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                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549
                                    FORM 10-K

   (Mark One)
     __X__      Annual Report  Pursuant to Section 13 or 15(d) of the Securities
                Exchange  Act of 1934 for the Fiscal  Year Ended  September  30,
                1997.

                                       OR

     _____      Transition  Report  Pursuant  to  Section  13  or  15(d)  of the
                Securities  Exchange Act of 1934  for the Transition Period from
                _____________to ________________.

                         Commission File Number 0-26690

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                           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
                                                              
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           Securities registered pursuant to Section 12(b) of the Act:
          None                                         None
(Title of each class)                (Name of each exchange on which registered)

           Securities registered pursuant to Section 12(g) of the Act:
                     Common Stock, par value $0.01 per share
                                (Title of class)

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the  preceding 12 months (or for such  shorter  period that the  registrant  was
required  to file  such  reports),  and  (2) has  been  subject  to such  filing
requirements for the past 90 days.
                                 YES  __X__                    NO   _____

Indicate by check mark if disclosure of delinquent filer pursuant to Item 405 of
Regulation S-K is not contained herein,  and will not be contained,  to the best
of  registrant's  knowledge,  in  definitive  proxy  or  information  statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [ ]

Aggregate  market  value  of the  voting  stock  held by  non-affiliates  of the
registrant,  based upon the closing  sale price of the common  stock on November
21,  1997  as  reported  on  the  Nasdaq  National  Market:  $51,660,637.   This
calculation does not include a determination that persons are affiliates for any
other purpose.

Number of shares outstanding of the registrant's common stock as of November 21,
1997: 9,083,18

                                  -------------

Documents Incorporated By Reference

Part  III -  Portions  of the  registrant's  definitive  proxy  statement  to be
delivered to  stockholders in connection with the annual meeting of stockholders
to be held February 20, 1998.
                                                          
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<PAGE>


<TABLE>
                                           ELANTEC SEMICONDUCTOR, INC.
                                                    FORM 10-K
                                  For the Fiscal Year Ended September 30, 1997
                                                Table of Contents

<CAPTION>
                                                     PART I
                                                                                                            Page
                                                                                                            ----

<S>           <C>                                                                                             <C>
Item 1.       Business...........................................................................              3

Item 2.       Properties.........................................................................             13

Item 3.       Legal Proceedings..................................................................             14

Item 4.       Submission of Matters to a Vote of Security Holders................................             14

                                                      PART II

Item 5.       Market for Registrant's Common Equity and Related Stockholder Matters..............             14

Item 6.       Selected Financial Data............................................................             15

Item 7.       Management's Discussion and Analysis of Financial Condition and Results
              of Operations......................................................................             15

Item 7A.      Quantitative and Qualitative Disclosures about Market Risk.........................             21

Item 8.       Financial Statements and Supplementary Data........................................             21

Item 9.       Changes in and Disagreements with Accountants on Accounting and Financial
              Disclosure.........................................................................             21

                                                     PART III

Item 10.      Directors and Executive Officers of the Registrant.................................             22

Item 11.      Executive Compensation.............................................................             22

Item 12.      Security Ownership of Certain Beneficial Owners and Management.....................             22

Item 13.      Certain Relationships and Related Transactions.....................................             22

                                                      PART IV

Item 14.      Exhibits, Financial Statement Schedules and Reports on Form 8-K....................             23

Signatures    ...................................................................................             42

</TABLE>
                                                       2


<PAGE>



                                     PART I

         Except for the historical  information  contained herein, the following
discussion   contains   forward  looking   statements  that  involve  risks  and
uncertainties.  The Company's actual results could differ  materially from those
discussed  here.  Factors  that could cause or  contribute  to such  differences
include,  but are not limited to,  those  discussed  in this  section  under the
heading   entitled  "Risk  Factors",   as  well  as  in  the  section   entitled
"Management's  Discussion  and  Analysis of Financial  Condition  and Results of
Operations".

ITEM 1:  BUSINESS

         Elantec  Semiconductor,  Inc.  ("Elantec"  or the  "Company")  designs,
manufactures and markets high performance  analog integrated  circuits primarily
for the  video/multimedia,  data processing,  instrumentation and communications
markets. The Company targets high growth commercial markets in which advances in
digital  technology are driving increasing demand for high speed, high precision
and low power consumption analog circuits.  Electronic systems  manufacturers in
these markets  typically have  requirements  for analog circuits with particular
precision,  linearity, speed, power and signal amplification  capabilities.  The
Company  addresses these  requirements with standard products that serve several
markets  or  application  specific  standard  products  ("ASSPs")  designed  for
specific markets and applications. By offering both standard products and ASSPs,
the Company  seeks to broaden its customer  base with  standard  products and to
expand  product sales to new and existing  customers  with ASSPs that meet their
specific requirements.  The Company offers more than 150 high performance analog
products, such as amplifiers,  drivers,  faders,  transceivers and multiplexers,
most of which are available in multiple packaging  configurations.  The majority
of  the  Company's   products  are   manufactured  at  the  Company's   internal
manufacturing facility in Milpitas, California.

Industry Overview

         Analog circuits operate over a wide range of voltages, which limits the
minimum  dimensions  that  can  be  used  in the  device  structures  of  analog
integrated  circuits.  Thus,  the  development of successful  analog  integrated
circuits is generally more dependent on innovative  design within  technological
constraints  rather than on achieving  small feature  sizes and high  densities.
Typically,   designers  of  analog  circuits  must  take  into  account  complex
interrelationships between the manufacturing process, the physical layout of the
circuit  elements  and  the  packaging  of the end  product,  all of  which  can
significantly affect performance. Moreover, the high performance characteristics
required  by  new  and  emerging   applications   for  analog  circuits  involve
increasingly  advanced  designs,  which will in turn require more skilled analog
designers,  innovative design strategies and rigorous design methodologies.  The
number of design  engineers who have the training,  creativity and experience to
design complex analog circuits is very limited, and the available computer-aided
design  ("CAD") tools for analog circuit design  typically  require  substantial
customization  by the user in order to  provide  adequate  utility  for  complex
analog circuit design.

         In order to meet the needs of electronic systems manufacturers,  analog
integrated  circuit  companies  offer  a wide  range  of both  high  performance
standard  products and market  specific  ASSPs.  Standard  products can serve as
basic  building  blocks to assist  system  designers in bringing new products to
market rapidly. ASSPs enhance performance and combine functions to reduce system
size and cost as end-user  needs become  better  defined and system unit volumes
increase.  The  critical  point of  competition  for analog  integrated  circuit
companies is at the "design-in" stage when the system designer evaluates various
alternative components for implementing the system architecture.  Companies that
offer  families of analog  standard  products and ASSPs that perform a number of
the functions required by the systems design will typically have an advantage at
the design-in  stage because  systems  designers often prefer to choose products
from the same  vendor  once the  vendor  has been  qualified  as a  producer  of
reliable products.

                                       3

<PAGE>

         The  Company  believes  that the  pervasive  use of digital  integrated
circuits in electronic  systems and the rapid advances in digital technology are
driving increasing demand for high performance analog products,  particularly in
the  video/multimedia,   data  processing,  instrumentation  and  communications
markets.

Product Markets and Applications

         Elantec targets four high growth  commercial  markets where it believes
there is an  increasing  demand for  analog  solutions:  video/multimedia,  data
processing,  instrumentation and communications.  In each of its target markets,
the Company offers a family of standard  products and ASSPs that are designed to
be  used  as  building  blocks  by  addressing  a  number  of  common  component
requirements,  thereby providing more effective solutions for electronic systems
designers.  Most of the Company's standard products are used in more than one of
these markets, while in general each ASSP is used in only one specific market.

         The following table sets forth examples of typical  applications of the
Company's  products  in  each  of  the  four  target  commercial  markets  and a
representative application:

      ----------------------------------------------------------------------
                 Market                      Typical Applications
      ----------------------------------------------------------------------
      Video/Multimedia              Overhead Displays
                                    Set Top Converters
                                    Special Effects Generators
                                    Switchers/Routers
                                    Video Cameras
                                    Video Distribution Networks
                                    Video Signal Processing
                                    Workstations
      ----------------------------------------------------------------------
      Data Processing               Copiers
                                    Document Scanners
                                    Optical Storage
                                    Personal Computers
                                    Power Supplies
      ----------------------------------------------------------------------
      Instrumentation               Analyzers
                                    Automatic Testers
                                    Measuring Instruments
                                    Medical Instrumentation
      ----------------------------------------------------------------------
      Communications                ADSL Transceivers
                                    HDSL Transceivers
                                    Video Phones
                                    Video Teleconferencing
      ----------------------------------------------------------------------

Primary Markets

         Video/Multimedia. Video images are increasingly being incorporated into
electronic  applications such as multimedia  computing and communications.  This
trend is creating  increasing  demand for high speed  amplifiers  and  specialty
analog  circuits for the processing  and display of video  signals.  The Company
focuses on several segments of the video/multimedia  market, including displays,
set top  converters,  special  effects  generators,  studio  equipment and video
distribution networks.

                                       4

<PAGE>


         Data  Processing.  The  growth  of  data  processing,  particularly  in
personal  computers,  has been driven by advances in digital  technology,  which
have in turn created new applications for analog functions.  In this market, the
Company's products include  amplifiers for document scanners,  copiers and power
management circuits targeted for new generations of microprocessors that operate
at low voltages. An emerging area targeted by the Company is the optical storage
market. The Company is currently providing products that control the laser diode
driver for optical  disk  drives and plans to produce  similar  products  for CD
read/write and DVD read/write applications.

         Instrumentation.  The detection and  measurement of analog  information
such as light, sound, temperature, pressure and speed in industrial, medical and
other measurement  systems have been a traditional focus of analog circuits.  As
systems grow more complex and information is processed at higher rates, there is
a  concomitant  requirement  for higher  speed  analog  circuits  to process the
information  in analog  format.  The Company  supplies  products  for high speed
instrumentation,   automatic  testers  and  medical  instrumentation,   such  as
ultrasound scanners.

         Communications.  The  convergence of  communications  and computers has
also created  opportunities for high performance  analog circuits.  For example,
electronic  communications  through  telephone lines  increasingly  include both
digital and analog information such as audio, video and data and require digital
and analog  circuits to transmit and process them.  In this market,  the Company
supplies  transceivers  and  high  speed  amplifiers  for  Asymmetrical  Digital
Subscriber  Line  ("ADSL") and High Bit Rate Digital  Subscriber  Line  ("HDSL")
techniques  for   increasing  the  rate  at  which  data  is  transmitted   over
twisted-pair wires such as conventional  telephone lines, which is important for
emerging communications applications related to Internet access.

Other Markets

         In addition to its primary  markets,  the Company provides its products
to electronic systems manufacturers in the military and automotive markets.

         Military.  The Company has historically  offered products for a variety
of military  applications  and continues to offer  certain  products to meet the
needs of  customers  of these  products.  However,  on July 1, 1997 the  Company
announced that it would  discontinue its military hybrid products.  This product
line  accounted  for  8.9%  and  7.9% of  product  revenues  in 1996  and  1997,
respectively.  Orders for these  discontinued  products will be accepted through
mid 1998 with last shipments from the factory expected through Q1 1999.

         Automotive.  In February  1993,  the Company  entered into an exclusive
agreement with Aisin Seiki Co., Ltd.  ("Aisin"),  a  manufacturer  of automotive
parts in Japan and a member of the Toyota group of companies. Under the terms of
the  agreement,  Elantec  has  licensed  to Aisin  certain  proprietary  Elantec
technology  to  design  and  manufacture  analog  integrated  circuits  for  the
automotive  market, in return for certain license fees and royalty payments upon
the sale of  products  derived  therefrom.  Under  the  agreement,  the  Company
developed and manufactured  certain  automotive  products for Aisin. The current
agreement continues through February 1998 and provides for payment to Elantec of
a total of $7,000,000 in license fees of which $6,750,000 cash has been received
through 1997. The Company does not expect the license agreement or manufacturing
relationship to extend beyond February 1998.

Products

         The Company offers more than 150 high performance analog products, most
of which are available in multiple packaging configurations.

         Standard  Products.  Amplifiers  and  buffers  are used to  amplify  or
reproduce  analog  electrical   signals  (either  voltage  or  current)  without
distortion.  High power amplifiers  provide a large electrical output current or
voltage and are particularly  useful in video  transmission  and  communications

                                       5

<PAGE>


applications.  High speed  amplifiers and buffers are designed  specifically  to
process high frequency  signals such as video  information  without  distortion.
Comparators are circuits that accurately  measure an electrical  signal level in
comparison  with a predetermined  value and indicate the result.  Mosfet drivers
are    circuits    that    control   the    switching    functions   of   mosfet
(metal-oxide-semiconductor  field effect  transistor)  power transistors used in
power control applications.

         Application Specific Standard Products. For the video/multimedia market
the  Company  offers a variety  of ASSPs that can be used as  standard  building
blocks to provide  solutions to the video system  designer for many common video
circuit  designs.  Sync separators are timing circuits that control the position
and stability of the video image on a video display.  D.C.  restoration circuits
restore to the correct  voltage level a video signal that has been amplified and
processed  in order to ensure  accurate  transfer  of video  information.  Video
multiplexers allow multiple video inputs to be connected to a single output in a
selected manner. Faders combine separate signals in different ratios for special
effects  such as the fading of one video image into  another.  Power  management
circuits  effeciently  convert  supply  voltages from 5 volts to a lower voltage
required by modern microprocessors.  Laser diode drivers control the performance
of the laser diode used in the read/write mode in optical storage pick-up heads.
In the  instrumentation  market, pin drivers and receivers are used in automatic
test  equipment to generate  and detect  electrical  signals to test  electronic
components. In the communications market,  transceivers are used to transmit and
receive high speed analog signals  containing  encoded digital  information over
twisted pair telephone lines.

Sales and Distribution

         The Company sells its products  either  directly to customers  with the
assistance  of  independent  sales   representatives,   or  indirectly   through
independent  distributors.  The Company's  direct sales force  consists of sales
managers  and  field  application   engineers  who  support   customers,   sales
representatives  and  distributors in each major  geographic  market.  The sales
staff and field  application  engineers are located at the  Company's  Milpitas,
California headquarters and in field sales offices in Massachusetts and England.
The Company's sales staff and field application engineers also manage, train and
support the Company's network of distributors.

