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UNITED STATES
SECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549

FORM 10-Q

|  | (Mark One)                                                                                
|- | ------------------------------------------------------------------------------------------
|x | QUARTERLY REPORT PURSUANT TO
  SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 
|  |                                                                                           
|  | For the quarterly period ended April 3, 2004                                              
|  |                                                                                           
|o | 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 0-3698

|SILICONIX INCORPORATED                                
|------------------------------------------------------
|                                                      
|(Exact name of registrant as specified in its charter)
|                                                      
|Delaware                                              
|                                                      
|(State or Other Jurisdiction of
  Incorporation)      
|                                                      
|2201 Laurelwood Road,
  Santa Clara, CA 95054         
|                                                      
|(Address of Principal Executive
  Offices)            

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.YesxNoo

Indicate by checkmark whether the registrant is an accelerated filer
(as defined in Rule 12b-2 of the Exchange Act).YesxNoo

As of May 6, 2004 registrant had 29,879,040 shares of its common stock
outstanding.

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SILICONIX INCORPORATED

FORM 10-Q

APRIL 3, 2004

CONTENTS

|         |         |                                                                                                                 | Page
  Number
|-------- | ------- | --------------------------------------------------------------------------------------------------------------- | -------------
|         |         |                                                                                                                 |              
|         |         |                                                                                                                 |              
|PART I.  |         | FINANCIAL INFORMATION                                                                                           |              
|         |         |                                                                                                                 |              
|         | Item 1. | Financial Statements                                                                                            |              
|         |         |                                                                                                                 |              
|         |         | Consolidated Balance Sheets
  (Unaudited)  April 3, 2004 and December 31, 2003                                 | 3            
|         |         |                                                                                                                 |              
|         |         | Consolidated Statements of Operations
  (Unaudited)   Fiscal
  Quarters Ended April 3, 2004 and March 29, 2003 | 4            
|         |         |                                                                                                                 |              
|         |         | Consolidated Statements of Cash Flows
  (Unaudited)   Fiscal
  Quarters Ended April 3, 2004 and March 29, 2003 | 5            
|         |         |                                                                                                                 |              
|         |         | Notes to Consolidated Financial Statements
  (Unaudited)                                                        | 6            
|         |         |                                                                                                                 |              
|         | Item 2. | Managements Discussion and Analysis of FinancialCondition and
  Results of Operations                          | 8            
|         |         |                                                                                                                 |              
|         | Item 3. | Quantitative and Qualitative Disclosures About Market Risk                                                      | 13           
|         |         |                                                                                                                 |              
|         | Item 4. | Controls and Procedures                                                                                         | 13           
|         |         |                                                                                                                 |              
|PART II. |         | OTHER INFORMATION                                                                                               |              
|         |         |                                                                                                                 |              
|         | Item 1. | Legal Proceedings                                                                                               | 14           
|         |         |                                                                                                                 |              
|         | Item 2. | Changes in Securities                                                                                           | 14           
|         |         |                                                                                                                 |              
|         | Item 3. | Defaults Upon Senior Securities                                                                                 | 14           
|         |         |                                                                                                                 |              
|         | Item 4. | Submission of Matters to a Vote of Security Holders                                                             | 14           
|         |         |                                                                                                                 |              
|         | Item 5. | Other information                                                                                               | 14           
|         |         |                                                                                                                 |              
|         | Item 6. | Exhibits and Reports on Form 8-K                                                                                | 14           
|         |         |                                                                                                                 |              
|         |         | SIGNATURES                                                                                                      | 15           

2

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PART I -
FINANCIAL INFORMATION

Item 1.
Financial Statements

Siliconix incorporatedConsolidated Balance Sheets
(In thousands)

