<PAGE>

================================================================================
                                 UNITED STATES
                       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 Quarter ended December 29, 2001

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

For the transition period from _____ to _____.

                        Commission File Number: 0-19299


                        ________________________________

                       Integrated Circuit Systems, Inc.
            (Exact name of registrant as specified in its charter)

         Pennsylvania                                            23-2000174
(State or other jurisdiction of                              (IRS Employer
incorporation or organization)                               Identification No.)

                        2435 Boulevard of the Generals
                        Norristown, Pennsylvania 19403
                   (Address of principal executive offices)

                                (610) 630-5300
              (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_____
                                 -----

As of February 7, 2002, there were 66,560,306 shares of Common Stock; $0.01 par
value, outstanding.

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

                                       1
<PAGE>

                        INTEGRATED CIRCUIT SYSTEMS, INC.
                        --------------------------------

                                     INDEX
                                     -----

                                                                          Page
                                                                         Number
                                                                         ------

PART I.  FINANCIAL INFORMATION

Item 1.  Consolidated Financial Statements:

         Consolidated Balance Sheets:
         December 29, 2001 (Unaudited) and June 30, 2001                    3

         Consolidated Statements of Operations (Unaudited):
         Three and Six Months Ended December 29, 2001
         and December 30, 2000                                              4

         Consolidated Statements of Cash Flows (Unaudited):
         Six Months Ended December 29, 2001 and
         December 30, 2000                                                  5

         Notes to Consolidated Financial Statements                         6

Item 2.  Management's Discussion and Analysis of Financial
         Condition and Results of Operations                               10

Item 3.  Quantitative and Qualitative Disclosures About                    15
         Market Risk

PART II. OTHER INFORMATION

Item 4.  Submission of matters to a vote of security holders

Item 6.  Exhibits and Reports on Form 8-K

                                       2
<PAGE>

Item  1.    Consolidated Financial Statements
               INTEGRATED CIRCUIT SYSTEMS, INC. AND SUBSIDIARIES
                          Consolidated Balance Sheets
                                (In thousands)

<TABLE>
<CAPTION>

                                                                 December 29,               June 30,
                                                                    2001                      2001
                                                               ---------------          ---------------
                                                                 (Unaudited)
<S>                                                            <C>                      <C>
ASSETS
Current Assets:
   Cash and cash equivalents                                     $   87,868               $   91,400
   Marketable securities                                             27,253                    3,000
   Accounts receivable, net                                          22,502                   27,359
   Inventory, net                                                    11,810                   10,097
   Deferred taxes                                                     3,446                    4,053
   Prepaid income taxes                                               2,189                       --
   Prepaid assets                                                     5,969                    5,411
   Current portion of deposit on purchase contracts                      --                      596
                                                                 ----------               ----------
      Total current assets                                          161,037                  141,916
                                                                 ----------               ----------
Property and equipment, net                                          10,246                   11,215
Other assets                                                          1,279                      986
                                                                 ----------               ----------
      Total assets                                               $  172,562               $  154,117
                                                                 ==========               ==========

LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
   Current portion of long-term obligations                      $      423               $      429
   Accounts payable                                                   9,683                    8,579
   Accrued expenses and other current liabilities                     3,450                    3,566
   Income tax payable                                                    --                    1,306
                                                                 ----------               ----------
      Total current liabilities                                      13,556                   13,880
                                                                 ----------               ----------

Long-term debt, less current portion                                     71                      280
Other liabilities                                                       954                      904
                                                                 ----------               ----------
      Total liabilities                                              14,581                   15,064
                                                                 ----------               ----------

Shareholders' equity:
  Common stock, $0.01 par, authorized 300,000;
   Issued and outstanding 67,010 and 66,128 shares as of
    December 29, 2001 and June 30, 2001, respectively.                  670                      661
  Additional paid in capital                                        218,290                  211,524
  Accumulated deficit                                               (51,230)                 (70,229)
  Deferred compensation                                              (2,194)                  (2,722)
  Notes receivable                                                       --                     (181)
  Treasury stock, at cost, 655 shares                                (7,799)                      --
  Other comprehensive income                                            244                       --
                                                                 ----------               ----------
      Total shareholders' equity                                    157,981                  139,053
                                                                 ----------               ----------
      Total liabilities and shareholders' equity                 $  172,562               $  154,117
                                                                 ==========               ==========
</TABLE>
         See accompanying notes to consolidated financial statements.

