SECOND AMENDMENT TO THE CREDIT AGREEMENT

                  SECOND AMENDMENT, dated as of June 22, 1999 (this "Second
Amendment"),  to the Credit  Agreement,  dated as of July 23, 1997 (as  amended,
supplemented,  or otherwise modified from time to time, the "Credit Agreement"),
among GENERAL SEMICONDUCTOR,  INC., a Delaware corporation (the "Company"),  the
several  lenders from time to time  parties  thereto  (the  "Banks"),  THE CHASE
MANHATTAN BANK, a New York banking corporation,  as administrative agent for the
Banks  (in  such  capacity,  the  "Administrative  Agent"),  and  the  financial
institutions  named  therein  as  co-agents  for the  Banks  (in such  capacity,
collectively, the "Co-Agents"; each, individually, a "Co-Agent").


                              W I T N E S S E T H:


                  WHEREAS, the Company, the Banks, the Administrative Agent and
the Co-Agents are parties to the Credit Agreement;

                  WHEREAS, the Company has requested that the Banks amend the
Credit Agreement as set forth herein;

                  WHEREAS, the Banks, the Administrative Agent and the Co-Agents
are willing to agree to such amendment to the Credit  Agreement,  subject to the
terms and conditions set forth herein;

                  NOW, THEREFORE, in consideration of the premises and mutual
covenants contained herein, the Company, the Banks, the Administrative Agent and
the Co-Agents hereby agree as follows:

                  1.       Defined Terms.  Unless otherwise defined herein,
capitalized  terms which are defined in the Credit  Agreement are used herein as
therein defined.

                  2.       Amendments to Credit Agreement.  (a) Subsection 1.1
of the  Credit  Agreement  is hereby  amended  by  deleting  the  definition  of
"Applicable Margin" and substituting therefor the following:

                  "Applicable Margin":  for each Eurodollar Loan, each ABR Loan,
the Facility Fee and the Standby L/C fees,  the rate per annum  determined  from
time to time based upon the Leverage Ratio  determined as of the last day of the
most  recent  fiscal  quarter  for which the  Company  has  delivered  financial
statements pursuant to subsections 6.1(a) and (b) and the related certificate of
the chief financial  officer of the Company referred to in subsection 6.2 as set
forth under the relevant column heading below opposite such Leverage Ratio:
<PAGE>

                                             (in basis points)
                                  Eurodollar    ABR Loan                Standby
Leverage Ratio                    Applicable    Applicable   Facility     L/C
                                  Margin        Margin         Fee        Fee

Less than 1.5 to 1.0                36.25          0          18.75       36.25

Less than 2.0 to 1.0 but
greater than or equal to 1.5
to 1.0                              42.50                     20.00       42.50

Less than 2.25 to 1.0 but
greater than or equal to 2.0
to 1.0                              52.50          0          22.50       52.50

Less than 2.75 to 1.0 but
greater than or equal to 2.25
to 1.0                              60.00          0          25.00       60.00

Less than 3.0 to 1.0 but
greater than or equal to 2.75
to 1.0                              70.00          0          30.00       70.00

Less than 3.5 to 1.0 but
greater than or equal to 3.0 to
1.0                                 112.50      12.5          37.50      112.50

Less than 3.75 to 1.0 but
greater than or equal to 3.5
to 1.0                              130.00      30.0          45.00      130.00

Less than 4.0 to 1.0 but
greater than or equal to 3.75
to 1.0                              150.00      50.0          50.00      150.00

Less than 4.25 to 1.0 but
greater than or equal to 4.0
                                    175.00      75.0          50.00      175.00

Greater than or equal to 4.25
to 1.0                              200.00      100.0         50.00      200.00
<PAGE>


For the purpose of this Agreement,  any change in the Eurodollar Loan Applicable
Margin,  the ABR Loan  Applicable  Margin,  the Facility Fee and the Standby L/C
fees  shall  become   effective  on  the  day  following  the  delivery  to  the
Administrative  Agent by the Company of the financial  statements referred to in
subsections  6.1(a) and (b) and the related  certificate of the chief  financial
officer of the Company  referred to in subsection  6.2  indicating  the Leverage
Ratio as of the last day of such  period.  If the Company  shall fail to deliver
the  financial  statements  referred  to in  subsections  6.1(a) and (b) and the
related certificate of the chief financial officer of the Company referred to in
subsection  6.2  indicating  the  Leverage  Ratio as of such last day,  then the
Applicable  Margin,  Facility Fee and Standby L/C fee shall  automatically,  and
without  further act of the  Administrative  Agent,  the  Co-Agents or any Bank,
equal the highest Applicable Margin,  Facility Fee and Standby L/C fee set forth
above until such statements are delivered.  In addition,  the Applicable  Margin
for Eurodollar Loans and ABR Loans and the Standby L/C fee shall increase (i) by
 .50% per annum on the Effective Date (as defined in the Second  Amendment  dated
as of June 22, 1999 to this  Agreement) and (ii) by an additional .50% per annum
on November 16, 1999,  provided  that all  increases  in the  Applicable  Margin
pursuant to this  sentence  shall cease to be  effective on and after the Senior
Subordinated Note Trigger Date.

