|SECURITIES
AND EXCHANGE COMMISSIONWASHINGTON, D.C. 20549FORM 10-Q
|-----------------------------------------------------------------

|[X] |  | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|--- |  | ---------------------------------------------------------------------------------------

|For the quarterly period ended April
1, 2001
|--------------------------------------------

|[   ] |  | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THESECURITIES EXCHANGE ACT OF 1934
FOR THE TRANSITION PERIOD FROMTO
|----- |  | ------------------------------------------------------------------------------------------------------------------------

|Commission File No. 000-26690


ELANTEC SEMICONDUCTOR,
INC.(Exact Name of Registrant as specified in its charter)
|-----------------------------------------------------------------------------------------------------------------

|Delaware                                                           |  | 77-0408929          | 
|------------------------------------------------------------------ |  | ------------------- | 
|                                                                  
|(State or other jurisdiction of                                    |  | ( I.R.S. Employer   | 
|incorporation or organization)                                     |  | Identification No.) | 
|                                                                  
|675 Trade Zone Boulevard, Milpitas, California                     |  | 95035               | 
|                                                                  
|(Address of principal executive offices)                           |  | (Zip Code)          | 
|                                                                  
|Registrants telephone number, including area code: (408) 945-1323
|                                                                  

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



Indicate the number of
shares outstanding of each of the issuers classes of common stock, as of
the latest practicable date:


As of May 1, 2001,
22,475,843 shares of the Registrants Common Stock, $0.01 par value, were
issued and outstanding.




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|TABLE OF CONTENTS
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|PART I. 
FINANCIAL INFORMATION




ITEM 1.  CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS


ELANTEC
SEMICONDUCTOR, INC.CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS(In
thousands, except per share data)(Unaudited)
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|                                             | Three Months EndedMarch 31, | Six Months EndedMarch 31,
|-------------------------------------------- | --------------------------- | -------------------------
|
|Net revenues                                 |                             | $30,553                  
|Cost of revenues                             |                             | 14,026                   
|                                            
|Gross profit                                 |                             | 16,527                   
|                                            
|Operating expenses:                          |                            
|Research and development                     |                             | 6,178                    
|Marketing, sales, general and administrative |                             | 4,970                    
|                                            
|Total operating expenses                     |                             | 11,148                   
|                                            
|                                            
|Income from operations                       |                             | 5,379                    
|Interest and other income, net               |                             | 2,278                    
|                                            
|Income before income taxes                   |                             | 7,657                    
|Provision for income taxes                   |                             | 2,680                    
|                                            
|Net income                                   |                             | $  4,977                 
|                                            
|                                            
|Earnings per share:                          |                            
|Basic                                        |                             | $    0.22                
|                                            
|Diluted                                      |                             | $    0.20                
|                                            
|                                            
|Shares used in computing per share amounts:  |                            
|Basic                                        |                             | 22,294                   
|                                            
|Diluted                                      |                             | 25,403                   
|                                            

|See accompanying notes
to the condensed consolidated financial statements.



3
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|ELANTEC
SEMICONDUCTOR, INC.CONDENSED
CONSOLIDATED BALANCE SHEETS(In
thousands)
|------------------------------------------------------------------------------

|                                              | Mar. 312001(1) | Sept. 302000(2)
|--------------------------------------------- | -------------- | ---------------
|Assets:                                       |                |                
|Current assets:                               |                |                
|Cash and cash equivalents                     |                | $ 129,202      
|Short-term investments                        |                | 45,334         
|Accounts receivable                           |                | 14,226         
|Inventories                                   |                | 16,015         
|Deferred income taxes                         |                | 4,000          
|Prepaid expenses and other current assets     |                | 1,689          
|                                             
|Total current assets                          |                | 210,466        
|                                             
|Property and equipment, net                   |                | 29,179         
|Other assets, net                             |                | 790            
|Non-current deferred income taxes             |                | 5,170          
|                                             
|Total assets                                  |                | $ 245,605      
|                                             
|                                             
|Liabilities and stockholders equity:         |               
|Current liabilities:                          |               
|Accounts payable and accrued liabilities      |                | $   23,653     
|Deferred revenue                              |                | 3,579          
|Current portion of capital lease obligations  |                | 1,315          
|                                             
|Total current liabilities                     |                | 28,547         
|                                             
|Long-term capital lease obligations           |                | 880            
|Other long-term liabilities                   |                | 1,759          
|                                             
|Stockholders equity:                         |               
|Common stock                                  |                | 227            
|Additional paid-in capital                    |                | 193,412        
|Deferred stock compensation                   |                | (4,265         
|Retained earnings                             |                | 29,108         
|Accumulated other comprehensive income (loss) |                | 18             
|Treasury stock at cost                        |                | (4,081         
|                                             
|Total stockholders equity                    |                | 214,419        
|                                             
|Total liabilities and stockholders equity    |                | $ 245,605      
|                                             

|(1) |  | Unaudited
|--- |  | ---------

|(2) |  | These
amounts were derived from the Companys audited consolidated financial statements at
September 30, 2000.
|--- |  | --------------------------------------------------------------------------------------------------------------

|See accompanying notes
to the condensed consolidated financial statements.



4
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|
|

|ELANTEC
SEMICONDUCTOR, INC.CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS(In
thousands)(Unaudited)
|---------------------------------------------------------------------------------------------------

|                                                                | Six months endedMarch 31,
|--------------------------------------------------------------- | -------------------------
|
|Operating activities                                            |                          
|Net income                                                      |                          
|Reconciliation of net income to net cash provided by            |                          
|operating activities:                                           |                          
|Depreciation and amortization                                   |                          
|Amortization of deferred stock compensation                     |                          
|Deferred income taxes                                           |                          
|Loss on disposal of property and equipment                      |                          
|Changes in operating assets and liabilities:                    |                          
|Accounts receivable                                             |                          
|Inventories                                                     |                          
|Prepaid expenses and other current assets                       |                          
|Accounts payable and accrued liabilities                        |                          
|Deferred revenue                                                |                          
|                                                               
|Net cash provided by operating activities                       |                          
|                                                               
|Investing activities                                            |                          
|Sale/maturity (purchase) of available for sale investments, net |                          
|Purchase of property and equipment                              |                          
|Decrease in other assets                                        |                          
|                                                               
|Net cash used in investing activities                           |                          
|                                                               
|Financing activities                                            |                          
|Payments on capital lease obligations                           |                          
|Purchase of treasury stock                                      |                          
|Proceeds from exercise of stock options and employee stock      |                          
|purchase plan                                                   |                          
|                                                               
|Net cash provided by (used in) financing activities             |                          
|                                                               
|Effect of exchange rate changes on cash and cash equivalents    |                          
|                                                               
|Increase (decrease) in cash and cash equivalents                |                          
|Cash and cash equivalents at beginning of period                |                          
|                                                               
|Cash and cash equivalents at end of period                      |                          
|                                                               
|                                                               
|Supplemental disclosures of cash flow information               |                          
|Taxes paid (refunded)                                           |                          
|                                                               
|Interest paid                                                   |                          
|                                                               

|See accompanying notes
to the condensed consolidated financial statements.



