<PAGE>   1
                     U.S. SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D. C. 20549

                                    FORM 10-Q

(Mark One)

    X       Quarterly report pursuant to Section 13 or 15(d) of the Securities
 -------    Exchange Act of 1934 For the quarterly period ended September 30,
            1997 or

 -------    Transition report pursuant to Section 13 or 15(d) of the Securities
            Exchange Act of 1934

               For the transition period from ________to________


COMMISSION FILE NO. 0-13836


                         SILICON VALLEY RESEARCH, INC.
             ------------------------------------------------------
             (Exact name of registrant as specified in its charter)


          California                                       94-2743735
--------------------------------------------------------------------------------
(State or other jurisdiction of                           (IRS Employer
incorporation or organization)                          Identification No.)


 6360 San Ignacio Avenue      San Jose, CA                  95119-1231
--------------------------------------------------------------------------------
(Address of principal executive offices)                    (Zip Code)

                                 (408) 361-0333
--------------------------------------------------------------------------------
               Registrant's telephone number, including area code


--------------------------------------------------------------------------------
     (Former name, former address and former fiscal year, if changed since
                                  last report.)

Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.

                          YES   [X]            NO [ ]

Indicate the number of shares outstanding of each of the Issuer's classes of
common stock, as of the latest practicable date.

          Common Shares Outstanding at September 30, 1997:  16,776,883





<PAGE>   2

                 SILICON VALLEY RESEARCH, INC. AND SUBSIDIARIES

                                     INDEX

<TABLE>
<CAPTION>
                                                                                                       Pages
                                                                                                       -----
<S>              <C>                                                                                   <C>
Part I.          FINANCIAL INFORMATION
                 ---------------------

                 Item 1.      Financial Statements

                     Consolidated Balance Sheets -
                        March 31, 1997 and September 30, 1997 (unaudited)                                   3

                     Consolidated Statements of Operations -
                        Three and Six Months Ended September 30, 1996 and 1997 (unaudited)                  4

                     Consolidated Statements of Cash Flows -
                        Six Months Ended September 30, 1996 and 1997 (unaudited)                            5

                     Notes to Consolidated Financial Statements                                           6-8

                 Item 2.      Management's Discussion and Analysis of
                              Financial Condition and Results of
                              Operations                                                                 9-14

Part II.         OTHER INFORMATION                                                                      15-16
                 -----------------                                                                           

                 Item 1       Legal Proceedings
                 Item 2       Changes in Securities
                 Item 3       Defaults Upon Senior Securities
                 Item 4       Submission of Matters to a Vote of
                              Securities Holders
                 Item 5       Other Information
                 Item 6       Exhibits and Reports on Form 8-K

                 Signatures                                                                                17

Exhibit 27.      Financial Data Schedule                                                                   18
</TABLE>





                                       2
<PAGE>   3
                         PART I.  FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS

SILICON VALLEY RESEARCH, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS)


<TABLE>
<CAPTION>
Assets                                                      March 31, 1997        September 30, 1997
------                                                      --------------        ------------------
                                                                                     (Unaudited)
<S>                                                           <C>                     <C>    
Current Assets:
Cash and cash equivalents                                      $  2,064                $  2,264
Accounts receivable, net of allowances of
     $150 in each period                                          1,129                   1,265
Prepaid expenses and other current assets                           453                     273
                                                               --------                --------
                                                                  3,646                   3,802

Fixed assets, net                                                   879                     740
Other assets, net                                                 3,952                   2,134
                                                               --------                --------
                                                               $  8,477                $  6,676
                                                               ========                ========

Liabilities and Shareholders' Equity

Current Liabilities:
Short-term borrowings                                          $   --                  $    254
Current portion of long-term debt                                   189                     227
Accounts payable                                                    515                     992
Accrued expenses                                                  1,443                     963
Deferred revenue                                                  1,018                     933
                                                               --------                --------
                                                                  3,165                   3,369

Long-term debt, less current portion                                254                     201
                                                               --------                --------

                                                                  3,419                   3,570
                                                               --------                --------
Contingencies (Note 7)

Shareholders' Equity:
Preferred stock, no par value:
    Authorized: 1,000 shares
    Issued and outstanding: none                                   --                      --
Common stock, no par value:
    Authorized: 40,000 shares
    Issued and outstanding:
         12,227 shares at March 31, 1997
         and 16,777 shares at September 30, 1997                 32,375                  36,263
Accumulated deficit                                             (27,308)                (33,116)
Cumulative translation adjustment                                    (9)                    (41)
                                                               --------                --------
                                                                  5,058                   3,106
                                                               --------                --------

                                                               $  8,477                $  6,676
                                                               ========                ========
</TABLE>

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





                                       3


<PAGE>   4
                 SILICON VALLEY RESEARCH, INC. AND SUBSIDIARIES
                     CONSOLIDATED STATEMENTS OF OPERATIONS
                                  (UNAUDITED)
                     (IN THOUSANDS, EXCEPT PER SHARE DATA)


<TABLE>
<CAPTION>
                                                   Three Months Ended           Six Months Ended
                                                      September 30,              September 30,
                                                  1996          1997          1996           1997  
                                                --------      --------      --------      --------
<S>                                            <C>           <C>           <C>           <C>
Revenue:
License fees and other                          $    195      $    487      $  1,764      $    729
Maintenance fees                                     748           497         1,401           968
                                                --------      --------      --------      --------
         Total revenue                               943           984         3,165         1,697
                                                --------      --------      --------      --------

Cost of revenue:
License fees and other                               178           212           297         1,530
Maintenance fees                                     137           155           236           261
                                                --------      --------      --------      --------
         Total cost of revenue                       315           367           533         1,791
                                                --------      --------      --------      --------

Gross profit                                         628           617         2,632           (94)
                                                --------      --------      --------      --------