         In North America, the Company sells its products through 22 independent
sales  representative  organizations  having a total of more than 35 offices and
five distributors  having a total of more than 90 locations.  These distributors
are  entitled to price  rebates on unsold  inventory  if the Company  lowers the
prices of its products.  In addition, on a semi-annual basis, these distributors
are permitted to return for credit,  against  purchases of an equivalent  dollar
value of products,  up to 5% of their total  product  purchases  during the most
recent six-month period.

         In fiscal 1995, sales to Marshall  Industries and Insight  Electronics,
Inc.  represented  approximately  13% and  10% of the  Company's  net  revenues,
respectively.   In  1996,  no  single  domestic  representative  or  distributor
accounted for sales in excess of 10% of the  Company's  net revenues.  In fiscal
1997, sales to Insight Electronics,  Inc.  represented  approximately 12% of the
company's  net  revenues.   See  Note  1  of  Notes  to  Consolidated  Financial
Statements.

         Outside North America, the Company sells its products through a network
of   international   distributors.    Such   international   sales   represented
approximately 32%, 48% and 54% of the Company's net product revenues,  excluding
Aisin contract revenues, in fiscal 1995, 1996, and 1997, respectively.

         In fiscal 1995, sales to Internix,  Inc. represented  approximately 11%
of the  Company's net revenues.  During  fiscal 1996,  approximately  15% of the
Company's net revenues were to Microtek International,  Inc. in Japan. In fiscal
1997,  approximately  14%  of  the  Company's  net  revenues  were  to  Microtek
International,  Inc. On a  semi-annual  basis,  international  distributors  are
permitted to return for credit,  against purchases of an equivalent dollar value
of products,  up to 5% of their total product  purchases  during the most recent
six-month period.

                                       6

<PAGE>


         In connection with its  international  sales, the Company is subject to
the normal risks of  conducting  business  internationally.  These risks include
unexpected  changes  in  regulatory  requirements,  changes  in  legislation  or
regulations relating to the import or export of semiconductor  products,  delays
resulting from difficulty in obtaining  export licenses for certain  technology,
tariffs,  quotas  and  other  barriers  and  restrictions,  and the  burdens  of
complying with a variety of foreign laws. The Company is also subject to general
geopolitical  risks,  such as political and economic  instability and changes in
diplomatic  and  trade  relationships,  in  connection  with  its  international
operations.  Because sales of the Company's  products are  denominated in United
States  dollars,  fluctuations  in the value of the dollar  could  increase  the
prices in local currencies of the Company's products in foreign markets and make
the Company's products relatively more expensive than competitors' products that
are   denominated  in  local   currencies.   Additionally,   currency   exchange
fluctuations  could  reduce  the cost of  products  from the  Company's  foreign
competitors.

         A substantial  portion of the Company's  revenues are realized  through
independent  distributors  and independent  sales  representatives  that are not
under the direct control of the Company.  These independent sales  organizations
generally  carry the product lines of a number of companies,  are not subject to
any minimum  purchase  requirements  and can  discontinue  selling the Company's
products at any time.  Accordingly,  the Company  must compete for the focus and
sales efforts of its  distributors  and independent  sales  representatives.  In
addition,  the Company's  distributors  are permitted to return to the Company a
portion of the  products  purchased  by them,  and the  Company's  business  and
results of operations  could be materially  adversely  affected if the amount of
returns  exceeds the  Company's  reserves.  There can be no  assurance  that the
Company will be able to retain the loyalty and attention of its distributors and
representatives.  The  loss  of one or  more of the  Company's  distributors  or
representatives  could have a material adverse effect on the Company's  business
and results of operations.

Backlog

         At September 30, 1997, the Company's  product backlog was approximately
$12.7  million,  compared to $9.7  million at September  30,  1996.  The Company
includes all orders  scheduled  for delivery  within six months in backlog.  The
Company's business, and to a large extent the entire semiconductor  industry, is
characterized  by  short-term  orders and shipment  schedules.  These orders can
generally  be  cancelled  or  rescheduled  without  significant  penalty  to the
customers. As a result, the quantities of the Company's products to be delivered
and their  delivery  schedules  are  frequently  revised by customers to reflect
changes in their  needs.  Since  backlog can be cancelled  or  rescheduled,  the
Company's backlog at any time is not necessarily indicative of future revenues.

Design Methodology and Process Technology

         Design   Methodology.   The  Company's   designers  apply  a  rigorous,
standardized  design  methodology  intended to accelerate  the  development  and
introduction  of new  products,  maintain  consistent  quality  and  promote the
development and sharing of design  expertise among the engineering  staff.  Each
designer  utilizes a common set of customized CAD tools on a network of computer
workstations  and applies  standardized  design rules in order to facilitate the
integration of different designs or design elements. The Company promotes design
integrity and sharing of expertise by requiring each designer to subject designs
to a series of peer reviews and simulation and  verification  tests at different
stages of design  development.  The Company has developed  proprietary  computer
models of circuit  elements to assist in the  modeling,  simulation,  layout and
verification of circuit designs.

         The Company's approach to new product development is driven by specific
market   requirements   in  addition  to  advances  in  technology   and  design
methodology.  The Company has adopted a  systematic  approach of using its field
application  engineers to identify market opportunities for new high performance
products,   contacting  other  customers  to  determine   whether  there  is  an
opportunity  to develop  products  that will be  applicable  to a broad range of
customers in the  Company's  target  markets and  consulting  with the Company's
analog designers and marketing personnel to define ASSPs for the target markets.

                                       7

<PAGE>


         Process Technology. The Company uses a variety of semiconductor process
technologies  for its products in order to meet the particular  requirements  of
different customers and applications. The Company's process technologies include
dielectric  isolation and junction  isolation  complementary  bipolar,  junction
isolation  bipolar,  and CMOS  technologies.  In addition,  the Company utilizes
other  manufacturing  technologies  to produce  hybrid  semiconductor  products,
primarily for military applications.

         Complementary  Bipolar  Technology.   The  Company  uses  complementary
bipolar  technologies  primarily  for  high  speed  applications  such as  video
amplifiers and video ASSPs.  Complementary bipolar technology uses two different
types of  transistors  (referred  to as "pnp" and "npn") to  process  high speed
analog  signals  efficiently  in either  positive  or negative  polarity,  which
substantially  simplifies  the design  process by  allowing  symmetrical  design
architectures,  permits  improved speed and requires less power. For high speed,
high  voltage  applications,  which  constitute  a  majority  of  the  Company's
applications,   Elantec  uses   dielectric   isolation   complementary   bipolar
technology.  For low voltage, high speed applications such as certain amplifiers
and video  ASSPs,  the Company uses  junction  isolation  complementary  bipolar
technologies provided by an outside foundry.

         Dielectric   Isolation   Technology.    Dielectric   isolation   is   a
silicon-on-insulator (SOI) manufacturing technique that uses insulating oxide to
isolate  transistors  from  each  other  electrically.  This  technique  has the
inherent  advantages  of low  electrical  capacitance,  which  allows high speed
signal processing and minimizes  cross-talk or unwanted  interference from other
signals,  and higher voltage operation,  which is useful for instrumentation and
many other analog applications.

         Complementary Metal-Oxide-Semiconductor Technology. Since 1992, Elantec
has  pursued  a  strategy  to  provide  a wider  range of  products  using  CMOS
technology.  CMOS  technology  enables the design of  circuits  with lower power
consumption than bipolar circuits,  but with relatively lower speed, and is well
suited for analog  switching  and mixed  signal  applications.  The Company uses
several third-party foundries to supply wafers for its CMOS products.

         The markets  for the  Company's  products  are  characterized  by rapid
technological  change and  frequent new product  introductions.  There can be no
assurance  that  the  Company's  analog  products  or the  process  technologies
utilized  by the  Company  will not become  obsolete.  In  addition,  as digital
integrated  circuits  have  become  faster  and their  processing  capacity  has
expanded,  digital circuits have  increasingly been used to perform functions in
electronic  systems that were  previously  performed  with analog  technologies.
There can be no assurance that further advances in digital processing power will
not eventually  supplant analog  technologies in those new  applications,  which
could have a material  adverse  effect on the Company's  business and results of
operations.

Manufacturing

         The  Company  manufactures  semiconductor  wafers  for  its  dielectric
isolation  complementary  bipolar  products in its own  facility to optimize the
performance  of these  products  and  maintain  a high  degree of  manufacturing
control.  The Company also uses a third-party  foundry that  provides  partially
processed  dielectric  isolation  complementary  bipolar  wafers. The  Company's
manufacturing  facilities  in  Milpitas,  California  include a four-inch  wafer
fabrication  facility and a 3,500 square foot clean room.  The Company  broadens
its  manufacturing  capabilities  by  using  third-party  foundries  to  produce
junction  isolation  bipolar  wafers  and CMOS  wafers.  The use of  third-party
foundries  enables the  Company to focus on its design  strengths  and  minimize
fixed  costs  and  capital   expenditures  while  providing  access  to  diverse
manufacturing technologies without bearing the full risk of obsolescence.

         Sales of dieletric isolation products represented  approximately 74% of
the Company's net product  revenues in fiscal 1996 and 67% in 1997.  The process
for manufacturing  dielectrically  isolated  integrated circuits is more complex
than processes for junction isolation bipolar  manufacturing,  and the number of
foundries   that  have  the  capability  to  produce   dielectrically   isolated
semiconductor wafers is limited. The Company has been informed that its existing
dielectric isolation foundry will discontinue  supplying this technology in late
1998.  The  company  is  currently  developing  an  alternative  source for this
technology.

                                       8

<PAGE>


The  loss of this  foundry  prior to  locating  a second  source  or  developing
alternate  technology  would have a  material  adverse  effect on the  Company's
business and results of operations.

         The   Company   uses   different   third-party   foundries   to  supply
semiconductor wafers for its complementary bipolar and its CMOS products.  Sales
of these  products  collectively  represented  approximately  16% and 23% of the
Company's net product revenues in fiscal 1996 and fiscal 1997, respectively. The
Company currently uses a single source of wafers for its  complementary  bipolar
process,  and has two sources for CMOS processes.  The Company  believes that it
has  had  good  long-term   relationships   with  its  foundries  and  that  its
relationships  with its foundries are stable.  However,  any interruption in the
supply of wafers from the Company's  foundries  would have a negative  impact on
the Company's business and results of operations until an alternate source could
be established.  Although the Company believes that it could develop alternative
sources of supply,  there can be no assurance  that the Company could do so in a
timely manner to prevent such a material adverse impact.

         The  Company's  commercial  products  are  assembled  by a  variety  of
subcontractors  in Asia. These  subcontractors  may also be subject to capacity,
yield and quality problems or have difficulty  obtaining critical raw materials,
which could result in disruptions in the supply of assembled products. Any delay
or  disruption  in the  supply  of  assembled  products,  whether  by  reason of
manufacturing or assembly delays or other problems,  might result in the loss of
customers,  limitations or reductions in the Company's revenue or other material
adverse effects on the Company's business and results of operations.

         The  Company  tests  each  integrated  circuit  or "die" on the  wafers
produced  by the Company  and its  foundries  for  compliance  with  performance
specifications  before  assembly.  Following  assembly,  the packaged  units are
returned to the Company for final  testing and  inspection  prior to shipment to
customers.  The Company then performs  extensive  testing on all circuits  using
advanced  automated test equipment to ensure that the circuits satisfy specified
performance   levels.   The  Company   manufactures  its  military  products  in
conformance with the stringent quality and reliability  requirements of Military
Standard 883, at its military-certified facility in Milpitas, California.

         The  Company   anticipates   that  it  will  meet  its  future   growth
requirements by expanding its  manufacturing  capability at its present location
in  Milpitas,  California.  These  plans  include  expanding  wafer  fabrication
capability  for dielectric  isolation and bonded wafers.  On October 1, 1996 the
Company signed a lease for a total of approximately  24,000 square feet of space
located adjacent to the Milpitas manufacturing facility and moved administrative
functions to this new facility to facilitate  the  manufacturing  expansion.  In
1997 the Company  completed  an expansion of its test  facility,  expanding  its
analog and mixed signal testing capability.

Environmental Laws

         The  Company  is  subject  to a  variety  of  federal,  state and local
governmental regulations related to the use, storage,  discharge and disposal of
toxic,  volatile or  otherwise  hazardous  chemicals  used in its  manufacturing
process.  Although the Company believes that its activities conform to presently
applicable  environmental  regulations,  the failure to comply  with  present or
future  regulations  could  result  in  fines  being  imposed  on  the  Company,
suspension of production or a cessation of operations. There can be no assurance
that regulatory  changes or changes in regulatory  interpretation or enforcement
will not render compliance more difficult and costly. Any failure of the Company
to control  the use of, or  adequately  restrict  the  discharge  of,  hazardous
substances, or otherwise comply with environmental regulations, could subject it
to significant future liabilities.

Research and Development

         The Company's  ability to compete depends,  in part, upon its continued
introduction of technologically innovative products on a timely basis. Elantec's
product  development  strategy  emphasizes a broad line of products to address a
diversity of customer  applications.  The  Company's  research  and  development
efforts are directed  primarily at designing  and  introducing  new products and

                                       9

<PAGE>


technologies  and, to a lesser  extent,  developing  new  testing and  packaging
techniques.  The Company continually upgrades its internal technology while also
working  with  foundries  to develop new  technologies  for new  generations  of
products.  In  addition,  the  Company  continually  refines  its  manufacturing
practices and technology to improve the yields of its products.

         The  Company  has  assembled  a team of highly  skilled  analog  design
engineers.  As  performance  demands have  increased  the  complexity  of analog
circuits,  the design and  development  process has become a  multi-disciplinary
effort, requiring expertise ranging from detailed knowledge of device physics to
expertise in device  placement and packaging to avoid  unwanted  cross-talk  and
signal   interference.   The  Company   supports  its  key  designers   with  an
infrastructure  of device  physicists,  product engineers and test engineers who
perform various  support  functions and allow the designers to focus on the core
elements of the design.