5
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|ELANTEC
SEMICONDUCTOR, INC.NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)



1.  Basis of
Presentation


We have prepared the unaudited
condensed consolidated financial statements included herein pursuant to the
rules and regulations of the Securities and Exchange Commission. Certain
information and footnote disclosures normally included in financial statements
prepared in accordance with accounting principles generally accepted in the
United States of America have been condensed or omitted pursuant to such rules
and regulations. In the opinion of management, all adjustments (consisting of
normal recurring items) considered necessary for a fair presentation have been
included. The results of operations for the three and six month periods ended
March 31, 2001 are not necessarily indicative of the results to be expected for
the entire year. These consolidated financial statements should be read in
conjunction with the consolidated financial statements and the notes thereto
included in our Amended Annual Report on Form 10-K/A for the year ended
September 30, 2000.


Our fiscal year end is the
Sunday closest to September 30 and our fiscal quarters end on the Sunday closest
to the end of the calendar quarter. For convenience, we have indicated that our
quarters end on December 31, March 31, June 30 and September 30.


2.  Accounting
Change


Effective October 1, 2000,
the Company adopted SFAS 133, Accounting for Derivative Instruments and
Hedging Activities, as amended. The statement requires that all
derivatives, whether designated in hedging relationships or not, are required to
be recorded on the balance sheet at fair value. If the derivative is designated
as a fair value hedge, the changes in the fair value of the derivative and of
the hedged item attributable to the hedged risk are recognized in earnings. If
the derivative is designated as a cash flow hedge, the effective portions of the
changes in the fair value of the derivative are recorded in other comprehensive
income (OCI) and are recognized in the income statement when the hedged item
affects earnings. Ineffective portions of changes in the fair value of cash flow
hedges are recognized in earnings. The adoption of SFAS 133 did not result in a
transition adjustment at October 1, 2000.


The Company uses derivative
instruments, primarily forward exchange contracts, to manage the foreign
currency exchange rate risk associated with certain assets and forecasted
transactions which are denominated in currencies other than the U.S. Dollar. The
Company monitors its foreign currency exposures regularly to maximize the
overall effectiveness of its foreign currency hedge positions, with the
principal currency hedged being the Japanese yen. The Company has not designated
any of its forward exchange contracts as hedging instruments under SFAS 133, and
therefore the unfavorable change in fair value of these forward exchange
contracts of $0.3 million and $0.1 million, respectively, for the three and six
month periods ended March 31, 2001 has been charged to interest and other
income. The fair value of these instruments as of March 31, 2001 was a $0.1
million asset.

6
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|3.  Inventories


Inventories are stated at
the lower of cost (first-in, first-out method) or market and consist of the
following balances in thousands:
|--------------------------------------------------------------------------------------------------------------------------------------------------------

|                | March31, 2001 | September30, 2000
|--------------- | ------------- | -----------------
|Raw materials   |               | $  1,154         
|Work-in-process |               | 11,962           
|Finished goods  |               | 2,899            
|               
|                |               | $16,015          
|               

|4. 
Stockholders Equity


On December 19, 2000,
our Board of Directors authorized a share repurchase program to purchase up
to 1,000,000 shares of our common stock in the open market, depending on
market conditions and other corporate considerations. As of March 31, 2001,
we have repurchased 183,000 shares of our common stock for $4.1
million in connection with our share repurchase program.


5.  Earnings
per share


Earnings per share (EPS) is computed
as basic EPS using the weighted average number of shares of common stock outstanding and
diluted EPS using the weighted average number of shares of common stock and dilutive
common equivalent shares outstanding from stock options (using the treasury stock method)
and shares issuable under our employee stock purchase plan.


The following table sets forth the
computation of basic and diluted earnings per share (in thousands, except per share data):
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|                                                            | Three Months EndedMarch 31, | Six Months EndedMarch 31,
|----------------------------------------------------------- | --------------------------- | -------------------------
|
|Net income (Numerator):                                     |                             |                          
|Net income, basic and diluted                               |                             | $  4,977                 
|                                                           
|                                                           
|Shares (Denominator):                                       |                            
|Weighted average shares of common stock outstanding used in |                            
|computation of basic earnings per share                     |                             | 22,294                   
|Dilutive effect of common stock options                     |                             | 3,095                    
|Dilutive effect of shares issuable under Employee Stock     |                            
|Purchase Plan                                               |                             | 14                       
|                                                           
|                                                           
|Shares used in computation of diluted earnings per share    |                             | 25,403                   
|                                                           
|Basic earnings per share                                    |                             | $    0.22                
|                                                           
|Diluted earnings per share                                  |                             | $    0.20                
|                                                           

|7
|-

|At March 31, 2001,
outstanding options to purchase 1,871,548 shares at exercise prices between
$36.00 and $121.75 were excluded from the computation of earnings per share as
the option price was greater than the average market price of the common shares
and, therefore, would be antidilutive under the treasury stock method.


At March 31, 2000,
outstanding options to purchase 15,912 shares at exercise prices of $29.75 and
$41.38 were excluded from the computation of earnings per share as the option
price was greater than the average market price of the common shares and,
therefore, would be antidilutive under the treasury stock method.


6. 
Comprehensive Income


There were no material
differences between comprehensive income and net income for all periods
presented.


7.  Segment
Information


The Company markets its
products in the United States and in foreign countries through its sales
personnel, independent sales representatives and distributors. The
Companys geographic sales, as a percentage of net revenues, were as
follows:
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|                            | Three Months EndedMarch 31, | Six Months EndedMarch 31,
|--------------------------- | --------------------------- | -------------------------
|
|Domestic                    |                             | 46                       
|Export:                     |                            
|Europe                      |                             | 8                        
|Japan                       |                             | 20                       
|Other Pacific Rim Countries |                             | 26                       
|                           
|                            |                             | 100                      
|                           

|The Companys assets
located outside the United States are insignificant.


The Companys products
are sold to a wide variety of original equipment manufacturers through a direct
sales force and to a network of distributors.


Customers comprising 10% or
greater of the Companys net revenues are summarized as follows:
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|                                          | Three months endedMarch 31, | Six months endedMarch 31,
|----------------------------------------- | --------------------------- | -------------------------
|
|Solectron - United States                 |                             | 23                       
|Microtek International, Inc. - Japan      |                             | 16                       
|Samsung - Korea                           |                             | 14                       
|Lucent Technologies                       |                             | *                        
|Insight Electronics, Inc. - United States |                             | *                        

|* |  | less
than 10%
|- |  | -------------

|8
|-

|As of March 31, 2001,
Solectron, Microtek International and Lucent Technologies accounted for 27%, 17%
and 13%, respectively, of the Companys accounts receivable. At September
30, 2000, Microtek International and Samsung Electronics accounted for 32% and
13%, respectively, of the Companys accounts receivable.


8.  Recent
Accounting Pronouncements


Revenue Recognition.
In December 1999, the Securities and Exchange Commission issued Staff Accounting
Bulletin (SAB) No. 101, Revenue Recognition, which provides guidance
on the recognition, presentation and disclosure of revenue in financial
statements filed with the SEC. SAB No. 101 outlines the basic criteria that must
be met in order to recognize revenue and provides guidance for disclosures
related to revenue recognition policies. We are required to adopt SAB No. 101,
as amended, in the fourth quarter of fiscal 2001. Although we have not fully
assessed the implications of SAB No. 101, our management currently does not
believe that adoption of this bulletin will have a material impact on our
consolidated financial position, results of operations or cash flows.



