<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 September 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 November 9, 2001, there were 66,107,329 shares of Common Stock; $0.01 par
value, outstanding.

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

                                       1
<PAGE>

                        INTEGRATED CIRCUIT SYSTEMS, INC.

                                      INDEX

<TABLE>
<CAPTION>

                                                                                                          Page
                                                                                                         Number
                                                                                                         ------
<S>                                                                                                       <C>
PART I.  FINANCIAL INFORMATION

Item 1.  Consolidated Financial Statements:

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

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

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

         Notes to Consolidated Financial Statements                                                         6

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

Item 3.  Quantitative and Qualitative Disclosures About
         Market Risk                                                                                       12

PART II. OTHER INFORMATION

Item 6. Exhibits and Reports on Form 8-K                                                                   13
</TABLE>

                                       2
<PAGE>

Item  1.    Consolidated Financial Statements

                INTEGRATED CIRCUIT SYSTEMS, INC. AND SUBSIDIARIES
                           Consolidated Balance Sheets
                                 (In thousands)
<TABLE>
<CAPTION>

                                                                       September 29,              June 30,
                                                                           2001                    2001
                                                                   --------------------     ------------------
                                                                       (Unaudited)
<S>                                                                <C>                      <C>
ASSETS
Current Assets:
   Cash and cash equivalents                                             $ 77,798              $ 91,400
   Marketable securities                                                   26,228                 3,000
   Accounts receivable, net                                                31,800                27,359
   Inventory, net                                                          11,578                10,097
   Deferred income taxes                                                    3,810                 4,053
   Prepaid income taxes                                                     1,625                    --
   Prepaid assets                                                           5,143                 5,411
   Other current assets                                                       940                   596
                                                                         --------              --------
      Total current assets                                                158,922               141,916
                                                                         --------              --------
Property and equipment, net                                                10,547                11,215
Other assets                                                                  970                   986
                                                                         --------              --------
      Total assets                                                       $170,439              $154,117
                                                                         ========              ========

LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
   Current portion of long-term obligations                              $    412              $    429
   Accounts payable                                                        17,116                 8,579
   Accrued expenses and other current liabilities                           3,373                 3,566
   Income taxes payable                                                        --                 1,306
                                                                         --------              --------
      Total current liabilities                                            20,901                13,880
                                                                         --------              --------

Long-term debt, less current portion                                          175                   280
Other liabilities                                                           1,048                   904
                                                                         --------              --------
      Total liabilities                                                    22,124                15,064
                                                                         --------              --------

Shareholders' equity:
  Common stock, $0.01 par, authorized 300,000;
  Issued and outstanding 66,733 and 66,128 shares as of
  September 29, 2001 and June 30, 2001, respectively.                         667                   661
  Additional paid in capital                                              216,100               211,524
  Accumulated deficit                                                     (61,364)              (70,229)
  Deferred compensation                                                    (2,437)               (2,722)
  Notes receivable                                                           (185)                 (181)
  Treasury stock, at cost, 375 shares                                      (4,681)                   --
  Other comprehensive income                                                  215                    --
                                                                         --------              --------
      Total shareholders' equity                                          148,315               139,053
                                                                         --------              --------
      Total liabilities and shareholders' equity                         $170,439              $154,117
                                                                         ========              ========
</TABLE>
         See accompanying notes to consolidated financial statements.

                                       3
<PAGE>

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

                                                                                      Three Months Ended
                                                                             ----------------------------------
                                                                             September 29,         September 30,
                                                                                  2001                  2000
                                                                             --------------        --------------
<S>                                                                         <C>                    <C>
Revenues:                                                                        $35,707              $51,351

Cost and expenses:
   Cost of sales                                                                  15,146               19,469
   Research and development                                                        6,648                7,140
   Selling, general and administrative                                             4,448                6,117
   Goodwill amortization                                                              --                   59
                                                                                 -------              -------
      Operating income                                                             9,465               18,566
                                                                                 -------              -------

