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                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 Quarterly Period Ended June 30, 1999

                                       OR

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

                        For the transition period from to
                         Commission File Number 0-24758

                            MICRO LINEAR CORPORATION
             (Exact name of Registrant as specified in its charter)
                    Delaware                         94-2910085
          (State or other jurisdiction of         (I.R.S. Employer
          incorporation or organization)       Identification Number)

                 2092 Concourse Drive                     95131
                 San Jose, California                  (Zip Code)
                 (Address of principal executive
                            offices)

       Registrant's telephone number, including area code: (408) 433-5200

     Indicate by check mark whether the  Registrant (1) has filed all reports 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 [ ]

     The number of shares of the  Registrant's  Common Stock  outstanding  as of
June 30, 1999 was 10,978,266.

<PAGE>
<TABLE>
<CAPTION>

                                                 TABLE OF CONTENTS

                                                                                                    Page
       PART I.       FINANCIAL INFORMATION

       Item 1.       Financial Statements
                     <S>                                                                             <C>
                     Consolidated Condensed Statements of Operations for the three and six
                     months ended June 30, 1999 and 1998........................................      3

                     Consolidated Condensed Balance Sheets at June 30, 1999 and December 31, 1998     4

                     Consolidated Condensed Statements of Cash Flows for the six months ended
                     June 30, 1999 and 1998......................................................     5

                     Notes to Consolidated Condensed 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 .................     15


       PART II.      OTHER INFORMATION

       Item 1.       Legal Proceedings...........................................................     16

       Item 4.       Submission of Matters to a Vote of Security Holders.........................     18

       Item 6.       Exhibits and Reports on Form 8-K............................................     18

       SIGNATURES..............................................................................       19
</TABLE>


<PAGE>
<TABLE>
<CAPTION>


                                           PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

                                             MICRO LINEAR CORPORATION
                                  CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
                                                    (Unaudited)
                                     (In thousands, except per share amounts)

                                                                           Three Months Ended          Six Months Ended
                                                                        -------------------------   ------------------------
<S>                                                                           <C>           <C>           <C>          <C>
                                                                         June 30,      June 30,      June 30,     June 30,
                                                                           1999          1998          1999         1998
                                                                        -----------   -----------   -----------  ------------
Net revenues...........................................................   $11,270       $11,745       $22,176       $23,984
Cost of revenues.......................................................     5,616         6,641        11,267        12,252
                                                                        -----------   -----------   -----------  ------------
   Gross profit........................................................     5,654         5,104        10,909        11,732
Operating expenses:
   Research and development............................................     3,349         2,912         6,849         6,151
   Selling, general and administrative.................................     2,696         2,396         5,580         5,191
                                                                        -----------   -----------   -----------  ------------
                                                                            6,045         5,308        12,429        11,342
                                                                        -----------   -----------   -----------  ------------
   Income (loss) from operations.......................................      (391)         (204)       (1,520)          390
Interest and other income, net.........................................       392           365           771           728
Interest expense.......................................................       (62)          (66)         (125)         (133)
                                                                        -----------   -----------   -----------  ------------
   Income (loss) before taxes..........................................       (61)           95         (874)           985
Provision (benefit) for income taxes...................................       197            34         (559)           354
                                                                        -----------   -----------   -----------  ------------
   Net income (loss)...................................................   $  (258)      $    61       $ (315)       $   631
                                                                        ===========   ===========   ===========  ============

Net Income (loss) Per Share:
Basic:
   Net income (loss) per share.........................................   $ (0.02)      $  0.01       $(0.03)       $  0.05
                                                                        ===========   ===========   ===========  ============
   Weighted average number of shares used in per share computation.....    10,940        11,692       10,957         11,671
                                                                        ===========   ===========   ===========  ============
Diluted:
   Net income (loss) per share.........................................    $(0.02)      $  0.01       $(0.03)       $  0.05
                                                                        ===========   ===========   ===========  ============
   Weighted average number of shares used in per share computation.....    10,940        12,087       10,957         12,155
                                                                        ===========   ===========   ===========  ============
<FN>
                           See accompanying notes to consolidated condensed financial statements.
</FN>
</TABLE>

                                                         3
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<TABLE>
<CAPTION>

                                             MICRO LINEAR CORPORATION
                                       CONSOLIDATED CONDENSED BALANCE SHEETS
                                                    (Unaudited)
                                                  (In thousands)

<S>                                                                                                 <C>                       <C>
                                                                                               June 30,              December 31,
                                                                                                 1999                    1998
                                                                                         -------------------   -------------------
Assets
Current assets:
   Cash and cash equivalents...........................................................             $ 7,056                 6,393
   Short-term investments..............................................................              22,226                 2,937
   Accounts receivable, net............................................................               5,440                 5,476
   Inventories.........................................................................               5,755                 7,260
   Other current assets................................................................               5,662                 5,670
                                                                                         -------------------   -------------------
     Total current assets..............................................................              46,139                47,736
                                                                                         -------------------   -------------------
Property, plant and equipment, net.....................................................              19,629                21,140
Other assets...........................................................................                 514                   568
                                                                                         -------------------   -------------------
       Total assets....................................................................             $66,282               $69,444
                                                                                         ===================   ===================

Liabilities and Stockholders' Equity
Current liabilities:
   Accounts payable....................................................................             $ 2,467               $ 3,030
   Deferred income on shipments to distributors........................................               3,035                 2,739
   Other accrued liabilities...........................................................               2,710                 4,075
   Current portion of long-term debt...................................................               2,701                 2,791
                                                                                         -------------------   -------------------
     Total current liabilities.........................................................              10,913                12,635
                                                                                         -------------------   -------------------
Long-term debt.........................................................................                  --                    --
                                                                                         -------------------   -------------------
Stockholders' equity:
   Preferred stock.....................................................................                  --                    --
   Common stock........................................................................                  14                    14
   Additional paid-in capital..........................................................              54,514                54,125
   Retained earnings...................................................................              21,074                21,389
   Treasury stock......................................................................             (20,233)              (18,719)
                                                                                         -------------------   -------------------
     Total stockholders' equity........................................................              55,369                56,809
                                                                                         -------------------   -------------------
       Total liabilities and stockholders' equity......................................              66,282                69,444
                                                                                         ===================   ===================
<FN>
                               See accompanying notes to consolidated condensed financial statements.