9
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|ITEM 2. MANAGEMENTS
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS


This Form 10-Q contains
forward-looking statements within the meaning of Section 21E of the Securities
Exchange Act of 1934, as amended, and Section 27A of the Securities Act of 1933,
as amended, that involve substantial risks and uncertainties. In some cases, you
can identify these statements by forward-looking words such as may,
will, should, expect, plan,
anticipate, believe, estimate, or
continue and variations of these words or comparable words. In
addition, any statements which refer to expectations, projections or other
characterizations of future events or circumstances are forward-looking
statements. These forward-looking statements involve known and unknown risks,
uncertainties and situations that may cause our or our industrys actual
results, level of activity, performance or achievements to be materially
different from any future results, levels of activity, performance or
achievements expressed or implied by these statements.


Although we believe that
the expectations reflected in the forward-looking statements are reasonable, we
cannot guarantee future results, levels of activity, performance or
achievements. You should not place undue reliance on these forward-looking
statements, which apply only as of the date of filing this Form 10-Q. We do not
undertake to update or revise any forward-looking statement, whether as a result
of new information, future events or otherwise.


The section entitled
Factors Affecting Future Results and other cautionary language in
this Form 10-Q, as well as the various disclosures made by us in our reports
filed with the Securities and Exchange Commission, including our 2000 Annual
Report on Form 10-K, provide examples of risks, uncertainties and events that
may cause our actual results to differ from the expectations we describe in our
forward-looking statements. You are urged to read and carefully consider these
disclosures made by us.


Results of Operations
The following table sets forth, as a percentage of net
revenues, certain consolidated statement of operations data for the periods
indicated.
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|                           | ThreeMonths EndedMar. 31, 2001 | ThreeMonths EndedMar. 31, 2000 | SixMonths EndedMar. 31, 2001 | SixMonths EndedMar. 31, 2000
|-------------------------- | ------------------------------ | ------------------------------ | ---------------------------- | ----------------------------
|Net revenues               |                                | 100                            | .0%                          | 100                         
|Cost of revenues           |                                | 45                             | .9%                          | 38                          
|Gross profit               |                                | 54                             | .1%                          | 61                          
|                          
|Operating expenses:        |                               
|Research and development   |                                | 20                             | .2%                          | 16                          
|Marketing, sales, general  |                               
|and administrative         |                                | 16                             | .3%                          | 18                          
|Income from operations     |                                | 17                             | .6%                          | 26                          
|Income before income taxes |                                | 25                             | .1%                          | 27                          
|Net income                 |                                | 16                             | .3%                          | 16                          

|Net Revenues. Net
revenues were $30.6 million in the second quarter of fiscal 2001, an increase of
53% over net revenues of $20.0 million in the second quarter of fiscal 2000. The
increase in net revenues was driven by strong growth in our communications
market segment, which was largely driven by the success of our xDSL products.
Revenue from this market segment represented 43% of our net revenues in the
second quarter of fiscal 2001 compared to 10% of net revenues in the second
quarter of fiscal 2000. As a percentage of net revenues, sales from our video
and optical storage market segments decreased to 35% and 19% in the second
quarter of fiscal 2001 from 48% and 34% respectively, in the same period of
fiscal 2000. Our business in the optical storage and video market segments were
adversely affected by the slow down in demand for personal computers. Our power
management product line, which is still in its early stages, did not contribute
significantly to our net revenues. Sales from this market segment represented 1%
of our net revenues, down from 2% of net revenues in the second quarter of
fiscal 2000.
10
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|Geographically, in the
second quarter of fiscal 2001, sales increased in North America and Asia Pacific
(other than Japan) when compared to the second quarter of fiscal 2000, due to
increased demand for our communications products. Sales in Japan and Europe
remained relatively flat. International revenues represented 54% of net
revenues, down from 70% of net revenues in the second quarter of fiscal 2000,
while domestic net revenues in the second quarter of fiscal 2001 increased from
30% in the second quarter of fiscal 2000 to 46%.


For the first six months of
fiscal 2001, net revenue was $71.3 million, an increase of 99% from the $35.7
million reported in the corresponding period of fiscal 2000. This increase over
the prior year was driven largely by strong growth in our communications market
segment. Sales increased in all geographic areas, especially in North America.


Gross margin. Gross
margin was 54.1% and 57.6% for the second quarter and first six months of fiscal
2001, respectively, compared to 61.6% and 61.3% in the corresponding periods in
fiscal 2000. Over the past several quarters we have substantially increased our
manufacturing capacity by adding manufacturing personnel, capital equipment and
leasehold improvements to support higher levels of revenue. Net revenues in the
second quarter of fiscal 2001, while significantly higher than in the same
period in fiscal 2000, decreased 25% from net revenues in the first quarter of
fiscal 2001. The decrease in gross margin as a percentage of net revenues was
due primarily to the absorption of higher fixed costs over a lower revenue base.


Research and development
expenses. Research and development expenses (R&D) increased
by $2.8 million, or 84.6%, and $6.0 million, or 104.8%, for the second quarter
and first six months of fiscal 2001, respectively, as compared to the
corresponding periods in fiscal 2000. The increase in R&D expenses in the
second quarter and first six months of fiscal 2001, as compared to the same
periods of fiscal 2000, was due primarily to an increase in staffing and related
compensation of $1.3 million and $2.2 million respectively, particularly related
to the hiring of additional design engineering personnel, and higher spending of
$0.7 million and $3.2 million respectively, on new product development. As a
percentage of net revenues, R&D expenses increased from 16.7% to 20.2% for
the second quarter of 2001 and from 16.1% to 16.5% for the first six months of
fiscal 2001.


Marketing, sales,
general and administrative expenses. Marketing, sales, general and
administrative (SG&A) expenses increased by $1.2 million or
32.6% and $4.5 million or 66.7% for the second quarter and first six months of
fiscal 2001, respectively, compared to the corresponding periods in fiscal 2000.
The increase in SG&A expenses in the second quarter and first six months of
fiscal 2001 as compared to the same period of fiscal 2000 was due primarily to
an increase in staffing and related compensation of $0.8 million and $2.4
million respectively, particularly related to the hiring of additional sales and
marketing personnel, as well as higher selling expenses of $0.4 million and $2.1
million respectively, due to an increase in revenue. As a percentage of net
revenues, SG&A expenses decreased from 18.7% to 16.3% for the second quarter
of 2001 and from 19.0% to 15.9% for the first six months of fiscal 2001
primarily due to higher revenues in the second quarter and first six months of
fiscal 2001.


Interest and Other
Income, net. Interest and other income, net was $2.3 million and $4.7
million in the second quarter and first six months of fiscal 2001, respectively,
an increase of $2.0 million and $4.4 million over the corresponding periods of
fiscal 2000. The increase in interest and other income was due primarily to
higher levels of cash, cash equivalents and short-term investments, from the
proceeds of additional stock issued by us in September 2000.
11
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|Provision for Income
Taxes. Our effective tax rate for the first six months of fiscal 2001
is 35% compared to 37% in the same period of fiscal 2000.


Factors
Affecting Future Results


The markets in which
we participate are intensely competitive, and if we are unable to compete
effectively, our operating results could be harmed.