|                                       |                                              | April 3,
  2004 |  | December 31,
  2003 |        
|-------------------------------------- | -------------------------------------------- | --------------- |  | ------------------- | -------
|                                       |                                              |                 |  |                     |        
|Assets                                 |                                              |                 |  |                     |        
|Current assets:                        |                                              |                 |  |                     |        
|                                       | Cash and cash equivalents                    |                 |  | $                   | 296,078
|                                       | Accounts receivable, net                     |                 |  |                     | 53,897 
|                                       | Accounts receivable from
  affiliates        |                 |  |                     | 29,259 
|                                       | Inventories                                  |                 |  |                     | 62,566 
|                                       | Other current assets                         |                 |  |                     | 19,654 
|                                       | Deferred income taxes                        |                 |  |                     | 3,508  
|                                       |                                              |                 |  |                     |        
|                                       | Total current assets                         |                 |  |                     | 464,962
|                                       |                                              |                 |  |                     |        
|Property and equipment, at
  cost:     |                                              |                 |  |                     |        
|                                       | Land                                         |                 |  |                     | 1,715  
|                                       | Buildings and improvements                   |                 |  |                     | 58,009 
|                                       | Machinery and equipment                      |                 |  |                     | 369,472
|                                       |                                              |                 |  |                     |        
|                                       |                                              |                 |  | 429,196             |        
|                                       | Less accumulated
  depreciation              |                 |  |                     | 292,288
|                                       |                                              |                 |  |                     |        
|                                       |                                              |                 |  | 136,908             |        
|Goodwill                               |                                              |                 |  | 7,445               |        
|Other assets                           |                                              |                 |  | 1,595               |        
|                                       |                                              |                 |  |                     |        
|                                       | Total assets                                 |                 |  | $                   | 610,910
|                                       |                                              |                 |  |                     |        
|Liabilities and
  Stockholders Equity |                                              |                 |  |                     |        
|Current liabilities:                   |                                              |                 |  |                     |        
|                                       | Accounts payable                             |                 |  | $                   | 28,308 
|                                       | Accounts payable to
  affiliates             |                 |  |                     | 30,168 
|                                       | Accrued payroll and
  related compensation   |                 |  |                     | 8,846  
|                                       | Other accrued liabilities                    |                 |  |                     | 31,176 
|                                       |                                              |                 |  |                     |        
|                                       | Total current liabilities                    |                 |  |                     | 98,498 
|                                       |                                              |                 |  |                     |        
|                                       |                                              |                 |  |                     |        
|Accrued pension benefits               |                                              |                 |  | 3,192               |        
|Deferred income taxes                  |                                              |                 |  | 15,498              |        
|Other non-current
  liabilities        |                                              |                 |  | 52,371              |        
|Minority interest                      |                                              |                 |  | 3,203               |        
|                                       |                                              |                 |  |                     |        
|                                       | Total liabilities                            |                 |  |                     | 172,762
|                                       |                                              |                 |  |                     |        
|Commitments and
  contingencies        |                                              |                 |  |                     |        
|Stockholders equity:                  |                                              |                 |  |                     |        
|                                       | Common stock                                 |                 |  |                     | 299    
|                                       | Additional paid-in-capital                   |                 |  |                     | 59,373 
|                                       | Retained earnings                            |                 |  |                     | 379,621
|                                       | Accumulated other
  comprehensive loss       |                 |  |                     | (1,145 
|                                       |                                              |                 |  |                     |        
|                                       | Total stockholders equity                   |                 |  |                     | 438,148
|                                       |                                              |                 |  |                     |        
|                                       | Total liabilities and
  stockholders equity |                 |  | $                   | 610,910
|                                       |                                              |                 |  |                     |        
|                                       |                                              |                 |  |                     |        

See accompanying notes.

3

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Siliconix incorporatedConsolidated Statements of Operations
(In thousands, except per share and share information)

|                                                         |  | Three Fiscal Months Ended |  
|-------------------------------------------------------- |  | ------------------------- | -
|                                                         |  | April 3,
  2004           |  
|                                                         |  |                           |  
|                                                         |  |                           |  
|Net sales                                                |  |                           | $
|Cost of products sold                                    |  |                           |  
|                                                         |  |                           |  
|                                                         |  |                           |  
|Gross profit                                             |  |                           |  
|                                                         |  |                           |  
|Operating expenses:                                      |  |                           |  
|Research and development                                 |  |                           |  
|Selling, marketing, and
  administrative expenses        |  |                           |  
|                                                         |  |                           |  
|                                                         |  |                           |  
|Operating income                                         |  |                           |  
|                                                         |  |                           |  
|Interest income                                          |  |                           |  
|Other income (expense) net                               |  |                           |  
|                                                         |  |                           |  
|                                                         |  |                           |  
|Income before taxes and
  minority interest              |  |                           |  
|Income tax provision                                     |  |                           |  
|Minority interest in
  income of consolidated subsidiary |  |                           |  
|                                                         |  |                           |  
|                                                         |  |                           |  
|Net income                                               |  |                           | $
|                                                         |  |                           |  
|                                                         |  |                           |  
|Net income per share (basic
  and diluted)               |  |                           | $
|                                                         |  |                           |  
|                                                         |  |                           |  
|Shares used to compute net
  income per share            |  |                           |  
|                                                         |  |                           |  

See accompanying notes.