</FN>
</TABLE>
                                                              4
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<TABLE>
<CAPTION>

                                            MICRO LINEAR CORPORATION
                                  CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
                                                    (Unaudited)
                                                  (In thousands)

                                                                                         Six Months Ended
                                                                                ------------------------------------
<S>                                                                                     <C>                  <C>
                                                                                   June 30,             June 30,
                                                                                     1999                 1998
                                                                                ---------------       --------------
Cash provided by operating activities.........................................        $  1,838             $  5,559

Investing activities:
   Capital expenditures.......................................................            (752)              (1,751)
   Proceeds from sale of equipment............................................             115                   --
   Purchases of short-term investments........................................         (18,062)             (17,024)
   Sales of short-term investments............................................          18,773               16,431
                                                                                ---------------       --------------
     Net cash provided by (used in) investing activities......................              74               (2,344)

Financing activities:
   Principal payments under capital lease obligations and debt................             (81)                (104)
   Proceeds from issuance of common stock.....................................             346                  947
   Acquisition of treasury stock..............................................          (1,514)              (1,011)
                                                                                ---------------       --------------
     Net cash used in financing activities....................................          (1,249)                (168)
                                                                                ---------------       --------------

Net increase in cash and cash equivalents.....................................             663                3,047
Cash and cash equivalents at beginning of period..............................           6,393                5,210
                                                                                ---------------       --------------
Cash and cash equivalents at end of period....................................          $7,056               $8,257
                                                                                ===============       ==============
<FN>
See accompanying notes to consolidated condensed financial statements.
</FN>
</TABLE>
                                                         5
<PAGE>

                                             MICRO LINEAR CORPORATION

              NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
                                   (Unaudited)

1)   Micro Linear Corporation (the "Company") designs, develops and markets high
     performance  analog and mixed signal integrated  circuits for a broad range
     of applications within the communications,  computer and industrial markets
     for sale primarily in North America,  Asia and Europe. The Company operates
     in a single industry segment.

2)   The accompanying  interim financial  statements are unaudited and have been
     prepared by the Company in accordance  with generally  accepted  accounting
     principles  and contain all  adjustments  (consisting  of normal  recurring
     adjustments) to fairly present the financial  information  included.  While
     the  Company  believes  that  the  disclosures  are  adequate  to make  the
     information not misleading, it is suggested that these financial statements
     be read in  conjunction  with the Company's  Annual Report on Form 10-K for
     the year ended December 31, 1998. The results of operations for the interim
     periods shown in this report are not  necessarily  indicative of results to
     be expected for the fiscal year.

3)   For financial  reporting  purposes,  the Company's  fiscal year ends on the
     Sunday  closest to December 31.  Fiscal year 1998 ended on January 3, 1999.
     The Company's fiscal quarters are 13 weeks in length. The second quarter of
     1999 ended on July 4, 1999. For  presentation  purposes,  the  accompanying
     unaudited   consolidated   condensed  financial  statements  refer  to  the
     quarters' calendar month end for convenience.

     The Company  exclusively  uses the U.S. dollar as its functional  currency.
     Foreign  currency  transaction  gains and losses are  included in income as
     they occur. The effect of foreign currency  exchange rate  fluctuations was
     not significant. The Company does not use derivative instruments.

     The  preparation  of financial  statements  in  conformity  with  generally
     accepted  accounting  principles  requires management to make estimates and
     assumptions  that affect the reported amounts of assets and liabilities and
     disclosure  of  contingent  assets  and  liabilities  at  the  date  of the
     financial  statements  and the  reported  amounts of revenues  and expenses
     during  the  reporting  period.  Actual  results  could  differ  from those
     estimates.

4)   During the three months ended June 30, 1999,  two  customers  accounted for
     32% and 10% of total sales, respectively.  During the six months ended June
     30,  1999,  two  customers  accounted  for  26%  and  10% of  total  sales,
     respectively.

5)   Supplemental Financial Information:

     Inventories consist of the following (in thousands):

                                                      June 30,     December 31,
                                                        1999          1998
                                                    -----------  --------------
          Raw materials........................      $    2         $  314
          Work-in-process......................       4,048          4,906
          Finished goods.......................       1,705          2,040
                                                     $5,755         $7,260


     Property, plant and equipment consist of the following (in thousands):
<TABLE>
<CAPTION>

<S>                                                                            <C>               <C>
                                                                          June 30,      December 31,
                                                                             1999              1998
                                                                        -------------   --------------
          Land.......................................................       $ 2,850         $ 2,850
          Buildings and improvements.................................         9,927           9,904
          Machinery and equipment....................................        34,351          33,736
                                                                             47,128          46,490
          Accumulated depreciation and amortization..................        27,499          25,350
          Net property, plant and equipment..........................       $19,629         $21,140
</TABLE>
                                       6
<PAGE>

6)   Cash payments for income taxes and interest  expense  totaled  $250,000 and
     $125,000, respectively, for the six months ended June 30, 1999.

7)   The  Company's  provision  for taxes on income is based on estimates of the
     levels of income and certain deductions expected for the year, which may be
     subject to change.  The Company's  effective tax rate for the first half of
     1999 was a benefit  of 64%,  compared  to a  provision  of 36% for the same
     period in 1998,  which differs from the statutory income tax rate primarily
     due to state income taxes and federal research credits.  The reason for the
     higher  effective tax rate in the first half of 1999 is the greater  impact
     that the Federal  R&D Tax Credit and  California  Investment  Tax Credit is
     expected to have on the 1999 tax provision.

8)   From January 1996 through June 1999, the Company had repurchased  2,696,900
     shares of its common stock for a total cost of $20.2 million.