Operating expenses:
Engineering, research and development                844         1,152         1,512         1,777
Selling and marketing                              1,648           932         3,216         2,273
General and administrative                           695           277         1,103           580
Impairment loss on prepaid royalty (Note 7)         --            --            --           1,217
                                                --------      --------      --------      --------
         Total operating expenses                  3,187         2,361         5,831         5,847
                                                --------      --------      --------      --------

Operating loss                                    (2,559)       (1,744)       (3,199)       (5,941)
                                                --------      --------      --------      --------

Other income (expense):
Interest income                                       87            34           199           105
Interest expense                                      (8)           (8)          (16)          (12)
Other, net                                             1           (96)            2            40
                                                --------      --------      --------      --------
         Total other income (expense)                 80           (70)          185           133
                                                --------      --------      --------      --------

Loss before provision for
         income taxes                             (2,479)       (1,814)       (3,014)       (5,808)

Provision for income taxes                          --            --            --            --
                                                --------      --------      --------      --------

Net loss                                        $ (2,479)     $ (1,814)     $ (3,014)     $ (5,808)
                                                ========      ========      ========      ========


Net loss per share                              $  (0.22)     $  (0.11)     $  (0.26)     $  (0.35)
                                                ========      ========      ========      ========

Shares used in per share calculation              11,418        16,773        11,383        16,375
                                                ========      ========      ========      ========
</TABLE>

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





                                       4
<PAGE>   5
                 SILICON VALLEY RESEARCH, INC. AND SUBSIDIARIES
                     CONSOLIDATED STATEMENTS OF CASH FLOWS
                                  (UNAUDITED)
                                 (IN THOUSANDS)


<TABLE>
<CAPTION>
                                                                     Six Months Ended
                                                                        September 30,
                                                                     1996           1997
                                                                   --------      --------
<S>                                                               <C>           <C>
Cash Flows from Operating Activities:
Net loss                                                           $ (3,014)     $ (5,808)
Adjustments to reconcile net loss to net
cash used in operating activities:
         Provision for impairment of prepaid marketing royalty         --           1,217
         Amortization of software development costs                     263         1,259
         Depreciation and amortization                                  416           522
Changes in assets and liabilities, net:
         Accounts receivable                                          2,388          (136)
         Prepaid expenses and other current assets                     (422)          180
         Accounts payable                                               145           477
         Accrued expenses                                                60          (480)
         Deferred revenue                                              (439)          (85)
         Other, net                                                  (1,380)           77
                                                                   --------      --------

Net cash used in operating activities                                (1,983)       (2,777)
                                                                   --------      --------

Cash Flows from Investing Activities:
Acquisition of fixed assets                                            (283)          (21)
Capitalization of software development costs and
   purchase of software licenses                                     (2,102)       (1,038)
                                                                   --------      --------

Net cash used in investing activities                                (2,385)       (1,059)
                                                                   --------      --------

Cash Flows from Financing Activities:
Principal payments of long-term debt                                    (68)         (121)
Advances on credit line                                                --             301
Proceeds from issuance of common stock                                  242         3,888
                                                                   --------      --------

Net cash provided by financing activities                               174         4,068
                                                                   --------      --------

Effect of exchange rate changes on cash                                  29           (32)
                                                                   --------      --------

Net increase (decrease)  in cash and
   cash equivalents                                                  (4,165)          200
Cash and cash equivalents at beginning
   of  period                                                        10,238         2,064
                                                                   --------      --------

Cash and cash equivalents at end
   of period                                                       $  6,073      $  2,264
                                                                   ========      ========
</TABLE>

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





                                       5
<PAGE>   6

                 SILICON VALLEY RESEARCH, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                          SEPTEMBER 30, 1997- UNAUDITED
                      (IN THOUSANDS EXCEPT FOR SHARE PRICE)

NOTE 1:      BASIS OF PRESENTATION AND FINANCIAL STATEMENT INFORMATION

       The accompanying consolidated financial statements have been prepared by
the Company, pursuant to the rules and regulations of the Securities and
Exchange Commission for interim financial statements.  Therefore, they do not
include all the disclosures which were presented in the Company's annual report
on Form 10-K.  These financial statements do not include all disclosures
required by  generally accepted accounting principles and accordingly, should
be read in conjunction with the consolidated financial statements and notes
included as part of the Company's latest annual report on Form 10-K.

         In the opinion of management, the consolidated financial statements
include all adjustments (consisting only of normal recurring adjustments)
necessary to present fairly the consolidated financial position, results of
operations and cash flows for the interim period.  The results of operations
presented are not necessarily indicative of the results to be expected for the
full year or for any other period.

         The report of Price Waterhouse LLP on the Company's fiscal 1997
consolidated financial statements was amended on September 17, 1997 to add an
explanatory paragraph regarding the Company's ability to continue as a going
concern.  There can be no assurance that the Company will not continue to incur
significant operating losses or that required additional financing will be
available to meet the Company's business plans in fiscal 1998 and beyond.

         In February 1997, the Company restated its unaudited consolidated
financial statements for the quarters ended June 30, 1996 and September 30,
1996 to reverse certain transactions and related expenses which were recognized
other than in accordance with the Company's accounting policies.  The financial
statements for the three and six months ended September 30, 1996 include the
effect of the restatement referred to above.

NOTE 2:      EARNINGS PER SHARE

         The calculation of net loss per share is based upon the weighted
average number of shares outstanding during the period.  During the three and
six month periods ended September 30, 1997 and 1996, the common equivalent
shares were antidilutive due to losses and, accordingly, were excluded from the
computation of net loss per share.