                                       3
<PAGE>

<TABLE>
<CAPTION>
                                         INTEGRATED CIRCUIT SYSTEMS, INC. AND SUBSIDIARIES
                                               Consolidated Statements of Operations
                                                          (In thousands)
                                                            (Unaudited)


                                                        Three Months Ended                       Six Months Ended
                                                        ------------------                       ----------------
                                               December 29, 2001      December 30, 2000   December 29, 2001   December 30, 2000
                                               -----------------      -----------------   -----------------   -----------------
<S>                                            <C>                    <C>                 <C>                 <C>
Revenue:                                        $    38,560             $    56,484         $     74,267           $     107,835

Cost and expenses:
   Cost of sales                                     16,014                  21,362               31,160                  40,831
   Research and development                           5,846                   7,503               12,494                  14,643
   Selling, general and administrative                5,526                   4,301                9,974                  10,418
   Goodwill amortization                                 --                      58                   --                     117
                                               ------------          --------------     ----------------         ---------------
      Operating income                               11,174                  23,260               20,639                  41,826
                                               ------------          --------------     ----------------         ---------------

Interest and other income                               666                     865                1,591                   1,466
Interest expense                                        (23)                    (22)                 (45)                   (175)
                                               ------------          --------------     ----------------         ---------------
      Income before income taxes                     11,817                  24,103               22,185                  43,117
Income taxes                                          1,683                   5,221                3,186                   8,684
                                               ------------          --------------     ----------------         ---------------
 Net income                                     $    10,134             $    18,882         $     18,999           $      34,433
                                               ============          ==============     ================         ===============
Basic income per share:
    Net income                                  $      0.15             $      0.29         $       0.29           $        0.53

Diluted income per share:
    Net income                                  $      0.15             $      0.27         $       0.27           $        0.50

Weighted average share outstanding - basic           66,180                  64,597               66,314                  64,486
Weighted average share outstanding - diluted         69,535                  69,404               69,796                  69,451
</TABLE>



          See accompanying notes to consolidated financial statements.

                                       4
<PAGE>

               INTEGRATED CIRCUIT SYSTEMS, INC. AND SUBSIDIARIES

                     Consolidated Statements of Cash Flows
                                  (Unaudited)
                                 (In thousands)

<TABLE>
<CAPTION>
                                                                                                 Six Months Ended
                                                                                                 ----------------
                                                                                          December 29,        December 30,
                                                                                             2001                2000
                                                                                          ----------          ----------
<S>                                                                                      <C>                  <C>
Cash flows from operating activities:
   Net income                                                                             $   18,999          $   34,433
   Adjustments to reconcile net income to net
      cash provided by operating activities:
      Depreciation and amortization                                                            2,578               2,583
      Amortization of bond premiums                                                                6                  (4)
      Deferred financing charge                                                                    7                   5
      Amortization of deferred compensation                                                      489                 535
      (Gain) loss on sale of assets                                                             (105)                 (1)
      Tax benefit of stock options                                                             5,402               2,857
      Deferred income taxes                                                                      710                (726)
   Changes in assets and liabilities:
      Accounts receivable                                                                      4,857              (6,671)
      Inventory                                                                               (1,713)                192
      Other assets, net                                                                         (224)                567
      Accounts payable, accrued expenses and other current liabilities                           987               1,422
      Income taxes                                                                            (3,496)              8,858
                                                                                          ----------          ----------

         Net cash provided by operating activities                                            28,497              44,050
                                                                                          ----------          ----------
Cash flows from investing activities:
   Purchase of marketable securities                                                         (38,019)                 --
   Sales/maturities of marketable securities                                                  14,062                  --
   Capital expenditures                                                                       (1,621)             (2,056)
   Refunds of deposits on purchase contracts                                                      --               9,877
   Other                                                                                         192                  49
                                                                                          ----------          ----------
         Net cash (used in) provided by investing activities                                 (25,386)              7,870
                                                                                          ----------          ----------
Cash flows from financing activities:
   Net repayments under line of credit agreement                                                  --             (10,000)
   Exercise of stock options                                                                   1,098                 210
   Shares purchased through stock purchase plan                                                  314                 351
   Initial public offering expenses                                                               --                (194)
   Purchase of treasury stock                                                                 (7,799)                 --
   Repayments of long-term debt                                                                 (256)               (329)
                                                                                          ----------          ----------
         Net cash used in financing activities                                                (6,643)             (9,962)
                                                                                          ----------          ----------
Net (decrease) increase in cash and cash equivalents                                          (3,532)             41,958
Cash and cash equivalents:
   Beginning of period                                                                        91,400              28,940
                                                                                          ----------          ----------
   End of period                                                                          $   87,868          $   70,898
                                                                                          ==========          ==========
</TABLE>

See accompanying notes to consolidated financial statements.

                                       5
<PAGE>

               INTEGRATED CIRCUIT SYSTEMS, INC. AND SUBSIDIARIES

                  Notes to Consolidated Financial Statements

(1)  INTERIM ACCOUNTING POLICY

The accompanying financial statements have not been audited. In the opinion of
our management, the accompanying consolidated financial statements reflect all
adjustments (consisting only of normal recurring accruals) necessary to present
fairly our financial position at December 29, 2001 and results of operations and
cash flows for the interim periods presented. Certain items have been
reclassified to conform to current period presentation.

Certain footnote information has been condensed or omitted from these financial
statements. Therefore, these financial statements should be read in conjunction
with the consolidated financial statements and related notes included in our
Annual Report on Form 10-K for the year ended June 30, 2001. Results of
operations for the six months ended December 29, 2001 are not necessarily
indicative of results to be expected for the full year.