9)   The  Company  uses  the  net  income  per  share  calculation   methodology
     prescribed  by Statement of Financial  Accounting  Standards No. 128 ("SFAS
     128").  SFAS 128 requires  presentation of basic and diluted net income per
     share.  Basic net  income  per share is  computed  by  dividing  net income
     available to common stockholders (numerator) by the weighted average number
     of common shares outstanding  (denominator)  during the period and excludes
     the dilutive  effect of stock  options.  Diluted net income per share gives
     effect to all  dilutive  potential  common  stock  outstanding  during  the
     period.  In computing diluted net income per share, the average stock price
     for the period is used in  determining  the number of shares  assumed to be
     purchased from the exercise of stock options.

     Following is a  reconciliation  of the numerators and  denominators  of the
     basic and diluted income per share  computations for the periods  presented
     below (in thousands except per share data):

<TABLE>
<CAPTION>

                                                  Three Months Ended June 30,
                          -----------------------------------------------------------------------------
<S>                                       <C>                                    <C>
                                          1999                                   1998
                          -------------------------------------  --------------------------------------
                                                        Per-                                    Per-
                              Loss         Shares     Share         Income         Shares     Share
                          (Numerator)  (Denominator)   Amount     (Numerator)  (Denominator)   Amount
  Basic Income (loss)
  Per Share:
  Net income  (loss)
  available
    to common               $(258)         10,940     $(0.02)        $61           11,692      $0.01
    stockholders

  Effect of dilutive
  securities:                                  --                                     395
    Stock options

  Diluted Income (loss)
  Per Share:
  Net income ( loss)
  available
    to common
    stockholders assuming   $(258)         10,940     $(0.02)        $61           12,087      $0.01
    dilution
</TABLE>
                                       7
<PAGE>
<TABLE>
<CAPTION>




                                                   Six Months Ended June 30,
                          -----------------------------------------------------------------------------
<S>                                       <C>                                    <C>
                                          1999                                   1998
                          -------------------------------------  --------------------------------------
                                                        Per-                                    Per-
                              Loss         Shares     Share         Income         Shares     Share
                          (Numerator)  (Denominator)   Amount     (Numerator)  (Denominator)   Amount
  Basic Income (loss)
  Per Share:
  Net income (loss)
  available
    to common                $(315)         10,957    $(0.03)        $631       11,671         $0.05
    stockholders

  Effect of dilutive
  securities:                                   --                                 484
    Stock options

  Diluted Income (loss)
  Per Share:
  Net income (loss)
  available
    to common
    stockholders assuming    $(315)         10,957    $(0.03)        $631       12,155         $0.05
    dilution

</TABLE>


     Options to purchase  304,186 shares of common stock were  outstanding as of
     June 30,  1999,  but were not  reflected  in the  computations  of  diluted
     earnings  per share  because the Company  recorded a net loss in the period
     and to do so would have been anti-dilutive.

10)  In April  1998,  the  Accounting  Standards  Executive  Committee  released
     Statement of Position ("SOP") No. 98-5, "Reporting on the Costs of Start-up
     Activities."  SOP No. 98-5 is effective  for fiscal years  beginning  after
     December 15, 1998 and requires  companies to expense all costs  incurred or
     unamortized in connection  with start-up  activities.  The adoption of this
     SOP did not have any effect on the  Company's  results of operations as the
     Company has expensed such start-up costs in prior years.

     In  March  1998,  the  Accounting  Standard  Executive  Committee  released
     Statement  of  Position  ("SOP")  No.  98-1  "Accounting  for the  Costs of
     Computer  Software  Developed or Obtained for Internal Use". SOP No.98-1 is
     effective for financial statements for periods beginning after December 15,
     1998.  Direct  external  costs,   directly  related  internal  payroll  and
     payroll-related  cost and interest expenses associated with the application
     development  stage  are   capitalizable.   Upgrades  and  enhancements  are
     capitalized  if they meet  certain  criteria.  Training,  maintenance,  and
     data-conversion  costs are expensed.  The adoption of this SOP did not have
     any significant effect on the Company's results of operations.

11)  A discussion of a certain  pending legal  proceedings is included in Item 1
     of Part II of the Company's Form 10-Q for the fiscal quarter ended June 30,
     1999. The Company believes that the final outcome of such matters discussed
     will not have a  material  adverse  effect  on the  Company's  consolidated
     financial  position or results of  operations.  No assurance  can be given,
     however,  that these matters will be resolved  without the Company becoming
     obligated  to make  payments or to pay other costs to the  opposing  party,
     with the potential for having an adverse effect on the Company's  financial
     position or its results of operations.

                                       8
<PAGE>

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

     This report on Form 10-Q  contains  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. The forward-looking statements contained herein
are  subject  to  certain  factors  that could  cause  actual  results to differ
materially from those projected in the forward-looking  statements. Such factors
include,  but are not limited to, the factors set forth below and  elsewhere  in
this Form 10-Q.

Results of Operations

   Net Revenues

     Net  revenues  were  $11.3  million  for the second  quarter of 1999,  a 4%
decrease over net revenues of $11.7 million for the second quarter of 1998 and a
4% increase  over net revenues of $10.9  million for the first  quarter of 1999.
Net revenues  were $22.2  million for the first half of 1999, a 8% decrease over
net revenues of $24.0 million for the first half of 1998. The decline in the net
revenues  in the  first  half of 1999  compared  to the  first  half of 1998 was
primarily  due to soft  market  condition,  particularly  in the  communications
market. The increase in net revenues over the first quarter of 1999 is primarily
attributable to stronger  business demand which resulted in higher than expected
orders. The Company expects its third quarter 1999 net revenues to be lower than
the second quarter of 1999.

     The Company serves three principal  markets:  computer,  communications and
industrial.  Net revenues for the second  quarter of 1999 compared to the second
quarter of 1998 decreased 15% in the communications  market and increased 19% in
the industrial market and 4% in the computer market. Net revenues for the second
quarter  of 1999  compared  to the first  quarter  of 1999  increased  9% in the
communications  market and  decreased  5% in the  computer  market and 1% in the
industrial market. Net revenues for the first half of 1999 compared to the first
half of 1998 decreased 24% in the communications market and increased 28% in the
computer market and 25% in the industrial market. The Company's products for the
communications  market tend to have higher average  selling prices and therefore
have a significant impact on the revenue change.

