One Trust Company, National Association, as trustee, including the form
        of the Company's 4% Convertible Subordinated Notes Due February 1, 2007
        attached as Exhibit A thereto, filed as Exhibit 4.04 to the Company's
        Registration Statement on Form S-4 (Registration No. 333-96033),
        incorporated herein by reference.

10.1    Credit agreement dated as of December 21, 1998, as Amended and Restated
        as of July 27, 2000, among Conexant Systems, Inc., certain of its
        Subsidiaries, the Lenders and the Issuing Banks thereunder, and Credit
        Suisse First Boston, as administrative agent and collateral agent.

 12     Statement re: computation of ratios

 27     Financial Data Schedule.
</TABLE>


(b) Reports on Form 8-K

Report on Form 8-K dated April 3, 2000, containing historical financial
statements of Maker Communications, Inc. and pro forma financial information.

Report on Form 8-K dated April 12, 2000, reporting the Company's announcement of
the acquisition of Applied Telecomm, Inc. and the Company's agreement to acquire
Philsar Semiconductor Inc.

Report on Form 8-K dated May 17, 2000, containing pro forma financial
information relating to the acquisition of Maker Communications, Inc.

Report on Form 8-K dated May 23, 2000, reporting the Company's agreement to
acquire Sierra Imaging, Inc.

Report on Form 8-K dated May 30, 2000, reporting the completion of the Company's
acquisition of Philsar Semiconductor Inc.

Report on Form 8-K dated June 13, 2000, reporting the completion of the
Company's acquisition of Sierra Imaging, Inc.

Report on Form 8-K dated June 27, 2000, reporting the Company's agreement to
acquire HotRail, Inc.

Report on Form 8-K dated June 29, 2000, reporting the completion of the
Company's acquisition of HotRail, Inc.

Report on Form 8-K dated July 19, 2000, reporting the Company's agreement to
acquire Novanet Semiconductor Ltd. and the Company's agreement to acquire
NetPlane Systems, Inc.



                                       23
<PAGE>   24
                                   SIGNATURES

Pursuant to the requirements 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.

                                    CONEXANT SYSTEMS, INC.
                                    (Registrant)



Date: August 4, 2000                By  /s/  Dennis E. O'Reilly
                                        -------------------------------------
                                        Dennis E. O'Reilly
                                        Senior Vice President,
                                        General Counsel and Secretary


Date: August 4, 2000                By  /s/ Steven M. Thomson
                                        -------------------------------------
                                        Steven M. Thomson
                                        Vice President and Controller
                                        (principal accounting officer)



                                       24
<PAGE>   25

                                  EXHIBIT INDEX


<TABLE>
<S>     <C>
  3.1   Restated Certificate of Incorporation of Conexant Systems, Inc.

 10.1   Credit agreement dated as of December 21, 1998, as Amended and Restated
        as of July 27, 2000, among Conexant Systems, Inc., certain of its
        Subsidiaries, the Lenders and the Issuing Banks thereunder, and Credit
        Suisse First Boston, as administrative agent and collateral agent.

 12     Statement re: computation of ratios

 27     Financial Data Schedule.
</TABLE>