4

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Siliconix incorporatedConsolidated Statements of Cash Flows
(In thousands)

|                                                                                       |                                                      | Three Fiscal Months Ended |  
|-------------------------------------------------------------------------------------- | ---------------------------------------------------- | ------------------------- | -
|                                                                                       |                                                      | April 3,
  2004           |  
|                                                                                       |                                                      |                           |  
|                                                                                       |                                                      |                           |  
|Cash flows from operating
  activities:                                                |                                                      |                           |  
|Net income                                                                             |                                                      |                           | $
|Adjustments to reconcile
  net income to net cash provided 
  by operating activities: |                                                      |                           |  
|                                                                                       | Depreciation and
  amortization                      |                           |  
|                                                                                       | Deferred income taxes                                |                           |  
|                                                                                       | Other non-cash expenses                              |                           |  
|                                                                                       | Changes in operating assets
  and liabilities:       |                           |  
|                                                                                       | Accounts receivable                                  |                           |  
|                                                                                       | Accounts receivable from
  affiliates                |                           |  
|                                                                                       | Inventories                                          |                           |  
|                                                                                       | Other current assets                                 |                           |  
|                                                                                       | Accounts payable                                     |                           |  
|                                                                                       | Accounts payable to
  affiliates                     |                           |  
|                                                                                       | Accrued liabilities                                  |                           |  
|                                                                                       | Other                                                |                           |  
|                                                                                       |                                                      |                           |  
|Net cash provided by
  operating activities                                            |                                                      |                           |  
|                                                                                       |                                                      |                           |  
|                                                                                       |                                                      |                           |  
|Cash flows from investing
  activities:                                                |                                                      |                           |  
|                                                                                       | Purchase of property and
  equipment                 |                           |  
|                                                                                       | Proceeds from sale of
  property and equipment       |                           |  
|                                                                                       | Proceeds from short-term
  investment with affiliate |                           |  
|                                                                                       | Short-term investment with
  affiliate               |                           |  
|                                                                                       |                                                      |                           |  
|Net cash provided by (used
  in) investing activities                                  |                                                      |                           |  
|                                                                                       |                                                      |                           |  
|                                                                                       |                                                      |                           |  
|Effect of exchange rate
  changes on 
       cash and cash equivalents                 |                                                      |                           |  
|                                                                                       |                                                      |                           |  
|                                                                                       |                                                      |                           |  
|Net increase in cash and
  cash equivalents                                            |                                                      |                           |  
|                                                                                       |                                                      |                           |  
|Cash and cash equivalents:                                                             |                                                      |                           |  
|Beginning of period                                                                    |                                                      |                           |  
|                                                                                       |                                                      |                           |  
|End of period                                                                          |                                                      |                           | $
|                                                                                       |                                                      |                           |  
|                                                                                       |                                                      |                           |  

See accompanying notes.

5

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Notes to Consolidated
Financial Statements(Unaudited)

Note 1:   Basis of Presentation

The accompanying
unaudited consolidated condensed financial statements have been prepared in
accordance with the instructions to Form 10-Q and therefore do not include all
information and footnotes necessary for presentation of financial position,
results of operations, and cash flows required by accounting principles
generally accepted in the United States for complete financial statements. The
information furnished reflects all adjustments (consisting of normal recurring
accruals) which are, in the opinion of management, necessary for a fair summary
of the financial position, results of operations, and cash flows for the
interim periods presented.  The
financial statements should be read in conjunction with the financial
statements and notes thereto filed with the Companys Form 10-K for the year
ended December 31, 2003.  The
results of operations for the fiscal quarter ended April 3, 2004 are not
necessarily indicative of the results to be expected for the full year.

The Company reports
interim financial information for 13-week periods ending on a Saturday, except
for the first quarter, which always begins on January 1, and the fourth
quarter, which always ends on December 31. 
The four fiscal quarters in 2004 end on April 3, 2004, July 3, 2004,
October 2, 2004 and December 31, 2004, respectively.  The four fiscal quarters in 2003 ended on March 29, 2003, June
28, 2003, September 27, 2003, and December 31, 2003, respectively.