         As part of its future bipolar product development strategy, the Company
is  developing a form of silicon on insulator  (SOI)  technology  called  bonded
wafers.  Bonded wafer  technology uses two flat oxidized silicon wafers that are
thermally  bonded to one another,  after which one wafer is precisely ground and
polished to form a thin silicon layer supported by the insulating  oxide and the
remaining  silicon  wafer.  This  thin  silicon  layer is  suitable  for  making
individual elements of the semiconductor circuits that are electrically isolated
from each  other by  insulating  oxide to  provide  performance  characteristics
superior  to  those  achievable  with  other  technologies  such  as  dielectric
isolation and junction isolation. The Company believes that, if successful,  the
bonded wafer  technology  could  provide many of the same benefits as dielectric
isolation but with lower wafer cost and improved performance due to higher speed
and smaller  device size.  This  technology  could  provide the Company with the
capability to provide products with higher levels of integration and performance
to the Company's  target  markets.  However,  there can be no assurance that the
development of the bonded wafer technology can be successfully accomplished in a
timely  manner  or  that it will  provide  the  desired  improvements  over  the
Company's current technology or that the bonded wafer technology being developed
by  the  Company  will  not  be  supplanted  by  alternative  new  technologies.
Significant  delays  in the  development  of this  bonded  wafer  technology  or
manufacturing  problems  associated  with  transferring  the  Company's  current
product  line to this  technology  could have a material  adverse  effect on the
Company's  business  and  results  of  operations.  In  addition,  delays in the
development  of this  technology  could  materially  and  adversely  affect  the
Company's new product development program.

         In fiscal  1995,  fiscal 1996 and fiscal 1997,  the Company  spent $4.8
million,  $6.4  million  and  $6.2  million,   respectively,   on  research  and
development.  The Company  expects  that it will  continue to spend  substantial
funds on research and development activities.

Patents and Licenses

         The Company seeks to protect its proprietary technology through patents
and trade  secret  protection.  Currently,  the Company  holds 32 United  States
patents and three foreign  patents,  expiring on various dates between the years
2005 and 2014 and has  additional  pending  United States  patent  applications,
although  there can be no  assurance  that any  patents  will  result from these
applications.  While the Company intends to continue to seek patent coverage for
its  products  and  manufacturing  technology  where  appropriate,  the  Company
believes that its success  depends more heavily on the  technical  expertise and
innovative abilities of its personnel than on its patent position.  Accordingly,
the Company also relies on trade secrets and confidential technological know-how
in the conduct of its  business.  There can be no assurance  that the  Company's
patents or  applicable  trade secret laws provide  adequate  protection  for the
Company's  technology  against  competitors  who may  develop or patent  similar
technology or reverse engineer the Company's products. In addition,  the laws of
certain  territories  in which the  Company's  products are or may be developed,
manufactured or sold,  including Asia, Europe and Latin America, may not protect
the Company's  products and  intellectual  property rights to the same extent as
the laws of the United States.

                                       10

<PAGE>


         The  Company  has  not  been  involved  in  any  intellectual  property
litigation to date.  However,  the  semiconductor  industry is  characterized by
frequent  litigation  regarding patent and other  intellectual  property rights.
There can be no assurance  that third parties will not assert claims against the
Company  with  respect to existing or future  products or  technologies.  In the
event of litigation to determine the validity of any  third-party  claims,  such
litigation,  whether or not determined in favor of the Company,  could result in
significant  expense to the  Company  and divert  the  efforts of the  Company's
technical and management  personnel from  productive  tasks.  In the event of an
adverse ruling in such litigation,  the Company might be required to discontinue
the use of certain processes, cease the manufacture,  use and sale of infringing
products,  expend significant resources to develop non-infringing  technology or
obtain  licenses to the  infringing  technology.  There can be no assurance that
licenses  will be available on  responsible  commercial  terms,  or at all, with
respect to disputed third-party  technology.  In the event of a successful claim
against the Company and the Company's failure to develop or license a substitute
technology  at  a  reasonable  cost,  the  Company's  business  and  results  of
operations would be materially and adversely affected.

         The Company has licensed to Aisin certain of the Company's  proprietary
technology  to design and  manufacture  analog  semiconductor  products  for the
automotive market. See "Product Markets and Applications -- Other Markets."

Competition

         The   semiconductor   industry   is   intensely   competitive   and  is
characterized  by rapid  technological  change,  product  obsolescence and price
erosion  in  many  markets.   The  analog  integrated  circuit  segment  of  the
semiconductor   industry  is  also   intensely   competitive,   and  many  major
semiconductor  companies  presently  compete or could compete in some segment of
the Company's  market.  Most of these  competitors  have  substantially  greater
financial, technical, manufacturing, marketing, distribution and other resources
and broader  product  lines than Elantec.  The Company also competes  indirectly
with the in-house design staffs of certain of its customers, which often provide
alternative solutions to individual analog systems  requirements.  The Company's
current  primary  competitors  are  Analog  Devices,   Inc.,  Linear  Technology
Corporation,   Maxim  Integrated  Products,  Inc.,  and  National  Semiconductor
Corporation.   As  the  Company  expands  its  product  line,  it  expects  that
competition  will increase with these and other domestic and foreign  companies.
Although  foreign  companies  have  not   traditionally   focused  on  the  high
performance analog market,  many foreign companies,  particularly  certain Asian
companies, have the financial and other resources to participate successfully in
these  markets,  and  there  can be no  assurance  that  they  will  not  become
formidable competitors in the future.

         The Company believes that its ability to compete  successfully  depends
on a number of factors,  including the breadth of its product line,  the ability
to develop and  introduce  new products  rapidly,  product  innovation,  product
quality and  reliability,  product  performance,  price,  technical  service and
support,  adequacy  of  manufacturing  capacity  and  sources of raw  materials,
efficiency of production,  delivery capabilities and protection of the Company's
products by  intellectual  property  laws.  The Company  believes  that  product
innovation,  quality,  reliability,  performance  and the  ability to  introduce
products rapidly are more important competitive factors than price in its target
markets  because  the  Company  competes  primarily  at the  stage  when  system
manufacturers design analog products into their systems. At the design-in stage,
there is less price competition,  particularly where there is only one source of
an application  specific  product.  The Company  believes that, by virtue of its
analog expertise and rigorous design  methodology,  it competes favorably in the
areas of rapid product introduction,  product innovation,  quality,  reliability
and  performance,  but it may  be at a  disadvantage  in  comparison  to  larger
companies with broader product lines,  greater technical and financial resources
and greater service and support capabilities. There can be no assurance that the
Company will be able to compete successfully in the future.

                                       11

<PAGE>


Employees

         At September  30, 1997,  the Company had 161 full time  employees.  The
Company believes that its future success will depend, in part, on its ability to
attract and retain  qualified  technical and  manufacturing  personnel.  This is
particularly  important in the areas of product  design and  development,  where
competition for skilled personnel, particularly those with analog experience, is
intense.  None of the Company's employees is subject to a collective  bargaining
agreement,  and the Company has never  experienced a work stoppage.  The Company
believes that its relations with its employees are good.

Executive Officers and Directors of the Company

         The executive officers and directors of the Company are as follows:

          Name                               Age    Positions
          ----                               ---    ---------
          David O'Brien                      58     President, Chief Executive
                                                    Officer, Chief Financial
                                                    Officer and Director

          Richard E. Corbin                  62     Vice President of Technology

          Ralph S. Granchelli, Jr.           42     Vice President of Marketing

          Donald T. Valentine (1)            65     Director and Chairman of the
                                                    Board

          Chuck K. Chan (2)                  47     Director

          James V. Diller (2)                62     Director

          B. Yeshwant Kamath (1)             49     Director

----------------

(1)  Member of the Audit Committee.
(2)  Member of the Compensation Committee.

         David O'Brien has served as President,  Chief  Executive  Officer and a
director of the Company  since  September  1987,  and served as Chief  Financial
Officer from August 1997 to present and previously  from August 1995 to December
1995.  From 1982 to September  1987, he served as President and Chief  Executive
Officer  of   Precision   Monolithics,   Inc.   ("Precision   Monolithics"),   a
semiconductor  company.  From 1979 to 1982, he was Vice President of Engineering
and Senior Vice  President of Operations at Precision  Monolithics.  Previously,
Dr.  O'Brien was employed by  Fairchild  Semiconductor  Corporation  ("Fairchild
Semiconductor")  from  1973 to  1979,  where he  served  in  several  managerial
positions in engineering  and  operations.  Dr.  O'Brien holds a B.S.  degree in
physics and M.S. and Ph.D. degrees in electrical engineering from the University
of Swansea,  United  Kingdom,  and a M.B.A.  degree from the University of Santa
Clara, California.

          Richard E. Corbin has served as Vice  President  of  Technology  since
June 1997 and Vice President of Bipolar Design  Engineering  from September 1992
to May 1997.  From October 1987 to August 1992, he served as the Company's  Vice
President of Operations. From 1981 to 1987, Mr. Corbin was employed at Precision
Monolithics,  in a variety of management  positions  including  Director of CMOS
Operations and Vice President of New Product Development. From 1976 to 1980, Mr.
Corbin held  various  positions at Fairchild  Semiconductor  including  Division
Operations  Manager of CMOS. Mr. Corbin holds a B.S.  degree in mathematics  and
physics from Arizona State University.

         Ralph S.  Granchelli,  Jr. has served as Vice  President  of  Marketing
since  September  1994 and Vice  President of Marketing and Sales of the Company
from  November  1990 to August 1994.  From 1985 to October 1990 he served as the
Company's  Vice  President  of Sales.  From  1983 to 1985,  Mr.  Granchelli  was
National Sales Manager of Teledyne  Semiconductor,  Inc., a division of Teledyne
Industries,  Inc.  Previously,  Mr.  Granchelli held senior sales positions with
Micro Power Systems,  Inc.,

                                       12

<PAGE>

an analog  semiconductor  company,  and the Advanced  Analog Division of Intech,
Inc., an analog hybrid  semiconductor  company,  and an engineering  position at
Teledyne Philbrick, a division of Teledyne Industries, Inc. Mr. Granchelli holds
an A.S. degree in Electronics Engineering from Wentworth Institute of Technology
and attended the University of  Massachusetts,  Amherst from 1976 to 1979, where
he studied electrical engineering and marketing.

         Donald T.  Valentine  has been a director of the Company  since January
1992 and  Chairman  of the Board  since March  1994.  Mr.  Valentine  has been a
general partner of Sequoia  Capital,  a venture capital firm,  since 1974. He is
also Chairman of the Board of C-Cube  Microsystems  Inc., a semiconductor  video
compression  company,  Vice Chairman of Cisco Systems,  Inc., an internetworking
communications   company,  and  Chairman  of  the  Board  of  Network  Appliance
Corporation, a company in the network file server business.

         Chuck K. Chan has been a director of the Company since January 1992 and
also  served as a  director  from 1983 to 1984.  Dr.  Chan has been a partner in
Alpine Technology  Ventures, a venture capital firm, since December 1994 and was
a partner in Associated Venture  Investors,  a venture capital firm from 1982 to
1996.  Dr.  Chan  holds  B.S.,  M.S.  and  Ph.D.  degrees  in  physics  from the
Massachusetts   Institute  of  Technology  and  a  M.B.A.  degree  from  Harvard
University.

         James V.  Diller has been a director of the  Company  since  1986.  Mr.
Diller  was a founder  of Sierra  Semiconductor  Corporation,  a  communications
semiconductor  company, was its President from 1983 to 1997 and is currently its
Chairman  of the Board.  Mr.  Diller  holds a B.S.  degree in  physics  from the
University of Rhode Island.

         B. Yeshwant  Kamath has been a director of the Company since July 1993.
Dr. Kamath is the Division  President of the KUB division of Videonics Inc.. KUB
Systems,  a company that  manufactures  video  special  effects  equipment,  was
founded by Dr.  Kamath in February  1992 and  acquired by Videonics in May 1996.
Previously, Dr. Kamath was a founder of Abekas Video Systems, Inc., a subsidiary
of Carlton  Communications PLC, where he was President from 1982 to August 1990.
Dr.  Kamath is also a director of Euphonix,  Inc.,  a company that  manufactures
digitally  controlled  analog audio consoles for the music industry.  Dr. Kamath
holds a B.Tech.  degree in electrical  engineering  from the Indian Institute of
Technology,  and M.S.  and Ph.D.  degrees  in  electrical  engineering  from the
University of California, Berkeley.

         Each   director   holds  office  until  the  next  annual   meeting  of
stockholders and until his successor has been elected and qualified or until his
earlier  resignation  or  removal.  Each  officer  was  chosen  by the  Board of
Directors  and  serves  at the  pleasure  of the  Board of  Directors  until his
successor is appointed or until his earlier resignation or removal.

ITEM 2:  PROPERTIES

         The Company leases approximately 39,000 square feet of space located in
Milpitas, California for its manufacturing and engineering functions pursuant to
a lease that expires on June 30, 2005. In addition, the Company has a seven year
lease  expiring on October 1, 2003 for a total of  approximately  24,000  square
feet of space  located  adjacent  to the  Milpitas  manufacturing  facility  for
administrative  functions. This seven year lease expires on October 1, 2003. The
company  also  leases  2,443  square  feet of space  for its  sales  offices  in
Massachusetts and Wokingham,  England,  and  approximately  4,137 square feet of
warehouse space in San Jose,  California.  The Company believes that its current
facilities are adequate to meet its current  requirements for the near term. See
Notes to Consolidated Financial Statements.

                                       13

<PAGE>


ITEM 3:  LEGAL PROCEEDINGS

         The Company is a party to a number of legal proceedings  arising in the
ordinary  course  of its  business.  These  actions  include  patent  liability,
warranty  of  merchantability  and  employee-related  issues.  While  it is  not
feasible  to predict or  determine  the  outcome of these  maters,  the  Company
believes  that the ultimate  resolution of these claims will not have a material
adverse effect on its financial position or results of operations.

ITEM 4:  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

No matters were submitted to a vote of security holders during the quarter ended
September 30, 1997.


PART II


ITEM 5:  MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

<TABLE>
Price Range Of Common Stock

         Elantec's  Common Stock has been traded on the Nasdaq  National  Market
under the Nasdaq symbol "ELNT" since the Company's  initial  public  offering on
October 11, 1995. The high and low closing sales prices  indicated  below are as
reported on the Nasdaq  National  Market.  As of September 30, 1997,  there were
approximately 260 stockholders of record.