                  (b)  The definition of  "Consolidated EBITDA" in subsection
1.1 of the Credit  Agreement  is hereby  amended  (other  than for  purposes  of
calculating  the  Applicable  Margin)  by (i)  amending  the  phrase  "and  (e)"
appearing therein to read A, (e)" and (ii) inserting the following new clause at
the end thereof:

                  and (f) if the Senior Subordinated Note Trigger Date has
occurred,  all of the  Company's  restructuring  and other  charges  principally
associated  with  a  restructuring  of  a  portion  of  the  Company's  European
operations in an aggregate  amount not to exceed  $9,000,000  for the two fiscal
quarter period ended December 31, 1999;

                  (c)  Subsection 1.1 of the Credit Agreement is hereby amended
by deleting  the  definition  of  "Obligations"  and  substituting  therefor the
following:

                   "Obligations":  the collective reference to (i) the unpaid
principal of and interest on the Loans and all other obligations and liabilities
of the Company to the Administrative  Agent, the Co-Agents or the Banks, whether
direct or indirect,  absolute or contingent,  due or to become due, now existing
or hereafter  incurred,  which may arise under,  out of, or in connection  with,
this  Agreement,  the  other  Credit  Documents,  any  Letter  of  Credit or L/C
Application, any agreements between the Company and any Bank or any Affiliate of
a Bank  relating  to  interest  rate,  currency  or  similar  swap  and  hedging
arrangements  or any  other  document  made,  delivered  or given in  connection
therewith, whether on account of principal, interest, reimbursement obligations,
fees, indemnities,  costs, expenses (including, without limitation, all fees and
disbursements of counsel to the Administrative Agent, the Co-Agents or any Bank)
or otherwise and (ii) all overdrafts, overdraft charges, ACH charges and similar
amounts  owed by the Company or any of its  Subsidiaries  to the  Administrative
Agent,  any  Co-Agent  or any Bank (the  obligations  referred to in this clause
(ii), the "Overdraft Obligations").

                  (d)  Subsection 1.1 of the Credit Agreement is amended by
adding the following definitons in proper alphabetical order:

<PAGE>

                  "Security Documents":  the Pledge Agreements and each other
security  agreement,  mortgage,  pledge agreement or other  collateral  security
document  delivered by the Company or any of its Subsidiaries  which purports to
create a lien or  security  interest  to secure  any of the  Obligations  or any
guarantee thereof.

                  "Senior Leverage Ratio":  as of the last day of any fiscal
quarter the ratio of (a)  Consolidated  Total  Indebtedness  less the  aggregate
principal  amount  of  the  Senior  Subordinated  Notes  then  outstanding  on a
consolidated  basis  for the  Company  and its  Subsidiaries  on such day to (b)
Consolidated  EBITDA for the period of four  consecutive  fiscal quarters of the
Company ending on such day.

                  "Senior Subordinated Note Indenture":  the Indenture to be
entered into by the Company and certain of its  Subsidiaries  in connection with
the issuance of the Senior Subordinated Notes, together with all instruments and
other agreements  entered into by the Company or such Subsidiaries in connection
therewith,  as the same may be amended,  supplemented or otherwise modified from
time to time in accordance with subsection 7.19.

                  "Senior Subordinated Note Issuance Date":  the first date on
which the Senior Subordinated Notes are issued.

                  "Senior Subordinated Note Trigger Date":  the first date on
which the Company has received at least $150,000,000 in gross cash proceeds from
the issuance of the Senior Subordinated Notes.

                  "Senior Subordinated Notes":   the subordinated notes
(including  any  exchange  notes) of the  Company to be issued  pursuant  to the
Senior Subordinated Note Indenture.

                  (e)  Subsection 3.6 of the Credit Agreement is amended by
deleting  from  paragraph  (b) the  phrase ",  provided  ..." to the end of such
paragraph and substituting  therefor the phrase "plus the Applicable  Margin for
"BR Loans."

                  (f)  Section 4 of the Credit Agreement is amended by adding
the following new subsections 4.20 and 4.21 at the end thereof:

                  4.20 Seniority.  On and after the Senior Subordinated Note
     Issuance Date, the Obligations will constitute "Senior Indebtedness" of the
Company  under and as defined in the Senior  Subordinated  Note  Indenture.  The
obligations of each Subsidiary  Guarantor under each Credit Document to which it
is a party constitute "Senior  Indebtedness" of such Subsidiary  Guarantor under
and as defined in the Senior Subordinated Note Indenture.