         In February 1997, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards No. 128, "Earnings per Share".
This Statement is effective for the Company's quarter ending December 31, 1997.
The Statement redefines earnings per share under generally accepted accounting
principles.  Under the new standard, primary earnings per share is replaced by
basic earnings per share and fully diluted earnings per share is replaced by
diluted earnings per share.  The Company does not expect the adoption of this
Statement to have a significant impact on the previously reported losses per
share.

NOTE 3:      STATEMENT OF CASH FLOWS INFORMATION
<TABLE>
<CAPTION>
                                                                Six Months Ended
                                                                  September 30      
                                                              ------------------
                                                              1996          1997
                                                              ----          ----
<S>                                                           <C>           <C>
Supplemental Cash Flow Information:
Cash paid during the period for:
                Interest                                       $16           $12
                Income Taxes                                    13            --
</TABLE>





                                       6
<PAGE>   7



                 SILICON VALLEY RESEARCH, INC. AND SUBSIDIARIES
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)
                         SEPTEMBER 30, 1997- UNAUDITED
                     (IN THOUSANDS EXCEPT FOR SHARE PRICE)

NOTE 4:        BALANCE SHEET COMPONENTS
<TABLE>
<CAPTION>
                                                       March 31,      September 30,
                                                        1997              1997
                                                      -------           -------
<S>                                                  <C>               <C>
Other Assets:
Software development costs                            $ 2,163           $ 1,685
Software licenses                                       2,388             2,869
                                                      -------           -------
                                                        4,551             4,554
Less accumulated amortization                          (2,425)           (2,953)
                                                      -------           -------
                                                        2,126             1,601
Prepaid royalties, net                                  1,592               317
Other                                                     234               216
                                                      -------           -------
                                                      $ 3,952           $ 2,134
                                                      =======           =======

Accrued Expenses:
Payroll and related costs                             $   434           $   447
Taxes payable                                             108               106
Other                                                     901               410
                                                      -------           -------
                                                      $ 1,443           $   963
                                                      =======           =======
</TABLE>

NOTE 5:        BANK LINE OF CREDIT

         In June 1997, the Company entered into an additional line of credit
with its bank.  The revolving line of credit will provide for borrowings up to
$2,000 with available borrowings limited to certain percentages of eligible
accounts receivable.  Interest at prime plus one percent will be due monthly
with principal due in one year.  As of September  30, 1997, $254 has been
borrowed under the line of credit.

NOTE 6:        REPRICING OF STOCK OPTIONS

         On July 17, 1997, the Compensation Committee of the Board of Directors
approved a proposal under which all employees could elect to amend certain
stock options with exercise prices in excess of $0.875 to change the price to
the fair market value of the Company's common stock on that date, which was
$0.875, with continuation of the existing vesting schedule.  Options for the
purchase of a total of 1,563 shares were amended.

NOTE 7:        CONTINGENCIES

         The Company is subject to various types of litigation during its
normal course of business.  In January 1997, Gambit Automated Design, Inc.
("Gambit"), a competitor of the Company, filed a complaint alleging
misappropriation of trade secrets, breach of contract, inducing breach of
contract, breach of fiduciary duty, unfair competition and unjust enrichment
against the Company and a former employee of Gambit who is a current employee
of the Company.  Gambit seeks injunctive relief, compensation and punitive
damages, restitution and attorneys' fees and costs.  The parties are currently
engaged in discovery.  The Company believes the lawsuit is without merit and
intends to defend itself vigorously.

         In June 1996, the Company entered into an agreement whereby the
Company was granted the exclusive marketing rights to Bell Labs' CLOVER line of
deep submicron verification products worldwide, with the exception of Japan and
Taiwan, where the Company would co-market with Bell Labs' existing
distributors.  Pursuant to the four year agreement, the Company  made prepaid
royalty payments of $1,750.  The agreement also provided for future prepaid
royalty payments of:  $1,250 in fiscal 1998 and $1,000 in fiscal 1999.  Despite
active marketing efforts, the product had limited success due to product issues
and to strong competitive factors.  The Company  recognized an impairment loss
on the balance of unamortized prepaid royalties totaling $1,217 during the six
months ended September 30, 1997.  In July and August 1997, both parties sent
notices of termination, alleging breach of the agreement by the other party.
The agreement provides that any dispute,











                                       7

<PAGE>   8

controversy or claim arising out of the agreement shall be resolved through
good faith consultation for a specified period.  That period has passed.  The
agreement provides that if the dispute is not resolved by consultation, it
shall be referred to and finally resolved by arbitration.  Request for
arbitration has been made and arbitrators are in the process of being
appointed.  Lucent's request for arbitration includes a "Prayer for Relief" of
$750 of royalty prepayments, consequential, special and incidental damages in
an unspecified sum and punitive damages in an unspecified sum.  The Company has
filed a counterclaim, which includes a "Prayer for Relief" of direct and
consequential damages according to proof at the arbitration hearing in an
amount in excess of $1,750, recision of the License Agreement and the return of
the consideration exchanged thereunder, declaratory relief  and punitive
damages in an unspecified sum.  The dispute is in its early stages and the
ultimate outcome cannot presently be determined.  Accordingly, no provision for
any liability that may result upon adjudication has been made in the
consolidated financial statements.  The Company believes that Lucent's "Prayer
for Relief" is without merit and intends to vigorously dispute the claim.
































                                       8
<PAGE>   9
ITEM 2.                MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                   FINANCIAL CONDITION AND RESULTS OF OPERATIONS
                     (IN THOUSANDS, EXCEPT PER SHARE DATA)

This Management's Discussion and Analysis of Financial Condition and Results of
Operations includes a number of forward-looking statements which reflect the
Company's current view with respect to future events and financial performance.
These forward-looking statements are subject to certain risks and
uncertainties, including those discussed in the Other Factors Affecting Future
Results section of this Item 2, elsewhere in this Form 10-Q and as set forth in
the Company's form 10-K on file with the SEC  that could cause actual results
to differ materially from historical results or those anticipated.  In this
report, the words "anticipates," "believes," "expects," "intends," "future,"
and similar expressions identify forward-looking statements.  Readers are
cautioned not to place undue reliance on these forward-looking statements,
which speak only as of the date hereof.