The analog semiconductor
industry is intensely competitive and is characterized by rapid technological
change, product obsolescence and price erosion. Increased competition has in the
past and could in the future result in price reductions, reduced gross margins
or loss of market share, any of which could harm our operating results. In our
primary markets, we compete with Analog Devices, Inc., Linear Technology
Corporation, Maxim Integrated Products, Inc., Texas Instruments, Toshiba and
National Semiconductor Corporation. We also compete indirectly with the in-house
design staffs of some of our customers and end-users, which often provide
alternative solutions to individual analog systems requirements. Many of our
current and potential competitors have greater name recognition, larger customer
bases and greater financial, technical, manufacturing, marketing and other
resources than we do. As a result, they may be able to respond more quickly to
new or emerging technologies and changes in customer requirements, devote
greater resources to the development, promotion, sale and support of their
products, and reduce prices to increase market share. Moreover, there has been
significant merger and acquisition activity among our competitors and potential
competitors. These combinations may provide our competitors and potential
competitors with a competitive advantage over us by enabling them to expand
their product offerings and service capabilities to meet a broader range of
customer needs. In addition, the introduction of new technologies and new market
entrants may increase competitive pressures.


Cyclicality in the
semiconductor industry has historically led to substantial decreases in demand
for our products and technologies and may do so in the future.


Our operating results are
subject to significant variation due to the cyclical nature of the semiconductor
industry. The semiconductor industry is currently experiencing a downturn that
is adversely affecting our operating results. Our net revenues for the quarter
ended March 31, 2001 decreased 25% from the quarter ended December 31, 2000. Our
net income decreased from $9.7 million in the first quarter of fiscal 2001 to
$5.0 million in the second quarter of fiscal 2001. Our business depends upon the
current and anticipated market demand for analog semiconductors and products
using analog semiconductors. Prolonged downturns in the semiconductor industry
will likely lead to proportionately greater downturns in our net income or we
may incur net losses.


Our operating results
are likely to fluctuate, which could cause us to miss expectations about those
results and cause the trading price of our common stock to decline.


Our quarterly operating
results are likely to fluctuate, and if we fail to meet or exceed the
expectations of securities analysts or investors, the trading price of our
common stock could decline. Some of the important factors that could cause our
net revenues and operating results to fluctuate from period to period include:
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  |  |  | shifts
in demand for, and average selling prices of, our products;
| |  | - |  | ------------------------------------------------------------------

|12
|--

|
|

| |  |  |  | the
reduction, rescheduling or cancellation of orders by our customers;
| |  | - |  | -----------------------------------------------------------------------

| |  |  |  | the
timing and success of product introductions and new technologies by our competitors and
us;
| |  | - |  | -----------------------------------------------------------------------------------------------

| |  |  |  | the
quantities of our products which we or third parties can manufacture and deliver in a
quarter;
| |  | - |  | --------------------------------------------------------------------------------------------------

| |  |  |  | the
timing of our investments in research and development;
| |  | - |  | ----------------------------------------------------------

| |  |  |  | the
timing and provision of pricing protections and returns from our customers;
| |  | - |  | -------------------------------------------------------------------------------

| |  |  |  | competitive
pressures on selling prices;
| |  | - |  | ----------------------------------------

| |  |  |  | the
length of our sales cycle;
| |  | - |  | ------------------------------

| |  |  |  | availability
of manufacturing capacity for our products;
| |  | - |  | --------------------------------------------------------

| |  |  |  | fluctuations
in manufacturing yields; and
| |  | - |  | -----------------------------------------

| |  |  |  | changes
in product mix.
| |  | - |  | -----------------------

|As a result of these
factors our operating results may vary widely. We believe that period-to-period
comparisons of our net revenues and operating results are not necessarily
meaningful and, should not be relied upon as indications of future performance.


We depend upon the
continued demand for our products in the communication, video and optical
storage markets for a significant portion of our net revenues.


We have derived, and expect
to continue to derive, a significant portion of our net revenues from products
that we sell in the communications, video and optical storage markets.
Therefore, our success depends in part on the continued acceptance of our
products within these markets and our ability to continue to develop and
introduce new products on a timely basis for these markets. In addition,
although the communications, video and optical storage markets have grown
rapidly in the last few years, we have recently experienced a slowdown in these
markets and cannot be certain that these markets will return to growth in the
future. A prolonged downturn in these markets could harm our business and
operating results.


The failure to
manage and sustain our growth may harm our business.


Our ability to continue to
grow successfully requires an effective planning and management process. Since
September 30, 1999, we increased our headcount substantially, from 175 employees
to 374 at March 31, 2001. Our growth has placed, and the recruitment and
integration of additional employees will continue to place, a significant strain
on our infrastructure, internal systems and other resources. To manage our
growth effectively, we must continue to improve and expand our operational,
financial and management information systems in a timely and efficient manner
and invest the necessary capital. We cannot assure you that those resources will
be available when we need them or that we will have sufficient capital to
invest. If we are unable to manage and sustain our growth, our operating results
may be harmed.


Difficulties in
estimating the amount and timing of sales to our customers could harm our
operating results.
13
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|It is difficult for us to
forecast accurately the timing and amount of sales to our customers, which
include distributors and original equipment manufacturers, or OEMs. Our
customers generally take a long time to evaluate our products and technologies
before committing to design our products into their systems. Moreover, our
business is characterized by short-term orders and shipment schedules, and
customer orders typically can be canceled or rescheduled on short notice to us
and without significant penalty to our customers. We do not have substantial
noncancellable backlog and often we are forced to obtain inventory and materials
from our manufacturing subcontractors in advance of anticipated customer demand.
Because we incur expenses, many of which are fixed, based in part on our
forecasts of future product sales, our operating results could be harmed if
sales levels are below our expectations.


Our net revenues may
decrease if we lose any of our significant customers, thereby harming our
operating results.


A relatively small number
of customers have accounted for a significant portion of our net revenues in any
particular period. For the three and six months ended March 31, 2001, Solectron,
Microtek International, Inc., Samsung and Lucent Technologies accounted for 23%,
16%, 14%, 0% and 18%, 26%, 10%, 11% respectively, of our net revenues for those
periods. The loss of any significant customer coupled with our inability to
obtain orders from new customers to compensate for such loss could cause our net
revenues to decline, thereby harming our operating results.


We have no long-term
purchase commitments with these or any of our other important customers. These
customers, therefore, could cease purchasing our products with short notice to
us and without significant penalty to our customers. In addition, Microtek is a
distributor of our products to various OEMs. Any of these OEMs could choose to
reduce or eliminate orders that would reduce our distributors orders for
our products.


We anticipate that sales of
our products to a relatively small number of customers will continue to account
for a significant portion of our net revenues. Due to these factors, the
following may reduce our operating results:
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  |  |  | reduction,
delay or cancellation of orders from one or more of our significant distributors or OEMs;
| |  | - |  | ----------------------------------------------------------------------------------------------------

| |  |  |  | development
by one or more of our significant distributors or end-user customers of other sources of
supply;
| |  | - |  | ------------------------------------------------------------------------------------------------------------

| |  |  |  | selection
by one or more of our significant OEMs of devices manufactured by one or more of our
competitors for inclusion in future product generations;
| |  | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------

| |  |  |  | sales
of competing products by our distributors; or
| |  | - |  | ---------------------------------------------------

| |  |  |  | failure
of one of our significant customers to make timely payment of our invoices.
| |  | - |  | -----------------------------------------------------------------------------------

|We must achieve new
design wins, and these design wins must translate into customer purchases.


Our success depends in part
upon achieving design wins for our products with current and future customers.
Design wins are indications by existing and potential customers that they intend
to incorporate our products into their new product designs. To achieve design
wins, we must continually increase the performance levels of our products, keep
pace with evolving industry standards and introduce new products in a timely
manner. If we fail to achieve design wins, we may lose potential sales
opportunities. However, customer decisions to use our products can often require
significant expenditures by us without any assurance of success. Design wins
also do not necessarily result in purchase orders for our products. In addition,
it could take up to several months before a design win translates into a
purchase order, if at all. The value of any design win, moreover, will largely
depend upon the commercial success of our customers product and on the
extent to which the design of the customers electronic system accommodates
components manufactured by our competitors.
14
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|
|

|If we fail to develop
and introduce new products on a timely basis, we may not be able to attract and
retain customers.