<CAPTION>
                                Common Stock Prices
           ---------------------------------------------------------------------------------------
                                                                         HIGH         LOW
                                                                   -------------------------------
<S>        <C>                                                         <C>         <C>        
           Quarter ended September 30, 1997                            $ 7.250     $ 4.000
           Quarter ended June 30, 1997                                 $ 4.625     $ 3.125
           Quarter ended March 31, 1997                                $ 6.125     $ 3.125
           Quarter ended December 31, 1996                             $ 7.000     $ 4.750

           Quarter ended September 30,1996                             $ 9.125     $ 5.500
           Quarter ended June 30,1996                                  $13.250     $ 6.750
           Quarter ended March 31,1996                                 $10.250     $ 7.125
           Quarter ended December 31,1995 (Starting on 10/11/95)       $11.875     $ 7.000

</TABLE>
Dividend Policy

         The  Company has never paid cash or  declared  dividends  on its stock.
Elantec  anticipates that it will continue to retain its earnings to finance the
growth of its business.

                                       14

<PAGE>


<TABLE>
ITEM 6:  SELECTED FINANCIAL DATA

         The  following  selected  consolidated  financial  data is qualified by
reference to and should be read in conjunction with the  consolidated  financial
statements  and related  notes thereto and the section  captioned  "Management's
Discussion and Analysis of Financial  Condition and Results of  Operations"  and
other  financial  information  included  elsewhere in this Annual Report on Form
10-K.


<CAPTION>
                                                                                September 30 (1)
                                                              1993          1994          1995          1996          1997
                                                      ---------------------------------------------------------------------
                                                                     (in thousands, except per share data)
Statement of Operations Data:
<S>                                                        <C>           <C>           <C>           <C>           <C>    
     Net revenues                                          $18,477       $22,937       $26,884       $36,806       $35,388
     Gross profit                                            9,510        10,819        13,928        18,798        15,277
     Income from operations                                  1,588         1,859         2,887         4,300           177
     Income before taxes                                     1,553         1,568         2,951         4,761           647
     Net income                                            $ 1,270       $ 1,125       $ 2,713       $ 4,389       $   566
     Net income per share (2)                              $  0.18       $  0.15       $  0.34       $  0.47       $  0.06
     Number of shares used in computing per share
        amounts (2)                                          7,495         7,736         7,874         9,332         9,323


                                                                               September 30, (1)
                                                               1993          1994         1995         1996         1997
                                                      ---------------------------------------------------------------------
                                                                                 (in thousands)
Balance Sheet Data:

     Working capital                                       $  5,537      $  6,018      $ 6,854      $17,638      $18,287
     Total assets                                            11,058        14,919       20,910       35,246       37,091
     Long-term debt and capital lease obligations               298           517        1,313        1,566        3,336
     Total stockholders' equity                               7,064         8,318       11,142       24,074       24,803

<FN>
-------------------
(1)    The Company's  fiscal periods end on the Sunday closest to the end of the
       calendar period.  For ease of  presentation,  each fiscal period has been
       presented as though it ended on the final day of the calendar period.

(2)    See  Note  1  of  Notes  to  Consolidated  Financial  Statements  for  an
       explanation  of the  determination  of  the  number  of  shares  used  in
       computing net income per share.
</FN>
</TABLE>

ITEM 7: MANAGEMENT'S  DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
        OF OPERATIONS.

         Except for the historical  information  contained herein, the following
discussion   contains   forward  looking   statements  that  involve  risks  and
uncertainties.  The Company's actual results could differ  materially from those
discussed  here.  Factors  that could cause or  contribute  to such  differences
include,  but are not limited to, those discussed in this section, as well as in
the section entitled "Risk Factors".

                                       15

<PAGE>


Results of Operations

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

                                                September 30,
                                       1995          1996          1997
                                     ------------------------------------

Net revenues                           100.0%       100.0%       100.0%
Gross profit                            51.8%        51.1%        43.2%
Income from operations                  10.7%        11.7%         0.5%
Income before income taxes              11.0%        12.9%         1.8%
Net income                              10.1%        11.9%         1.6%

         Net Revenues.  The Company's  net revenues  increased  36.9% from $26.9
million in fiscal  1995 to $36.8  million in fiscal 1996 and  decreased  3.9% to
$35.4 million in fiscal 1997. Net product  revenues  increased  40.0% from $25.2
million in fiscal  1995 to $35.3  million in fiscal 1996 and  decreased  3.4% to
$34.1 million in fiscal 1997.  The increase in net product  revenues in 1995 and
1996 was primarily a result of increases in  commercial  product  revenues.  The
decrease in net product revenues in 1997 was due to decreased commercial product
revenues combined with a continued  decrease in the Company's military business.
License fees and technology  transfer revenue from Aisin Seiki Co., Ltd. (Aisin)
was $1.5  million in 1995 and  declined by $195,000  and $160,000 in fiscal 1996
and 1997,  respectively.  The Company does not expect this license agreement and
manufacturing relationship with Aisin to extend beyond February 1998.

         Commercial product revenues,  driven by increased unit sales, increased
57.0% from  $20.7  million in fiscal  1995 to $32.1  million in fiscal  1996 and
decreased  2.2% to $31.4  million in fiscal  1997.  Increases in unit volumes in
each period resulted from stronger demand for the Company's  products  primarily
in  the  video/multimedia,  communications  and  data  processing  markets.  The
Company's  commercial  product average selling prices remained flat from 1995 to
1996,  but  decreased  by 14.4%  during  1997.  The Company  expects the average
selling prices of its commercial products to continue to decrease over time.

         The  Company's  military  product  revenues  decreased  28.9% from $4.5
million in fiscal 1995 to $3.2 million in fiscal 1996,  and  decreased  15.6% to
$2.7 million in fiscal 1997. The decrease in military  product  revenues between
1995 and 1996 was a result of a 54% unit  volume  decrease  which was  partially
offset by an  increase  in  average  selling  prices.  The  decrease  in product
revenues  between 1996 and 1997 was due to a 6.8% unit volume decrease  combined
with an 8.2%  decrease in average  selling  prices.  On July 1, 1997 the Company
announced that it would  discontinue its military  hybrid product.  This product
line accounted for 17.9%,  8.9% and 7.9% of product  revenues in 1995,  1996 and
1997,  respectively.  Orders for these  discontinued  products  will be accepted
through mid 1998 with last shipments from the factory expected through Q1, 1999.

         Sales of dieletric isolation products represented  approximately 74% of
the Company's net product  revenues in fiscal 1996 and 67% in 1997.  The process
for manufacturing  dielectrically  isolated  integrated circuits is more complex
than processes for junction isolation bipolar  manufacturing,  and the number of
foundries   that  have  the  capability  to  produce   dielectrically   isolated
semiconductor wafers is limited. The Company has been informed that its existing
dielectric isolation foundry will discontinue  supplying this technology in late
1998.  The  company  is  currently  developing  an  alternative  source for this
technology.

                                       16

<PAGE>


The  loss of this  foundry  prior to  locating  a second  source  or  developing
alternate  technology  would have a  material  adverse  effect on the  Company's
business and results of operations.

         Export  revenues were 43.7%,  52.3% and 55.5% of net revenues in fiscal
1995,  1996 and 1997,  respectively.  The increase in export sales was primarily
the result of the development of Japanese,  Taiwanese and Korean markets for the
Company's products. See Note 9 of Notes to Consolidated Financial Statements.

         Gross Margin.  The Company's gross margin  decreased from 51.8% in 1995
to 51.1% in 1996 and decreased  slightly to 43.2% in 1997. The decrease in gross
margin from fiscal 1995 to 1996  resulted  from  reductions  in average  selling
prices and increases in unfavorable  manufacturing  yield  variances  associated
with third party foundry services. The decrease in gross margin from fiscal 1996
to 1997 resulted from continued  reductions in average  selling prices  combined
with increasingly  unfavorable  manufacturing  yield and overhead  variances and
increased  provisions  for excess and obsolete  inventory.  Manufacturing  yield
variances are primarily  associated  with  third-party  foundries while overhead
variances are  predominantly due to capacity  utilization.  While the Company is
working on programs to reduce  these  manufacturing  variances,  there can be no
assurance  that the  Company  will not  encounter  similar  difficulties  in the
future, and gross margin may continue to fluctuate from quarter to quarter.

         Research and Development  Expenses.  Research and development  expenses
increased  33.4% from $4.8 million in fiscal 1995 to $6.4 million in fiscal 1996
and decreased 2.8% to $6.2 million in fiscal 1997. The increases in research and
development  from 1995 to 1996 was primarily the result of costs associated with
additional  employees  and  consultants  and,  to  a  lesser  extent,  increased
expenditures  for mask  sets,  silicon  and other  materials.  The  decrease  in
research and development expenses in 1997 was due to lower spending on prototype
materials,  consulting  services and contract  services.  The Company expects to
incur higher absolute research and development expenses in the future,  although
these expenses are expected to remain relatively constant as a percentage of net
revenues. There can be no assurance, however, that net revenues will grow at the
same rate as the anticipated research and development expenses.

         Marketing,  Sales,  General  and  Administrative  Expenses.  Marketing,
sales, general and administrative  expenses increased 29.7% from $6.2 million in
fiscal 1995 to $8.1 million in fiscal 1996 and increased an  additional  9.9% to
$8.9  million in fiscal  1997.  For 1995,  selling and  administrative  expenses
included added compensation expenses for additional  personnel,  increased sales
commissions  due to  increased  sales,  increases  in the  level of  advertising
expenses,  and, higher absolute  marketing,  sales,  general and  administrative
expenses due to reporting and other  requirements of a public company.  In 1996,
selling and administrative expenses increased due to added compensation expenses
for additional personnel, increased sales commissions due to increased sales and
increases  in  the  level  of  advertising   expenses.   In  1997,  selling  and
administrative  expenses  increased  primarily  due  to  costs  related  to  the
Company's new administrative offices.

         Interest and Other  Income  (Expense),  Net.  Interest and other income
(expense),  net was $64,000 in fiscal 1995, $461,000 in fiscal 1996 and $470,000
in 1997.  The increase of interest  income in each year resulted from  investing
proceeds  from the  Company's  initial  public  offering in October 1995 in cash
equivalents  and  short-term  investments.  See Note 1 of Notes to  Consolidated
Financial Statements.

         Provision  for Taxes on  Income.  Provisions  for  taxes on income  for
fiscal 1995, 1996 and 1997 were lower than the statutory rate principally due to
the benefit of net operating loss  carryforwards  offset by alternative  minimum
taxes,  state taxes and foreign  withholding  taxes.  At September 30, 1997, the
Company had federal net operating loss carryforwards of approximately $3,680,000
that expire in the years 2004 through 2005. In addition, the Company had federal
general business credit  carryforwards of

                                       17

<PAGE>


approximately  $739,000  that expire in the years 1999  through 2011 and foreign
tax credit carryforwards of $625,000 that expire in 1998 through 2001.

         Under  certain  provisions  of the Internal  Revenue  Code of 1986,  as
amended,  the  availability  of the Company's net operating  loss and tax credit
carryforwards may be subject to limitation if it should be determined that there
has been a change in  ownership  of more than 50% of the value of the  Company's
stock. See Note 7 of Notes to Consolidated Financial Statements.

Factors Affecting Future Results

         Elantec's  operating  results  have  been,  and in the  future  may be,
subject to fluctuations due to a wide variety of factors including the timing of
or delays in new  product  and  process  technology  announcements  and  product
introductions by the Company or its competitors,  competitive pricing pressures,
fluctuations  in  manufacturing  yields,  changes in the mix or markets in which
products  are  sold,  availability  and  costs  of raw  materials,  reliance  on
subcontractors, the cyclical nature of the semiconductor industry, industry-wide
wafer  processing  capacity,   political  and  economic  conditions  in  various
geographic   areas,   and  costs   associated   with  other   events,   such  as
underutilization  or expansion of  production  capacity,  intellectual  property
disputes, litigation, or environmental regulation.

         The  semiconductor  industry is highly cyclical and has been subject to
significant economic  fluctuations at various times that have been characterized
by rapidly fluctuating product demand,  periods of over and under capacity,  and
accelerated   erosion  of  average   selling   prices.   A  material  change  in
industry-wide  production  capacity,  shift in industry capacity toward products
competitive with the Company's  products,  rapidly  fluctuating demand, or other
factors could result in a rapid decline in product pricing or unit volumes which
could adversely affect the Company's operating results.

         From time to time, the Company has experienced production  difficulties
that have caused delivery delays and quality problems. There can be no assurance
that the Company will not experience manufacturing problems and product delivery
delays in the future as a result of, among other things,  changes to its process
technologies, ramping production, installing new equipment at its facilities and
constructing new facilities in Milpitas, California.

         The Company has  initiated  an  extensive  production  expansion at its
primary  manufacturing  facility in Milpitas,  California.  The expansion,  when
completed,  will  result  in a  significant  increase  in  fixed  and  operating
expenses.  These additional  expenses could reduce gross margins.  Specifically,
the  Company  would  anticipate  incurring   substantial   operating  costs  and
depreciation  expense  relating to the expanded  facility  before  production of
substantial volume is achieved.  If revenue levels do not increase  sufficiently
to offset  these  additional  expense  levels,  or if the  Company  is unable to
achieve  gross  margin  greater  than or  comparable  to the  Company's  current
products,  the  Company's  future  results  of  operations  could  be  adversely
impacted.  Additionally,  the  project  faces  a  number  of  substantial  risks
including, but not limited to, project termination, delays in construction, cost
overruns,  equipment  delays or  shortages,  manufacturing  start-up  or process
problems, or difficulties in hiring key managers and technical personnel.

         New products, process technology and start-up costs associated with the
Milpitas  wafer  fabrication  facility  will  require  significant  research and
development  expenditures.  However,  there can be no assurance that the Company
will be able to develop and introduce new products in a timely manner,  that new
products  will gain market  acceptance or that new process  technologies  can be
successfully implemented.  If the Company is unable to develop new products in a
timely  manner,  and to sell them at

                                       18

<PAGE>


gross margins at least comparable to the Company's current products,  the future
results of operations could be adversely impacted.

         Part of the Company's future bipolar product  development  strategy may
include the development of an alternative form of  silicon-on-insulator  ("SOI")
technology  called  bonded  wafers.  The Company  currently  believes  that,  if
successful,  the bonded wafer technology could provide technologically  advanced
products at a lower cost than the  current  dielectric  isolation  complementary
bipolar  technology.  However,  there  can be no  assurance  that  bonded  wafer
technology can be  successfully  accomplished in a timely manner or that it will
provide  the  desired   improvements  over  the  Company's  current  technology.
Significant  delays or  cancellation  of the  development  of the  bonded  wafer
technology  and/or  manufacturing  problems  associated  with  transferring  the
Company's  current product line to this technology could have a material adverse
affect on the Company's business and results of operations.  In addition, delays
or cancellation of the development of this technology could adversely affect the
Company's new product development program.