The Company is engaged
primarily in the design, marketing, and manufacturing of power and analog
semiconductor products. The Company is organized into three operating segments,
which due to their inter-dependencies, similar long-term economic characteristics,
and shared production processes and distribution channels have been aggregated
into one reportable segment.

Vishay Intertechnology,
Inc. owns 80.4% of the Companys outstanding common stock.  The Company maintains various agreements and
relationships with Vishay, as described in Note 2 to the Companys consolidated
financial statements included in the Companys Annual Report on Form 10-K for
the year ended December 31, 2003.  There
were no changes to these agreements and relationships during the first fiscal
quarter of 2004.

Due to the Companys
simple capital structure, basic and diluted net income per share are the same.

Certain prior period
amounts have been reclassified to conform to the current financial statement
presentation.

Note
2:   Inventories

The components of
inventory are as follows:

| | (In thousands)  |  | April
  3,
  2004 |   | December 31,
  2003 | 
| | --------------- |  | ----------------- | - | ------------------- | 
| |                 |  |                   |   |                     | 
| |                 |  |                   |   |                     | 
| | Finished goods  |  |                   | $ | 16,033              | 
| | Work-in-process |  |                   |   | 34,742              | 
| | Raw materials   |  |                   |   | 11,791              | 
| |                 |  |                   |   |                     | 
| |                 |  |                   | $ | 62,566              | 
| |                 |  |                   |   |                     | 

6

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Note
3:   Contingencies

As of April 3, 2004, the
Company remained a party to two environmental proceedings.

As of April 3, 2004, the
Company is engaged in discussions with various parties regarding patent
licensing and cross patent licensing issues. 
In addition, the Company has observed that in the current semiconductor
industry business environment, companies have become more aggressive in
asserting and defending patent claims against competitors.  While the Company will continue to
vigorously defend its intellectual property rights, the Company may become
party to disputes regarding patent licensing and cross patent licensing.  An unfavorable outcome regarding one of
these intellectual property matters could have a material adverse effect on the
Companys business and operating results.

In managements opinion,
based on discussion with legal counsel and other considerations, the ultimate
resolution of the above-mentioned matters are not expected to have a material
adverse effect on the Companys consolidated financial condition or results of
operations.  There have been no
significant changes in regard to these matters since December 31, 2003.

Note
4:   Comprehensive Income

Comprehensive income includes
the following components (in thousands):

| |                                      |                                           | Three Fiscal Months Ended |  
| | ------------------------------------ | ----------------------------------------- | ------------------------- | -
| |                                      |                                           | April 3,
  2004           |  
| |                                      |                                           |                           |  
| |                                      |                                           |                           |  
| | Net income                           |                                           |                           | $
| |                                      |                                           |                           |  
| | Other
  comprehensive income (loss): |                                           |                           |  
| |                                      | Foreign
  currency translation adjustment |                           |  
| |                                      | Pension
  liability adjustment            |                           |  
| |                                      |                                           |                           |  
| | Total other
  comprehensive loss     |                                           |                           |  
| |                                      |                                           |                           |  
| | Total
  comprehensive income         |                                           |                           | $
| |                                      |                                           |                           |  

Note
5:   New Accounting Pronouncements

In January 2003, the FASB
issued Interpretation No. 46 (FIN 46), Consolidation of Variable Interest Entities, an
interpretation of ARB 51. The primary objectives of this
interpretation are to provide guidance on the identification of entities for
which control is achieved through means other than through voting rights
(variable interest entities) and how to determine when and which business
enterprise (the primary beneficiary) should consolidate the variable interest
entity. This new model for consolidation applies to an entity in which either
(i) the equity investors (if any) do not have a controlling financial interest;
or (ii) the equity investment at risk is insufficient to finance that entitys
activities without receiving additional subordinated financial support from
other parties. In addition, FIN 46 requires that the primary beneficiary, as
well as all other enterprises with a significant variable interest in a
variable interest entity, make additional disclosures. Certain disclosure
requirements of FIN 46 were effective for financial statements issued after
January 31, 2003. In December 2003, the FASB issued FIN 46 (revised December
2003), Consolidation
of Variable Interest Entities (FIN 46-R) to address certain FIN 46
implementation issues.   The adoption of
FIN 46 and FIN 46-R did not have a material effect on the Companys financial
position, results of operations, or liquidity.