Interest and other income                                                            925                  601
Interest expense                                                                     (22)                (153)
                                                                                 -------              -------
      Income before income taxes                                                  10,368               19,014
Income taxes                                                                       1,503                3,463
                                                                                 -------              -------
Net income                                                                       $ 8,865              $15,551
                                                                                 =======              =======
Basic income per share:
    Net income                                                                   $  0.13              $  0.24

Diluted income per share:
    Net income                                                                   $   0.13             $  0.22

Weighted average share outstanding - basic                                         66,428              64,375
Weighted average share outstanding - diluted                                       70,019              69,428
</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>

                                                                                                Three Months Ended
                                                                                        --------------------------------------
                                                                                        September 29,             September 30,
                                                                                            2001                       2000
                                                                                        --------------            --------------
<S>                                                                                        <C>                       <C>
Cash flows from operating activities:
   Net income                                                                                $  8,865                  $ 15,551
     Adjustments to reconcile net income to net
      cash provided by operating activities:
      Depreciation and amortization                                                             1,273                     1,286
      Amortization of bond premiums                                                                 3                       (3)
      Deferred financing charge                                                                     3                         3
      Amortization of deferred compensation                                                       246                       286
      (Gain) loss on sale of assets                                                               (28)                      (29)
      Tax benefit of stock options                                                              3,946                     2,586
      Deferred income taxes                                                                       414                      (543)
   Changes in assets and liabilities:
      Accounts receivable                                                                      (4,442)                     (857)
      Inventory                                                                                (1,480)                     (172)
      Other assets, net                                                                          (146)                      748
      Accounts payable, accrued expenses and other current liabilities                          8,342                       305
      Accrued interest expense                                                                     --                       (14)
      Income taxes                                                                             (2,932)                    4,986
                                                                                             --------                  --------

         Net cash provided by operating activities                                             14,064                    24,133
                                                                                             --------                  --------

Cash flows from investing activities:
   Purchase of marketable securities                                                          (23,019)                       --
   Capital expenditures                                                                          (621)                   (1,182)
   Other                                                                                          101                       347
                                                                                             --------                  --------

         Net cash used in investing activities                                                (23,539)                     (835)
                                                                                             --------                  --------

Cash flows from financing activities:
   Net repayments under line of credit agreement                                                   --                   (10,000)
   Exercise of stock options                                                                      531                       190
   Shares purchased through stock purchase plan                                                   144                       155
   Initial public offering expenses                                                                --                     (194)
   Purchase of treasury stock                                                                  (4,681)                       --
   Repayments of long-term debt                                                                  (121)                     (139)
                                                                                             --------                  --------
         Net cash used in financing activities                                                 (4,127)                   (9,988)
                                                                                             --------                  --------

Net (decrease) increase in cash and cash equivalents                                          (13,602)                   13,310
Cash and cash equivalents:
   Beginning of period                                                                         91,400                    28,940
                                                                                             --------                  --------
   End of period                                                                             $ 77,798                  $ 42,250
                                                                                             ========                  ========
</TABLE>

See accompanying notes to consolidated financial statements.

                                       5
<PAGE>

                INTEGRATED CIRCUIT SYSTEMS, INC. AND SUBSIDIARIE
                   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 September 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 three months ended September 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 quarter
of fiscal year 2001 totaled $59,000 pretax. Had we continued to amortize
goodwill, our amortization expense in the first quarter of fiscal year 2002
would have been $59,000 pretax. This transition had no impact on diluted EPS in
either quarter.

(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):

                              September 29, 2001          June 30, 2001
                              ------------------          -------------
Work-in-process                        $   6,521              $   6,513
Finished parts                             8,334                  7,178
Less:  Obsolescence reserve               (3,277)                (3,594)
                                       ---------              ---------
                                       $  11,578              $  10,097
                                       =========              =========

(5) DEBT
In June 2000, we obtained a $30.0 million revolving credit facility with a
commercial bank. The facility expires in June 2002, with an option to extend the
facility for additional period and is subject to certain covenants, including
maintenance of certain financial ratios. As of September 29, 2001, we had no
outstanding balances under this agreement, and we were in compliance with the
revolving credit facility covenants.