     The  communications  market  includes  the  computer  networking  equipment
("networking") sub-market. Sales of products to the networking market constitute
a  substantial  majority of the  Company's  net  revenues.  Net revenues for the
second  quarter of 1999 in the networking  sub-market  decreased 12% compared to
the second  quarter of 1998 and  increased  7% compared to the first  quarter of
1999. Sales of the Company's networking products accounted for approximately 49%
and 60% of net  revenues in the first half of 1999 and 1998,  respectively.  The
decline in  networking  product  revenues for the first half of 1999 compared to
the  first  half of 1998 is  principally  attributable  to  lower  shipments  of
ethernet  parts.   The  networking   sub-market  is   characterized  by  intense
competition,  relatively  short  product  life  cycles  and rapid  technological
change.  In addition,  the network  sub-market  has  undergone a period of rapid
growth,  price erosion and  consolidation in recent years.  Although the Company
has  expanded  its  product  mix and  customer  base,  the  Company  expects its
dependency on sales to network equipment  manufacturers to continue for the near
future.  The Company's  business and results of operations  have in the past and
would in the  future be  materially  and  adversely  affected  in the event of a
significant slowdown in the computer networking equipment market.

     International net revenues were $4.3 million,  or 38% of net revenues,  for
the second  quarter of 1999,  compared to $5.7 million,  or 49% of net revenues,
for the second quarter of 1998 and $4.7 million, or 43% of net revenues, for the
first quarter of 1999.  International  revenues were $9.0 million, or 41% of net
revenues,  for the first half of 1999,  compared to $10.9 million, or 45% of net
revenues, for the first half of 1998. The decrease in international revenues for
the second  quarter of 1999 compared to the second quarter of 1998 and the first
quarter of 1999 and also for the first half of 1999  compared  to the first half
of 1998  was due to the  combination  of lower  direct  product  demand  for the
Company's  products in Asia and  decreased  Asia  Pacific  subcontract  work for
domestic customers.

     Domestic  distributor  revenues were  approximately 37% of net revenues for
the second  quarter of 1999,  18% of net revenues for the second quarter of 1998
and 27% for the  first  quarter  of 1999.  Domestic  distributor  revenues  were
approximately  32% and 20% of net  revenues for the first half of 1999 and first
half of 1998,  respectively.  The Company expects sales to domestic distributors
to remain at about 30% as a percentage  of total net  revenues.  In this regard,
several of the Company's OEM (Original  Equipment  Manufacturer)  customers have
moved their manufacturing  operations to subcontractors and in turn, are placing
their orders through  distributors.  The Company  defers  recognition of revenue
derived from sales to domestic  distributors until such distributors  resell the
products to their customers.  Revenue is recognized by the Company upon shipment
to  international  representatives,  but the gross margin on these  shipments is
deferred until international distributors notify the Company of product sales to
end user.

                                       9
<PAGE>

   Gross Margin

     The  Company's  gross  margin is affected  by the volume of product  sales,
price,  product  mix,  manufacturing  utilization,   product  yields,  inventory
obsolescence  and the mix of sales to OEM's and to  distributors.  The Company's
gross margin has been and will continue to be periodically  affected by expenses
incurred  in  connection   with  start-up  and   installation   of  new  process
technologies at outside manufacturing foundries.

     The Company's  gross margin  increased to 50% in the second quarter of 1999
from 43% in the  second  quarter  of 1998 and 48% in the first  quarter of 1999.
Gross margin in the first half of 1999  remained  flat at 49% in relation to the
first half of 1998. The Company's gross margin improved in the second quarter of
1999  compared  to the  second  quarter  of 1998 and the first  quarter  of 1999
primarily  due to a favorable  change in product mix to higher margin and higher
average sales price products.

     The Company's  gross margin is adversely  impacted by the costs  associated
with  installing  new  processes  at its  foundries.  Although  the  Company has
recently  been able to mitigate the adverse  impact on gross  margin  associated
with new wafer manufacturing  process costs by relying upon process technologies
existing at its outside  wafer  foundries,  there can be no  assurance  that the
Company  will not be  required  to incur  significant  expenses in the future to
develop, or obtain access to, advanced process  technologies and to transfer and
install such  technologies  at one or more of its foundries,  which could have a
material adverse effect on gross margin in the future.

     The Company  currently  purchases its wafers from three wafer suppliers.  A
substantial  majority of the  Company's  wafer supply is obtained from two wafer
suppliers.  The  Company's  products are assembled and packaged by four vendors.
Any delays or  interruptions  due to such  factors  as  inadequate  capacity  or
unavailable raw materials in the Company's  wafer suppliers or assembly  vendors
could materially and adversely affect product  shipments.  The Company purchases
nearly all of its BiCMOS wafers from two wafer foundries,  the majority of which
are supplied by one wafer foundry in Taiwan.  Although both wafer  foundries are
qualified to supply the Company with BiCMOS  wafers,  the  Company's  short-term
BiCMOS wafer  supply could be  materially  and  adversely  affected if the wafer
foundry in Taiwan is unable to meet the Company's wafer supply requirements.

   Research and Development Expenses

     Research  and  development   expenses   include  payroll  and  other  costs
associated  with  the  definition,   design  and  development  of  standard  and
semi-standard  products,  tile arrays and standard cells. In addition,  research
and development  expenses include test development and prototype  assembly costs
associated with new product  development.  The Company also expenses the cost of
prototype  wafers  and new  production  mask sets  related  to new  products  as
research and  development  costs until  products  based on new designs are fully
characterized  by the Company and are  demonstrated  to support  published  data
sheets and satisfy reliability tests.  Research and development expenses such as
mask and silicon costs that are related to the  development  of new products can
fluctuate  from  quarter to  quarter  due to the  timing of the  product  design
process.