RESULTS OF OPERATIONS

REVENUE

         Revenue for the second quarter of fiscal year 1998, which ended
September 30, 1997, was $984, an increase from $943 in the second quarter a year
ago.  The 4% increase in revenues was due to an increase in license revenue
recorded from a multi-license order for SonIC from a leading design services
company during the quarter ended September 30, 1997.  The two companies are
entering into a joint development program to maximize SonIC's capabilities.  In
addition, the Company is purchasing two copies of a set of libraries from this
company, at an amount substantially equivalent to the license order, to utilize
in conjunction with the Company's customer benchmark and development engineering
for the Company's products to achieve maximum utilization of the library data.
Revenue for the six month period ended September 30, 1997 decreased to $1,697
from $3,165 over the six month period ended September 30, 1996.  The 46%
decrease is primarily due to weakened demand based on a reduction in capital
investment by semiconductor manufacturers, particularly in Asia, in the first
quarter of fiscal 1998, increased competition and the timing of renewals of
maintenance contracts.  International sales, primarily Japan and the Far East,
accounted for 24% of total revenue in the second quarter of fiscal 1998 compared
to 36% in the second quarter a year ago.

         The Company's expense levels are based, in part, on its expectations
as to future revenue levels, which are difficult to predict.  A substantial
portion of the Company's revenues in each quarter results from shipments during
the last month of that quarter, and for that reason among others, the Company's
revenues are subject to significant quarterly fluctuations.   If revenue levels
are below expectations, as in the six months ended September 30, 1997,
operating results may be materially and adversely affected.  In addition, the
Company's quarterly and annual results may fluctuate as a result of many
factors, including the size and timing of software license fees, timing of
co-development projects with customers, timing of operating expenditures,
increased competition, new product announcements and releases by the Company
and its competitors, gain or loss of significant customers or distributors,
expense levels, renewal of maintenance contracts, pricing changes by the
Company or its competitors, personnel changes, foreign currency exchange rates,
and economic  conditions generally and in the electronics industry
specifically.

COST OF REVENUE

         Cost of license fees and other revenue for the second quarter of
fiscal year 1998 was $212, compared to $178 in the second quarter of fiscal
1997.  Cost of license fees for the six months ended September 30, 1997 was
$1,530, compared to $297 in the six months ended September 30, 1996.  Cost of
sales of license fees is primarily the amortization of software development
costs and amortization of prepaid royalty payments to third parties.  As a
result of the significant reduction in revenue and due to the Company's
expanded product development program, the Company wrote-off $1,036 of
unamortized software development costs in the six months ended September 30,
1997.

         Cost of maintenance fees for the second quarter of fiscal year 1998
was $155 compared to $137 in the second quarter of fiscal 1997.  Cost of
maintenance fees for the six months ended September 30, 1997 was $261 compared
to $236 in the six months ended September 30, 1996.  Cost of maintenance fees
is primarily the cost of providing technical support and technical
documentation.










                                       9
<PAGE>   10
ENGINEERING, RESEARCH AND DEVELOPMENT EXPENSES

         Engineering, research and development expenses for the second quarter
of fiscal year 1998 were $1,152 compared to $844 in the second quarter a year
ago.  Comparing the second quarter of fiscal 1998 and the second quarter of
fiscal 1997, engineering, research and development expenses were 117% and 90%
of total revenue, respectively.  Engineering, research and development expenses
for the six months ended September 30, 1997 were $1,777 compared to $1,512 for
the six months ended September 30, 1996.  Comparing these periods, engineering,
research and development expenses were 105% and 48% of total revenue,
respectively.  Engineering, research and development expenses were lower in
previous quarters due to the capitalization of software development costs,
which was not required during the second fiscal quarter of 1998.

SELLING AND MARKETING EXPENSES

         Selling and marketing expenses for the second quarter of fiscal year
1998 decreased to $932 from $1,648 in the second quarter a year ago.  In the
second quarter of fiscal 1998 and the second quarter of fiscal 1997, selling
and marketing expenses were 95% and 175% of total revenue, respectively.
Selling and marketing expenses for the six months ended September 30, 1997
decreased to $2,273 from $3,216 in the six months ended September 30, 1996.
Comparing the six month periods, selling and marketing expenses were 134% and
102% of total revenue, respectively.  The dollar decrease is due to the effects
of the Company's cost-cutting measures, a consistent reserve for bad debts from
the previous year's increase and lower commissions resulting from reduced
revenue during the six months ended September 30, 1997.

GENERAL AND ADMINISTRATIVE EXPENSES

         General and administrative expenses decreased to $277 for the second
quarter of fiscal year 1998 from $695 in the second quarter a year ago.  In the
second quarter of fiscal 1998 and the second quarter of fiscal 1997, general
and administrative expenses were 28% and 74% of total revenue, respectively.
General and administrative expenses for the six months ended September 30, 1997
decreased to $580 from $1,103 in the six months ended September 30, 1996.
Comparing the six month periods, general and administrative expenses were 34%
and 35% of total revenue, respectively.  General and administrative expenses
have decreased due to streamlining the organization, lower relocation expenses,
lower consulting and legal expenses and cost-cutting measures instituted by
management.