         The semiconductor  industry is characterized by vigorous protection and
pursuit of  intellectual  property  rights or positions,  which have resulted in
significant  and often  protracted  and expensive  litigation.  In recent years,
there has been a growing  trend of companies to resort to  litigation to protect
their  semiconductor  technology from  unauthorized  use by others.  The Company
believes its products do not infringe upon any valid patents. However, there can
be no assurance that the Company's position in these matters will prevail. There
can be no assurance  that  additional  future claims  alleging  infringement  of
intellectual  property  rights will not be asserted  against  the  Company.  The
intellectual property claims that have been made, or may be asserted against the
Company in the future,  could  require that the Company  discontinue  the use of
certain processes or cease the manufacture, use and sale of infringing products.
Additionally,  the Company may incur significant litigation costs and damages to
develop  noninfringing  technology.  There can be no assurance  that the Company
would  be able to  obtain  such  licenses  on  acceptable  terms  or to  develop
noninfringing technology without a material adverse effect on the Company.

         The  Company  is  subject  to a  variety  of  federal,  state and local
governmental regulations related to the use, storage,  discharge and disposal of
toxic,  volatile or  otherwise  hazardous  chemicals  used in its  manufacturing
process.  Although the Company believes that its activities conform to presently
applicable  environmental  regulations,  the failure to comply  with  present or
future  regulations  could  result  in  fines  being  imposed  on  the  Company,
suspension of production or a cessation of operations. There can be no assurance
that regulatory  changes or changes in regulatory  interpretation or enforcement
will not render compliance more difficult and costly. Any failure of the Company
to control  the use of, or  adequately  restrict  the  discharge  of,  hazardous
substances, or otherwise comply with environmental regulations, could subject it
to significant future liabilities.

         The Company's Common Stock has experienced substantial price volatility
and  such  volatility  may  occur in the  future,  particularly  as a result  of
quarter-to-quarter  variations in the actual or anticipated financial results of
the  Company,  the  companies  in the  semiconductor  industry or in the markets
served by the  Company,  or  announcements  by the  Company  or its  competitors
regarding  new  product  introductions.   In  addition,  the  stock  market  has
experienced  extreme price and volume fluctuations that have affected the market
price of many  technology  companies'  stock in  particular.  These  factors may
adversely affect the price of the Common Stock.

         The  Company  has  initiated  a year  2000  remediation  plan  which is
expected  to make the  Company's  operating  and  ancillary  systems  year  2000
compliant.  This plan includes implementing  financial application software that
is year 2000  compatible.  The  software has been  purchased  and the

                                       19

<PAGE>


project is expected to be complete during fiscal 1998. The costs of implementing
such a plan are not expected to be material to the Company's  operating results.
However,  failure to implement the year 2000  remediation plan prior to the year
2000 could have a material adverse affect on the Company.

Liquidity and Capital Resources

         From  fiscal  1995  through  fiscal  1997,  the  Company  financed  its
operations  primarily  from cash  provided  by  operating  activities  and lease
financing.

         Net cash  provided  by  operating  activities  was $2.8  million,  $5.1
million and $1.5 million in fiscal 1995, 1996 and 1997,  respectively.  Net cash
provided by operating  activities  in fiscal 1995  resulted  primarily  from net
income of $2.7  million  and  depreciation  of $1.2  million,  offset in part by
increased working capital,  principally from increased  accounts  receivable and
inventories.  Net cash provided by operating  activities in fiscal 1996 resulted
primarily  from net income of $4.4  million and  depreciation  of $1.7  million,
offset in part by increased  working capital,  again  principally from increased
accounts receivable and inventories.  Net cash provided by operating  activities
in  fiscal  1997  resulted  primarily  from  net  income  of  $0.6  million  and
depreciation  of $2.0  million,  offset in part by  increased  working  capital,
principally from increased inventories and decreased deferred revenue.

         Net cash used in investing  activities  was $2.2 million in fiscal 1995
and $8.6 million in fiscal 1996.  Net cash provided by investing  activities was
$0.2 million in 1997.  The  Company's  investing  activities  in fiscal 1995 was
principally the purchase of property and equipment.  In addition to property and
equipment purchases, $6.7 million of net cash was invested in available for sale
investments in 1996. In 1997, purchases of property and equipment were more than
offset from net sales of available for sale  investments  of $0.6 million.  Cash
purchases of property and  equipment  totaled $1.7 million in fiscal 1995,  $2.1
million in fiscal 1996 and $0.4 million in 1997.  At September  30, 1997,  there
were  outstanding  commitments for capital  expenditures of  approximately  $2.4
million.  The  Company  plans to spend  approximately  $8.0  million  on capital
expenditures   during   fiscal  1998,   primarily  on  expanding   manufacturing
capabilities in Milpitas, California.

         Net cash used in  financing  activities  was  $355,000 in fiscal  1995.
Financing  activities in fiscal 1995 were primarily  repayments on capital lease
obligations  and long-term  debt. Net cash provided by financing  activities was
$6.8 million in fiscal 1996. In October 1995 (fiscal  1996),  the Company raised
net  proceeds  of  approximately  $8.2  million by issuing  common  stock in its
initial  public  offering.  This  financing  activity  was  partially  offset by
payments on long-term  debt during 1996 of $1.6 million,  primarily on long-term
notes and capital  leases.  In 1997,  net cash used in financing  activities was
$1.2 million due to repayments on capital lease obligations and long-term debt.

         At September 30, 1997, the Company had working capital of $18.3 million
and cash and cash  equivalents and short-term  investments of $15.9 million.  At
September 30, 1997 the Company also had non-revolving  lease credit lines for up
to $10 million  that can be  utilized  to finance up to 100% of certain  capital
equipment.  The non-revolving  lease lines of credit expire in December 1997 and
March 1998.  Three,  3 to 5 year capital leases have been  negotiated  under the
lines.  At September 30, 1997,  $4,042,000 was  outstanding,  and  approximately
$5,958,000   remained   available  under  the  lines.  See  footnote  3  to  the
consolidated  financial statements.  The Company believes that its existing cash
and cash  equivalents,  its current line of credit and cash from operations will
be  sufficient  to support its operating and capital needs for at least the next
twelve months. Any major change in the nature of the Company's business, such as
the  acquisition  of  products,  the  design of  products  not  currently  under
development or the need for significant  unplanned capital  expenditures,  could
change the Company's capital requirements. To the extent the Company

                                       20

<PAGE>


requires  additional  cash,  there can be no assurance  that the Company will be
able to obtain such financing on terms favorable to the Company, or at all.

ITEM 7A: QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

       Not applicable

<TABLE>
ITEM 8:  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

1.            INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

              The  following  Financial  Statements  are  filed  as part of this
Report.

<CAPTION>
                                                                                                      Page No.

<S>           <C>                                                                                       <C>
              Report of Ernst & Young LLP, Independent Auditors..................................       25

              Consolidated Balance Sheets as of September 30, 1997 and 1996......................       26

              Consolidated Statements of Income for each of the three fiscal years
              in the period ended September 30, 1997.............................................       27

              Consolidated Statements of Stockholders' Equity for each of the three
              fiscal years in the period ended September 30, 1997................................       28

              Consolidated Statements of Cash Flows for each of the three fiscal
              years in the period ended September 30, 1997.......................................       29

              Notes to Consolidated Financial Statements.........................................       30


2.             INDEX TO SUPPLEMENTAL FINANCIAL INFORMATION

              Unaudited Interim Financial Information............................................       40

3.             INDEX TO FINANCIAL STATEMENT SCHEDULE

              The   following    financial   statement   schedule   of   Elantec
              Semiconductor,  Inc. for the years ended  September 30, 1997, 1996
              and 1995 is filed as part of this  report  and  should  be read in
              conjunction with the Consolidated  Financial Statements of Elantec
              Semiconductor, Inc.

                  Schedule II - Valuation and Qualifying Accounts for each of the
                  three fiscal years in the period ended September 30, 1997......................       41

              Schedules  other than that listed  above have been  omitted  since
              they are either not required,  not applicable,  or the information
              is otherwise included.
</TABLE>


ITEM 9:  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND 
         FINANCIAL DISCLOSURE

         Not Applicable.

                                       21

<PAGE>


PART III

ITEM 10:  DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

       Information  required by this Item with respect to Directors may be found
in the  section  captioned  "Election  of Elantec  Directors"  appearing  in the
definitive  Proxy  Statement to be delivered to  stockholders in connection with
the  Annual  Meeting of  Stockholders  to be held on  February  20,  1998.  Such
information is incorporated  herein by reference.  Information  required by this
Item with  respect to  executive  officers  may be found in Part I hereof in the
section  captioned  "Executive  Officers of the Company."  Such  information  is
incorporated herein by reference.

ITEM 11:  EXECUTIVE COMPENSATION

       Information  with  respect  to this  Item  may be  found  in the  section
captioned "Executive  Compensation"  appearing in the definitive Proxy Statement
to be  delivered  to  stockholders  in  connection  with the  Annual  Meeting of
Stockholders to be held on February 20, 1998.  Such  information is incorporated
herein by reference.

ITEM 12: SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

       Information  with  respect  to this  Item  may be  found  in the  section
captioned  "Security  Ownership  of Certain  Beneficial  Owners and  Management"
appearing in the definitive  Proxy  Statement to be delivered to stockholders in
connection  with the Annual Meeting of  Stockholders  to be held on February 20,
1998. Such information is incorporated herein by reference.

ITEM 13:  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

         Information  with  respect  to this  Item may be  found in the  section
captioned "Certain Transactions"  appearing in the definitive Proxy Statement to
be  delivered  to   stockholders  in  connection  with  the  Annual  Meeting  of
Stockholders to be held on February 20, 1998.  Such  information is incorporated
herein by reference.

                                       22

<PAGE>


                                     PART IV


ITEM 14: EXHIBITS, FINANCIAL STATEMENT SCHEDULE AND REPORTS ON FORM 8-K

(a)  The following documents are filed as part of this report:

     1.  Financial  Statements and Financial  Statement Schedule -- See Index to
         Consolidated  Financial  Statements and Financial Statement Schedule at
         Item 8 on page 21 of this Report.

     2.  Exhibits.  The following exhibits are filed as part of, or incorporated
         by reference into, this Report:


Exhibit
Number  Exhibit Title
------  --------------
3.01    -- Company's Certificate of Incorporation.*
3.02    -- Company's Bylaws.*

4.01    -- Registration Rights Agreement dated August 12, 1988 by and among
           the Company and certain  stockholders and warrantholders,  as amended
           January 12, 1990 and as of August 4, 1995.*

10.01   -- Company's 1983 Stock Option Plan, as amended, and related documents.
           */+
10.02   -- Company's 1994 Equity Incentive Plan, as amended, and related
           documents.*/+
10.03   -- Form of Company's 1995 Equity Incentive Plan and related documents.
           **/+
10.04   -- Form of Company's 1995 Directors Stock Option Plan and related
           documents.*/+
10.05   -- Form of Company's 1995 Employee Stock Purchase Plan and related
           documents.*/+

10.06   -- Form of Indemnification Agreement to be entered into by the Company
           with each of its directors and executive officers.*

10.07   -- Form of Executive Compensation Agreement dated as of March 22, 1991,
           by and between the Company and David O'Brien.*/+

10.08   -- Form of Executive  Compensation Agreement dated as of March
           22,  1991,  by and  between  the  Company  and  each of  Ralph
           Granchelli, Richard Corbin, and Barry Siegel.*/+

10.09   -- Standard Industrial/Commercial Single-Tenant Lease dated June 23,
           1993,  by and  between the  Company  and Robert  Ruggles,  including
           amendments one through five thereto.*

10.10   -- Technology Transfer Agreement dated February 24, 1993, between the
           Company and Aisin Seiki Co., Ltd. ("Aisin").*
10.11   -- Product Development Agreement No. 1 dated March 24, 1993, between the
           Company and Aisin.*
10.12   -- Product Development Agreement No. 2 dated March 24, 1995, between the
           Company and Aisin.*

10.13   -- Distributor Agreement dated December 8, 1986, between the Company and
           Insight Electronics, Inc. ("Insight").*
10.14   -- Distributor Agreement dated October 1, 1989, between the Company and
           Insight.*
10.15   -- Distributor Agreement dated November 1, 1987, between the Company and
           Marshall Industries.*
10.16   -- Distributor Agreement dated March 7, 1994, between the Company and
           Internix, Inc.*
10.17   -- Amendment to Standard Industrial/Commercial Single-Tenant Lease dated
           June 23, 1993.***
10.18   -- Standard Industrial/Commercial Single-Tenant Lease dated February 20,
           1996.***

10.19   -- Amendment to Standard Industrial/Commercial Single-Tenant Lease dated
           February 20, 1996.***
10.20   -- Distributor  Agreement dated August 1, 1996,  between the Company and
           Microtek Inc.****

                                       23

<PAGE>


11.01   -- Statement re computation of per share earnings.
21.01   -- Subsidiary of the Company.*
23.01   -- Consent of Ernst & Young LLP, Independent Auditors (see page 46 of
           this Report).
24.01   -- Powers of Attorney (see page 47 of this Report).
27.01   -- Financial Data Schedule.

---------------------

       * Incorporated by reference to the Company's Registration Statement on
         Form S-1, filed August 24,
         1995, as amended (File No. 33-96136).
      ** Incorporated by reference to the Company's Registration Statement on
         Form S-8, filed November 5,
         1997 (File No. 333-39613).
     *** Incorporated  by reference to the  Company's  Quarterly  Report on Form
         10-Q for the quarter ended September 30, 1996.
    **** Incorporated  by reference to the Company's  Annual Report on Form 10-K
         for the quarter ended September 30, 1996.
       + Represents a management contract or compensatory plan or arrangement.

(b)  Reports on Form 8-K

         No current  reports on Form 8-K were  filed  during the fiscal  quarter
ended September 30, 1997.

(c)  Exhibits:
         The Registrant  hereby files as part of this Report the exhibits listed
         in Item 14(a)(2), as set forth above.

(d)  Financial Statement Schedules:
         No such  financial  statement  schedules  are  required  to be filed in
accordance with Regulation S-X.

                                       24

<PAGE>


                Report of Ernst & Young LLP, Independent Auditors

The Board of Directors and Stockholders
Elantec Semiconductor, Inc.