We operate in an industry
that is characterized by rapidly changing technology, frequent product
introductions, product obsolescence, and ongoing demands for greater performance
and functionality. We, therefore, must continually design, develop and introduce
on a timely basis new products with improved features to retain and attract
customers and be competitive. Successful product development and introduction on
a timely basis requires that we:
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  |  |  | design
innovative and performance-enhancing features that differentiate our products from those
of our competitors;
| |  | - |  | -------------------------------------------------------------------------------------------------------------------

| |  |  |  | transition
our products to new manufacturing technologies;
| |  | - |  | ----------------------------------------------------------

| |  |  |  | identify
emerging technological trends in our target markets, including new standards for our
products;
| |  | - |  | -------------------------------------------------------------------------------------------------------

| |  |  |  | accurately
identify and design new products to meet market needs;
| |  | - |  | -----------------------------------------------------------------

| |  |  |  | bring
products to market on a timely basis at competitive prices and maintain effective
marketing strategies;
| |  | - |  | -------------------------------------------------------------------------------------------------------------

| |  |  |  | maintain
a high level of investment in research and development;
| |  | - |  | ----------------------------------------------------------------

| |  |  |  | respond
effectively to technological changes or product announcements by others; and
| |  | - |  | ------------------------------------------------------------------------------------

| |  |  |  | adjust
to changing market conditions as quickly and cost-effectively as necessary to compete
successfully.
| |  | - |  | ----------------------------------------------------------------------------------------------------------

|We cannot assure you that
we will be able to meet the design and market introduction schedules for our new
products or enhancements to our existing products or that these products will
achieve market acceptance.


In order to remain
competitive in the analog semiconductor industry, we must develop and introduce
new semiconductor design and process technologies on a timely basis.


Our future success depends
upon our ability to:
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  |  |  | design
and develop products that utilize new process technologies;
| |  | - |  | ------------------------------------------------------------------

| |  |  |  | secure
the availability of our new process technologies from our foundry;
| |  | - |  | -------------------------------------------------------------------------

| |  |  |  | introduce
new process technologies to the marketplace earlier than our competitors do; and
| |  | - |  | ------------------------------------------------------------------------------------------

| |  |  |  | transfer
our product design to multiple foundries efficiently.
| |  | - |  | --------------------------------------------------------------

|15
|--

|
|

|Semiconductor design and
process methodologies are subject to rapid technological change, and require
large expenditures for research and development. We incurred research and
development expenses of $6.2 million and $11.8 million in the three and six
month periods ended March 31, 2001, respectively, and $3.3 million and $5.8
million in the three and six month periods ended March 31, 2000, respectively.
We expect that our expenses for research and development will continue to
increase because we continuously attempt, on a product-by-product basis, to
migrate to smaller geometry process technologies. Other companies in the
industry have experienced difficulty in transitioning to new manufacturing
processes and, consequently, have suffered reduced yields or delays in product
deliveries. While we believe that transitioning our products to smaller
geometries will be important for us to remain competitive, we cannot be certain
that we can make these transitions successfully and on a cost-effective basis.


Due to our
significant level of international sales and the utilization of foreign
manufacturers and subcontractors, we are subject to international operational,
financial and political risks.


Sales of our products to
customers outside the United States have accounted for a significant part of our
net revenues. Our net international sales, as a percentage of our net revenues,
were 54% and 56% for the three and six months ended March 31, 2001 and 70% and
72% for the three and six months ended March 31, 2000. We expect net
international sales, particularly into Japan, Taiwan and Korea, to continue to
account for a significant percentage of our net revenues in the future. In
addition, we expect to continue to rely on manufacturers and subcontractors
located in Taiwan, Malaysia and Thailand. Accordingly, we will be subject to
risks and challenges that we would not otherwise face if we conducted our
business only in the United States. These include:
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  |  |  | compliance
with a wide variety of foreign laws and regulations;
| |  | - |  | ---------------------------------------------------------------

| |  |  |  | changes
in laws and regulations relating to the import or export of semiconductor products;
| |  | - |  | -------------------------------------------------------------------------------------------

| |  |  |  | legal
uncertainties regarding taxes, tariffs, quotas, export controls, export licenses and
other trade barriers;
| |  | - |  | ----------------------------------------------------------------------------------------------------------------

| |  |  |  | political
and economic instability in or foreign conflicts involving the countries of our
customers, manufacturers and subcontractors causing delays or reductions in orders for
our products;
| |  | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  |  |  | difficulties
in collecting accounts receivable and longer accounts receivable payment cycles;
| |  | - |  | ---------------------------------------------------------------------------------------------

| |  |  |  | difficulties
in staffing and managing personnel, distributors and representatives in foreign countries;
| |  | - |  | -------------------------------------------------------------------------------------------------------

| |  |  |  | reduced
protection for intellectual property rights in some countries, particularly in Asia;
| |  | - |  | --------------------------------------------------------------------------------------------

| |  |  |  | currency
exchange rate fluctuations, which could increase the price of our products in local
currencies and thereby reduce our revenue from these sales;
| |  | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------

| |  |  |  | seasonal
fluctuations in purchasing patterns in other countries; and
| |  | - |  | --------------------------------------------------------------------

| |  |  |  | fluctuations
in freight rates and transportation disruptions.
| |  | - |  | -------------------------------------------------------------

|Any of these factors could
harm our existing international operations and business or impair our ability to
continue expanding into international markets. To the extent we are unable to
expand our net international sales in a timely and cost-effective manner, our
business could be harmed. We cannot assure you that we will be able to maintain
or increase international market demand for our products.



16
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|
|

|We depend on a
limited number of third party foundries to manufacture most of our products,
which reduces our control over the production, supply and delivery of our
products.


We depend on a limited
number of third party foundries for the production of most of our products. In
particular, Agere Systems Inc. (formerly Lucent Technologies) manufactures all
of our junction isolation bipolar wafers, and American Microsystems, Inc. and
UMC manufacture all of our complementary metal-oxide-semiconductor wafers. In
addition, another foundry provides poly deposition on all of our dielectric
isolation wafers and silicon-on-insulator wafers. Furthermore, there are very
few foundries that have the capability to produce dielectric isolation wafers or
silicon-on-insulator wafers. Our dependence on third parties to fabricate our
products has significant risks that could potentially harm our operating
results, including:
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  |  |  | We
have no long-term contracts with any foundry and we do not have a guaranteed level of
production capacity at any foundry. The ability of each foundry to provide wafers to us
is limited by its available capacity and our foundry suppliers could provide that limited
capacity to its other customers. In addition, our foundry suppliers could reduce or even
eliminate the capacity allocated to us on short notice. Moreover, such a reduction or
elimination is possible even after we have submitted a purchase order.
| |  | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  |  |  | To
obtain foundry capacity, we may be forced to enter into equity and debt financing
arrangements. These arrangements could result in the dilution of our earnings or in the
ownership of our stockholders.
| |  | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  |  |  | We
provide the foundries with rolling forecasts of our production requirements, however, our
forecasts of production requirements may prove to be inaccurate.
| |  | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  |  |  | We
have limited control over product delivery schedules, and we may not receive products
within the time frames and in the volumes required by our customers.
| |  | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  |  |  | We
could face delays in obtaining, or we might not be able to obtain, access to foundries
with key fabrication process technologies, such as the fabrication process necessary to
manufacture dielectric isolation wafers and silicon-on-insulator wafers.
| |  | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  |  |  | We
have limited control over quality assurance and production costs.
| |  | - |  | --------------------------------------------------------------------

| |  |  |  | We
have limited control over manufacturing yields and our foundries occasionally experience
lower than anticipated manufacturing yields, particularly in connection with the
introduction of new products and the design, installation and initiation of new process
technologies.
| |  | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|We cannot be certain that
we will be able to maintain our good relationships with our existing foundries.
In addition, we cannot be certain that we will be able to form relationships
with other foundries as favorable as our current ones. Moreover, transferring
from our existing foundries to another foundry could require a significant
amount of time and loss of revenue, and we cannot assure you that we could make
a smooth and timely transition. If foundries are unable or unwilling to continue
to supply us with these semiconductor devices in required time frames and
volumes or at commercially acceptable costs, our business may be harmed.