IMPAIRMENT LOSS ON PREPAID ROYALTY

         In June 1996, the Company entered into an agreement whereby the
Company was granted the exclusive marketing rights to Bell Labs' CLOVER line of
deep submicron verification products worldwide, with the exception of Japan and
Taiwan.  Pursuant to the four year agreement, the Company has made prepaid
royalty payments of $1,750.  Despite active marketing efforts, the product had
limited success due to product issues and to strong competitive factors.
Accordingly, the Company recently ceased sales of the product line.  Provision
was made in the accompanying financial statements to expense the full amount of
unamortized prepaid royalty of $1,217, the future value of which was considered
impaired.

LIQUIDITY AND CAPITAL RESOURCES

         Since inception, the Company has financed its operations primarily
through sales of equity securities and to a lesser extent, cash generated from
operations.  To date in fiscal 1998, the Company has received net cash of $3,888
from the private placement of equity securities and the exercise of warrants and
options to purchase Common Stock ("financing activities").  During the six
months ended September 30, 1997, cash and cash equivalents increased $200 from
$2,064 to $2,264.  This increase resulted from cash provided by financing
activities of $4,069 less cash used by operations of $2,777 and $1,059 of cash
used for investing activities.








                                       10
<PAGE>   11
         The Company incurred a significant loss in the first six months of
fiscal 1998 and expects operating losses to continue, at least in the near
term, as it expands its product development and marketing capabilities.  The
achievement of profitability is primarily dependent upon the continued
development and commercial acceptance of the Company's products, the successful
management of the business and management's ability to strategically focus the
Company.  There can be no assurance as to whether or when achievement of
profitable operations will occur.  In addition, the Company is experiencing
negative cash flow from operations and it is expected that it will continue to
experience negative cash flow at least through fiscal 1998 and potentially
thereafter.

         The Company's primary unused sources of funds at September 30, 1997
consisted of cash and cash equivalents of $2,264 and an available line of credit
of $1,746 from its bank, limited to certain percentages of eligible accounts
receivable.  The Company believes its cash and cash generated from operations
and available borrowings may not be sufficient to finance its operations through
its 1998 fiscal year.  Management is exploring financing alternatives to
supplement the Company's cash position.  Potential sources of additional
financing include private equity financings, mergers, strategic investments,
strategic partnerships or various forms of debt financings.  The Company has no
commitments or arrangements to obtain any additional funding and there can be no
assurance that the required financing of the Company will be available on
acceptable terms, if at all.  The unavailability or timing of any financing
could prevent or delay the continued development and marketing of the products
of the Company and could require substantial curtailment of operations of the
Company.

         The report of Price Waterhouse LLP on the Company's fiscal 1997
consolidated financial statements was amended on September 17, 1997 to add an
explanatory paragraph regarding the Company's ability to continue as a going
concern.  There can be no assurance that the Company will not continue to incur
significant operating losses or that required additional financing will be
available to meet the Company's business plans in fiscal 1998 and beyond.

OTHER FACTORS AFFECTING FUTURE RESULTS

DEPENDENCE ON SINGLE PRODUCT LINE.  Revenues from sales of the SVR GARDS family
of products have historically represented  a substantial majority of the
Company's revenues.  Although the Company has introduced its SVR SonIC family
of products, the Company expects that revenues from the sale of SVR GARDS
products will continue to account for at least a significant portion of the
Company's revenues for the foreseeable future.  The life cycles of the
Company's products are difficult to predict due to the effect of new product
introductions or product enhancements by the Company or its competitors, market
acceptance of new and enhanced versions of the Company's products and
competition in the Company's marketplace.  Declines in the demand for the SVR
GARDS family of products, whether as a result of competition, technological
change, price reductions or otherwise, could have a material adverse effect on
the Company's business, operating results and financial condition.

NEW PRODUCTS AND RAPID TECHNOLOGICAL CHANGE; RISK OF PRODUCT DEFECTS.  The EDA
industry is characterized by extremely rapid technological change, frequent new
product introductions and enhancements, evolving industry standards and rapidly
changing customer requirements.  The development of more complex ICs embodying
new technologies will require increasingly sophisticated design tools.  The
Company's future results of operations will depend, in part, upon its ability
to enhance its current products and to develop and introduce new products on a
timely and cost-effective basis that will keep pace with technological
developments and evolving industry standards and methodologies, as well as
address the increasingly sophisticated needs of the Company's customers.  The
Company has in the past, and may in the future, experience delays in new
product development and product enhancements.

         The Company has recently released significant upgrades to GARDS to
provide a new Power Router, to SonIC to provide a new placer and new routing
capabilities, and to SC to provide a rewritten Global Router and fast new
placement.  There can be no assurance that these new products will gain market
acceptance or that the Company will be successful in developing and  marketing
product enhancements or other new products that respond to technological
change, evolving industry standards and changing customer requirements, that
the Company will not experience difficulties that could delay or prevent the
successful development, introduction and marketing of these products or product
enhancements, or that its new products and product enhancements will adequately
meet the requirements of the marketplace and achieve any significant degree of
market acceptance.





                                       11
<PAGE>   12
         In addition, all of the Company's current products operate in, and
planned future products will operate in, the Unix operating system.  In the
event that another operating system, such as Windows NT, were to achieve broad
acceptance in the EDA industry, the Company would be required to port its
products to such an operating system, which would be costly and time consuming
and could have a material adverse effect on the Company's business, operating
results or financial condition.  Failure of the Company, for technological or
other reasons, to develop and introduce new products and product enhancements
in a timely and cost-effective manner would have a material and adverse effect
on the Company's business, operating results and financial condition.  In
addition, the introduction, or even announcement of products by the Company or
one or more of its competitors embodying new technologies or changes in
industry standards or customer requirements could render the Company's existing
products obsolete or unmarketable.  There can be no assurance that the
introduction or announcement of new product offerings by the Company, or one or
more of its competitors, will not cause customers to defer purchases of
existing Company products.  Such deferment of purchases could have a material
adverse effect on the Company's business, operating results or financial
condition.