<PAGE>

                  4.21.  Year 2000 Matters.  Any reprogramming required to
permit the proper functioning,  in and following the year 2000, of the Company's
computer systems and equipment containing embedded  microchips,  and the testing
of all such  systems and  equipment,  as so  reprogrammed,  will be completed by
September  30,  1999.  The  testing of all such  systems  and  equipment,  as so
reprogrammed,  will be  accomplished  in a manner  and by a date that  could not
reasonably be expected to result in a Material  Adverse Effect.  The cost to the
Company of any such reprogramming and testing and of the reasonably  foreseeable
consequences  of  year  2000  to the  Company  (including,  without  limitation,
reprogramming  errors and the failure of others' systems or equipment) could not
reasonably  be  expected  to result in a Default or a Material  Adverse  Effect.
Except for such of the  reprogramming  referred to in the preceding  sentence as
may be necessary, the computer and management information systems of the Company
and  its   Subsidiaries   will  be  and,  with  ordinary  course  upgrading  and
maintenance,  will  continue to be,  sufficient to permit the Company to conduct
its business without Material Adverse Effect. The foregoing representation shall
be qualified as to the status of year 2000 matters with respect to third parties
that,  to the knowledge of the Company after  reasonable  inquiry,  such matters
could not be reasonably expected to result in a
         Material Adverse Effect.

                  (g)  Subsection 6.2(a) of the Credit Agreement is amended by
deleting  the phrase "and 7.9" in clause (i) thereof  and  substituting  in lieu
thereof the phrase ",7.9 and 7.20".

                  (h)  Subsection 6.2(b) of the Credit Agreement is amended by
deleting  the phrase "and 7.9" in clause (ii) thereof and  substituting  in lieu
thereof the phrase ",7.9 and 7.20".

                  (i)  Section 6 of the Credit Agreement is amended by deleting
subsection 6.8 and substituting therefor the following:

                  6.8  Additional Collateral, etc.  (a)  Cause each Domestic
Subsidiary  to  execute  and  deliver  a  Subsidiary  Guarantee  in favor of the
Administrative  Agent in  substantially  the form of  Exhibit  D,  each of which
Subsidiary  Guarantees  shall be  accompanied  by such  resolutions,  incumbency
certificates   and  legal   opinions  as  are   reasonably   requested   by  the
Administrative Agent and its counsel.

<PAGE>

                  (b)  With respect to any property owned or acquired by the
Company or any of its  Subsidiaries  (other than (x) any  property  described in
paragraph  (c), (d) or (e) below,  (y) any property  subject to a Lien expressly
permitted  by  subsection  7.2(g),  (i),  (n) or (o) and (z)  property  owned or
acquired by any Foreign  Subsidiary) as to which the  Administrative  Agent, for
the benefit of the Lenders,  does not have a perfected  Lien,  promptly take all
actions  necessary or advisable to grant to the  Administrative  Agent,  for the
benefit of the Lenders, a perfected first priority security interest (subject to
Liens  permitted  by  subsection  7.2 which may have  priority,  if any) in such
property,  including the filing of Uniform Commercial Code financing  statements
in such jurisdictions as may be requested by the Administrative Agent; provided,
that the  Company and its  Subsidiaries  shall not be required to grant any such
security  interest in any contract,  agreement,  license or instrument,  in each
case to the  extent,  and only to the  extent,  the grant by the Company or such
Subsidiary  of a security  interest  pursuant  to any  Security  Document in its
right, title and interest in such contract,  agreement, license or instrument is
prohibited  by such  contract,  agreement,  license or  instrument  without  the
consent of any other party thereto, would give any other party to such contract,
agreement,  license  or  instrument  the  right  to  terminate  its  obligations
thereunder, or is permitted with consent if all necessary consents to such grant
of a security  interest have been  obtained  from the other parties  thereto (it
being  understood that the foregoing shall not be deemed to obligate the Company
or such  Subsidiary  to  obtain  such  consents);  provided  further,  that  the
foregoing limitation shall not affect, limit, restrict or impair the grant of by
the Company or such Subsidiary of a security interest pursuant to this Agreement
in any  receivable  or any money or other amounts due or to become due under any
such contract, agreement, license or instrument.