17
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|
|

|We are responsible
for the production of our dielectric isolation and silicon-on-insulator wafers
and our results of operations could be harmed if our supply of those wafers does
not meet the demand.


Our fabrication facilities
are the only facilities currently available to us that are capable of
manufacturing dielectric isolation wafers and silicon-on-insulator wafers for
our products. If we experience a reduction or interruption in the supply, or a
degradation in the quality of any of the wafers, we may be forced to discontinue
that product based upon those wafers until we can contract with third party
foundries that are qualified to produce those wafers. As a result, our
relationships with our customers could be harmed if we are unable to deliver
sufficient quantities of wafers. We intend to outsource the volume production of
silicon-on-insulator wafers upon the stabilization of the process. Accordingly,
we intend to export the process to a suitable foundry for manufacturing of these
wafers. However, we cannot provide any assurance that a suitable foundry can be
qualified for such volume production.


If we fail to develop
our next generation silicon-on-insulator technology in a timely manner, our
business and operating results could be harmed.


Part of our future product
development strategy includes the development of an advanced
silicon-on-insulator technology. As with the development of any process
technology, we cannot assure you that this new technology can be successfully
implemented in a timely manner or that it will provide the desired improvements
over our current technology. In addition, our next generation
silicon-on-insulator technology could be supplanted by alternative new
technologies and may not be able to be transferred to third party foundries.
Significant delays or cancellation of the development of this new generation of
technology or manufacturing problems associated with transferring our current
product line to this technology could harm our business and results of
operations. Significant delays or cancellation of the development of this
technology also could harm our new product development program.


We rely on a limited
number of packaging subcontractors that may not have adequate capacity to meet
our product delivery requirements.


We rely on a limited number
of packaging subcontractors with whom we do not have long-term contracts. In
general, the wafers we manufacture at our fabrication facilities and the wafers
we purchase from our outside foundries are tested at our facilities. The wafers
are then sent to our packaging subcontractors for packaging and assembly. Our
reliance on these subcontractors involves significant risks, including a lack of
adequate capacity, the possibility that necessary process technologies will be
eliminated and reduced control over quality and delivery schedules. These
independent subcontractors may discontinue doing business with us for a variety
of reasons. As a result, we may experience product delivery and quality
assurance problems, which in turn may harm our reputation and operating results.


If our products
contain defects or fail to achieve industry reliability standards, our
reputation may be harmed, and we may incur significant unexpected expenses and
lose sales opportunities.


Our products have in the
past contained, and may in the future contain, undetected errors or defects. Any
similar problem in the future may:
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  |  |  | cause
delays in product introductions and shipments;
| |  | - |  | ----------------------------------------------------

| |  |  |  | result
in increased costs and diversion of development resources;
| |  | - |  | -----------------------------------------------------------------

| |  |  |  | cause
us to incur increased charges due to obsolete or unusable inventory;
| |  | - |  | --------------------------------------------------------------------------

|18
|--

|
|

| |  |  |  | require
design modifications; or
| |  | - |  | --------------------------------

| |  |  |  | decrease
market acceptance or customer satisfaction with these products, which could result in
product returns.
| |  | - |  | ---------------------------------------------------------------------------------------------------------------

|In addition, we may not
find defects or failures in our products until after commencement of commercial
shipments, which may result in loss or delay in market acceptance and could
significantly harm our operating results. Our current or potential customers
also might seek to recover from us any losses resulting from defects or failures
in our products. Liability claims could require us to spend significant time and
money in litigation or to pay significant damages. Any of these claims, whether
or not successful, could seriously damage our reputation and business.


Earthquakes, other
natural disasters and rolling blackouts may damage our facilities or
those foundries and others on which we depend.


Our corporate headquarters
and internal foundry are located in California near major earthquake faults
which have experienced earthquakes in the past. In addition, some of the
foundries, suppliers and other third parties upon which we rely are located near
fault lines. An earthquake or other natural disaster near one or more of the
facilities of third parties upon which we rely, like the earthquake in Taiwan in
September 1999, could disrupt the operations of those parties. Additionally, the
loss of power, such as the temporary loss of power caused by the rolling
blackouts experienced by us at our facility in Northern California, could
disrupt our operations. None of these disruptions would be covered by insurance
and thus, the supply of our products could be limited and our business could be
hampered.


If we fail to attract
and retain qualified personnel, our business may be harmed.


Our future success depends
largely upon the continued service of our key management and technical
personnel, and on our continued ability to hire, integrate and retain qualified
management and technical personnel, particularly engineers. Competition for
these employees in the analog semiconductor industry is intense, and we may not
be successful in attracting or retaining these personnel. In addition, it is
difficult to obtain work visas for foreign professionals trained in the United
States. The loss of any key employee, the failure of any key employee to perform
in his or her current position or our inability to attract and retain skilled
employees as needed could impair our ability to meet customer and technological
demands. The loss of the services of any executive officer or other key
technical or management personnel could harm our business. To help retain the
continued services of some of our key executives, we have entered into
employment agreements with some of them. We do not have key person life
insurance on any of our key personnel.


If we fail to protect
our intellectual property, our competitors could market products with similar
features, reducing demand for our products and harming our operating results.


Our success depends in part
on our ability to protect our intellectual property rights covering our products
and technologies. We rely on a combination of patent, copyright, trademark,
trade secret laws and confidentiality procedures to protect our proprietary
rights. Despite our efforts to protect our proprietary rights, unauthorized
parties may attempt to copy aspects of our products or to obtain and use
information that we regard as proprietary. In addition, the laws of some foreign
countries, and the enforcement of those laws, do not protect proprietary rights
to as great an extent as do the laws of the United States. We also cannot assure
you that:
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  |  |  | our
means of protecting our proprietary rights will be adequate;
| |  | - |  | ----------------------------------------------------------------

|19
|--

|
|

| |  |  |  | patents
will be issued from our currently pending or future applications;
| |  | - |  | -------------------------------------------------------------------------

| |  |  |  | our
existing patents or any new patents will be sufficient in scope or strength to provide
any meaningful protection or commercial advantage to us;
| |  | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------

| |  |  |  | any
patent or registered trademark owned by us will not be invalidated, circumvented or
challenged in the United States or foreign countries; or
| |  | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------

| |  |  |  | others
will not misappropriate our proprietary technologies or independently develop similar
technology, duplicate our products or design around any patent issued to us or other
intellectual property rights of ours.
| |  | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|In addition, we may
initiate claims or litigation against third parties for infringement of our
proprietary rights to establish the validity of our proprietary rights. This
litigation, whether or not it is resolved in our favor, could result in
significant expense to us and divert the efforts of our technical and management
personnel.