We  have  audited  the  accompanying  consolidated  balance  sheets  of  Elantec
Semiconductor,  Inc.  as of  September  30,  1997  and  1996,  and  the  related
consolidated statements of income, stockholders' equity, and cash flows for each
of the three  years in the period  ended  September  30,  1997.  Our audits also
included the financial  statement schedule listed in the index at Item 14(a)(1).
These financial  statements and schedule are the responsibility of the Company's
management.  Our  responsibility  is to express  an  opinion on these  financial
statements and schedule based on our audits.

We  conducted  our  audits  in  accordance  with  generally   accepted  auditing
standards.  Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement.  An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements.  An audit also includes
assessing the  accounting  principles  used and  significant  estimates  made by
management,  as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated  financial statements referred to above present
fairly, in all material respects, the consolidated financial position of Elantec
Semiconductor, Inc. at September 30, 1997 and 1996, and the consolidated results
of its  operations  and its cash flows for each of the three years in the period
ended  September 30, 1997,  in conformity  with  generally  accepted  accounting
principles.  Also, in our opinion the related financial statement schedule, when
considered  in  relation  to the basic  financial  statements  taken as a whole,
presents fairly in all material respects the information set forth therein.



                                                     ERNST & YOUNG LLP


San Jose, California
October 22, 1997

                                       25

<PAGE>



<TABLE>
                                       Elantec Semiconductor, Inc.

                                       Consolidated Balance Sheets
                           (in thousands, except share and per share amounts)

<CAPTION>
                                                                                      September 30,
                                                                                     1997        1996
                                                                                   --------------------
Assets
Current assets:
<S>                                                                                <C>         <C>     
   Cash and cash equivalents                                                       $  9,839    $  9,377
   Short-term investments                                                             6,089       6,663
   Accounts receivable, net of allowances of $840 in 1997
     and $340 in 1996                                                                 3,315       4,175
   Inventories                                                                        7,369       6,475
   Prepaid expenses and other current assets                                            627         554
                                                                                   --------------------
Total current assets                                                                 27,239      27,244

Property and equipment:
   Machinery and equipment                                                           16,085      13,005
   Furniture and fixtures                                                               563         314
   Leasehold improvements                                                             2,970       2,407
                                                                                   --------------------
                                                                                     19,618      15,726
   Accumulated depreciation and amortization                                        (10,388)     (8,366)
                                                                                   --------------------
                                                                                      9,230       7,360
Other assets, net                                                                       622         642
                                                                                   --------------------
Total assets                                                                       $ 37,091    $ 35,246
                                                                                   ====================

Liabilities and stockholders' equity Current liabilities:
   Accounts payable                                                                $  3,368    $  3,749
   Income taxes payable                                                                 339         315
   Accrued salaries and benefits                                                      1,231       1,027
   Other accrued liabilities                                                            429         244
   Deferred revenue                                                                   2,094       3,143
   Current portion of long-term debt and capital lease obligations                    1,491       1,128
                                                                                   --------------------
Total current liabilities                                                             8,952       9,606
Long-term debt and capital lease obligations                                          3,336       1,566
Commitments and contingencies
Stockholders' equity:
   Preferred stock, $.01 par value:
     Authorized shares - 5,000,000 in 1997 and 1996                                    --          --
     Issued and outstanding shares - none
   Common stock, $.01 par value: Authorized shares - 25,000,000 in 1997 and 1996
     Issued and outstanding shares - 9,019,000 in 1997 and
     8,745,000 in 1996                                                                   90          87
   Additional paid-in capital                                                        33,635      33,475
   Accumulated deficit                                                               (8,922)     (9,488)
                                                                                   --------------------
Total stockholders' equity                                                           24,803      24,074
                                                                                   ====================
Total liabilities and stockholders' equity                                         $ 37,091    $ 35,246
                                                                                   ====================
<FN>
                                         See accompanying notes.

</FN>
</TABLE>
                                                   26

<PAGE>


<TABLE>
                                 Elantec Semiconductor, Inc.

                              Consolidated Statements of Income
                           (in thousands, except per share amounts)

<CAPTION>
                                                                     September 30,
                                                              1997        1996        1995
                                                            --------------------------------


<S>                                                         <C>         <C>         <C>     
         Net revenues                                       $ 35,388    $ 36,806    $ 26,884
         Cost of revenues                                     20,111      18,008      12,956
                                                            --------------------------------
         Gross profit                                         15,277      18,798      13,928

         Operating expenses:
            Research and development                           6,234       6,413       4,806
            Marketing, sales, general, and administrative      8,866       8,085       6,235
                                                            --------------------------------
                 Total operating expenses                     15,100      14,498      11,041
                                                            --------------------------------

         Income from operations                                  177       4,300       2,887
         Interest and other income, net                          759         687         195
         Interest expense                                       (289)       (226)       (131)
                                                            --------------------------------
         Income before taxes                                     647       4,761       2,951

         Provision for taxes on income                            81         372         238
                                                            --------------------------------
         Net income                                         $    566    $  4,389    $  2,713
                                                            ================================

         Net income per share                               $   0.06    $   0.47    $   0.34
                                                            ================================
         Shares used in computing per share amounts            9,323       9,332       7,874
                                                            ================================

<FN>
                                   See accompanying notes.

</FN>
</TABLE>
                                              27

<PAGE>


<TABLE>
                                                  Elantec Semiconductor, Inc.

                                        Consolidated Statements of Stockholders' Equity
                                                         (in thousands)


<CAPTION>
                                          Convertible                                                               
                                        Preferred Stock            Common Stock        Additional                    Total
                                      ----------------------------------------------    Paid-In     Accumulated   Stockholders'
                                       Shares       Amount       Shares       Amount     Capital      Deficit       Equity
                                      -------------------------------------------------------------------------------------

<S>                                      <C>       <C>             <C>       <C>         <C>          <C>          <C>     
Balance at September 30, 1994            4,937     $ 24,543        1,779     $     18    $    347     $(16,590)    $  8,318
   Exercise of stock options              --           --            239            2         129         --            131
   Exercise of warrants                   --           --              3         --          --           --           --
   Repurchase of common stock             --           --             (4)        --           (20)        --            (20)
   Net income                             --           --           --           --          --          2,713        2,713
                                      -------------------------------------------------------------------------------------
Balance at September 30, 1995            4,937       24,543        2,017           20         456      (13,877)      11,142
   Conversion of preferred stock        (4,937)     (24,543)       4,937           49      24,494         --           --
   Proceeds from IPO, net of              --           --          1,400           14       8,189         --          8,203
   offering expenses of $911
   Exercise of stock options              --           --            369            4         293         --            297
   Exercise of warrants                   --           --             22         --            43         --             43
    Net income                            --           --           --           --          --          4,389        4,389
                                      -------------------------------------------------------------------------------------
Balance at September 30, 1996             --           --          8,745           87      33,475       (9,488)      24,074
   Exercise of stock options              --           --            274            3         160         --            163
    Net income                            --           --           --           --          --            566          566
                                      -------------------------------------------------------------------------------------
Balance at September 30, 1997             --       $   --          9,019     $     90    $ 33,635     $ (8,922)    $ 24,803
                                      =====================================================================================

<FN>
                                                    See accompanying notes.

</FN>
</TABLE>
                                                               28

<PAGE>


<TABLE>
                              Elantec Semiconductor, Inc.

                         Consolidated Statements of Cash Flows
                                     (in thousands)


<CAPTION>
                                                                  September 30,
                                                           1997      1996        1995
                                                         -----------------------------

<S>                                                      <C>        <C>        <C>    
 Operating activities
Net income                                               $   566    $ 4,389    $ 2,713
Adjustments to reconcile net income to net cash
   provided by operating activities:
     Depreciation and amortization                         2,022      1,677      1,182
     Changes in operating assets and liabilities:
       Accounts receivable                                   860        (50)    (1,971)
       Inventories                                          (894)    (1,885)      (765)
       Prepaid expenses and other current assets             (73)        31       (179)
       Payables and accrued liabilities                       32      1,217      1,657
       Deferred revenue                                   (1,049)      (273)       207
                                                         -----------------------------
Net cash provided by operating activities                  1,464      5,106      2,844

Investing activities
Sale (purchase) of available for sale investments, net       574     (6,663)      --
Purchase of property and equipment                          (425)    (2,144)    (1,673)
Decrease (increase) in other assets                           20        238       (524)
                                                         -----------------------------
Net cash provided by (used in) investing activities          169     (8,569)    (2,197)

Financing activities
Payments on capital lease obligations                       (426)      (145)      (176)
Payments on long-term debt                                  (908)    (1,567)      (290)
Issuances of common stock                                    163      8,543        111
                                                         -----------------------------
Net cash  provided by (used in)  financing activities     (1,171)     6,831       (355)
                                                         -----------------------------

Increase in cash and cash equivalents                        462      3,368        292
Cash and cash equivalents at beginning of period           9,377      6,009      5,717
                                                         =============================
Cash and cash equivalents at end of period               $ 9,839    $ 9,377    $ 6,009
                                                         =============================

Supplemental disclosures of cash flow information
Lease and installment financing for capital equipment    $ 3,467    $ 2,172    $ 1,769
Interest paid                                            $   285    $   202    $   117
Taxes paid                                               $    57    $   236    $    86

<FN>
                                See accompanying notes.

</FN>
</TABLE>
                                       29

<PAGE>


1. Business and Summary of Significant Accounting Policies

Basis of  Presentation.  Elantec  Semiconductor,  Inc. (the "Company")  designs,
manufactures and markets high performance analog integrated circuits used in the
video/multimedia,  data processing,  instrumentation and communications markets.
Principal  markets  include  sales in North  America,  Asia,  Europe  and  other
countries.

On October 11,  1995,  the Company  effected an initial  public  offering of its
shares pursuant to which it issued  1,400,000  common shares for net proceeds of
approximately $8,203,000.  Upon the closing of the initial public offering, each
outstanding share of Series 1 preferred stock was converted to common stock on a
share-for-share basis.

The consolidated  financial  statements  include the accounts of the Company and
its  wholly  owned  subsidiary,  Elantec  Government  Products,  Inc.,  which is
currently inactive.

Fiscal Year.  The Company's  fiscal year ends on the Sunday closest to September
30. Fiscal years 1997,  1996, and 1995 ended on September 28,  September 29, and
October 1, respectively.  The Company also follows a 4/4/5 week quarterly cycle.
For convenience, the accompanying financial statements have been shown as ending
on September 30 for each fiscal year.

Use of Estimates.  The  preparation of financial  statements in conformity  with
generally accepted  accounting  principles requires management to make estimates
and assumptions that affect the amounts reported in the financial statements and
accompanying notes. Actual results could differ from those estimates.

Cash and Cash Equivalents.  The Company considers all highly liquid  investments
with an original  maturity  (at the date of purchase) of three months or less to
be the equivalent of cash for the purposes of the balance sheet and statement of
cash flows  presentation.  Cash and cash  equivalents  are carried at cost which
approximates market value.

Short-Term Investments.  The Company's policy is to invest in various short-term
instruments  with investment  grade credit ratings.  Generally such  investments
have  contractual  maturities  of  less  than  one  year.  All of the  Company's
marketable  investments are classified as  "available-for-sale"  and the Company
views its  available-for-sale  portfolio  as  available  for use in its  current
operations. At September 30, 1997, short-term investments consisted of corporate
debt of $3,888,000,  auction-rate  securities of $901,000, and US Treasury bills
of  $1,300,000.  At September  30,  1996,  short-term  investments  consisted of
corporate debt of  $2,152,000,  auction-rate  securities of  $3,200,000,  and US
Treasury bills of $1,311,000.

The  following  table is a summary of debt and money  market  auction  preferred
securities by contractual maturity at September 30, 1997 (in thousands):

                                                               Amortized Cost
                                                               --------------
     Maturing within one year                                    $ 1,281
     Maturing after one year and before three years                2,649
     Maturing after three years and before 15 years                1,258
     Money market auction preferred securities                      901
                                                               --------------
     Total                                                       $ 6,089
                                                               ==============


                                     30

<PAGE>


In accordance  with Statement of Financial  Accounting  Standards (FAS) No. 115,
"Accounting for Certain  Investments in Debt and Equity Securities," the Company
classifies its short-term investments as "available-for-sale" securities and the
cost of  securities  sold is based on the  specific  identification  method.  At
September 30, 1997 there was no significant  difference  between the fair market
value,  determined  by quoted market  prices,  and the  underlying  cost of such
investments. Realized gains and losses were immaterial.

Inventories.  Inventories  are  stated  at the  lower of  standard  cost  (which
approximates actual cost using the first-in, first-out method) or market.

Property  and  Equipment.  Machinery  and  equipment  as well as  furniture  and
fixtures are stated at cost and depreciated  over the estimated  useful lives of
the  assets  (three to ten  years)  using the  straight-line  method.  Leasehold
improvements are stated at cost and amortized on a straight-line  basis over the
shorter of the useful lives of the assets or the  remaining  lease term.  Assets
under  capital  leases are  recorded at the present  value of the related  lease
obligations and amortized on a straight-line basis over the lease term.

Employee  Stock Plans.  The Company  accounts for its stock option plans and its
employee  stock  purchase plan in accordance  with  provisions of the Accounting
Principles  Board's  Opinion No. 25 (APB 25),  "Accounting  for Stock  Issued to
Employees." In October 1995, the Financial  Accounting  Standards Board released
the Statements of Financial Accounting Standards No. 123 (FAS 123),  "Accounting
for Stock Based  Compensation." FAS 123 provides an alternative to APB 25 and is
effective for fiscal years  beginning  after December 15, 1995. As allowed under
FAS 123,  the  Company  continues  to account  for its  employee  stock plans in
accordance with the provisions of APB 25.
See footnote 6.

Revenue  Recognition.  Net revenues are stated net of discounts and  allowances.
Revenue from  product  sales direct to  customers  and foreign  distributors  is
generally recognized upon shipment.  However, the Company defers the recognition
of revenue and the related cost of revenue on shipments to domestic distributors
that have certain  rights of return and price  protection  privileges  on unsold
merchandise until the merchandise is sold by the distributor.