(6) CAPITAL STOCK
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 September 29, 2001, we had purchased 375,000 shares for $4.7 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

                                       6
<PAGE>

("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.

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.

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

                                                                                 Three Months Ended
                                                                           September 29,        September 30,
                                                                               2001                  2000
                                                                           -------------         -------------
<S>                                                                        <C>                   <C>
Numerator (in thousands):
 Net income                                                                    $ 8,865             $15,551
                                                                               -------             -------

 Denominator (in thousands):
 Weighted average shares outstanding used for basic
    income per share                                                            66,428              64,375
 Common stock options                                                            3,591               5,053
                                                                               -------             -------
 Weighted average shares outstanding used for diluted
    income per share                                                            70,019              69,428
                                                                               =======             =======
</TABLE>

(9)  INCOME TAXES
Our effective income tax rate was 14.5% for the first quarter of fiscal year
2002 as compared to 18.2% 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

                                       7
<PAGE>

reinvested back into the Singapore facility. If we were to record deferred taxes
on our investment, the amount would be a $27.7 million liability as of September
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 after-tax components of accumulated other
comprehensive income are shown below.
<TABLE>
<CAPTION>

                                                                              Three Months Ended
                                                                       September 29,        September 30,
                                                                           2001                  2000
                                                                       -------------        --------------
<S>                                                                          <C>                 <C>

 Net income                                                                 $ 8,865             $15,551
                                                                            -------             -------

 Other comprehensive income:
   Unrealized Gain on Investments                                               215                  --
                                                                            -------             -------
 Total comprehensive income                                                 $ 9,080             $15,551
                                                                            =======             =======
</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.

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 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 July 20, 2001,
Cypress filed a complaint with the U.S. International Trade Commission, ("ITC"),
to commence an investigation of us for patent infringement. . We denied the
allegations of Cypress in the 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 November 5,
2001, we filed a complaint with the ITC to commence an investigation of Cypress
for patent infringement. We will continue to vigorously pursue our rights and
defenses in all litigation with Cypress. Although we believe that all the
litigation would not have a material adverse effect on our results of operations
and financial condition, no assurance can be made in this regard.

                                       8
<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
                                                                             September 29,          September 30,
                                                                                  2001                   2000
                                                                           -------------------     -----------------
<S>                                                                         <C>                    <C>
Revenues                                                                         100.0%                100.0%

Gross Margin                                                                      57.6                  62.1

   Research and development                                                       18.6                  13.9
   Selling, general and administrative                                            12.5                  11.9
   Goodwill amortization                                                            --                   0.1
                                                                                 -----                 -----
Operating income                                                                  26.5                  36.2
                                                                                 -----                 -----

Interest and other income                                                          2.6                   1.2
Interest expense                                                                  (0.1)                 (0.3)
                                                                                 -----                 -----
      Income before income taxes and extraordinary gain                           29.0                  37.1
Income taxes                                                                       4.2                   6.8
                                                                                 -----                 -----
      Net income                                                                  24.8%                 30.3%
                                                                                 =====                 =====
</TABLE>

                                       9
<PAGE>

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

Revenue. Revenue decreased by $15.7 million to $35.7 million for the first
quarter ended September 29, 2001 as compared to the prior year quarter. The 31%
decrease is primarily due to macroeconomic factors, which affected overall
revenue. The average selling price declined 21.1%, while the volume decreased
11.9%.

Foreign revenue (which includes shipments of integrated circuits ("ICs") to
foreign companies as well as offshore subsidiaries of US multinational
companies) was 78.2% of total revenue for the first quarter of fiscal year 2002
as compared to 72.2% of total revenue in the prior year quarter. This increase
is attributable to strong demand in the Asian PC market for the first quarter of
fiscal year 2002. 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 $4.4 million to $15.1 million for the
quarter ended September 29, 2001, as compared to the prior year quarter. Cost of
sales as a percentage of total revenue was 42.4% for the first quarter of fiscal
year 2002 as compared to 37.9% in the prior year quarter. The overall decrease
in margin is due to product mix.