7

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

Overview

Siliconix incorporated is
engaged in designing, manufacturing, and marketing power and analog
semiconductor products. We are a leading manufacturer of power MOSFETs, power
ICs, and analog signal processing devices for computers, cellular phones, fixed
communication networks, automobiles and other electronic systems.  Power MOSFETs are low-voltage, surface-mount
products primarily used in the communication, computer, and automotive markets,
as well as other industrial and consumer applications.  Power ICs are integrated circuits used in
communication and data storage applications. 
The signal processing products are a wide array of commodity products
such as analog switches, low power MOSFETs, and JFETs used in the industrial
and consumer markets.

Vishay Intertechnology,
Inc. (Vishay) owns an 80.4% interest in Siliconix.  Vishay, a Fortune 1,000 company listed on the New York Stock
Exchange, is one of the worlds largest manufacturers of discrete semiconductors
(diodes, rectifiers, transistors, optoelectronics, and selected ICs) and
passive electronic components (resistors, capacitors, inductors, and
transducers).  Vishays components can
be found in products manufactured in a very broad range of industries
worldwide.  Vishay is headquartered in
Malvern, Pennsylvania, and has plants in seventeen countries employing
approximately 26,000 people.

We maintain various
agreements and relationships with Vishay. 
Our products are sold by the Vishay worldwide sales organizations.  Effective from January 2001, Vishay Americas
Inc., a wholly owned subsidiary of Vishay, assumed responsibility for
collecting our accounts receivable for the North America region.  Other relationships with Vishay include
administrative service sharing agreements, centralized payment services, a
short-term loan agreement, and management fees for services provided by the
Vishay corporate office.  All agreements
and relationships with Vishay are reviewed and approved by the Siliconix Board
of Directors.  There were no changes to
these agreements and relationships during the first fiscal quarter of 2004.

Net income in the first
quarter of 2004 was $14.0 million, or $0.47 per share, an increase of 33% from
net income of $10.5 million, or $0.35 per share, in the fourth quarter of 2003,
and an increase of 40% from net income of $10.0 million or $0.33 per share, in
the first quarter of 2003.  Net sales in
the first quarter of 2004 were $118.4 million, a 9% increase over net sales of
$108.6 million for the fourth quarter of 2003 and a 21% increase from net sales
of $97.8 million in the first quarter of 2003.

Financial Metrics

We analyze several
financial measures and metrics to evaluate the performance and predict the
future direction of our business.  These
key financial measures and metrics include sales, backlog, and book-to-bill
ratio.  We also monitor changes in
average selling prices.

End-of-period backlog is
one indicator of future sales.  
However, if demand falls below customers forecasts, or if customers do
not control their inventory effectively, they may cancel or reschedule the
shipments that are included in our backlog, in many instances without the
payment of any penalty.  Therefore, the
backlog is not necessarily indicative of the results to be expected for future
periods.

Another important
indicator of demand in our industry is the book-to-bill ratio, which is the
ratio of the amount of product ordered during a period as compared with the
product that we ship during that period. A book-to-bill ratio that is greater
than one indicates that our orders are building and that we are likely to see
increasing revenues in future periods. Conversely, a book-to-bill ratio that is
less than one is an indicator of declining demand and may foretell declining sales.

8

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The quarter-to-quarter
trends in these financial metrics can also be an important indicator of the
likely direction of our business.  The
following table shows sales, the end-of-period backlog and the book-to-bill ratio
for our business during the five quarters beginning with the first quarter of
2003 through the first quarter of 2004.

|                      |  | 1st Quarter
  2003 |   | 2nd Quarter
  2003 |  | 3rd Quarter
  2003 |  | 4th Quarter
  2003 |            | 1st Quarter
  2004 | 
|--------------------- |  | ------------------ | - | ------------------ |  | ------------------ |  | ------------------ | ---------- | ------------------ | 
|                      |  |                    |   |                    |  |                    |  |                    |            |                    | 
|                      |  |                    |   |                    |  |                    |  |                    |            |                    | 
|Sales                 |  |                    | $ | 97,826,000         |  |                    |  | $                  | 88,208,000 |                    | 
|                      |  |                    |   |                    |  |                    |  |                    |            |                    | 
|End-of-Period Backlog |  |                    | $ | 57,000,000         |  |                    |  | $                  | 64,600,000 |                    | 
|                      |  |                    |   |                    |  |                    |  |                    |            |                    | 
|Book-to-Bill Ratio    |  |                    |   | 0.94               |  |                    |  |                    | 1.08       |                    | 

Management
believes that these trends are an encouraging indication of broad-based demand
into the remainder of 2004, which will continue to encompass all of our major
markets and all geographic areas.