     Research  and  development  expenses  were  $3.3  million,  or  30%  of net
revenues,  for the second quarter of 1999,  compared to $2.9 million,  or 25% of
net revenues,  for the second  quarter of 1998 and $3.5  million,  or 32% of net
revenues,  for the first quarter of 1999. Research and development expenses were
$6.8 million,  or 31% of net revenues,  for the first half of 1999,  compared to
$6.2 million, or 26% of net revenues, in the first half of 1998. The increase in
research and development  expenses in absolute  dollars in the second quarter of
1999  compared  to the  second  quarter  of 1998 is  primarily  attributable  to
increased  contract  expenses  associated  with mask design and the  addition of
personnel  associated  with the  Company's  new design  center in Scotland.  The
decrease in research and development  expenses in absolute dollars in the second
quarter of 1999 compared to the first quarter of 1999 is primarily  attributable
to a decrease in mask costs and  consulting  fees.  The increase in research and
development  expenses in absolute  dollars in the first half of 1999 compared to
the first half of 1998 is primarily  attributable to increased contract expenses
associated  with mask design and the addition of personnel  associated  with the
Company's new design center in Scotland.  During the first quarter of 1999,  the
Company  announced the  establishment  of a new development  center in Scotland.
Staffing at this site consists of six designers and will increase to seven later
in 1999.  Staffing at the Company's  development  center in England totals nine,
and selective  headcount  additions are expected in 1999.  The Company  believes
that the timely  development and introduction of new products is critical to its
future success.

                                       10
<PAGE>

   Selling, General and Administrative

     Selling,  general and administrative  expenses were $2.7 million, or 24% of
net revenues,  for the second quarter of 1999,  compared to $2.4 million, or 20%
of net revenues,  for the second quarter of 1998 and $2.9 million, or 26% of net
revenues,  for the first quarter of 1999.  Selling,  general and  administrative
expenses were $5.6 million,  or 25% of net revenues,  for the first half of 1999
compared to $5.2 million,  or 22% of net  revenues,  for the first half of 1998.
The increase in absolute  dollars in the second  quarter of 1999 compared to the
second  quarter of 1998 is  primarily  attributable  to  increases  in  business
conferences and investor relation expenses.  The decrease in absolute dollars in
the second  quarter of 1999  compared to the first  quarter of 1999 is primarily
attributable to lower marketing  costs.  The increase in absolute dollars in the
first half of 1999 compared to the first half of 1998 is primarily  attributable
to  increases in payroll and business  conference  expenses  offset by decreased
databook costs. The Company expects selling, general and administrative expenses
will remain constant as a percentage of revenue.

   Interest and Other Income and Interest Expense

     Interest  and other  income  was $0.4  million  for the  first  and  second
quarters  of  1999  and  the  second  quarter  of  1998.  Interest  expense  was
insignificant  for the first and second  quarters of 1999 and the second quarter
of 1998.

   Provision for Income Taxes

     The  Company's  provision  for taxes on income is based on estimates of the
levels of income and  certain  deductions  expected  for the year,  which may be
subject to change.  The Company's  effective tax rate for the first half of 1999
was a benefit of 64%,  compared  to a  provision  of 36% for the same  period in
1998,  which differs from the statutory  income tax rate  primarily due to state
income taxes and federal research  credits.  The reason for the higher effective
tax rate in the first half of 1999 is the  greater  impact  that the Federal R&D
Tax Credit and California  Investment Tax Credit is expected to have on the 1999
tax provision.

Liquidity and Capital Resources

     During the last several years,  the Company has financed its operations and
capital requirements  principally through cash flow from operations.  Operations
provided  $1.8  million of net cash during the first half of 1999, a decrease of
$3.7 million over the first half of 1998. The decrease in the first half of 1999
compared to the first half of 1998 is primarily attributable to lower net income
(loss) and decreased accounts payable and accrued  liabilities  partially offset
by lower inventory and accounts receivable.

     Cash  provided  by  investing  activities  for  the  first  half of 1999 is
attributable  to net sale of short-term  investments  of $0.7 million  offset by
capital  expenditures  of $0.7 million.  The Company  currently  expects capital
expenditure for the year of 1999 to be approximately $3.5 million.

     Financing  activities for the first half of 1999 consisted primarily of the
repurchase  of the Company's  Common Stock for $1.5  million.  From January 1996
through  June 30,  1999,  the Company had  repurchased  2,696,900  shares of its
common stock at an aggregate cost of $20.2 million.

     Working  capital was $35.2  million as of June 30, 1999,  compared to $35.1
million as of December 31, 1998.  Working capital at June 30, 1999 included cash
and  cash  equivalents  of $7.1  million  and  short-term  investments  of $22.2
million.

     The Company anticipates that its existing cash resources and cash generated
from operations will fund necessary  purchases of capital  equipment and provide
adequate  working  capital for at least the next twelve  months.  The  Company's
liquidity is affected by many factors,  including,  among others,  the extent to
which the Company pursues  additional wafer  fabrication  capacity from existing
foundry suppliers or new suppliers,  capital expenditures,  and the level of the
Company's  product  development  efforts,  and  other  factors  related  to  the
uncertainties of the industry and global economies. Accordingly, there can be no
assurance  that  events in the  future  will not  require  the  Company  to seek
additional  capital  sooner  or,  if so  required,  that  such  capital  will be
available on terms acceptable to the Company.