Research and Development Expense. Research and development ("R&D") expense
decreased $0.5 million to $6.6 million for the first quarter of fiscal year 2002
from $7.1 million in the prior year quarter. As a percentage of revenue,
research and development increased to 18.6% in the first quarter of fiscal year
2002 as compared to 13.9% 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 first quarter of fiscal year
2002.

Selling, General, Administrative and Other. Selling, general, administrative and
other expense decreased $1.7 million to $4.4 million for the first quarter of
fiscal year 2002 as compared to the prior year period. We continued to benefit
from operating expense control measures. As a percentage of total revenue,
selling, general and administrative expenses increased to 12.5% in the first
quarter of fiscal year 2002 as compared to 11.9% in the prior year period. The
increase as a percentage of revenue is the result of lower revenues.

Operating Income. In dollar terms, operating income was $9.5 million in the
first quarter of fiscal year 2002 compared to $18.6 million in the first quarter
of fiscal year 2001. Expressed as a percentage of revenue, operating income was
26.5% and 36.2% in the first quarter of fiscal year 2002 and the prior year
period, respectively.

Interest Expense. Interest expense was $22,000 in the first quarter of fiscal
year 2002 and $0.2 million in the first quarter of fiscal year 2001.

Interest and Other Income. Interest and other income was $0.9 million for the
quarter ended September 29, 2001 and $0.6 million in the prior year quarter. An
increase in cash flows from operations has contributed to a greater cash balance
available for investing.

Income Tax Expense. Our effective income tax rate was 14.5% for the first
quarter of fiscal year 2002 as compared to 18.2% 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 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 $27.7 million liability as of September 29, 2001.


                                       10
<PAGE>

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 FTG components,
data communication components and PC multimedia audio and graphics components,
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 and personal computer industry, in which we participate, is
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, continuing demand for our custom ASIC products and
acceptance of our newly introduced ICs, board level and software products 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 September 29, 2001, our principal sources of liquidity included cash and
investments of $104.0 million as compared to the June 30, 2001 balance of $94.4
million. Net cash provided by operating activities was $14.1 million in the
first quarter of fiscal year 2002, as compared to $24.1 million in the prior
year quarter. This decrease is primarily attributable to the decrease in income,
and the increase in accounts receivable and income tax, partially offset by an
increase in accounts payable. Our days sales outstanding increased from 71 days
as of the fourth quarter of fiscal year 2001 to 81 days in the first quarter of
fiscal year 2002, while inventory turns increased from 5.2 times in fiscal year
2001 to 5.6 times in the first quarter of fiscal year 2002.

Purchases for property and equipment were $0.6 million in the first quarter of
fiscal year 2002 as compared to $1.2 million in the prior year quarter.

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 September 29, 2001, we had purchased 375,000 shares for $4.7 million.

In June 2000, we secured a $30.0 million revolving credit facility with a
commercial bank. The facility expires in June 2002, with an option, at the
bank's sole discretion, to extend the facility for additional period and is
subject to certain covenants, including maintenance of certain financial ratios.
In the first quarter of fiscal year 2002, we had no outstanding balances under
this agreement. As of September 29, 2001, we were in compliance with the
revolving credit facility covenants.

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

                                       11
<PAGE>

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.

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.

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 September 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 6.  Exhibits and Reports on Form 8-K

         (a)  Reports on Form 8-K:

         A report on Form 8-K, dated September 19, 2001, was filed to
         report the announcement of a stock repurchase program. The
         repurchase program authorizes the purchase, from time to time,
         of 2,000,000 shares of the Company's common stock.

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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: November 13, 2001      By: /s/ Hock E. Tan
                                 -----------------------------------------------
                              Hock E. Tan
                              President and Chief Executive Officer

Date: November 13, 2001      By: /s/ Justine F. Lien
                                 -----------------------------------------------
                             Justine F. Lien
                             Vice President, Finance and Chief Financial Officer
                             (Principal financial & accounting officer)

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