(2)  CONSOLIDATION POLICY

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

(3)  ACCOUNTING FOR GOODWILL

Our adoption of Statement of Financial Accounting Standards No. 142 ("SFAS No.
142"), "Goodwill and Intangible Assets" eliminates the amortization of goodwill
in our current quarter. Our goodwill amortization expense in the first six
months of fiscal year 2001 totaled $117,000 pretax. Had we continued to amortize
goodwill, our amortization expense in the first six months of fiscal year 2002
would have been $117,000 pretax. This transition had no impact on diluted EPS in
either period.

(4)  INVENTORY

Inventory is valued at the lower of cost or market. Cost is determined by the
first in, first out (FIFO) method. The components of inventories are as follows
(in thousands):

                                           December 29,          June 30,
                                               2001                2001
                                           ------------        ------------
       Work-in-process                     $      6,240        $      6,513
       Finished parts                             8,735               7,178
       Less:  Obsolescence reserve               (3,165)             (3,594)
                                           ------------        ------------
                                           $     11,810        $     10,097
                                           ============        ============

(5)  DEBT

In June 2000, we obtained a $30.0 million revolving credit facility with a
commercial bank to expire in June 2002, with an option to extend the facility
for an additional period subject to certain covenants, including maintenance of
certain financial ratios. As of December 29, 2001, we had no outstanding
balances under this agreement, and we were in compliance with the revolving
credit facility covenants. Subsequent to quarter end, we terminated this credit
facility and entered into a new facility as discussed below.

In connection with the acquisition of Micro Networks, we entered into a new
revolving credit and term loan facility dated December 31, 2001, which expire
December 31, 2004. The new facility enables us to draw down $45.0 million under
the term loan and $10.0 million under the revolving credit facility. At our
option, the interest rates under the term loan will be either (1) a base rate,
which is the higher of (i) a rate of interest announced from time to time by the
lenders'

                                       6
<PAGE>

administrative agent as the base rate ("Base Rate") or (ii) the sum of 0.5% per
annum plus the federal funds rate or (2) London Interbank Offer Rate ("LIBOR")
plus 1.75%. At our option, the interest rates under the Revolving Credit Loan,
will be either (1) the Base Rate or (2) the LIBOR Rate plus a pre-formulated
margin.

(6)  CAPITAL STOCK

In September 2001, we announced a stock repurchase program, which authorized the
purchase, from time to time, of 2.0 million shares of our common stock on the
market. As of December 29, 2001, we had purchased 655,000 shares for $7.8
million.

(7)  NEW ACCOUNTING PRONOUNCEMENTS

In June 2001, the Financial Accounting Standards Board ("FASB") issued Statement
of Financial Accounting Standards No. 141 ("SFAS No. 141"), "Business
Combinations", which supersedes Accounting Principles Board Opinion No. 16 ("APB
No. 16"), "Business Combinations". The most significant changes made by SFAS No.
141 is the requirement of the usage of the purchase method of accounting for all
business combinations initiated after June 30, 2001 and established specific
criteria for the recognition of intangible assets separately from goodwill. We
adopted this statement during the first quarter of fiscal year 2002.

In June 2001, the FASB issued SFAS No. 142, "Goodwill and Other Intangible
Assets", which supercedes APB No. 17, "Intangible Assets". SFAS No. 142 provides
guidance on accounting for goodwill and other intangible assets subsequent to
acquisition. These provisions are effective for fiscal years beginning after
December 15, 2001. We adopted this statement during the first quarter of fiscal
year 2002.

In June 2001, the FASB issued SFAS No. 143, "Accounting for Asset Retirement
Obligations", which amends SFAS No. 19, "Financial Accounting and Reporting by
Oil and Gas Producing Companies". SFAS No. 143 provides guidance on accounting
for the retirement of tangible long-lived assets and the associated asset
retirement costs. These provisions are effective for fiscal year beginning after
June 15, 2002. We do not believe that adoption of this statement will have a
material impact on our operating results.

In August 2001, the FASB issued SFAS No. 144, "Accounting for the Impairment or
Disposal of Long-Lived Assets", which supercedes SFAS No. 121, "Accounting for
the Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed
Of". SFAS No. 144 established a single accounting model for the disposition of
long-lived assets by sale. These provisions are effective for fiscal years
beginning after December 15, 2001. We do not believe that adoption of this
statement will have a material impact on our operating results.

(8)  NET INCOME PER SHARE

Basic net income per share is based on the weighted average number of common
shares outstanding excluding contingently issuable or returnable shares that
contingently convert into Common Stock upon certain events. Diluted net income
per share is based on the weighted average number of common shares outstanding
and diluted potential common shares outstanding.