         Software products as complex as those offered by the Company may
contain defects or failures when introduced or when new versions are released.
The Company has in the past discovered software defects in certain of its
products and may experience delays or lost revenue to correct such defects in
the future.  Although the Company has not experienced material adverse effects
resulting from any such defects to date, there can be no assurance that,
despite testing by the Company, errors will not be found in new products or
releases after commencement of commercial shipments, resulting in loss of
market share or failure to achieve market acceptance.  Any such occurrence
could have a material effect upon the Company's business, operating results or
financial condition.

POTENTIAL FLUCTUATIONS IN QUARTERLY OPERATING RESULTS.  Numerous factors may
materially and unpredictably affect operating results of the Company, including
the uncertainties of the size and timing of software license fees, timing of
co-development projects with customers, timing of operating expenditures,
increased competition, new product announcements and releases by the Company
and its competitors, gain or loss of significant customers or distributors,
expense levels, renewal of maintenance contracts, pricing changes by the
Company or its competitors, personnel changes, foreign currency exchange rates,
and economic conditions generally and in the electronics industry specifically.
Any unfavorable change in these or other factors could have a material adverse
effect on the Company's operating results for a particular quarter.  Many of
the Company's customers order on an as-needed basis and often delay delivery of
firm purchase orders until their project commencement dates are determined,
and, as a result, the Company operates with no significant backlog.  Quarterly
revenue and operating results will therefore depend on the volume and timing of
orders received during the quarter, which are difficult to forecast accurately.
Historically, the Company has often recognized a substantial portion of its
license revenues in the last month of the quarter, with these revenues
frequently concentrated in the last two weeks of the quarter.  Operating
results would be disproportionately affected by a reduction in revenue because
only a small portion of the Company's expenses vary with its revenue.
Operating results in any period should not be considered indicative of the
results to be expected for any future period, and there can be no assurance
that the Company's revenues will increase or that the Company will achieve
profitability.

LENGTHY SALES CYCLE.  The licensing and sales of the Company's software
products generally involves a significant commitment of capital by prospective
customers, with the attendant delays frequently associated with large capital
expenditures and lengthy acceptance procedures.  For these and other reasons,
the sales cycle associated with the licensing of the Company's products is
typically lengthy and subject to a number of significant risks over which the
Company has little or no control.  Because the timing of customer orders is
hard to predict, the Company believes that its quarterly operating results are
likely to vary significantly in the future.  Actual results of the Company
could vary materially as a result of a variety of factors, including, without
limitation, the high average selling price and long sales cycle for the
Company's products, the relatively small number of orders per quarter,
dependence on sales to a limited number of large customers, timing of receipt
of orders, successful product introduction and acceptance of the Company's
products and increased competition.









                                       12
<PAGE>   13

DEPENDENCE UPON SEMICONDUCTOR AND ELECTRONICS INDUSTRIES; GENERAL ECONOMIC AND
MARKET CONDITIONS.  The Company is dependent upon the semiconductor and more
generally, the electronics industries.  Each of these industries is
characterized by rapid technological change, short product life cycles,
fluctuations in manufacturing capacity and pricing and gross margin pressures.
Each of these industries is highly cyclical and has periodically experienced
significant downturns, often in connection with, or in anticipation of,
declines in general economic conditions during which the number of new IC
design projects often decreases.  Purchases of new licenses from the Company
are largely dependent upon the commencement of new design projects, and factors
negatively affecting any of these industries could have a material adverse
effect on the Company's business,  operating results or financial condition.
The Company's business, operating results and financial condition may in the
future reflect substantial fluctuations from period to period as a consequence
of patterns and general economic conditions in either the semiconductor or
electronics industry.

COMPLIANCE WITH NASDAQ LISTING REQUIREMENTS; DISCLOSURE RELATING TO LOW-PRICED
STOCK.  The Company's Common Stock is quoted on the Nasdaq National Market ("The
National Market").  However, in order to continue to be included in the National
Market, a company must meet certain maintenance criteria. Continued inclusion
requires, among other things, a minimum bid price of $1.00 per share or, in the
alternative, a public market float of at least $3,000 and net tangible assets of
at least $4,000.  Effective February 1998, the maintenance criteria will be
increased, requiring a minimum bid price of $1.00 per share, and $4,000 in net
tangible assets (total assets less total liabilities and goodwill) and $5,000
market value of the public float (excluding shares held directly or indirectly
by any officer or director of the Company and by any person holding beneficially
more than 10% of he Company's outstanding shares).  As of November 10, 1997, the
closing sales price of a share of the Company's common stock was $0.75.  Failure
to meet these maintenance criteria in the past and future may result in the
delisting of the Company's Common Stock from the National Market and the
quotation of the Company's Common Stock on the Nasdaq SmallCap Market (the
"SmallCap Market"), if the requirements for inclusion on the SmallCap Market are
met.  As a result of quotation on the SmallCap Market, an investor may find it
more difficult to dispose of the Company's Common Stock.

         Effective February 1998, a company must have $4,000 in net tangible
assets or $50,000 market capitalization or $750 net income in two of the last
three years, a minimum bid price of $4.00 per share and a public float of $5,000
for inclusion in the SmallCap Market, subject to certain exception.  Failure to
meet the SmallCap Market inclusion criteria, or the failure to meet the SmallCap
Market maintenance criteria if the initial SmallCap Market inclusion criteria
are met, may result in the delisting of the Company's Common Stock from Nasdaq.
Trading, if any, in the Company's Common Stock would thereafter be conducted in
the non-Nasdaq over-the-counter market.  As a result of such delisting, an
investor may find it more difficult to dispose of, or to obtain accurate
quotations as to the market value of, the Company's Common Stock.