                                       11
<PAGE>

Other Factors Affecting Future Operating Results

     The Company's quarterly and annual operating results are affected by a wide
variety of factors  that could  materially  and  adversely  affect  revenues and
profitability,  including the Company's access to advanced process technologies,
the timing and extent of process  development  costs,  the Company's  ability to
introduce  new  products  on a timely  basis,  the  volume  and timing of orders
received,  market acceptance of the Company's and its customers'  products,  the
timing of new  product  announcements  and  introductions  by the Company or its
competitors,  changes  in the mix of  products  sold,  the  timing and extent of
research and  development  expenses,  the  availability  and cost of wafers from
outside foundries,  fluctuations in manufacturing  yields,  competitive  pricing
pressures  and cyclical  semiconductor  industry  conditions.  A majority of the
Company's  net revenues are derived from sales of a limited  number of products.
Historically,   average  selling  prices  in  the  semiconductor  industry  have
decreased over the life of any particular product. Competitive pricing pressures
are expected to continue in the future, especially in the communications market,
which includes the networking sub-market, and may have a material adverse effect
on the  Company's  gross  margin.  The Company's  business is  characterized  by
short-term orders and shipment  schedules,  and customer orders typically can be
canceled or rescheduled without significant penalty to the customer.  Due to the
absence of substantial  noncancellable  backlog, the Company typically plans its
production and inventory levels based on internal  forecasts of customer demand,
which are highly unpredictable and can fluctuate substantially. In addition, the
Company is limited in its  ability to reduce  costs  quickly in  response to any
revenue shortfalls.  As a result of the foregoing or other factors, there can be
no  assurance  that the Company will not  experience  material  fluctuations  in
future  operating  results on a quarterly or annual basis which would materially
and adversely affect the Company's business,  financial condition and results of
operations.

     The  markets  for  the  Company's   products  are  characterized  by  rapid
technological  change  and  frequent  new  product   introductions.   To  remain
competitive, the Company must develop or obtain access to advanced semiconductor
process  technologies in order to reduce die size,  increase die performance and
functional  complexity,  and improve  yields.  Semiconductor  design and process
methodologies  are  subject  to  rapid  technological  change,  requiring  large
expenditures for research and  development.  If the Company is unable to develop
or obtain  access to  advanced  wafer  processing  technologies  as they  become
needed, or is unable to define,  design,  develop and introduce  competitive new
products on a timely basis, its future operating  results will be materially and
adversely  affected.  In  addition,  if the  Company is unable to  transfer  and
install  such new  process  technologies  to one or more of its  foundries  in a
timely  manner,  its business and results of operations  could be materially and
adversely affected.

     The semiconductor  industry is characterized by rapid technological change,
cyclical market patterns,  significant  price erosion,  periods of over-capacity
and  production  shortages,  variations  in  manufacturing  costs and yields and
significant  expenditures  for capital  equipment and product  development.  The
industry has from time to time experienced  depressed business  conditions.  The
Company  may  experience  substantial  period-to-period  fluctuations  in future
operating  results due to general  semiconductor  industry  conditions  or other
factors.

Year 2000 Readiness Disclosure

     The "Year 2000 issue"  arises  because most  computer  systems and programs
were designed to handle only a two-digit  year, not a four-digit  year. When the
Year 2000 begins,  these computers may interpret "00" as the year 1900 and could
either  stop  processing   date-related   computations  or  could  process  them
incorrectly.  The Company has implemented, for all of its information systems, a
year 2000 date conversion project to address all necessary code changes, testing
and  implementation  and accordingly  does not anticipate any internal Year 2000
issues from its own information systems,  databases or programs. The Company has
also  implemented  a Year 2000 date  conversion  project to  address  machinery,
equipment and other items used in the operations of the Company.

     The Company has a comprehensive  Year 2000 project designed to identify and
assess the risks associated with its information systems,  products,  operations
and  infrastructure,  and  suppliers  that are not Year 2000  compliant,  and to

                                       12
<PAGE>

develop, implement, and test remediation and contingency plans to mitigate these
risks.  The project  comprises four phases:  (1)  identification  of risks,  (2)
assessment of risks,  (3) development of remediation and contingency  plans, and
(4) implementation and testing. In addition,  the Company provides its customers
with  information  on the Year 2000 project and the  progress  made towards Year
2000 compliance.

     INFORMATION  SYSTEMS.  The company's current enterprise  information system
has been  remediated  and was fully tested in May 1998 and determined to be Year
2000 compliant.

     The required changes to the Company's information systems and items used in
the  operations  of the  Company  are  expected  to be  completed  by the end of
September 1999.

     Based on the current status of the assessments  and remediation  plans made
to date, the Company expects total Year 2000 related  external costs  pertaining
to its information  systems to be between  $50,000 and $65,000.  Of such amount,
approximately  $20,000  has  been  spent to date.  None of the  Company's  other
information  technology projects have been deferred as a result of the Company's
Year 2000 compliance efforts.

     PRODUCTS.  The Company has assessed the capabilities of all of its products
sold to customers.  Based on the assessments made to date, none of the Company's
products are affected by Year 2000 issues.

     OPERATIONS AND INFRASTRUCTURE. Machinery and equipment and other items used
in the operations and  facilities of the Company have been  inventoried  and are
currently  being assessed for Year 2000  compliance.  The assessment to date has
not yielded any major areas of concern.  The assessment process was completed in
September 1998. In June 1998, the Company started to develop  remediation plans.
Based on the assessments and remediation plans made to date, the Company expects
Year 2000 related external costs pertaining to its operations and infrastructure
to range between $20,000 and $30,000.

     SUPPLIERS. The Company continues to evaluate its supplier base to determine
whether Year 2000 issues affecting suppliers will adversely impact the Company's
operations.  The  Company  has  recently  completed  an  assessment  of its  key
suppliers.  Although the Company does not  anticipate  any business  disruptions
based on the assurances  made by these  suppliers,  the Company will continue to
assess and monitor key suppliers through the year 2000 transition period.

     CUSTOMERS.  The  Company  established  a  Global  Year  2000  Desk  at  its
headquarters  in California to handle all customer  requests for  compliance and
survey  information,  and for other general information related to the Company's
Year 2000 programs.

     GENERAL AND RISK FACTORS.  Although the Company  expects that the Year 2000
project  will be  completed  in a  timely  manner  to  prevent  any  significant
disruptions  of business,  unforeseen  risks and delays may cause  disruption in
manufacturing,  order processing and distribution services or lead to additional
costs.  The Company  believes  that its greatest  potential  risks for Year 2000
issues are associated with its information  systems and systems  embedded in its
operations and infrastructure, for which the Company is continuing to review and
evaluate the need of contingency planning that may be required.