                                       7
<PAGE>

The following table set forth the computation of net income (numerator) and
shares (denominator) for earnings per share:

<TABLE>
<CAPTION>
                                                                       Three Months Ended                    Six Months Ended
                                                                  December 29,      December 30,      December 29,      December 30,
                                                                      2001              2000              2001              2000
                                                                  ------------------------------------------------------------------
<S>                                                               <C>               <C>                <C>              <C>
Numerator (in thousands):
Net income                                                        $     10,134      $     18,882      $     18,999      $     34,433
                                                                  ------------------------------------------------------------------
Denominator (in thousands):
Weighted average shares outstanding used for basic
   income per share                                                     66,180            64,597            66,314            64,486
Common stock options                                                     3,355             4,807             3,482             4,965
                                                                  ------------------------------------------------------------------
Weighted average shares outstanding used for diluted
   income per share                                                     69,535            69,404            69,796            69,451
                                                                  ==================================================================
</TABLE>

(9)   INCOME TAXES

Our effective income tax rate was 14.4% for the first six months of fiscal year
2002 as compared to 20.1% in the prior year period. The effective tax rate for
fiscal years 2002 and 2001 reflects the tax-exempt status of our Singapore
operation, which has been given pioneer status, or exemption of taxes on non-
passive income for five years. We do not currently calculate deferred taxes on
our investment in our Singapore operations, as all undistributed earnings are
permanently reinvested back into the Singapore facility. If we were to record
deferred taxes on our investment, the amount would be a $30.5 million liability
as of December 29, 2001.

(10)  COMPREHENSIVE INCOME

Total comprehensive income represents net income plus the results of certain
equity changes not reflected in the condensed consolidated and combined
statements of operations. The components of accumulated other comprehensive
income are shown below.

<TABLE>
<CAPTION>
                                                             Three Months Ended                          Six Months Ended
                                                     December 29,           December 30,         December 29,         December 30,
                                                         2001                   2000                 2001                 2000
                                                     -----------------------------------------------------------------------------
<S>                                                  <C>                    <C>                  <C>                  <C>
Net income                                           $     10,134           $     18,882         $     18,999         $     34,433
                                                     -----------------------------------------------------------------------------
Other comprehensive income:
   Unrealized Gain on Investments                              28                     --                  243                  ---
                                                     -----------------------------------------------------------------------------
Total comprehensive income                           $     10,162           $     18,882         $     19,242         $     34,433
                                                     =============================================================================
</TABLE>

(11)  LEGAL PROCEEDINGS

From time to time, various inquiries, potential claims and charges and
litigation are made, asserted or commenced by or against us, principally arising
from or related to contractual relations and possible patent infringement. We
believe that any of these claims currently pending, individually and in the
aggregate, have been adequately reserved and will not have any material adverse
effect on our consolidated financial position or results of operations, although
no assurance can be made in this regard.

On or about March 28, 2001, Cypress Semiconductor Corporation, ("Cypress"), and
International Microcircuits Inc. filed a suit against us in the U.S. District
Court in Delaware, alleging that we infringed on three patents and induced
others to infringe on them as well. Plaintiffs seek injunctive relief,
unspecified damages and enhanced damages for willful

                                       8
<PAGE>

infringement. We denied the allegations and filed a counterclaim seeking to
invalidate the patents. We filed a patent infringement lawsuit in the U.S.
District Court, Northern District of California against Cypress, alleging that
Cypress infringes upon one of our patents, and we seek injunctive relief and
damages against Cypress. Cypress denied the allegations and filed a counterclaim
seeking to invalidate our patent. On or about July 20, 2001, Cypress filed a
complaint with the U.S. International Trade Commission, ("ITC"), to commence an
investigation of us for patent infringement. A notice of investigation was
issued, and we denied the allegations of Cypress in this ITC complaint.
Litigation in the Delaware lawsuit about a patent that is subject of Cypress'
ITC complaint is stayed, until the ITC's determination under the Cypress
complaint becomes final. On or about November 5, 2001, we filed a complaint with
the ITC to commence an investigation of Cypress for patent infringement. A
notice of investigation was issued, and Cypress denied the allegations in our
complaint. We will continue to vigorously pursue our rights and defenses in all
litigation with Cypress. Although we believe that all the litigation will not
have a material adverse effect on our results of operations and financial
condition, no assurance can be made in this regard.

(12)  CUSTOMERS

In fiscal year 2001, we entered into an Investment and Stock Trade Agreement
(the "agreement") with Maxtek Technology Co. Ltd ("Maxtek"), a distributor in
Taiwan. We advanced $4.0 million dollars as a prepayment for acquiring 4.0
million shares, or approximately 10%, of Maxtek. The agreement states that if
Maxtek fails to successfully complete a public offering by December 5, 2005, we,
at our sole option, have the right to demand immediate repurchase of all 4.0
million shares, at the original purchase price plus accrued annual interest
(commercial rate set by the bank of China) during the said period. Maxtek is one
of our distributors and represented approximately 18% of our sales for the first
six months of fiscal year 2002, and 12% in the prior year period. Additionally,
sales to Maxtech Corporation Limited ("Maxtech"), a company controlled by the
primary shareholder of Maxtek, were 20% of our sales in the first six months of
fiscal year 2002 and 8% in the prior year period.

(13)  SUBSEQUENT EVENTS

On December 20, 2001, we announced that we signed a definitive agreement to
acquire Micro Networks Corporation ("Micro Networks"), a leading supplier of
precision timing devices for optical networking, wireless infrastructure and
high-end network servers using surface acoustic wave (SAW) technology.
Subsequent to quarter end, we announced our completion of the acquisition.