                  (c)  With respect to any interest in real property having a
value (together with improvements  thereof) of at least $500,000 individually or
$2,000,000  in the  aggregate  owned or  acquired  by the  Company or any of its
Subsidiaries  (other than (w)  leasehold  interests  set forth on  Schedule  6.8
unless the consent of the  applicable  landlord is obtained to the granting of a
Lien thereon pursuant to this subsection,  (x) any such real property subject to
a Lien  expressly  permitted by  subsection  7.2(g) or (n) and (y) real property
owned or acquired by any Foreign Subsidiary), promptly (i) execute and deliver a
first priority mortgage or deed of trust in the Administrative Agent's customary
form  therefor,  in favor of the  Administrative  Agent,  for the benefit of the
Lenders,  covering such real property,  (ii) if requested by the  Administrative
Agent,  provide  the  Lenders  with (x) title and  extended  coverage  insurance
covering such real property in an amount at least equal to the purchase price of
such real property (or such other amount as shall be reasonably specified by the
Administrative Agent) as well as a current ALTA survey thereof,  together with a
surveyor's  certificate  and (y) any  consents or  estoppels  reasonably  deemed
necessary or  advisable  by the  Administrative  Agent in  connection  with such
mortgage or deed of trust,  including  (other than with respect to the leasehold
interests  set forth in  Schedule  6.8)  lessor  and  landlord  consents  in the
Administrative  Agent's customary forms therefor,  each of the foregoing in form
and substance  reasonably  satisfactory to the Administrative Agent and (iii) if
requested by the Administrative Agent, deliver to the Administrative Agent legal
opinions  relating to the matters  described  above,  which opinions shall be in
form  and  substance,   and  from  counsel,   reasonably   satisfactory  to  the
Administrative Agent.

<PAGE>

                  (d)  With respect to any Subsidiary (other than a Foreign
Subsidiary)  owned or acquired by the Company  (which,  for the purposes of this
paragraph (d), shall include any existing Subsidiary that ceases to be a Foreign
Subsidiary),  the Company or any of its  Subsidiaries,  promptly (i) execute and
deliver to the Administrative Agent such pledge agreements in the Administrative
Agent's customary form therefor as the  Administrative  Agent deems necessary or
advisable to grant to the Administrative  Agent, for the benefit of the Lenders,
a perfected  first priority  security  interest in the Capital Stock of such new
Subsidiary that is owned by the Company or any of its Subsidiaries, (ii) deliver
to the  Administrative  Agent the certificates  representing such Capital Stock,
together with undated stock powers,  in blank,  executed and delivered by a duly
authorized officer of the Company or such Subsidiary,  as the case may be, (iii)
cause such  Subsidiary  to take such actions  necessary or advisable to grant to
the  Administrative  Agent for the  benefit  of the  Lenders a  perfected  first
priority  security  interest in substantially  all of its assets,  including the
filing of Uniform Commercial Code financing  statements in such jurisdictions as
may be  requested  by the  Administrative  Agent  and (iv) if  requested  by the
Administrative  Agent,  deliver  to  the  Administrative  Agent  legal  opinions
relating to the matters  described  above,  which  opinions shall be in form and
substance,  and from  counsel,  reasonably  satisfactory  to the  Administrative
Agent.

                  (e)  With respect to any Foreign Subsidiary owned or acquired
by the Company or any of its  Subsidiaries  (other  than a Foreign  Subsidiary),
promptly  (i)  execute  and  deliver to the  Administrative  Agent  such  pledge
agreement  in  the  Administrative   Agent's  customary  form  therefor  as  the
Administrative Agent deems necessary or advisable to grant to the Administrative
Agent,  for the benefit of the  Lenders,  a perfected  first  priority  security
interest in the Capital  Stock of such Foreign  Subsidiary  that is owned by the
Company or any of such  Subsidiaries  (provided that in no event shall more than
65% of the total  outstanding  Capital  Stock of any such Foreign  Subsidiary be
required  to be so  pledged),  (ii)  deliver  to the  Administrative  Agent  the
certificates  representing  such Capital  Stock,  together  with  undated  stock
powers,  in blank,  executed and delivered by a duly  authorized  officer of the
Company or such  Subsidiary,  as the case may be, and take such other  action as
may be necessary or, in the opinion of the  Administrative  Agent,  desirable to
perfect the  Administrative  Agent's  security  interest  therein,  and (iii) if
requested by the Administrative Agent, deliver to the Administrative Agent legal
opinions  relating to the matters  described  above,  which opinions shall be in
form  and  substance,   and  from  counsel,   reasonably   satisfactory  to  the
Administrative Agent.

                  (f)  In the event that there shall be a Change in Law which
eliminates the adverse tax consequences  from (A) the pledge of more than 65% of
the total  outstanding  Capital Stock any Foreign  Subsidiary or (B) any Foreign
Subsidiary granting any of the Liens or guaranteeing  payment of the Obligations
on the  same  terms as  required  for  Domestic  Subsidiaires  in the  preceding
paragraphs (a) through (d), the Company shall promptly thereafter (i) pledge and
deliver, or shall cause to be pledged and delivered, to the Administrative Agent
such additional  stock as can be so pledged without adverse tax consequences and
(ii) cause any such  Foreign  Subsidiary  that has not  previously  granted such
Liens or  executed  and  delivered  a  Guarantee  because  of such  adverse  tax
consequences to grant such Liens and deliver Security  Documents and a Guarantee
to the  Administrative  Agent to the  extent  any such  Security  Documents  and
Guarantee can be so executed and delivered  without adverse tax  consequences to
the Company or any of its Subsidiaries.