     Internal costs  incurred for the Year 2000 project are being tracked;  they
principally consist of payroll and related costs. The Company does not currently
expect  the total  costs to be  material,  and it expects to be able to fund the
total  costs  through  operating  cash flows.  However,  the Company has not yet
completed all of its assessments, developed remediation or contingency plans for
all problems, or completely implemented or tested its remediation plans.

     As the Year 2000 project  continues,  the Company may  discover  additional
Year 2000 problems; may not be able to develop,  implement,  or test remediation
or  contingency  plans;  or may find that the costs of these  activities  exceed
current expectations and become material.  In many cases, the Company is relying
on assurances from suppliers that new and upgraded information systems and other
products  will be  Year  2000  compliant.  The  Company  plans  to test  certain
third-party  products,  but  cannot be sure that its tests will be  adequate  or
that,  if problems are  identified,  they will be addressed by the supplier in a
timely and satisfactory way.

     Because  the  Company  uses  a  variety  of  information  systems  and  has
additional  systems embedded in its operations and  infrastructure,  the Company
cannot  be  sure  that  all  of  its  systems  will  work  together  in  a  Year

                                       13
<PAGE>

2000-compliant fashion. Furthermore, the Company cannot be sure that it will not
suffer business  interruptions,  either because of its own Year 2000 problems or
those of its  customers  or  suppliers  whose  Year  2000  problems  may make it
difficult or impossible for them to fulfill their commitments to the Company. If
the Company fails to satisfactorily resolve Year 2000 issues in a timely manner,
it could be exposed to claims by third parties.

     The Company is evaluating  the various types of  contingency  plans such as
procedures for dealing with disruptions of internal business systems,  plans for
factory  shutdowns and  identification  of alternative  material  vendors in the
event of Year 2000 related  disruption  in supply.  Contingency  evaluation  and
planning will continue  through 1999,  and will depend heavily on the results of
the remediation and testing of critical systems.  The Company cannot assure that
any contingency  plans in effect at the time of a system failure will adequately
address the immediate or long term effects of a failure,  or that such a failure
would not have a material adverse impact on our operations or financial  results
in spite of prudent planning.

     The Company could be adversely  impacted by Year 2000 issues faced by major
distributors,  suppliers, customers, vendors and financial service organizations
with which the Company  interacts.  The Company is  continuing  to evaluate Year
2000-related  risks  and  corrective  actions.  At  this  time,  the  Year  2000
compliance  expense and related  potential effect of the Company's  earnings are
estimated to be insignificant.  However, the risks associated with the Year 2000
problem are pervasive and complex,  can be difficult to identify and to address,
and can result in material  adverse  consequences  to the  Company.  Even if the
Company,  in a timely manner,  completes all of its assessments,  identifies and
tests remediation plans believed to be adequate,  and develops contingency plans
believed to be adequate,  some  problems may not be  identified  or corrected in
time to prevent material adverse consequences to the Company.


                                       14
<PAGE>

Item 3.  Quantitative and Qualitative Disclosures about Market Risk

Interest Rate Risk

     The Company's investment portfolio consisted of U.S. government obligations
and commercial  paper  typically with  maturities of less than 12 months.  These
securities are subject to interest rate risk and will decline in value if market
interest  rates  increase.  The Company has the ability to hold its fixed income
investments  until  maturity  and,  therefore,  the Company  would not expect to
recognize such an adverse impact in income or cash flows.

Foreign Currency Exchange Rate Risk

     The Company has international sales and research and development facilities
and is,  therefore,  subject to foreign  currency rate  exposure.  The Company's
foreign  currency risks are mitigated  principally  by maintaining  only minimal
foreign  currency  balances.  To date,  the  exposure to the Company  related to
exchange rate  volatility  has not been  significant.  However,  there can be no
assurance that there will not be a material impact in the future.

     For further  discussion of risk factors,  refer to the Company's  filing on
Form 10-K with the Securities and Exchange Commission.

                                       15
<PAGE>

                                            PART II. OTHER INFORMATION

Item 1.  Legal Proceedings

     In December 1995, Pioneer Magnetics,  Inc. ("Pioneer") filed a complaint in
the Federal District Court for the Central District of California  alleging that
certain of the Company's  integrated circuits violate a Pioneer patent.  Pioneer
is seeking  monetary  damages and an  injunction  against  such  alleged  patent
violation.  The Company has denied any  infringement  and filed a  counter-claim
seeking  invalidity  of the patent.  The court held a patent claim  construction
hearing on November 9, 1998. The court subsequently  issued a claim construction
opinion that is favorable to Micro Linear.  The court  ordered  Pioneer to brief
additional claim elements.  The final claim  construction  hearing took place on
July 19, 1999.  The court has issued a tentative  order also  favorable to Micro
Linear. The parties anticipate filing a stipulated judgment of Non-Infringement,
which would result in a termination  of the district  court action against Micro
Linear.  Pioneer may appeal such judgment. The court has not set a trial date or
a discovery cutoff date.

     On February 24,  1997, a former  employee of Micro Linear filed a complaint
in the Superior Court of California,  County of Santa Clara,  alleging breach of
contract and employment discrimination.  On June 5, 1997, the case was dismissed
and the  parties  agreed to submit the dispute to  arbitration.  As of April 27,
1999, no arbitration  date had been scheduled.  The Company denies all liability
and intends to vigorously defend its actions in the arbitration.