This agreement provides for all outstanding equity interests of Micro Networks
to be exchanged for $65.0 million in cash, net of certain adjustments including
Micro Networks' severance and benefit plan payments, obligations arising upon a
change of control and changes in Micro Networks' working capital since September
30, 2001, and an assumption of approximately $12.0 million of debt. The
acquisition was funded through cash on hand as well as through term bank
financing obtained subsequent to quarter end.

On or about January 22, 2002, the presiding judge in the 2 ITC investigations
involving Cypress and us ordered the investigations consolidated.

                                       9
<PAGE>

Item 2.  Management's Discussion and Analysis of Financial Condition and Results
         of Operations
Forward-Looking Statements

Except for the historical statements and discussions contained herein,
statements contained in this Report on Form 10-Q constitute "forward-looking
statements" within the meaning of Section 27A of the Securities Act of 1933 and
Section 21E of the Securities Exchange Act of 1934, such as when we describe
what we believe, expect or anticipate will occur, and other similar statements,
you must remember that our expectations may not be correct. While we believe
these expectations and projections are reasonable, such forward-looking
statements are inherently subject to risks, uncertainties and assumptions about
us, including, among other things:

 .    Our dependence on continuous introduction of new products based on the
     latest technology

 .    The intensely competitive semiconductor and personal computer component
     industries

 .    The importance of frequency timing generator products to total revenue

 .    Our dependence on the personal computer industry and third-party silicon
     wafer fabricators and assemblers of semiconductors

 .    Risks associated with international business activities and acquisitions
     and integration of acquired companies or product lines

 .    Our dependence on proprietary information and technology and on key
     personnel

 .    Our product liability exposure and the potential unavailability of
     insurance

 .    General economic conditions, including economic conditions related to the
     semiconductor and personal computer industries

We do not guarantee that the transactions and events described in this Form 10-Q
will happen as described or that they will happen at all. You should read this
Form 10-Q completely and with the understanding that actual future results may
be materially different from what we expect. We disclaim any intention or
obligation to update these forward-looking statements, even though our situation
will change in the future.

Results of Operations

The following table sets forth, for the periods indicated, the percentage
relationship to revenue of certain cost, expense and income items. The table and
the subsequent discussion should be read in conjunction with the financial
statements and the notes thereto:

<TABLE>
<CAPTION>
                                                        Three Months Ended                   Six Months Ended
                                                        ------------------                   ----------------
                                                    December            December       December           December
                                                       29,                 30,            29,                30,
                                                      2001                2000           2001               2000
                                                   ----------          ----------     ----------         ----------
<S>                                                <C>                 <C>            <C>                <C>
Revenues                                                100.0%              100.0%         100.0%             100.0%

Gross margin                                             58.5                62.2           58.1               62.1

   Research and development                              15.2                13.3           16.8               13.6
   Selling, general and administrative                   14.3                 7.6           13.5                9.6
   Goodwill amortization                                   --                 0.1             --                0.1
                                                   ----------          ----------     ----------         ----------
Operating income                                         29.0                41.2           27.8               38.8
                                                   ----------          ----------     ----------         ----------

Interest and other income                                 1.7                 1.5            2.1                1.4
Interest expense                                         (0.1)               (0.0)          (0.0)              (0.2)
                                                   ----------          ----------     ----------         ----------
      Income before income taxes                         30.6                42.7           29.9               40.0
Income taxes                                              4.3                 9.3            4.3                8.1
                                                   ----------          ----------     ----------         ----------
      Net income                                         26.3%               33.4%          25.6%              31.9%
                                                   ==========          ==========     ==========         ==========
</TABLE>

                                       10
<PAGE>

SECOND QUARTER FISCAL YEAR 2002 AS COMPARED TO SECOND QUARTER FISCAL YEAR 2001

Revenue. Revenue decreased by $17.9 million to $38.6 million for the second
quarter ended December 29, 2001 as compared to the prior year quarter. The 31.7%
decrease is primarily due to macroeconomic factors, which affected overall
revenue and was slightly offset by shipments to new end markets such as game
machines and DDR memory modules. Although we have experienced stabilization in
our average selling prices this quarter, the average selling price declined
21.1% from the prior year quarter, while the volume decrease 13.5%.

Foreign revenue (which includes shipments of integrated circuits ("ICs") to
foreign companies as well as offshore subsidiaries of US multinational
companies) was 78.9% of total revenue for the second quarter of fiscal year 2002
as compared to 65.1% of total revenue in the prior year quarter. This increase
is attributable to strong demand in the Asian PC market. While the percentage
increase reflected growing sales to the Pacific Rim markets, certain of our
international sales were to customers in the Pacific Rim, which in turn sold
some of their products to North America, Europe and other non-Asian markets. Our
sales are denominated in U.S. dollars and minimize foreign currency risk.

Gross Margin. Cost of sales decreased $5.4 million to $16.0 million for the
second quarter of fiscal year 2002, as compared to the prior year quarter. Cost
of sales as a percentage of total revenue was 41.5% for the second quarter of
fiscal year 2002 as compared to 37.8% in the prior year quarter. The overall
decrease in margin is due to product mix as well as a general decline in average
selling prices.