                  (j)  Notwithstanding the foregoing provisions of this
subsection 6.8, upon the reasonable  request of the  Administrative  Agent,  the
Company shall, and shall cause its Subsidiaries to:

<PAGE>

                          (i)  Prior to the Senior Subordinated Note Trigger
Date (A)  pledge  more than 65% of the total  outstanding  Capital  Stock of any
Foreign Subsidiary and (B) cause its Foreign  Subsidiaries to deliver guarantees
and grant Liens on their  assets to the extent that  Domestic  Subsidiaries  are
required  to do so  pursuant  to  paragraphs  (a)  through  (d)  above,  if  the
Administrative Agent believes that the cost (including incremental tax costs) to
the Company and its  Subsidiaries  in doing so are not  disproportionate  to the
benefits  to be  obtained  (including  the  benefits  of  any  purported  Liens)
therefrom by the Banks.

                           (ii)  On and after the Senior Subordinated Note
Trigger Date (A) pledge more than 65% of the total outstanding  Capital Stock of
any  Foreign  Subsidiary  and (B)  cause its  Foreign  Subsidiaries  to  deliver
guarantees  and  grant  Liens  on  their  assets  to the  extent  that  Domestic
Subsidiaries are required to do so pursuant to paragraphs (a) through (d) above,
if the  Company  and  the  Administrative  Agent  mutually  agree,  acting  in a
commercially  reasonable manner, that the cost (including incremental tax costs)
to the Company and its Subsidiaries in doing so are not  disproportionate to the
benefits  to be  obtained  (including  the  benefits  of  any  purported  Liens)
therefrom by the Banks.

                  (k)  Upon the request of the Administrative Agent, promptly
perform  or cause to be  performed  any and all acts and  execute or cause to be
executed  any  and  all  documents  (including,  without  limitation,  financing
statements and  continuation  statements) for filing under the provisions of any
Requirement  of Law which are necessary or advisable to maintain in favor of the
Administrative  Agent,  for the  benefit of the Banks,  Liens on any  collteral
under the Security Documents that are duly accepted in accordance with all
applicable Requirements of Law.

                  (l)  Subsection 7.2 of the Credit Agreement is hereby amended
by (i)  deleting  the word "and" from the end of clause (m),  (ii)  deleting the
period at the end of clause (n) and substituting therefor the phrase "; and" and
(iii) adding the following new clause (o):

                           (o)  Liens on inventory consigned by the Borrower
and Domestic Subsidiaries having a book value not in excess of $3,000,000.

                  (m)  Subsection 7.3 of the Credit Agreement is amended by
(i) deleting the word "and" from the end of clause (f), (ii) deleting the period
at the end of clause (g) and  substituting  therefor  the phrase "and" and (iii)
adding thereto the following new clause (h):

                           (h) Guarantee Obligations of the Subsidiary
Guarantors  in respect  of the Senior  Subordinated  Notes,  provided  that such
Guarantee  Obligations are subordinated to the Subsidiary Guarantees to the same
extent as the obligations of the Borrower in respect of the Senior  Subordinated
Notes are subordinated to the Obligations.

                  (n)  Subsection 7.6 of the Credit Agreement is amended by
adding the following at the end of paragraph (c) thereof:

                           and provided further, no acquisition may be made
pursuant to this paragraph (c) until the Senior  Subordinated  Note Trigger Date
has occurred;

<PAGE>

                  (o)  Subsections 7.8 and 7.9 of the Credit Agreement are
amended by deleting such subsections and substituting therefor the following:

                  7.8  Maintenance of Interest Coverage.  Prior to the Senior
Subordinated  Note Issuance Date, permit the Interest Coverage Ratio on the last
day of any fiscal  quarter,  commencing  with the fiscal quarter ending June 30,
1999, to be less than 3.0:1.0.

                  7.9  Maintenance of Leverage Ratio.  Prior to the Senior
Subordinated  Notes  Issuance  Date,  permit,  as of the last day of any  fiscal
quarter  occuring  during any period set forth below,  the Leverage  Ratio to be
greater than the ratio set forth opposite such period:

                                    Period                           Ratio

                  April 1, 1999 - September 30, 1999               4.60:1.0
                  October 1, 1999 - December 31, 1999              4.35:1.0
                  January 1, 2000 - March 31, 2000                 4.00:1.0
                  April 1, 2000 - June 30, 2000                    3.75:1.0
                  July 1, 2000 and thereafter                      3.50:1.0

                  (p)  Subsection 7.14 of the Credit Agreement is hereby amended
by deleting clause (b) and substituting therefor the following:

                  (b) Indebtedness of the Company consisting of the Senior
Subordinated  Notes as long as (i) the aggregate  principal amount of the Senior
Subordinated Notes does not exceed  $250,000,000,  (ii) the Senior  Subordinated
Notes are issued at par or at a discount  or premium not giving rise to original
issue  discount  under the Code,  (iii) the Senior  Subordinated  Notes  contain
covenants,  events of default  and  remedies  as are then  customary  for senior
subordinated  unsecured debt  securities  issued in a public  offering or a Rule
144A  transaction  and in any event no more  restrictive  than  those  contained
herein,  (iv) the Senior Subordinated Notes have no scheduled principal payments
prior to the seventh anniversary of the date of issuance thereof and are subject
to no mandatory  prepayments  or  redemptions  or offers to purchase  except for
those based on a change of control or asset sales on terms as are then customary
for senior unsecured debt securities  issued in a public offering or a Rule 144A
transaction  and  (v)  the  Senior  Subordinated  Notes  contain   subordination
provisions  satisfactory to the  Administrative  Agent (the Senior  Subordinated
Notes  shall be deemed to comply  with this  paragraph  (b) unless the  Required
Banks or the  Administrative  Agent notify the Company within five Business Days
after their receipt of the preliminary offering memorandum (or any draft thereof
containing  substantially  the same  terms as are set forth in such  preliminary
offering   memorandum)  for  the  Senior  Subordinated  Notes  that  the  senior
subordinated  notes described therein do not comply with this paragraph (b), the
Company hereby agreeing to distribute such  preliminary  offering  memorandum to
the Banks promptly following the printing thereof);

<PAGE>

                  (q)  Subsection 7.18 of the Credit Agreement is hereby amended
by (i) deleting the phrase "or (c)" and substituting  therefor the phrase ",(c)"
and (ii) adding at the end of clause (c) the phrase:

         or (d) the Senior Subordinated Note Indenture (in which case, any
prohibition  or  limitation  shall not limit the  ability of the Company and its
Subsidiaries to provide  collateral  security for the Obligations and guarantees
thereof or limit the ability of Subsidiaries to make payments to the Company)

                  (r)  Section 7 of the Credit Agreement is hereby amended by
adding the following new subsections 7.19 and 7.20:

                  7.19  Optional Payments and Modifications of Senior
Subordinated  Note  Indenture.  (a)  Make or  offer  to make  any  optional  or
voluntary  payment,  prepayment,   repurchase  or  redemption  of  or  otherwise
optionally or voluntarily  defease or segregate funds with respect to the Senior
Subordinated Notes, (b) amend,  modify, waive or otherwise change, or consent or
agree to any  amendment,  modification,  waiver or other  change  to, any of the
terms  of  the  Senior  Subordinated  Notes  (other  than  any  such  amendment,
modification,  waiver or other  change  that (i) would  extend the  maturity  or
reduce the  amount of any  payment  of  principal  thereof or reduce the rate or
extend any date for  payment of  interest  thereon and (ii) does not involve the
payment  of a consent  fee),  or (c)  designate  any  Indebtedness  (other  than
obligations of the Loan Parties pursuant to the Credit Documents) as "Designated
Senior Indebtedness" for the purposes of the Senior Subordinated Note Indenture.

                  7.20  Financial Covenants On and After Senior Subordinated
Note Issuance Date. On and after the Senior Subordinated Note Issuance Date:

                           (a)  Maintenance of Interest Coverage.  Permit the
Interest  Coverage  Ratio on the last day of any  fiscal  quarter to the be less
than 2.5:1.0.

                           (b)  Maintenance of Leverage Ratio.  Permit, as of
the last day of any fiscal quarter  occuring  during any period set forth below,
the Leverage Ratio to be greater than the ratio set forth opposite such period:


                                    Period                        Ratio

                  April 1, 1999 - December 31, 1999             5.00:1.0
                  January 1, 2000 - June 30, 2000               4.50:1.0
                  July 1, 2000 and thereafter                   4.00:1.0


                           (c)  Maintenance of Senior Leverage Ratio.  Permit,
as of the last day of any fiscal  quarter  occuring  during any period set forth
below, the Senior Leverage Ratio to be greater than the ratio set forth opposite
such period:
<PAGE>

                                    Period                        Ratio

                  April 1, 1999 - December 31, 1999             2.50:1.0
                  January 1, 2000 - June 30, 2000               2.25:1.0
                   July 1, 2000 and thereafter                  2.00:1.0

                  (s)  Section 8 of the Credit Agreement is hereby amended by
deleting  from   paragraph  (i)  each   reference  to  "Pledge   Agreement"  and
substituting therefor each time the phrase "Security Document".