         In addition, if the Company's Common Stock were delisted from trading
on Nasdaq and the trading price of the Common Stock was less than $5.00 per
share, trading in the Common Stock would also be subject to certain rules
promulgated under the Exchange Act, which require additional disclosure by
broker-dealers in connection with any trades involving a stock defined as a
penny stock (generally, any non-Nasdaq equity security that has a market price
of less than $5.00 per share, subject to certain exceptions).  Such rules
require the delivery, prior to any penny stock transaction, of a disclosure
schedule explaining the penny stock market and the risks associated therewith,
and impose various sales practice requirements on broker-dealers who sell penny
stock to persons other than established customers and accredited investors
(generally institutions).  For these types of transactions, the broker-dealer
must make a special suitability determination for the purchaser and have
received the purchaser's written consent to the transaction prior to sale.  The
additional burden imposed upon broker-dealers by such requirements may
discourage broker-dealers from effecting transactions in the Common Stock,
which could severely limit the market liquidity of the Common Stock and limit
the ability of sellers to sell the Common Stock in the secondary market.

INTERNATIONAL SALES.  International sales, primarily in Japan, Korea and
Taiwan, accounted for approximately 52%, 43% and 25% of the Company's total
revenue in fiscal 1995, 1996 and 1997, respectively.  Declining revenues from
international sales were a result of the reduction in capital expenditures by
semiconductor manufacturers, particularly in Asia, and increased competition in
the electronic design automation (EDA) software market.  The Company expects
that international sales will continue to account for a significant portion of
its revenue and plans to continue to expand its international sales and
distribution channels.  This revenue involves a number of inherent risks,
including economic downturn in the electronics industry in Asia, traditionally
slower adoption of the Company's products internationally, general strikes or
other disruptions in working conditions, generally longer receivables
collection periods, unexpected changes in or impositions of












                                       13
<PAGE>   14

legislative or regulatory requirements, reduced protection for intellectual
property rights in some countries, potentially adverse taxes, delays resulting
from difficulty in obtaining export licenses for certain technology and other
trade barriers.  There can be no assurance that such factors will not have a
material adverse effect on the Company's future international sales and,
consequently, on the Company's results of operations.  Sales orders received by
foreign sales subsidiaries are primarily denominated in currencies other than
the U.S. dollar.  In order to reduce the risk of loss between the time the
Company's products are purchased by subsidiaries and the time payment is made,
the subsidiaries enter into foreign exchange contracts when economically
feasible.

COMPETITION.  The EDA software market in which the Company competes is
intensely competitive and subject to rapid technological change.  The Company
currently faces competition from EDA vendors, including Cadence Design Systems,
Inc. ("Cadence"), which currently holds the dominant share of the market for IC
physical design software, Avant! Corporation and Mentor Graphics.  These EDA
vendors have significantly greater financial, technical and marketing
resources, greater name recognition and, in some cases, a larger installed
customer base than the Company.  These companies also have established
relationships with current and potential customers of the Company and can
devote substantial resources aimed at preventing the Company from enhancing
relationships with existing customers or establishing relationships with
potential customers.  The Company believes that competitive factors in the EDA
software market include product performance, price, support of industry
standards, ease of use, delivery schedule, product enhancements, and customer
technical support and service.  The Company believes that, with respect to ease
of use, the Company's products may not be perceived as competing favorably.

         Competition from EDA companies that choose to enter the IC physical
design market could present particularly formidable competition due to their
large installed customer base and their ability to offer a complete integrated
IC design solution, which the Company does not offer.  The Company expects
additional competition from other established and emerging companies.  In
addition, the EDA industry has become increasingly concentrated in recent years
as a result of consolidations, acquisitions and strategic alliances.
Accordingly, it is possible that new competitors or alliances among competitors
could emerge and rapidly acquire significant market share.  There can be no
assurance the Company will be able to compete successfully against current and
future competitors or that competitive pressures faced by the Company will not
have a material adverse effect on its business, operating results and financial
condition.

MANAGEMENT TRANSITION.  The Company is experiencing a period of management
transition that has placed, and may continue to place, a significant strain on
its resources, including its personnel.  Robert R. Anderson resumed the role of
Chief Executive Officer in December 1996 and has assembled a new senior
management team.  The Company's ability to manage growth successfully will
require its new management personnel to work together effectively and will
require the Company to improve its operations, management and financial systems
and controls.  If the Company management is unable to manage this transition
effectively,  the Company's business, competitive position, results of
operations and financial condition will be materially and adversely affected.














                                       14
<PAGE>   15

                          PART II.  OTHER INFORMATION

Item 1.          Legal Proceedings (in thousands):

                 In June 1996, the Company entered into an agreement whereby
                 the Company was granted the exclusive marketing rights to Bell
                 Labs' CLOVER line of deep submicron verification products
                 worldwide, with the exception of Japan and Taiwan, where the
                 Company would co-market with Bell Labs' existing distributors.
                 Pursuant to the four year agreement, the Company  made prepaid
                 royalty payments of $1,750.  The agreement also provided for
                 future prepaid royalty payments of:  $1,250 in fiscal 1998 and
                 $1,000 in fiscal 1999.  In July and August 1997, both parties
                 sent notices of termination, alleging breach of the agreement
                 by the other party.  The agreement provides that any dispute,
                 controversy or claim arising out of the agreement shall be
                 resolved through good faith consultation for a specified
                 period.  That period has passed.  The agreement provides that
                 if the dispute is not resolved by consultation, it shall be
                 referred to and finally resolved by arbitration.  Request for
                 arbitration has been made and arbitrators are in the process
                 of being appointed.  Lucent's request for arbitration includes
                 a "Prayer for Relief" of $750 of royalty prepayments,
                 consequential, special and incidental damages in an
                 unspecified sum and punitive damages in an unspecified sum.
                 The Company has filed a counterclaim, which includes a "Prayer
                 for Relief" of direct and consequential damages according to
                 proof at the arbitration hearing in an amount in excess of
                 $1,750, recision of the License Agreement and the return of
                 the consideration exchanged thereunder, declaratory relief
                 and punitive damages in an unspecified sum.  The dispute is in
                 its early stages and the ultimate outcome cannot presently be
                 determined.  Accordingly, no provision for any liability that
                 may result upon adjudication has been made in the consolidated
                 financial statements.  The Company believes that Lucent's
                 "Prayer for Relief" is without merit and intends to vigorously
                 dispute the claim.