Research and Development Expense. Research and development ("R&D") expense
decreased $1.7 million to $5.8 million for the second quarter of fiscal year
2002 from $7.5 million in the prior year quarter. As a percentage of revenue,
research and development increased to 15.2% in the second quarter of fiscal year
2002 as compared to 13.3% in the prior year period. Our continued emphasis on
R&D includes greater spending in research and development for our silicon timing
business. The decreased expense represented a greater percentage of revenue due
to the significant decrease in sales during the second quarter of fiscal year
2002.

Selling, General, Administrative and Other. Selling, general, administrative and
other expense increased $1.1 million to $5.5 million for the second quarter of
fiscal year 2002 as compared to the prior year quarter. As a percentage of total
revenue, selling, general, administrative and other expenses increased to 14.3%
in the second quarter of fiscal year 2002 as compared to 7.7% in the prior year
period. Selling, general, administrative and other expense for the second
quarter of fiscal year 2001 is net of $2.0 million in insurance proceeds
received in relation to litigation. Excluding this event, selling, general,
administrative and other expense has decreased by $0.9 million.

Operating Income. In dollar terms, operating income was $11.2 million in the
second quarter of fiscal year 2002 compared to $23.3 million in the second
quarter of fiscal year 2001. Expressed as a percentage of revenue, operating
income was 29.0% and 41.2% in the second quarter of fiscal year 2002 and the
prior year period, respectively.

Interest Expense. Interest expense was $23,000 in the second quarter of fiscal
year 2002 and $22,000 in the second quarter of fiscal year 2001.

Interest and Other Income. Interest and other income was $0.7 million for the
quarter ended December 29, 2001 and $0.9 million in the prior year quarter.
Although we have a greater cash balance available for investing, the overall
decrease in federal rates over the past year has affected our investment income.

Income Tax Expense. Our effective income tax rate was 14.2% for the second
quarter of fiscal year 2002 as compared to 21.7% in the prior year period. The
effective tax rate for fiscal years 2002 and 2001 reflects the tax-exempt status
of our Singapore operation, which has been given pioneer status, or exemption of
taxes on non-passive income for five years. The decrease in overall tax rate was
directly attributable to increased revenue and income in our Singapore
operations relative to our domestic operations. We do not currently calculate
deferred taxes on our investment in our Singapore

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<PAGE>

operations, as all undistributed earnings are permanently reinvested back into
the Singapore facility. If we were to record deferred taxes on our investment,
the amount would be a $30.5 million liability as of December 29, 2001.

SIX MONTHS ENDED DECEMBER 29, 2001 AS COMPARED TO SIX MONTHS ENDED DECEMBER 30,
2000

Revenue. Consolidated revenue for the first half of fiscal year 2002 decreased
by $33.5 million to $74.3 million, compared to the corresponding prior year
period. The 31.1% decrease is primarily due to macroeconomic factors, which
affected overall revenue. Strength in the personal computer and gaming machines
markets has offset some of this decrease. The average selling price declined
21.1%, while the volume decreased 12.7%.

Foreign revenue (which includes shipments of integrated circuits ("ICs") to
foreign companies as well as offshore subsidiaries of US multinational
companies) was 78.6% of total revenue for the first six months of fiscal year
2002 as compared to 68.5% of total revenue in the prior year quarter. This
increase is attributable to strong demand in the Asian PC market. While the
percentage increase reflected growing sales to the Pacific Rim markets, certain
of our international sales were to customers in the Pacific Rim, which in turn
sold some of their products to North America, Europe and other non-Asian
markets. Our sales are denominated in U.S. dollars and minimize foreign currency
risk.

Gross Margin. Cost of sales for the first half of fiscal year 2002 decreased
$9.6 million to $31.2 million, compared to the corresponding prior year period.
Cost of sales as a percentage of total revenue was 41.9% for the first six
months of fiscal year 2002 as compared to 37.9% in the prior year period. The
overall decrease in margin is due to product mix as well as a decline in average
selling prices.

Research and Development Expense. Research and development expense for the first
half of fiscal year 2002 decreased $2.1 million to $12.5 million, compared to
the corresponding prior year period. As a percentage of revenue, research and
development increased to 16.8% in the first six months of fiscal year 2002 as
compared to 13.6% in the prior year period. Our continued emphasis on R&D
includes greater spending in research and development of our silicon timing
business. The decreased expense represented a greater percentage of revenue due
to the significant decrease in sales during the first six months of fiscal year
2002.

Selling, General, Administrative and Other. Selling, general, administrative and
other expense for the first half of fiscal year 2002 decreased by $0.5 million
to $10.0 million, compared to the corresponding prior year period. As a
percentage of total revenue, selling, general, administrative and other expenses
increased to 13.5% in the first half of fiscal year 2002, compared to 9.7% in
the prior year period. The increase is partly attributable to the inclusion in
the selling, general, administrative and other expense for the first half of
fiscal year 2001 of $2.0 million in insurance proceeds received in relation to
litigation. Excluding this litigation related item, selling, general,
administrative and other expense has decreased by $2.5 million.

Operating Income. Operating income decreased by $21.2 million to $20.6 million,
compared to the corresponding prior year period. Expressed as a percentage of
revenue, operating income was 27.8% and 38.8% in the first six months of fiscal
year 2002 and the prior year period, respectively.