     On September 4, 1998,  NetVantage,  Inc.  ("NetVantage")  filed a complaint
relating  to the  Company's  sale of  part  ML6692  to  NetVantage  through  the
Company's distributor, Insight Electronics, in the Superior Court of California,
County of Los  Angeles,  alleging  causes of action for: (1) breach of contract,
(2)  breach  of  express   warranty,   (3)   breach  of  implied   warranty   of
merchantability,  (4) breach of implied  warranty  of fitness,  (5)  intentional
misrepresentation,  (6) negligent  misrepresentation,  (7)  negligence,  and (8)
breach of implied  covenant  of good faith and fair  dealing.  NetVantage  seeks
compensatory  damages  of no less than  $6.0  million,  additional  compensatory
damages  according  to proof,  attorneys'  fees and  costs,  plus  interest.  On
February  12,  1999,  NetVantage  filed  a  first  amended  complaint  in  which
NetVantage withdrew its causes of action for intentional  misrepresentation  and
negligent misrepresentation but realleging the remaining causes of action of the
original  complaint.  On  February  26,  1999,  the  Company  filed an answer to
NetVantage's  complaint  denying  the  causes of action and  asserting  numerous
affirmative  defenses. On the same day, Insight Electronics filed its answer and
also filed a cross-complaint against NetVantage,  alleging causes of action for:
(1)  breach of  express  contract,  (2)  breach of  implied  contract,  (3) open
account,  and (4) quantum valebant,  seeking  compensatory  damages in excess of
$41,400, attorneys' fee and costs, plus interest. Since the filing of the action
no discovery has been taken or served.  On March 8, 1999,  the Superior Court of
Los  Angeles  issued an order to show cause  against  NetVantage  for failure to
prosecute case, with a hearing set for April 22, 1999. At that hearing,  a trial
date was set for  October 12,  1999.  All parties  have served  initial  written
discovery requests,  and Micro Linear expects to receive NetVantage's  responses
in late July.  Depositions have been noticed by Micro Linear for late July/early
August. Micro Linear agreed to indemnify Insighter Electronics in the litigation
and to defend Insight against NetVantage's claims.

     On December 16, 1998,  Accton  Technology  Corporation  ("Accton")  filed a
complaint  relating to the Company's sale of part ML6692 to Accton,  against the
Company in the Superior  Court of  California,  County of Santa Clara,  alleging
causes of action for:  (1) breach of contract,  (2) breach of express  warranty,
(3)  breach of  implied  warranty  of  merchantability,  (4)  breach of  implied
warranty of fitness for particular  purpose,  (5) fraud and  deceit-concealment,
(6)  negligent  misrepresentation,  (7)  negligent  interference  with  economic
advantage,  and (8)  declaratory  relief  to  establish  the  right  to  implied
contractual  indemnity.  Accton  seeks  compensatory  damages  in excess of $7.0
million,  exemplary damages  according to proof,  attorneys' fees and costs, and
prejudgment and postjudgment interest. On February 10, 1999, the company filed a
demurrer  attacking the legal  sufficiency  of Accton's  first,  fifth and sixth
causes of action and moving to strike certain  paragraphs of the  complaint.  On
April 20, 1999,  the same day scheduled for the hearing on the demurrer,  Accton
filed its Amended Complaint,  which rendered the demurrer moot. Accton's Amended
Complaint  alleges  essentially the same claims as its original  Complaint,  but
pleads the breach of contract  and fraud and deceit  claims with  somewhat  more
specificity,  as well as alleging  additional factual  information.  A discovery
hearing was held on May 7, 1999, on the Company's  motion for  protective  order
and  Accton's  motion to compel  and for  sanctions.  The  Company's  motion for
protection  order was granted by the Court,  as was  Accton's  motion to compel.
Accton's  request for sanctions was denied.  Complying with the protective order
as entered on May 7, 1999 the Company produced documents  responsive to Accton's
document request.  Depositions  started in late May and are expected to continue
for several  months.  The Company  served Accton with discovery in early May and
has received  responses  from Accton.  The company  filed a demurrer to Accton's
Amended  Complaint  and at the hearing on July 8, 1999,  the court  rejected the
Company's  demurrer.  The Company filed its answer to Accton's Amended Complaint
on July 27, 1999.
                                       16
<PAGE>
     Although the Company believes that the resolution of these actions will not
have a material adverse effect on the Company's  financial  condition or results
of  operations,  there can be no assurance that such actions will be resolved in
the  Company's  favor or that an  unfavorable  resolution  would not  materially
adversely effect the Company's financial condition or results of operations.

     From time to time,  the  Company  has  received,  and in the  future it may
receive,  correspondence  from  certain  vendors,  distributors,   customers  or
end-users of its products  regarding  disputes with respect to contract  rights,
product  performance  or other  matters  that  occur in the  ordinary  course of
business.  There  can  be no  assurance  that  any of  such  disputes  will  not
eventually  result in litigation or other actions involving the Company or as to
the outcome of such disputes.

                                       17
<PAGE>

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

The  following  matters  were  approved  at  the  Company's  Annual  Meeting  of
Stockholders held on June 7, 1999:

(a)      The following Directors were elected:
<TABLE>
<CAPTION>



                 Directors                     Votes For         % of Outstanding Shares
-------------------------------------------- --------------- ---------------------------------
<S>                                               <C>                      <C>
David L. Gellatly                                 3,785,164                65.4
Roger A. Smullen                                  3,785,164                65.4
Jeffrey D. West                                   3,785,164                65.4
Joseph D. Rizzi                                   3,785,164                65.4
William B. Pohlman                                3,785,164                65.4

    (b) The stockholders approved the following proposal:

                                                           Number of Common Shares Voted
                                                              % of Outstanding
                                                                   Shares
     Proposal                                     For                              Against     Abstain
     --------------------------------------- --------------- ------------------- ------------ ----------


<S>                                             <C>                <C>             <C>          <C>
     Ratification of the appointment of
     PricewaterhouseCoopers LLP as the
     Company's independent accountants for
     fiscal year 1999.                            5,771,382         99.7              16,904      2,755

</TABLE>

Item 6.  Exhibits and Reports on Form 8-K

    (a) Exhibits

        27.1     Financial Data Schedule

    (b) Reports on Form 8-K

        None






                                       18

<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.
































                                                   MICRO LINEAR CORPORATION

Date: August 17, 1999                              By:  /s/ J. PHILIP RUSSELL
                                                        J. Philip Russell
                                                        Chief Financial Officer
                                                       (Principal Financial and
                                                           Accounting Officer)
                                       19