Item 2.          Changes in Securities:  Not Applicable

Item 3.          Defaults Upon Senior Securities:  Not Applicable

Item 4.          Submission of Matters to a Vote of Securities Holders:

                 (A) On September 4, 1997, the Annual Meeting of the
                     Shareholders of the Registrant was held.  A total of
                     13,886,648 shares, or approximately 83%, of the shares
                     outstanding were represented at this meeting.

                 (B) At the meeting, the Shareholders elected Benjamin Huberman
                     and Roy Rogers as Directors with 13,759,832 votes in favor
                     and 126,816 withheld;  Robert R. Anderson as Director with
                     13,757,316 votes in favor and 129,332 votes withheld; and
                     Thomas A.  Sherby as Director with 13,760,832 votes in
                     favor and 125,816 votes withheld.

                 (C) The amendment to the Company's Amended and Restated
                     Articles of Incorporation was approved by 13,457,396 in
                     favor, 374,111 opposed and 35,141 abstained.

                 (D) The amendment to the Company's 1988 Stock Option Plan was
                     approved by 7,439,445 in favor, 484,802 opposed, 32,705
                     abstained and 5,929,696 broker non-votes.

                 (E) The amendment to the Company's 1990 Directors' Stock
                     Option Plan was approved by 9,341,511 in favor, 470,000
                     opposed, 39,885 abstained and 4,035,252 broker non-votes.

Item 5.          Other Information:   Not Applicable

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





                                       15
<PAGE>   16
EXHIBITS:


EXHIBIT
NUMBER                    DESCRIPTION OF EXHIBIT

 3.01        Registrant's Amended and Restated Articles of Incorporation as
             amended to date (incorporated by reference to Exhibit 3.01 of
             Registrant's Registration Statement on Form S-1 (File No. 2-89943)
             filed March 14, 1984, as amended (the "1984 Registration
             Statement")).

 3.02        Registrant's amendment to Amended and Restated Articles of
             Incorporation filed September 19, 1997.

 3.03        Registrant's bylaws, as amended to date (incorporated by reference
             to Exhibit 4.01 of the 1984 Registration Statement).

 3.05        Amendment to Bylaws dated November 12, 1996 (incorporated by
             reference to Exhibit 3.04 of Registrant's Quarterly Report on Form
             10-Q for the quarter ended December 31, 1996).

 10.01*      Registrant's 1990 Directors Stock Option Plan, as amended to date.

 10.03*      Registrant's 1988 Stock Option Plan, as amended to date.

 27.00       Financial Data Schedule

             *Management Contract or Compensatory Plan or Arrangement

REPORTS ON FORM 8-K:

Two form 8-K's were filed during the quarter covered by this report:

One Current Report on Form 8-K was dated July 7, 1997 and filed on July 14,
1997.  This reported the Company's exit from the integrated circuit design
verification market and the cessation of sales and support of the integrated
circuit design verification product line that the Company had licensed from
Lucent Technologies, Inc.  The Company also announced the anticipated release
of approximately ten percent of its workforce and a charge to earnings of
approximately $2 million for costs associated with these actions.

One Current Report on Form 8-K was dated September 17, 1997 and filed on
September 18, 1997.  This reported that the report of Price Waterhouse LLP on
SVR's fiscal 1997 consolidated financial statements was amended on September
17, 1997 to add an explanatory paragraph regarding SVR's ability to continue as
a going concern and the financial statements were updated to disclose the 
cancellation of a significant contract subsequent to March 31, 1997.




                                       16
<PAGE>   17

                                   SIGNATURE


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.


                                      SILICON VALLEY RESEARCH, INC.





Date:   November 7, 1997                        /s/ Robert R. Anderson
        ----------------                        ------------------------------
                                                Robert R. Anderson
                                                Chief Executive Officer and
                                                Chairman of the Board


                                                /s/ Laurence G. Colegate, Jr.
                                                ------------------------------
                                                Laurence G. Colegate, Jr.
                                                Senior Vice President,
                                                Finance and Administration

                                                (Chief Financial and Accounting
                                                Officer)
















                                       17
<PAGE>   18


                                INDEX TO EXHIBITS

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

 3.01        Registrant's Amended and Restated Articles of Incorporation as
             amended to date (incorporated by reference to Exhibit 3.01 of
             Registrant's Registration Statement on Form S-1 (File No. 2-89943)
             filed March 14, 1984, as amended (the "1984 Registration
             Statement")).

 3.02        Registrant's amendment to Amended and Restated Articles of
             Incorporation filed September 19, 1997.

 3.03        Registrant's bylaws, as amended to date (incorporated by reference
             to Exhibit 4.01 of the 1984 Registration Statement).

 3.05        Amendment to Bylaws dated November 12, 1996 (incorporated by
             reference to Exhibit 3.04 of Registrant's Quarterly Report on Form
             10-Q for the quarter ended December 31, 1996).

 10.01*      Registrant's 1990 Directors Stock Option Plan, as amended to date.

 10.03*      Registrant's 1988 Stock Option Plan, as amended to date.

 27.00       Financial Data Schedule

             *Management Contract or Compensatory Plan or Arrangement
















                                       18