We may from time to
time be subject to claims of infringement of other parties proprietary
rights or to claims that our intellectual property rights are invalid, which
could result in significant expense and loss of intellectual property rights.


From time to time we have
received and may receive in the future claims that we are infringing third
parties intellectual property rights or claims that our trademarks,
patents or other intellectual property rights are invalid. The semiconductor
industry is characterized by uncertain and conflicting intellectual property
claims and vigorous protection and pursuit of these rights. The resolution of
any claims of this nature, with or without merit, could be time consuming,
result in costly litigation or cause product shipment delays. In the event of an
adverse ruling, we might be required to discontinue the use of certain
processes, cease the manufacture and sale of infringing products, expend
significant resources to develop non-infringing technology or enter into royalty
or licensing agreements. Royalty or licensing agreements, if required, might not
be available on terms acceptable to us or at all. The loss of access to any
intellectual property could harm our business.


Our failure to comply
with environmental laws and regulations could subject us to significant fines
and liabilities, and new laws and regulations or changes in regulatory
interpretation or enforcement could make compliance more difficult and costly.


We are subject to a variety
of federal, state, local and foreign governmental laws and regulations related
to the use, storage, discharge and disposal of toxic, volatile or otherwise
hazardous chemicals used in our manufacturing of semiconductor wafers. Our
failure to comply with present or future environmental laws and regulations
could result in fines being imposed on us, suspension of our production or a
cessation of our operations. Any failure by us to comply with these laws and
regulations could subject us to significant liabilities, thereby harming our
business and operating results. In addition, new environmental laws and
regulations or changes in regulatory interpretation and enforcement could render
compliance more difficult and costly and require significant capital
expenditures.


We may require
additional capital to fund our capital expenditures or our operations, however,
such capital may not be available.


The operation of our
fabrication facility requires the continued investment of substantial capital.
We intend to make capital investments to support business growth and achieve
manufacturing cost reductions and improved yields. We may need equity or debt
financing to fund further expansion of our wafer fabrication capacity or to fund
other projects. The timing and amount of these capital requirements cannot be
precisely determined at this time and will depend on a number of factors,
including demand for our products, our product mix, changes in semiconductor
industry conditions and competitive factors. Debt or equity financing may not be
available when needed or, if available, may not be available on terms
satisfactory to us.



20
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|
|

|We may engage in
future acquisitions, which could harm our profitability or put a strain on our
resources, or cause dilution to our stockholders.


We may make acquisitions of
complementary businesses, products or technologies. Integrating newly acquired
organizations, products or technologies into our business could be expensive,
time consuming and may not be successful. Future acquisitions could divert our
managements attention from other business concerns and expose our business
to unforeseen liabilities or risks associated with entering new markets. In
addition, we may lose key employees while integrating these new organizations.
Consequently, we may not be successful in integrating any acquired business,
products or technologies and may not achieve anticipated revenue and cost
benefits. In addition, future acquisitions could result in customer
dissatisfaction, performance problems with an acquired company, potentially
dilutive issuances of equity securities, the incurrence of debt, contingent
liabilities, amortization expenses related to goodwill and other intangible
assets or other unanticipated events or circumstances, any of which could harm
our business.


Our trading
price may be volatile.


The market for securities
of technology companies in general, and of companies in the semiconductor
industry including us in particular, has been highly volatile. It is likely that
the trading price of our common stock will continue to fluctuate in the future.
Factors affecting the trading price of our common stock include:
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  |  |  | responses
to fluctuations in our operating results;
| |  | - |  | ---------------------------------------------------

| |  |  |  | announcements
of technological innovations, new products or product enhancements, joint ventures or
significant agreements by us or our competitors;
| |  | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------

| |  |  |  | our
sales of common stock or other securities in the future;
| |  | - |  | ------------------------------------------------------------

| |  |  |  | general
conditions in the video, optical storage, communications and power management markets; and
| |  | - |  | --------------------------------------------------------------------------------------------------

| |  |  |  | changes
in financial estimates or recommendations by market analysts regarding us and our
competitors.
| |  | - |  | ------------------------------------------------------------------------------------------------------

|In addition, the stock
market has experienced substantial price and volume volatility that has
particularly affected the trading prices of equity securities of many technology
companies and that often has been unrelated or disproportionate to the operating
results of these companies. As a result, any broad market fluctuations may
adversely affect the trading price of our common stock.


Provisions of our
Certificate of Incorporation and Bylaws or Delaware law may delay or prevent a
change of control of Elantec or changes in our management and therefore, depress
the trading price of our common stock.



21
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|
|

|Delaware corporate law and
our certificate of incorporation and bylaws contain provisions that could delay,
defer or prevent a change in control of our company or changes in our management
that you may deem advantageous. These provisions could also limit the price that
investors might be willing to pay in the future for shares of our common stock.
These provisions:
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  |  |  | authorize
the issuance of blank checkpreferred stock, which is preferred stock that our
board of directors can create and issue without prior stockholder approval with rights
senior to those of common stock;
| |  | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  |  |  | limit
the ability of stockholders to call special meetings of stockholders;
| |  | - |  | ---------------------------------------------------------------------------

| |  |  |  | prohibit
cumulative voting in the election of directors, which would allow less than a majority of
stockholders to elect director candidates; and
| |  | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------

| |  |  |  | establish
advance notice requirements for submitting nominations for election to the board of
directors and for proposing matters that can be acted upon by stockholders at a meeting.
| |  | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|In addition, our board of
directors declared a dividend of one preferred share purchase right for each
share of our common stock outstanding, subject to limitations stated in the
stockholder rights plan. These rights may delay, defer or prevent a change of
control of our company.


Liquidity and
Capital Resources


Our primary sources of liquidity
are cash and cash equivalents and short-term investments of $174.5 million at
March 31, 2001.


Cash and cash equivalents
were $129.2 million at March 31, 2001, representing a decrease of $30.3 million
from September 30, 2000. This decrease was due to net investment in marketable
securities with average maturities of more than ninety days of $44.3 million,
purchase of treasury stock of $4.1 million, capital expenditures of
approximately $10.9 million primarily for new process development, assembly and
test facilities and payments on capital leases of approximately $0.7 million.
These outflows were offset by an increase in cash generated from operations of
$27.1 million and proceeds from the exercise of employee stock options and
employee stock purchase plan of $2.6 million.


Cash and cash equivalents
were $18.7 million at March 31, 2000, representing an increase of $1.2 million
from September 30, 1999. The increase is primarily a result of cash generated
from operations of $5.9 million, net sale of available for sale securities of
approximately $0.1 million and proceeds from exercise of employee stock options
of $1.2 million. These cash inflows were offset by capital expenditures of
approximately $5.4 million primarily for new process development, assembly and
test facilities and payments on capital leases of approximately $0.7 million.


Our management believes
that our current cash and equivalents, short-term investments and cash generated
from operations will satisfy our expected working capital and capital
expenditure requirements for the next twelve months.