                  (t)  Section 8 of the Credit Agreement is amended by adding
the following at the end of paragraph (j):

         or (iii) a change of control, however denominated, shall occur under
the Senior Subordinated Note Indenture; or

                  (u)  Section 8 of the Credit Agreement is amended by adding
the following new paragraph (k) at the end thereof:

                  (k)  on and after the Senior Subordinated Note Issuance Date,
the Senior  Subordinated  Notes or the guarantees  thereof shall cease,  for any
reason, to be validly  subordinated to the Obligations or the obligations of the
Subsidiary  Guarantors  under  the  Credit  Documents,  as the case  may be,  as
provided in the Senior  Subordinated  Note  Indenture,  or any Loan  Party,  any
Affiliate of any Loan Party,  the trustee in respect of the Senior  Subordinated
Notes or the holders of at least 25% in aggregate principal amount of the Senior
Subordinated Notes shall so assert;

                  (v)  The Company agrees that no amendment, supplement or
modification  of any Credit  Document  shall  release  any  Subsidiary  from any
Security  Document to which it is a party  without  the  written  consent of the
Release Banks, except as otherwise provided,  notwithtstanding any provisions to
the contrary set forth in subsection 10.1 of the Credit Agreement.

                  (w)  Section 10 of the Credit Agreement is amended by adding
thereto the following new subsection 10.14:

<PAGE>

                          10.14  Overdraft Obligations.  The Banks (for
themselves and their  respective  Affiliates)  agree that it is their  intention
that only  $3,000,000 of the  Overdraft  Obligations  be guaranteed  and secured
ratably  and on a pari  passu  basis  with the other  Obligations  (i.e.,  those
described  in  clause  (i)  of  the  definiton  of  Obligations)  (the  "Primary
Obligations")  and that the balance of the  Overdraft  Obligations  in excess of
$3,000,000  be  subordinated  to the  Primary  Obligations.  To the  extent  the
Overdraft  Obligations  exceed  $3,000,000  each  Bank's  (and its  Affiliates')
Overdraft  Obligations  shall be entitled  to share  ratably and on a pari passu
basis in the Subsidiary  Guarantees and collateral under the Security  Documents
with the Primary Obligations in an amount equal to the product of (a) $3,000,000
and (b) the decimal  equivalent of (i) the amount of the  Overdraft  Obligations
owed to such Bank and its Affiliates divided by (ii) the aggregate amount of all
Overdraft  Obligations.  Payment of any  Overdraft  Obligations  pursuant to any
Subsidiary  Guarantee or from any collateral under the Security  Documents shall
be  subordinated to the prior payment of the Primary  Obligations  except to the
extent set forth in the two preceding sentences.

                  3.       Reduction of Revolving Credit Commitments.  The
aggregate  Revolving Credit  Commitments shall  automatically and irrevocably be
reduced on each day on which Senior  Subordinated  Notes are issued by an amount
equal to 50% of the gross cash proceeds of such Senior  Subordinated  Notes,  on
the tems set forth in subsection 3.3 of the Credit Agreement.

                  4.       Obligations to Issue Senior Subordinated Notes.
The Company agrees to use its commercially  reasonable efforts to issue at least
$200,000,000 aggregate principal amount of Senior Subordinated Notes on or prior
to November 15, 1999. The Company agrees to engage one or more investment  banks
(collectively,   the   "Investment   Bank")   reasonably   satisfactory  to  the
Administrative  Agent to publicly  sell or  privately  place up to  $250,000,000
aggregate  principal  amount of Senior  Subordinated  Notes of the Company on or
prior to November 15, 1999.

                  5.       Representations and Warranties.  The Company hereby
confirms, reaffirms and restates the representations and warranties set forth in
Section 4 of the Credit  Agreement,  as amended by this  Second  Amendment.  The
Company  represents  and  warrants  that,  after  giving  effect to this  Second
Amendment, no Default or Event of Default has occurred and is continuing.

                  6.       Effectiveness.  Upon receipt by the Administrative
Agent of counterparts of this Second  Amendment duly executed by the Company and
the Required Banks,  this Second Amendment shall become effective as of the date
(the  "Effective  Date")  of  receipt  by  the  Administrative   Agent  of  such
counterparts.  The  Applicable  Margin on and after the Effective  Date shall be
recalculated  to give effect to the amendment to the Credit  Agreement set forth
in Section 2(a) above.

                  7.       Delivery of Collateral.  Notwithstanding the
requirement of subsection 6.8 of the Credit Agreement, as amended by this Second
Amendment,  the failure of the Company and its  Subsidiaries  to take any action
required by such  subsection,  as so amended,  prior to the day which is 60 days
after the Effective  Date shall not  constitute a Default to the extent that the
taking of such  action  was not  required  under  such  subsection  prior to the
effectiveness of this Second Amendment.