In fiscal 1993, the Company entered into an agreement with a third party for the
transfer of certain  proprietary  process technology and technical  information,
training and, if requested by the third party,  engineering  assistance with the
design of integrated  circuits.  The agreement  also provides for the payment of
royalties  to the  Company  upon the sale by the third  party of  products  that
utilize the  transferred  technology.  The initial term of the agreement is five
years with optional renewal for an additional five successive  one-year periods.
Revenue related to the transfer of technical  information is recognized over the
life of the agreement in proportion to the total effort expected to be incurred,
which the Company expects will occur ratably.  Training revenue is recognized as
performed.  Fees for  engineering  services are recognized  over the development
periods.  The unearned portion of technology  transfer and engineering  services
fees are included in deferred revenue  ($278,000 and $1,064,000 at September 30,
1997 and 1996, respectively).

Advertising  Expense. The Company expenses the costs of advertising as incurred.
Advertising expense was approximately  $552,000,  $617,000, and $576,000 for the
fiscal years ended September 30, 1997, 1996, and 1995, respectively.

Concentration of Credit Risk. Financial instruments that potentially subject the
Company to concentrations of credit risk consist principally of cash investments
and trade receivables.

The Company's  policy is to place its cash and short-term  investments with high
credit  quality  institutions  and  limit  the  amount  invested  with  any  one
institution or in any type of financial instrument. The company does not hold or
issue financial instruments for trading purposes.

                                       31

<PAGE>


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. The
Company  generally does not require  collateral  from its trade  creditors.  The
concentration of credit risk in the Company's trade receivables is substantially
mitigated  by the  Company's  credit  evaluation  process  and the  geographical
dispersion of sales transactions. Bad debt write-offs have been insignificant.

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

                                                        September 30,
                                               1997          1996         1995
                                               -------------------------------

Microtek International, Inc.                    14%          15%           *
Marshall Industries                              *            *           13%
Internix, Inc.                                   *            *           11%
Insight Electronics, Inc.                       12%           *           10%

*indicates net revenues below 10%

Net Income  Per Share.  Net  income  per share is  computed  using the  weighted
average number of shares of common stock and dilutive common  equivalent  shares
from convertible  preferred stock (using the if-converted method) and from stock
options (using the treasury stock method).

In March 1997 the Financial Accounting Standards Board (FASB) released Statement
of Financial  Accounting Standards No. 128 "Earnings Per Share" (FAS 128), which
is required to be adopted on December 31, 1997.  At that time,  the Company will
be required to change the method  currently  used to compute  earnings per share
and to restate all prior periods.  Under the new  requirements  for  calculating
primary net income per share (basic earnings per share),  the dilutive effect of
stock  options will be excluded.  The Company's  basic and diluted  earnings per
share as calculated according to FAS 128 would have been as follows:

                                                     September 30,
                                             1997         1996         1995
                                             ------------------------------
Basic Earnings Per Share                  $   0.06     $   0.52     $   1.46
Diluted Earnings Per Share                $   0.06     $   0.47     $   0.34

Capital  Structure.  In February 1997, the FASB released  Statement of Financial
Accounting   Standards  No.  129,   "Disclosure  of  Information  about  Capital
Structure"  (FAS 129).  FAS 129  consolidates  the existing  guidance  regarding
disclosure relating to a company's capital structure and is effective for fiscal
years beginning after December 15, 1997.  Adoption of FAS 129 is not expected to
have a material impact on the Company's consolidated financial statements.

Comprehensive  Income.  In June 1997,  the FASB released  Statement of Financial
Accounting  Standards No. 130, "Reporting  Comprehensive  Income" (FAS 130). FAS
130 establishes  standards for the reporting and display of comprehensive income
and its components in a full set of general purpose financial  statements and is
effective  for fiscal years  beginning  after  December  15,  1997.  The Company
believes  that  adoption  of FAS 130  will  not have a  material  impact  on the
Company's consolidated financial statements

Segment  Information.  In June 1997,  the FASB  released  Statement of Financial
Accounting  Standards No. 131, " Disclosures about Segments of an Enterprise and
Related  Information"  (FAS 131).  FAS 131 will change the way companies  report
selected segment  information in annual  financial  statements and also requires
those  companies to report  selected  segment  information in interim  financial
reports to  stockholders.  FAS 131 is effective for fiscal years beginning after
December 15, 1997. The Company has not completed the determination of the impact
of the new rule on the Company's consolidated financial statements.

                                       32
<PAGE>


2. Inventories

Inventories consisted of the following (in thousands):

                                                             September 30,
                                                        1997               1996
                                                       -------------------------

Raw materials                                          $  431             $  800
Work-in-process                                         5,039              4,266
Finished goods                                          1,899              1,409
                                                       -------------------------
                                                       $7,369             $6,475
                                                       =========================

3. Borrowing Arrangements

At September 30, 1997 the Company had a  non-revolving  lease line of credit for
up to  $5,000,000,  which  can be  utilized  for up to 100% of the  value of the
equipment  financed.  Amounts drawn under this line represent  five-year capital
leases.  The  non-revolving  lease line of credit  expires in December  1997. At
September 30, 1997,  $2,100,000 was outstanding,  and  approximately  $2,900,000
remained  available under the line.  Amounts drawn under this line bear interest
at a rate equal to five year  Treasury  notes plus 2.25% (8.24% at September 30,
1997).

At  September  30,  1997 the Company  had a second  non-revolving  lease line of
credit for up to  $5,000,000,  which can be utilized for up to 100% of the value
of the equipment financed.  Amounts drawn under this line include three and five
year leases.  The  non-revolving  lease line of credit expires in March 1998. At
September 30, 1997,  $1,942,000 was outstanding,  and  approximately  $3,058,000
remained  available under the line.  Amounts drawn under this line bear interest
at a rate equal to three year  Treasury  notes plus 1.95% and five year Treasury
notes plus 2.10%  depending on the lease term (7.84% and 8.09%,  respectively at
September 30, 1997).

In addition,  as of September 30, 1997, the Company had four  outstanding  notes
payable totaling $785,000. These three-year notes bear interest at rates ranging
from prime plus 0.25% to prime  plus  1.75%  (8.75% to 10.25% at  September  30,
1997).  These notes originated from previously  expired  nonrevolving  equipment
lines of  credit.  These  notes  contain  financial  covenants  which were fully
complied with at September 30, 1997.

Future  payments  on notes  payable at  September  30,  1997 were as follows (in
thousands):

           1998                                       $ 657
           1999                                         128
           After 2000                                  --
                                                      -----
           Total                                      $ 785
                                                      =====

4. Obligations Under Capital Leases

Machinery and equipment  included  approximately  $4,491,000  and  $1,024,000 of
equipment acquired under capital leases and approximately  $705,000 and $114,063
of  related   accumulated   amortization   at  September   30,  1997  and  1996,
respectively.  Amortization  of capital leases is included in  depreciation  and
amortization expense.

                                       33

<PAGE>


The  following  is a schedule by year of future  minimum  lease  payments  under
capital  leases,  together  with  the  present  value of the net  minimum  lease
payments as of September 30, 1997 (in thousands):

           1998                                                $1,134
           1999                                                 1,117
           2000                                                 1,094
           2001                                                   985
           2002                                                   464
                                                               ------
           Total minimum lease payments                         4,794
           Amount representing interest                          (752)
                                                               ------
           Present value of net minimum lease payments         $4,042
                                                               ======

5. Commitments

The Company leases its principal  facilities  under operating leases that expire
at various dates through the year 2005. The Company is generally responsible for
taxes, assessments, maintenance, and insurance under its leases.

Future  minimum  lease  payments  under  operating  leases that have  initial or
remaining  noncancelable  lease terms in excess of one year, as of September 30,
1997, were approximately as follows (in thousands):

           1998                                                $  738
           1999                                                   725
           2000                                                   710
           2001                                                   714
           2002                                                   733
           Thereafter                                           1,571
                                                                -----
           Total                                               $5,191
                                                               ======

Total  rental  expense  on all  operating  leases  was  approximately  $689,000,
$339,000,  and $401,000 for the fiscal years ended September 30, 1997, 1996, and
1995,  respectively.  At September 30, 1997, there were  outstanding  cancelable
commitments for capital expenditures of approximately $2.4 million.

6. Stockholders' Equity

Preferred  Stock.  Upon the  closing of the initial  public  offering in October
1995, all 4,936,648  outstanding shares of Series 1 Convertible  Preferred Stock
of the Company (the "Convertible  Preferred") were automatically  converted into
4,936,648 shares of Common Stock.

Employee  Stock  Purchase  Plan.  The Company has reserved and the  stockholders
approved 225,000 shares of common stock for issuance to eligible employees under
the 1995 Purchase Plan (the Purchase  Plan).  Under the Purchase Plan,  eligible
employees, subject to certain restrictions,  may purchase shares of common stock
at a price  equal to the  lesser of 85% of the fair  market  value at either the
beginning  of each  six-month  offering  period  or the  end of  each  six-month
offering period.  As of September 30, 1997, no shares have been issued under the
Purchase Plan.

                                       34

<PAGE>


Stock  Option  Plans.  In August 1995,  the Board of  Directors  approved and in
September  1995, the  stockholders  approved (i) the adoption of the 1995 Equity
Incentive  Plan (the 1995 Equity Plan) as the  successor  to the 1994  Incentive
Plan (the Predecessor  Plan),  pursuant to which 550,000 shares of the Company's
common stock,  plus the number of shares  remaining  unissued and not subject to
outstanding  options  under the  Predecessor  Plan and any shares  issuable upon
exercise of options  granted  under the  Predecessor  Plan that expire or become
unexercisable  for any reason without  having been exercised in full,  have been
reserved for future issuance, and (ii) the adoption of the 1995 Directors' Stock
Option Plan (the 1995  Directors'  Plan) pursuant to which 150,000 shares of the
Company's common stock have been reserved for future issuance.  Each outstanding
option under the Predecessor  Plan will continue to be governed by the terms and
conditions  of such  plan;  no  additional  options  will be  granted  under the
Predecessor  Plan.  In December  1996,  the Board of  Directors  approved and in
February  1997,  the  stockholders  approved the adoption of an amendment to the
1995 Equity Plan pursuant to which an additional 400,000 shares of the Company's
Common Stock have been reserved for future issuance.

Under the 1995 Equity Plan,  incentive stock options may be granted to employees
only at the  price  per share  that is not less  than the fair  market  value of
common  stock on the date of  grant.  Nonqualified  options  may be  granted  to
employees  or others at a price per share not less than 85% of fair market value
of the common stock on the date of grant.  Options are exercisable to the extent
vested.  Vesting,  as established by the Board of Directors,  generally  accrues
monthly over four years from the date of grant. The Company may also grant stock
bonuses and issue restricted stock to employees and others. The Company has made
no such grants  since the 1995  Equity  Plan's  inception.  The 1995 Equity Plan
expires ten years after adoption.

Under  the  1995  Directors'  Plan,  nonqualified  options  may  be  granted  to
nonemployee directors only at the price per share that is not less than the fair
market  value of  common  stock on the date of  grant.  Vesting  under  the 1995
Directors' Plan accrues monthly over four years from the date of grant. The 1995
Directors' Plan expires ten years after adoption.

1997 Option Repricing  Program.  Competition for skilled engineers and other key
employees in the  semiconductor  industry is intense and the use of  significant
stock options for retention  and  motivation of such  personnel is widespread in
the high technology  industries.  The Compensation Committee believes that stock
options are a critical  component of the compensation  offered by the Company to
promote  long-term   retention  of  key  employees,   motivate  high  levels  of
performance and recognize employee  contributions in the success of the Company.
The market price of the Company's  common stock decreased  substantially  from a
high of $13.25 on April 30,  1996 to a low of $3.125 on April 2, 1997.  In light
of this  substantial  decline in the market price,  the  Compensation  Committee
believed  that the large numbers of  outstanding  stock options with an exercise
price in excess of the actual  market price were no longer an effective  tool to
encourage employee retention or to motivate high levels of performance.  Many of
these options were granted prior to the Company's initial public offering.

Employees and Consultants.  The Compensation  Committee  approved,  on April 25,
1997,  an option  repricing  program for all employees  and  consultants  to the
Company who were not executive officers of the Company.  Under this program, the
eligible  optionees  were  permitted to exchange  one or more of their  existing
stock  options  ("Old  Options")  for new  stock  options  ("Repriced  Options")
covering a number of shares equal to the number of unexercised shares covered by
the  applicable  Old Option under the Elantec  Semiconductor,  Inc.  1995 Equity
Incentive  Plan or the Elantec,  Inc.  1994 Equity  Incentive  Plan that (a) was
exercisable  at a per share price that was greater than the last reported  sales
price of the Company's Common Stock on the Nasdaq National Market on May 7, 1997
and  (b)  was  held  by an  optionee  who  was  not  an  executive  officer.  In
consideration of receiving a Repriced Option, the optionee forfeited all accrued
vesting on Old Options and  recommenced  vesting on May 7, 1997 as to 2.0833% of
the shares subject to such Repriced  Options at the end of each full  succeeding
month thereafter. Each exchanged Old Option was cancelled. Approximately 543,000
options  were  repriced  by  employees   (excluding   executive   officers)  and
consultants. The exercise price of the Repriced Options was equal to the closing
market price ($4.25) on May 7, 1997.

                                       35

<PAGE>


Executive Officers.  The Compensation  Committee approved,  on June 25, 1997, an
option repricing program for executive officers of the Company who were eligible
to participate in the program.  Under this program,  the executive officers were
permitted  to  exchange  one or more  of  their  existing  stock  options  ("Old
Options") for new stock options ("Repriced Options") covering a number of shares
equal to the number of  unexercised  shares covered by the applicable Old Option
under the Elantec Semiconductor, Inc. 1995 Equity Incentive Plan or the Elantec,
Inc. 1994 Equity  Incentive Plan that (a) is exercisable at a per share price of
$4.25 or the last  reported  sales price of the  Company's  Common  Stock on the
Nasdaq National Market on July 1, 1997, whichever is higher. In consideration of
receiving a Repriced Option,  the optionee  forfeited all accrued vesting on Old
Options  and  recommenced  vesting  on July 1, 1997 as to  2.0833% of the shares
subject  to such  Repriced  Options  at the end of each  full  succeeding  month
thereafter.  Each exchanged Old Option was cancelled. A total of 186,000 options
were repriced by executive officers.  The exercise price of the Repriced Options
($4.25) was above the closing market price ($4.0625) on July 1, 1997.