Interest Expense. Interest expense decreased by $0.1 million to $45,000,
compared to the corresponding prior year period.

Interest and Other Income. Interest and other income was $1.6 million in the
first six months of fiscal year 2002 and $1.5 million in the prior year period.
Although an increase in cash flows from operations has contributed to greater
cash balance available for investing, reductions by the Federal Reserve over the
past year have impacted rates available for investing.

                                       12
<PAGE>

Income Tax Expense. Our effective income tax rate for the first six months of
fiscal year 2002 was 14.4% as compared to 20.1% in the corresponding prior year
period. The effective tax rate for fiscal years 2002 and 2001 reflects the tax-
exempt status of our Singapore operation, which has been given pioneer status,
or exemption of taxes on non-passive income for five years. The decrease in
overall tax rate was directly attributable to increased revenue and income in
our Singapore operations relative to our domestic operations. We do not
currently calculate deferred taxes on our investment in our Singapore
operations, as all undistributed earnings are permanently reinvested back into
the Singapore facility. If we were to record deferred taxes on our investment,
the amount would be a $30.5 million liability as of December 29, 2001.

INDUSTRY FACTORS

Our strategy has been to develop new products and introduce them ahead of the
competition in order to have them selected for design into products of leading
OEMs. Our newer components, which include advanced motherboard frequency timing
generator components, and silicon timing devices for digital consumer and
communication applications, are examples of this strategy. However, there can be
no assurance that we will continue to be successful in these efforts or that
further competitive pressures would not have a material impact on revenue growth
or profitability.

We include customer released orders in our backlog, which may be canceled
generally with 30 days advance notice without significant penalty to the
customers. Accordingly, we believe that our backlog, at any time, should not be
used as a measure of future revenues.

The semiconductor, personal computer and communication industries, in which we
participate, are generally characterized by rapid technological change, intense
competitive pressure, and, as a result, products price erosion. Our operating
results can be impacted significantly by the introduction of new products, new
manufacturing technologies, rapid changes in the demand for products, decreases
in the average selling price over the life of a product and our dependence on
third-party wafer suppliers. Our operating results are subject to quarterly
fluctuations as a result of a number of factors, including competitive pressures
on selling prices, availability of wafer supply, fluctuation in yields, changes
in the mix of products sold, the timing and success of new product introductions
and the scheduling of orders by customers. We believe that our future quarterly
operating results may also fluctuate as a result of Company-specific factors,
including pricing pressures on our more mature FTG components as well as the
competitive pressure, and acceptance of our newly introduced ICs, and market
acceptance of our customers' products. Due to the effect of these factors on
future operations, past performance may be a limited indicator in assessing
potential future performance.

LIQUIDITY AND CAPITAL RESOURCES

At December 29, 2001, our principal sources of liquidity included cash and
investments of $115.1 million as compared to of $94.4 million at June 30, 2001.
Net cash provided by operating activities was $28.5 million in the first six
months of fiscal year 2002, as compared to $44.1 million in the prior year
period.  This decrease is primarily attributable to the decrease in revenue.
Our days sales outstanding decreased from 71 days as of the fourth quarter of
fiscal year 2001 to 53 days in the second quarter of fiscal year 2002, while
inventory turns increased from 5.2 times in fiscal year 2001 to 5.5 times in the
second quarter of fiscal year 2002.

Purchases for property and equipment were $1.6 million in the first six months
of fiscal year 2002 as compared to $2.1 million in the prior year period.

In September, we announced a repurchase program, which authorized the purchase,
from time to time, of 2.0 million shares of our common stock on the market.  As
of December 29, 2001, we had purchased 655,000 shares for $7.8 million.

In June 2000, we obtained a $30.0 million revolving credit facility with a
commercial bank to expire in June 2002, with an option to extend the facility
for an additional period subject to certain covenants, including maintenance of
certain

                                       13
<PAGE>

financial ratios. As of December 29, 2001, we had no outstanding balances under
this agreement, and we were in compliance with the revolving credit facility
covenants. Subsequent to quarter end, we terminated this credit facility and
entered into a new facility as discussed below.

In connection with the acquisition of Micro Networks, we entered into a new
revolving credit and term loan facility dated December 31, 2001, which expire
December 31, 2004. The new facility enables us to draw down $45.0 million under
the term loan and $10.0 million under the revolving credit facility. At our
option, the interest rates under the term loan will be either (1) a base rate,
which is the higher of (i) a rate of interest announced from time to time by the
lenders' administrative agent as the base rate ("Base Rate") or (ii) the sum of
0.5% per annum plus the federal funds rate or (2) London Interbank Offer Rate
("LIBOR") plus 1.75%. At our option, the interest rates under the Revolving
Credit Loan, will be either (1) the Base Rate or (2) the LIBOR Rate plus a pre-
formulated margin.

On December 20, 2001, we announced that we signed a definitive agreement to
acquire Micro Networks Corporation ("Micro Networks"), a leading supplier of
precision timing devices for optical networking, wireless infrastructure and
high-end network servers using surface acoustic wave (SAW) technology.
Subsequent to quarter end, we announced our completion of the acquisition.