We continue to operate at
full internal capacity, and the increased product demand has continued to
create longer lead times for manufacturing. 
We have taken and will continue to take necessary steps to increase our
capacity to accommodate the increased demand. 
Our manufacturing strategy is to be able to supply about 80% of the
customer demand from the internal capacity, and to rely on foundries and
subcontractors to meet the other 20% of the business.  Presently, our use of foundries and subcontractors is higher than
20%.  Our strategy of outsourcing a
portion of our manufacturing requirements enables us to deal effectively with
the fluctuating cycles of the semiconductor industry.

Pricing
in our industry is volatile.  During the
first quarter, average selling prices increased 3.5% compared to the fourth
quarter of 2003.  The current average
pricing levels, however, are significantly below average prices attained in the
first quarter of 2003 and prior periods. 
We expect relatively stable to modestly rising pricing trends for 2004.

Results
of Operations

Income statement captions
as a percentage of net sales, and the effective tax rates, were as follows:

|                                                |  | Fiscal Quarter Ended |     
|----------------------------------------------- |  | -------------------- | ----
|                                                |  | April 3, 2004        |     
|                                                |  |                      |     
|                                                |  |                      |     
|Costs of products sold                          |  |                      | 70.0
|Gross profit                                    |  |                      | 30.0
|Research and development                        |  |                      | 4.5 
|Selling, marketing, and administrative expenses |  |                      | 11.1
|Operating income                                |  |                      | 14.5
|Income before taxes and minority interest       |  |                      | 15.2
|Net income                                      |  |                      | 11.8
|                                                |  |                      |     
|Effective tax rate                              |  |                      | 21.9

9

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We report interim
financial information for 13-week periods ending on a Saturday, except for the
first quarter, which always begins on January 1, and the fourth quarter, which
always ends on December 31.  The four
fiscal quarters in 2004 end on April 3, 2004, July 3, 2004, October 2, 2004 and
December 31, 2004, respectively.  The
four fiscal quarters in 2003 ended on March 29, 2003, June 28, 2003, September
27, 2003, and December 31, 2003, respectively.

Net Sales

Net sales for the first
quarter of 2004 were $118.4 million as compared to $97.8 million for the
comparable prior year period, an increase of 21%.   The increase in sales versus the comparable prior year quarter
is primarily attributable to increased volumes and favorable mix in terms of
sale of higher price products.  We are
continuing to see strong demand, with volumes strong across all product
lines.  In  the latter half of 2003, the recovery in the general market
conditions were mainly noted in Asia. 
In the first quarter of 2004, we noted improvement in all regions,
particularly in North America and Europe.   
We see no signs of abatement in demand for the foreseeable future.  We have noted that corporate IT spending has
begun to revive.  Additionally, the
fixed telecommunications market segment, which had been weak last year, is
starting to rebound.   These trends in
end-use markets should translate into increased demand for our products.

Gross Profit Margins

Gross profit as a
percentage of net sales in the first quarter of 2004 was 30.0% as compared to
28.5% for the comparable prior year period. 
Gross margin improvement is largely attributable to increased sales
volume, which had a favorable impact on gross margin of approximately $16.4
million versus the comparable prior year period.  These improvements were offset in part by increased subcontractor
costs and increased prices of precious metals. 
Subcontractor fees from independent foundries in the first quarter of
2004 were approximately $13.8 million, as compared to $10.2 million in the
comparable prior year period. 
Subcontractor fees from independent subcontractors for assembly and
testing in the first quarter of 2004 were approximately $6.5 million, as
compared to $4.1 million for the comparable prior year period.  Subcontractor fees from Vishay affiliates in
the first quarter of 2004 were approximately $11.0 million, as compared to $9.5
million for the comparable prior year period. 
We concurrently are investing in expanding our in-house capabilities,
and expect to substantially increase our capital expenditures for the full year
2004.  The use of subcontractors, while
limiting margin improvements, is part of our manufacturing strategy of supplying
about 80% of the customer demand from the internal capacity, with reliance on
foundries and subcontractors to meet the other 20% of the business.  Presently, our use of foundries and
subcontractors is higher than 20%.  Our
strategy of outsourcing a portion of our manufacturing requirements enables us
to deal effectively with the fluctuating cycles of the semiconductor
industry.  The first quarter of 2003 was
characterized by increased pricing pressures and a shift in the product mix
towards commodity products that command lower margins, resulting in the lower
gross margin.  The sales mix in the
first quarter of 2004 was slightly more favorable, combined with more favorable
prices.