                  8.       Amendment Fee.  The Company will pay to the
Administrative  Agent, for the account of each Lender which executes and returns
this Second Amendment to the  Administrative  Agent on or prior to the Effective
Date, an amendment fee equal to .25% of the Revolving Credit  Commitment of such
Lender in effect on the Effective  Date, such fee to be payable on the Effective
Date.

<PAGE>


                  9.       Continuing Effect of the Credit Agreement.  This
Second Amendment shall not constitute an amendment of any other provision of the
Credit Agreement not expressly  referred to herein and shall not be construed as
a waiver or consent to any  further or future  action on the part of the Company
that would require a waiver or consent of the Banks, the Administrative Agent or
the Co-Agents.  Except as expressly amended hereby, the provisions of the Credit
Agreement are and shall remain in full force and effect.

                  10.      Counterparts.  This Second Amendment may be executed
by the  parties  hereto  in  any  number  of  separate  counterparts  (including
telecopied  counterparts),  each of which shall be deemed to be an original, and
all of which  taken  together  shall be  deemed to  constitute  one and the same
instrument.
                  11.      GOVERNING LAW.  THIS SECOND AMENDMENT SHALL BE
GOVERNED BY, AND CONSTRUED AND  INTERPRETED IN ACCORDANCE  WITH, THE LAWS OF THE
STATE OF NEW YORK.
<PAGE>


                  IN WITNESS WHEREOF, the parties hereto have caused this
Second  Amendment  to be duly  executed and  delivered in New York,  New York by
their  respective  proper and duly  authorized  officers  as of the day and year
first above written.


                             GENERAL SEMICONDUCTOR, INC.


                             By:Michael C. Smiley
                             Title: Vice President, Treasurer


                             THE CHASE MANHATTAN BANK, as
                             Administrative Agent, as a Co-Agent
                             and as a Bank


                             By:Steven J.Faliski
                             Title: Vice President


                             BANK OF AMERICA NATIONAL TRUST AND SAVINGS
                             ASSOCIATION, as a Co-Agent and as a Bank


                             By: Roger Fleischmann
                             Title: Managing Director

                             BANK OF MONTREAL, as a Co-Agent and as a Bank



                             By: Richard McClorey
                             Title: Director


                             THE BANK OF NOVA SCOTIA, as a Co-Agent
                             and as a Bank

                             By: J. Alan Edwards
                             Title: Authorized Signatory

<PAGE>

                             CIBC INC., as a Co-Agent and as a Bank


                             By: Paul J. Chakmak
                             Title: Managing Director CIBC World Markets Corp.,
                                    As Agent


                             CREDIT LYONNAIS NEW YORK BRANCH, as
                             a Co-Agent and as a Bank


                             By: Scott R. Chappelka
                             Title: Vice President


                             FLEET NATIONAL BANK, as a Co-Agent and as a Bank
                             By: Daniel Head Jr.
                             Title: Senior Vice President


                             WACHOVIA BANK, N.A., as a Co-Agent and as a Bank
                             By: Jane C. Deaver
                             Title: Senior Vice President


                             THE BANK OF NEW YORK


                             By: Eliza Adams
                             Title: Vice President


                             BANK OF TOKYO-MITSUBISHI TRUST COMPANY


                             By: Jim Brown
                             Title: Vice President

<PAGE>

                             BANKBOSTON, N.A.


                             By: Lynn Schade
                             Title: Vice President


                             BANQUE NATIONALE DE PARIS


                             By: Richard Pace               Thomas George
                             Title: Vice President          Vice President


                             PARIBAS


                             By: Duane Helkowski       Scott C. Sergeant
                             Title: Vice Preisdent     Associate


                             CREDIT AGRICOLE INDOSUEZ


                             By:  Sarah McClintock
                             Title: Vice President


                             By:  Rene LeBlanc
                             Title: Vice President



                             THE LONG-TERM CREDIT BANK OF JAPAN, LTD.


                             By: Jun Ebihara
                             Title: Deputy General Manager

<PAGE>


                             THE SANWA BANK LIMITED, CHICAGO BRANCH


                             By: Kenneth C. Eichwald
                             Title: First Vice President and
                             Assistant General Manager


                             SOCIETE GENERALE, NEW YORK BRANCH



                             By: Jerry Parisi
                             Title: Director


                             THE SUMITOMO BANK, LTD., CHICAGO BRANCH


                             By: John H. Kemper
                             Title: Senior Vice President


<PAGE>
                                                                 Schedule 6.8


                                Leased Properties

10 Melville Park Road
Melville, N.Y.

455A Union Avenue
Westbury, N.Y.

436 Maple Avenue
Melville, N.Y.

172 Spruce Street  (14,000 sq.ft.)
Melville, N.Y.

172 Spruce Street  (15 ft. strip)
Melville, N.Y.

48521 Warm Springs Blvd.
Freemont, CA (Sublease)