This agreement provides for all outstanding equity interests of Micro Networks
to be exchanged for $65.0 million in cash, net of certain adjustments including
Micro Networks' severance and benefit plan payments, obligations arising upon a
change of control and changes in Micro Networks' working capital since September
30, 2001, and an assumption of approximately $12.0 million of debt.  The
acquisition was funded through cash on hand as well as through term bank
financing obtained subsequent to quarter end.

We believe that the funds on hand together with funds expected to be generated
from our operations as well as borrowings under our bank revolving credit
facility will be sufficient to meet our anticipated cash needs for working
capital and capital expenditures for at least the next twelve months.
Thereafter, we may need to raise additional funds in future periods to fund our
operations and potential acquisitions if any. We may also consider conducting
future equity or debt financings if we perceive an opportunity to access the
capital markets on a favorable basis, within the next twelve months or
thereafter.  Any such additional financing, if needed, might not be available on
reasonable terms or at all. Failure to raise capital when needed could seriously
harm our business and results of operations. If additional funds were raised
through the issuance of equity securities or convertible debt securities, the
percentage of ownership of our shareholders would be reduced. Furthermore, such
equity securities or convertible debt securities might have rights, preferences
or privileges senior to our common stock.

NEW ACCOUNTING PRONOUNCEMENTS

In June 2001, the Financial Accounting Standards Board ("FASB") issued Statement
of Financial Accounting Standards No. 141 ("SFAS No. 141"), "Business
Combinations", which supersedes Accounting Principles Board Opinion No. 16 ("APB
No. 16"), "Business Combinations".  The most significant changes made by SFAS
No. 141 is the requirement of the usage of the purchase method of accounting for
all business combinations initiated after June 30, 2001 and established specific
criteria for the recognition of intangible assets separately from goodwill.  We
adopted this statement during the first quarter of fiscal year 2002.

In June 2001, the FASB issued SFAS No. 142, "Goodwill and Other Intangible
Assets", which supercedes APB No. 17, "Intangible Assets".  SFAS No. 142
provides guidance on accounting for goodwill and other intangible assets
subsequent to acquisition.  These provisions are effective for fiscal years
beginning after December 15, 2001.  We adopted this statement during the first
quarter of fiscal year 2002.

In June 2001, the FASB issued SFAS No. 143, "Accounting for Asset Retirement
Obligations", which amends SFAS No. 19, "Financial Accounting and Reporting by
Oil and Gas Producing Companies".  SFAS No. 143 provides guidance on accounting
for the retirement of tangible long-lived assets and the associated asset
retirement costs.  These provisions are

                                       14
<PAGE>

effective for fiscal year beginning after June 15, 2002. We do not believe that
adoption of this statement will have a material impact on our operating results.

In August 2001, the FASB issued SFAS No. 144, "Accounting for the Impairment or
Disposal of Long-Lived Assets", which supercedes SFAS No. 121, "Accounting for
the Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed
Of". SFAS No. 144 established a single accounting model for the disposition of
long-lived assets by sale. These provisions are effective for fiscal years
beginning after December 15, 2001. We do not believe that adoption of this
statement will have a material impact on our operating results.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

Foreign Currency Exposures
Our sales are denominated in U.S. dollars, accordingly, we do not use forward
exchange contracts to hedge exposures denominated in foreign currencies or any
other derivative financial instruments for trading or speculative purposes. The
effect of an immediate 10% change in exchange rates would not have a material
impact on our future operating results or cash flows.

Interest Rate Risk
As of December 29, 2001 we did not have obligations under the bank credit and,
therefore, we currently do not engage in interest rate hedging activities.

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<PAGE>

Item 4.  Submission of Matters to a Vote of Security Holders

At the Company's annual meeting of stockholders held on October 30, 2001, the
stockholders of the Company elected three directors of the Company.

Mr. Henry I. Boreen, Mr. David Dominik and Mr. Prescott Ashe were elected to
serve as directors at the meeting.  The voting results were 55,474,783 shares in
favor and 1,287,055 shares withheld for Mr. Boreen, 56,662,736 shares in favor
and 99,102 shares withheld for Mr. Dominik and 56,660,536 shares in favor and
101,302 shares withheld for Mr. Ashe.

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<PAGE>

Item 6.    Exhibits and Reports on Form 8-K

(a)   Exhibits

           Exhibit
           Number                            Description
           ------                            -----------


           3.2         Amended and Restated By-laws of the Company (as amended
                       effective August 3, 2001).


(b)   Reports on Form 8-K:

           None.

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<PAGE>

                                  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.


                                 INTEGRATED CIRCUIT SYSTEMS, INC.




Date: February 12, 2002          By:   /s/ Hock E Tan
                                       -----------------------------------------
                                 Hock E. Tan
                                 President and Chief Executive Officer



Date: February 12, 2002          By:   /s/ Justine F. Lien
                                       -----------------------------------------
                                 Justine F. Lien
                                 Vice President, Finance and Chief Financial
                                 Officer
                                 (Principal financial & accounting officer)

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