22
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|
|

|Recent
Accounting Pronouncements


Revenue Recognition.
In December 1999, the Securities and Exchange Commission issued Staff Accounting
Bulletin (SAB) No. 101, Revenue Recognition, which provides guidance
on the recognition, presentation and disclosure of revenue in financial
statements filed with the SEC. SAB No. 101 outlines the basic criteria that must
be met in order to recognize revenue and provides guidance for disclosures
related to revenue recognition policies. We are required to adopt SAB No. 101,
as amended, in the fourth quarter of fiscal 2001. Although we have not fully
assessed the implications of SAB No. 101, our management currently does not
believe that adoption of this bulletin will have a material impact on our
consolidated financial position, results of operations or cash flows.

23
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|
|

## ITEM 3.  QUANTITATIVE AND
QUALITATIVE DISCLOSURES ABOUT MARKET RISK

|Interest Rate Sensitivity.
We maintain a short-term investment portfolio consisting mainly of income
securities with an average maturity of less than one year. These securities are
subject to interest rate risk and will fall in value if market interest rates
increase. If market interest rates were to increase immediately and uniformly by
10% from levels at March 31, 2001, the fair value of the approximately $45.3
million portfolio would decline by an immaterial amount.


At March 31, 2001, we had
approximately $2.2 million of outstanding obligations under capital lease
arrangements. As the lease payments associated with these arrangements do not
have variable interest rates, an increase of 10% in short-term interest rates
would not have a material impact on our net income or cash flows. We do not
hedge any interest rate exposures.


We have not undertaken any
specific actions to cover exposure to interest rate risk and we are not a party
to any interest rate risk management transactions. We did not purchase or hold
any derivative financial instruments for trading purposes.


Foreign Currency
Exchange Risk. The Japanese Yen and the British Pound Sterling are the
functional currency of our subsidiaries in Japan and the United Kingdom,
respectively. We denominate certain sales transactions in Japanese Yen. We have
established a foreign currency-hedging program, utilizing foreign currency
forward exchange contracts, or forward contracts of various durations to hedge
trade receivables denominated in Japanese Yen. Under this program, gains and
losses on the forward contracts mitigate the risk of material foreign currency
transaction gains and losses and offset increases or decreases in our foreign
currency receivables. We do not use forward contracts for trading purposes. We
believe that the use of foreign currency financial instruments should reduce the
risks that arise from conducting business in international markets.



We do not currently enter
into foreign exchange forward contracts to hedge balance sheet exposures of our
foreign subsidiaries and intercompany balances against future movements in
foreign exchange rates. However, we do maintain cash balances denominated in Yen
and the British Pound Sterling. If foreign exchange rates were to weaken against
the United States dollar immediately and uniformly by 10.0% from the exchange
rate at March 31, 2001, the fair value of these foreign currency amounts would
decline by an immaterial amount.


At the end of each fiscal
month, all foreign currency assets and liabilities are revalued using the month
end spot rate and the realized and unrealized gains and losses are recorded and
included in net income as a component of interest and other income, net.



24
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|
|

|PART II 
OTHER INFORMATION



ITEM 4.  SUBMISSION
OF MATTERS TO A VOTE OF SECURITY HOLDERS



The 2001 Annual Meeting of
Stockholders of the Company (Annual Stockholders Meeting) was held
on January 12, 2001, in Milpitas, California. At the Annual Stockholders Meeting
the stockholders elected members of the Companys Board of Directors,
adopted the 2001 Equity Incentive Plan with 1,050,000 shares of common stock
reserved for issuance, approved an increase in the Companys authorized
shares of common stock from 50,000,000 to 100,000,000 shares; and ratified the
Companys appointment of Deloitte & Touche LLP as independent auditors.


The vote for nominated
directors was as follows:
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Nominee | In Favor         |  | Withheld   | 
| | ------- | ---------------- |  | ---------- | 
| |         | Richard M. Beyer |  | 19,919,716 | 
| |         | Chuck K. Chan    |  | 19,918,836 | 
| |         | James V. Diller  |  | 19,918,796 | 
| |         | Alan V. King     |  | 19,917,996 | 
| |         | Umesh Padval     |  | 19,919,496 | 

|The results of voting for
approval of the adoption of the 2001 Equity Incentive Plan with 1,050,000 shares
of common stock reserved for issuance were:
|------------------------------------------------------------------------------------------------------------------------------------------------------

| | For |            | Against |           | Abstain |        | BrokerNon-Votes |  
| | --- | ---------- | ------- | --------- | ------- | ------ | --------------- | -
| |     | 11,642,538 |         | 8,358,903 |         | 21,149 |                 | 

|The results of voting for
approval of an amendment to the Certificate of Incorporation to increase the
number of authorized shares from 50,000,000 to 100,000,000 shares were:
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | For |            | Against |           | Abstain |       | BrokerNon-Votes |  
| | --- | ---------- | ------- | --------- | ------- | ----- | --------------- | -
| |     | 18,651,761 |         | 1,361,054 |         | 9,775 |                 | 

|The results of voting for
ratification of appointment of Deloitte & Touche LLP as independent auditors
for the Company for the next fiscal year were:
|-----------------------------------------------------------------------------------------------------------------------------------------------------

| | For |            | Against |       | Abstain |       | BrokerNon-Votes |  
| | --- | ---------- | ------- | ----- | ------- | ----- | --------------- | -
| |     | 20,011,946 |         | 7,145 |         | 3,499 |                 | 

|25
|--

|
|

|ITEM 6. 
EXHIBITS AND REPORTS ON FORM 8-K
|------------------------------------------

|(a) |  | The
following exhibits are filed as part of this report:
|--- |  | --------------------------------------------------------

| |  | Exhibit 10.17  |  | Form of Companys 2001 Equity Incentive Plan, as amended (incorporated by reference
from Exhibit 4.02 to the Companys Registration Statement on Form S-8 filed on February
26, 2001 (File No. 333-56206)).
| |  | --------------- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  | Exhibit 10.18
 |  | Executive Change in Control Severance Benefits Agreement for Richard M. Beyer,
President & CEO.
| |  | --------------- |  | -----------------------------------------------------------------------------------------------

| |  | Exhibit 10.19
 |  | Form of Executive Change in Control Severance Benefits Agreement for Executive Officers.
| |  | --------------- |  | ----------------------------------------------------------------------------------------

|(b) |  | Reports
on Form 8K:
|--- |  | --------------------

| |  | None. |  | 
| |  | ----- |  | 

|26
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|
|

|SIGNATURES



Pursuant
to the requirements of the Securities Exchange Act of 1934, as amended, the Registrant
has duly caused this report to be signed on its behalf by the undersigned thereunto duly
authorized.
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|                   |  | ELANTEC SEMICONDUCTOR, INC.(Registrant)                                                                                             
|------------------ |  | ------------------------------------------------------------------------------------------------------------------------------------
|Date: May 15, 2001 |  | By: /s/ Brian McDonald
Brian McDonaldChief Financial Officer (duly authorized officer and principal financial officer)

|27
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|
|

|EXHIBIT INDEX



Exhibit
|------------------------

|Exhibit 10.17 |  | Form of Companys 2001 Equity Incentive Plan, as amended (incorporated by reference
from Exhibit 4.02 to the Companys Registration Statement on Form S-8 filed on February
26, 2001 (File No. 333-56206)).
|------------- | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|Exhibit 10.18 |  | Executive Change in Control Severance Benefits Agreement for Richard M. Beyer,
President & CEO.
|------------- | - | -----------------------------------------------------------------------------------------------

|Exhibit 10.19 |  | Form of Executive Change in Control Severance Benefits Agreement for Executive
Officers.
|------------- | - | ----------------------------------------------------------------------------------------

|28
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