Research and Development

Research and development
expenses were $5.3 million for the first quarter of 2004 as compared to $4.7
million for the comparable prior year period. 
We continue our commitment to the development of new products and
technologies.  During the first quarter
of 2004, we secured over 200 new designs, including new platforms for the power
supply market and consumer entertainment systems.

Selling, Marketing, and Administrative Expenses

Selling, marketing, and
administrative expenses were $13.1 million for the first quarter of 2004
compared to $11.0 million for the comparable prior year period.  Our selling, marketing, and administrative
expenses as a percentage of net sales were 11.1% as compared to 11.2% for the
comparable prior year period.  The
increase in selling, marketing, and administrative expenses is primarily
attributable to increased sales commissions due to increased sales, as well as
increased marketing activities and legal costs.  We continue our efforts to manage and control costs effectively,
as evidenced by the decrease in selling, marketing, and administrative expenses
as a percentage of sales.   Our legal
costs increased by approximately $0.7 million in the first quarter of 2004 as
compared to the corresponding 2003 period, and we anticipate legal expenses of
$3.0 million for all of 2004, which is almost double the legal expenses we
incurred in 2003.  The increase in legal
costs reflects our commitment to vigorously defend our intellectual property,
which we view as central
to our continued success in the marketplace. When we believe other companies
are misappropriating our

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intellectual
property rights, we vigorously enforce those rights through legal action, and
we intend to continue to do so.

Interest Income

Interest income for the
first quarter of 2004 was $0.6 million, approximately the same as the
comparable prior year period.   All
excess cash not immediately needed to fund our operations is invested in money
market funds.

Other Income

Other income was $283,000
for the first quarter of 2004, as compared to $67,000 for the comparable prior
year period.  The largest component of
other income is foreign currency gains in the first quarter of 2004, whereas
foreign currency impacts were essentially neutral in the first quarter of 2003.

Income Taxes

Our effective tax rate
was 21.9% for the first quarter of 2004, the same as for the comparable prior
year period.  We continue to recognize
favorable tax rates due to our foreign operations.

Financial
Condition, Liquidity, and Capital Resources

As of April 3, 2004, we
had $296.1 million in cash and cash equivalents, compared to $279.5 million in
cash and cash equivalents as of December 31, 2003.  The increase was primarily due to cash generated from
operations.  Approximately $292.6
million of the cash balance as of April 3, 2004 was mostly invested in foreign
money market accounts.  Our cash and
profits generated by foreign subsidiaries are expected to be reinvested
indefinitely.  Any repatriation of
earnings and cash back to the United States would be deemed to be a dividend
and would be subject to U.S. income taxes, state income taxes, and foreign
withholding taxes.

Our financial condition
at April 3, 2004, continued to be strong, with a current ratio (current assets
to current liabilities) of 4.7 to 1, as compared to a ratio of 4.3 to 1 at
December 31, 2003.  The improvement is
primarily attributable to increases in cash during the first quarter of
2004.  Our ratio of liabilities to total
assets was 0.28 to 1 at April 3, 2004, as compared to a ratio of 0.29 to 1 at
December 31, 2003.

Cash flows from
operations were $20.3 million for the first quarter of 2004, as compared to
$23.3 million for the first quarter of 2003.  
Increases in receivables attributable primarily to increased sales, and
reductions in payables to both third parties and affiliates resulted in the
reduction in operating cash flows as compared to the prior year period.  The decrease in third-party accounts payable
of $2.9 million at April 3, 2004 as compared to December 31, 2003, includes the
payment of approximately $2.0 million related to capital expenditures which were
unpaid at December 31, 2003.  This
payment for capital expenditures is reflected as investing cash flow in 2004.