<TABLE>
Additional information with respect to the Company's stock option plans follows:

<CAPTION>
                                                                            Options Outstanding
                                                                   --------------------------------------
                                                      Shares            Number              Price
                                                    Available          of Shares          Per Share
                                                 --------------------------------------------------------

<S>                                                 <C>                 <C>             <C>                     <C>  
Balance at September 30, 1994                          185,380          1,413,727       $0.20 - $6.00
   Additional share reservation                        860,000             -                $ -
   Options granted                                    (562,387)           562,387       $6.00 - $9.00
   Options exercised                                    -                (238,517)      $0.20 - $7.00
   Options canceled                                     52,740            (52,740)      $0.20 - $7.00
   Options expired                                     (12,590)            -                $ -
                                                 --------------------------------------------------------
Balance at September 30, 1995                          523,143          1,684,857       $0.20 - $9.00
   Options granted                                    (204,000)           204,000       $5.75 - $11.25
   Options exercised                                    -                (369,240)      $0.20 - $9.00         Weighted
   Options canceled                                    147,465           (147,465)      $0.20 - $11.25      Average Price
   Options expired                                     (23,865)            -                  -               Per Share
                                                 ---------------------------------------------------------------------------
Balance at September 30, 1996                          442,743          1,372,152       $0.20 - $11.25          $4.60
   Additional share reservation                        400,000             -                $ -                 $ -
   Options granted                                  (1,422,457)         1,422,457       $3.75 - $6.75           $4.76
   Options exercised                                    -                (273,772)      $0.20 - $5.00           $0.58
   Options canceled                                    936,251           (936,251)      $0.20 - $11.25          $6.90
   Options expired                                        (882)            -                $ -                 $ -
                                                 ---------------------------------------------------------------------------
Balance at September 30, 1997                          355,655          1,584,586       $0.20 - $11.25          $4.09
                                                 ===========================================================================
</TABLE>

<TABLE>
The following table summarizes  information  about stock options  outstanding at
September 30, 1997:

<CAPTION>
                                 Options Outstanding                                           Options Exercisable
--------------------------------------------------------------------------------------- ----------------------------------
                          Number             Weighted Average        Weighted Average      Number       Weighted Average
 Range of Exercise    Outstanding at      Remaining Contractual       Exercise Price     Exercisable     Exercise Price
      Prices              9/30/97              Life (Years)                              at 9/30/97
--------------------------------------------------------------------------------------- ----------------------------------

<S>       <C>              <C>                     <C>                    <C>                 <C>            <C>   
  $0.20 - $ 1.00           240,082                 2.98                   $ 0.51              240,082        $ 0.51
  $1.50 - $ 5.75         1,074,839                 9.06                   $ 4.18              231,146        $ 3.70
  $6.00 - $ 8.75           251,186                 9.22                   $ 6.76               45,425        $ 6.55
  $9.00 - $10.00            18,479                 8.01                   $ 9.05                9,154        $ 9.04
                                                                                           ----------------------------
 $ 0.20-$10.00           1,584,586                 8.15                   $ 4.09              525,807        $ 2.58
                                                                                           ============================
</TABLE>

At September 30, 1997 and 1996,  525,807,  and 794,891 options were exercisable,
respectively.

                                       36

<PAGE>


Stock-Based  Compensation.  Under APB 25, the Company  generally  recognizes  no
compensation expense with respect to stock-based awards to employees.  Pro forma
information  regarding  net income and earnings per share is required by FAS 123
for awards granted in fiscal years that begin after December 31, 1994, as if the
Company had accounted  for its  stock-based  awards to employees  under the fair
value method of FAS 123. The fair value of the Company's  stock-based  awards to
employees  was  estimated  using  a  Black-Scholes  option  pricing  model.  The
Black-Scholes  option  valuation  model was developed for use in estimating  the
fair value of traded  options  that have no vesting  restrictions  and are fully
transferable.  The  Black-Scholes  model requires the input of highly subjective
assumptions including the expected stock price volatility. Because the Company's
stock-based  awards to employees have  characteristics  significantly  different
from  those of traded  options,  and  because  changes in the  subjective  input
assumptions  can  materially  affect the fair value  estimate,  in  management's
opinion,  the  existing  models do not  necessarily  provide a  reliable  single
measure of the fair value of its stock-based awards to employees. The fair value
of the  Company's  stock-based  awards to employees  was  estimated  assuming no
expected dividends and the following weighted-average assumptions:

                                                                  Options
                                                              1997        1996
                                                              ----------------
               Expected life (years)                           5.0        5.0
               Expected volatility                            75.3%      75.3%
               Risk free interest rate                         6.0%       6.0%

The  weighted-average  fair value of stock options  granted during 1997 and 1996
was $3.44 and $5.68,  respectively  For purposes of pro forma  disclosures,  the
estimated  fair value of the options is amortized to pro forma net income (loss)
over  the  options  vesting  period.  The  Company's  historical  and pro  forma
information follows (in thousands, except for per share information):

                                                               September 30,
                                                            1997          1996
                                                            ------------------
               Net income (loss):
                    Historical                            $   566       $ 4,389
                    Pro Forma                             $  (283)      $ 4,111

               Net income (loss) per share:
                    Historical                            $  0.06       $  0.47
                    Pro Forma                             $ (0.03)      $  0.44

Because  FAS 123 is  applicable  to awards  granted  in fiscal  years that begin
subsequent  to  December  31,  1994,  its pro  forma  effect  will  not be fully
reflected until approximately fiscal year 2000.

7. Taxes on Income

The provision for taxes on income consisted of the following (in thousands):

                                                   September 30,
                                        1997              1996             1995
                                        ---------------------------------------
               Current:
                  Federal                $24              $207             $178
                  State                    7                90               10
                  Foreign                 50                75               50
                                        ---------------------------------------
               Total                     $81              $372             $238
                                        =======================================

Foreign  income taxes are incurred on  technology  transfer fees received from a
foreign third party.

                                       37

<PAGE>


Significant  components  of the  Company's  deferred  tax assets for federal and
state income taxes were as follows (in thousands):

                                                              September 30,
                                                          1997           1996
                                                         ----------------------
               Deferred tax assets:
                  Net operating loss carryforwards       $ 1,253        $ 1,201
                  Tax credit carryforwards                 1,581          1,269
                  Distributor reserves                       776            722
                  Deferred revenue                           107            669
                  Other                                    1,142            389
               Total deferred tax assets                   4,859          4,250
               Less valuation allowance                   (4,859)        (4,250)
                                                         ----------------------
               Net deferred tax                          $   --         $   --
                                                         ======================

The  valuation  allowance  increased  by  approximately  $609,000  in  1997  and
decreased by approximately  $1,701,000 in 1996.  Management has concluded that a
full  valuation  allowance is necessary  due to the Company's  limited  earnings
history and volatility of the industry.

The  provisions for taxes on income  differed from the provisions  calculated by
applying  the  federal  statutory  rate to income  before  taxes as follows  (in
thousands):

                                                           September 30,
                                                    1997        1996      1995
                                                   ----------------------------

       Expected provisions at statutory rates      $   220     $1,619    $1,003
       State taxes, net of federal benefit               4         59       --
       Foreign taxes                                    33         75       50
       Benefit of net operating loss
       carryforwards                                  (190)    (1,418)     (993)
       Other                                            14         37       178
                                                   ----------------------------
                                                   $    81     $  372    $  238
                                                   ============================

At September 30, 1997, the Company had federal net operating loss  carryforwards
of  approximately  $3,680,000  that expire in the years 2004  through  2005.  In
addition,  the Company had federal  general  business  credit  carryforwards  of
approximately  $739,000  that expire in the years 1999  through 2011 and foreign
tax credit carryforwards of $625,000 that expire in 1998 through 2001.

Under certain  provisions of the Internal Revenue Code of 1986, as amended,  the
availability  of the Company's net operating  loss and tax credit  carryforwards
may be subject to limitation  if it should be  determined  that there has been a
change in ownership of more than 50% of the value of the Company's  stock.  Such
determination  could limit the  utilization of net operating loss and tax credit
carryforwards.

8. Employee Benefit Plan

The Company has a 401(k)  savings plan that covers  substantially  all full-time
employees.  Eligible  employees  are permitted to make fully vested tax deferred
contributions  of up to 15% of  their  annual  gross  compensation,  subject  to
certain  Internal  Revenue Service  limitations.  The plan provides for employer
contributions at the discretion of the Board of Directors. Contributions made by
the  Company  for the  years  ended  September  30,  1997,  1996,  and 1995 were
approximately $18,000, $20,000, and $14,000, respectively.

                                       38

<PAGE>


9. Industry and Geographic Information

The  Company  operates in a single  industry  segment.  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:

                                                      September 30,
                                             1997          1996          1995
                                             --------------------------------

                  Domestic                    44%            48%          56%
                  Export:
                     Europe                   14             13           11
                     Asia                     42             39           33
                                             --------------------------------
                                             100%           100%         100%
                                             =============================== 

10. Contingencies

The Company is a party to a number of legal proceedings  arising in the ordinary
course of its business.  These actions  include  patent  liability,  warranty of
merchantability and employee-related issues. While it is not feasible to predict
or  determine  the  outcome of these  matters,  the  Company  believes  that the
ultimate  resolution of these claims will not have a material  adverse effect on
its financial position or results of operations.

11. Fair Value of Financial Instruments

The Company has evaluated the estimated fair value of financial instruments. The
amounts reported as cash and cash equivalents,  accounts receivable,  short-term
borrowings, accounts payable, and accrued expenses approximate fair value due to
their  short-term  maturities.  The fair value for long-term  debt was estimated
using  discounted  cash flow  analysis  based on  estimated  interest  rates for
similar types of borrowing  arrangements  and the  resulting  fair value was not
significantly different from the amounts reported.

                                       39

<PAGE>


<TABLE>
                                            Elantec Semiconductor, Inc.

                                      Unaudited Interim Financial Information


Selected Quarterly Financial Data:
<CAPTION>
                1997                              1st        2nd        3rd        4th
                                                 ----------------------------------------
                                              (Unaudited, in thousands except per share data)

<S>                                              <C>        <C>        <C>        <C>    
Revenue                                          $ 8,001    $ 8,494    $ 9,195    $ 9,698
Gross profit                                       3,191      3,791      3,972      4,323
Income (loss) from operations                       (198)       (39)       (11)       425
Net income                                           (97)        67         98        498
Net income per share                             $ (0.01)   $  0.01    $  0.01    $  0.05


                1996                              1st        2nd        3rd        4th
                                                 ----------------------------------------
                                              (Unaudited, in thousands except per share data)

Revenue                                          $ 8,567    $ 9,597    $ 9,782    $ 8,860
Gross profit                                       4,505      5,040      5,155      4,098
Income from operations                             1,111      1,199      1,325        665
Net income                                         1,121      1,213      1,323        732
Net income per share                             $  0.12    $  0.13    $  0.14    $  0.08
</TABLE>

                                       40

<PAGE>


<TABLE>

                                                                                                                Schedule II

                                                Elantec Semiconductor, Inc.

                                             Valuation And Qualifying Accounts

                                       Year ended September 30, 1997, 1996, and 1995



<CAPTION>
                                                                            Additions
                                                              Balance at    Charged to
                                                              Beginning      Cost and                        Balance at
                                                               of Year       Expense        Deductions      End of Year
                                                             -------------------------------------------------------------

<S>                                                               <C>         <C>             <C>               <C> 
Year ended September 30, 1997
   Allowance  for  doubtful  accounts  and  product
     returns (deducted from accounts receivable)                  $340        $1,447          ($947)            $840
                                                             =============================================================
Year ended September 30, 1996
   Allowance  for  doubtful  accounts  and  product
     returns (deducted from accounts receivable)                  $265          $566          ($491)            $340
                                                             =============================================================
Year ended September 30, 1995
   Allowance  for  doubtful  accounts  and  product
     returns (deducted from accounts receivable)                  $287          $776          ($798)            $265
                                                             =============================================================
</TABLE>

                                                             41

<PAGE>


                                   SIGNATURES

         Pursuant to the  requirements  of Section 13 or 15(d) 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,  in the
City of Milpitas, State of California, on the 26th day of December, 1997.

                                           ELANTEC SEMICONDUCTOR, INC.

                                           By:      /s/ David O'Brien
                                                    ----------------------------

                                           David O'Brien
                                           President, Chief Executive Officer,
                                           Chief Financial Officer and Director

         KNOW ALL PERSONS BY THESE  PRESENTS,  that each person whose  signature
appears  below  constitutes  and  appoints  David  O'Brien,  his true and lawful
attorneys-in-fact,  each with the power of substitution,  for him in any and all
capacities,  to sign  amendments  to this  Report on Form 10-K,  and to file the
same,  with all exhibits  thereto and other  documents in connection  therewith,
with the Securities and Exchange Commission, hereby ratifying and conforming all
that said attorneys-in-fact,  or his or her substitute or substitutes, may do or
cause to be done by virtue thereof.

<TABLE>
         Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, this report has been signed below by the following persons on behalf of
the Registrant and in the capacities and on the dates indicated.

<CAPTION>
                      Name                                         Title                                 Date
                      ----                                         -----                                 ----

<S>                                                <C>                                             <C> 
Principal Executive/Financial Officer:

/s/ David O'Brien                                 President, Chief Executive Officer,              December 29, 1997
--------------------------------------------      Chief Financial Officer and Director                           
     David O'Brien                                

Additional Directors:

/s/ Donald T. Valentine                           Chairman of the Board of Directors               December 29, 1997
--------------------------------------------                                                                        
     Donald T. Valentine
/s/ Chuck K. Chan                                 Director                                         December 29, 1997
--------------------------------------------                                                                        
     Chuck K. Chan
/s/ James V. Diller                               Director                                         December 29, 1997
--------------------------------------------                                                                        
     James V. Diller
/s/ B. Yeshwant Kamath                            Director                                         December 29, 1997
--------------------------------------------                                                                                
     B. Yeshwant Kamath

</TABLE>
                                       42

<PAGE>


                       SECURITIES AND EXCHANGE COMMISSION



                             Washington, D.C. 20549



                                   -----------



                                    EXHIBITS

                                       to

                                    Form 10-K



                                      Under

                           THE SECURITIES ACT OF 1933



                                   -----------



                           ELANTEC SEMICONDUCTOR, INC.


                                       43

<PAGE>


                                INDEX TO EXHIBITS



Exhibit          Description                                            Page
Number           -----------                                             No.
------                                                                   ---
 11.01           Statement Re Computation of Per Share Earnings.         45
 23.01           Consent of Ernst & Young LLP, Independent Auditors.     46
 24.01           Powers of Attorney.                                     47
 27.01           Financial Data Schedule                                 48


                                       44