Cash used by investing
activities was $3.7 million in 2004, as compared to cash provided by investing
activities of $0.8 million in 2003.  
Cash flows related to investing activities are impacted by our
short-term loan agreement with Vishay under which, we may, from time to time,
advance money to Vishay.  All notes
under this loan agreement are callable by us at any time.  Interest income related to these loans is
included in cash flows from operating activities.  For the first quarter of 2003, we had a net inflow of $5 million
for short-term investments pursuant to this agreement.  Since July 1, 2003, there have been no
amounts outstanding under this agreement. 
Cash paid for property and equipment were approximately $3.7 million in
the first quarter of 2004, including $2.0 million which was included in
accounts payable at December 31, 2003 and paid in 2004.   We continue to invest in expanding our
in-house manufacturing capabilities to meet increasing demand.   Our capital expenditure budget for 2004
represents a significant increase versus our 2003 spending of $30 million.

For the next twelve
months, management expects that cash flows from operations will be sufficient
to meet our normal operating requirements and to fund our research and
development and capital expenditure plans.

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Tower Semiconductor

On December 31, 2003, we
announced the signing of a memorandum of understanding with Tower Semiconductor
for a long-term manufacturing and supply arrangement between the parties.  Pursuant to the terms of the memorandum of
understanding, we plan to place with Tower orders valued at approximately $200
million for the purchase of semiconductor wafers to be manufactured in Towers
Fab 1 over a seven to ten year period. We plan to advance to Tower $20 million
to be used for the purchase of additional equipment required to satisfy
Siliconixs orders, which would be credited towards the purchase price of the
wafers.   The transaction is subject to
the approval of Towers lending bank and the Israeli investment center and to
definitive documentation.  We expect a
definitive agreement to be signed during the first half of 2004.  If a definitive agreement is not reached, we
will have no commitments related to this memorandum of understanding.

Safe Harbor Statement

Statements
contained herein that relate to the our future performance and outlook,
including, without limitation, statements with respect to our anticipated
results of operations or level of business for 2004 or any other future period,
including anticipated business improvements, synergies and cost savings, and
expected or perceived improvements in the economy and the electronic component
industry generally are forward-looking statements within safe harbor provisions
of the Private Securities Litigation Reform Act of 1995. Such statements are
based on current expectations only, and are subject to certain risks,
uncertainties and assumptions. Should one or more of these risks or
uncertainties materialize, or should underlying assumptions prove incorrect,
actual results may vary materially from those anticipated, estimated or
projected. Among the factors that could cause actual results to materially
differ include: changes in the demand for, or in the mix of, our products and
services; market-wide business and economic trends in general or in the
specific areas where we sells the bulk of our products; competitive pricing and
other competitive pressures; cancellation of a material portion of the orders
in our backlog; difficulties in expansion and/or new product development,
including capacity constraints and skilled personnel shortages; changes in
laws, including trade restrictions or prohibitions; currency exchange rate
fluctuations; labor unrest or strikes; capacity constraints and the ability to
respond quickly and efficiently to changing patterns of demand; and such other
factors affecting our operations, markets, products, services and prices as are
set forth in our Annual Report on Form 10-K for the year ended December 31,
2003 filed with the Securities and Exchange Commission. We undertake no
obligation to publicly update or revise any forward-looking statements, whether
as a result of new information, future events or otherwise.

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Item
3.  Quantitative and Qualitative
Disclosures About Market Risk.

In the normal course of
business, our financial position is routinely subjected to a variety of risks,
including market risks associated with interest rate movements, currency rate
movements on non-U.S. dollar denominated assets and liabilities, and
collectibility of accounts receivable. 
Due to the short-term nature of our investment portfolio, an immediate
10 percent increase in interest rates will not have a material effect on our
near-term financial condition or results of operations.  We do not use derivative financial
instruments for trading or speculative purposes.  We monitor our underlying market risk exposures on an ongoing
basis and believe that we can modify or adapt our hedging strategies as
needed.  No derivative financial
instruments were utilized to hedge these exposures during the quarter ended
April 3, 2004.

Item
4.  Disclosure Controls and Procedures.

An evaluation was
performed under the supervision and with the participation of our management,
including the Chief Executive Officer (CEO) and Principal Accounting Officer
(PAO), of the effectiveness of the design and operation of our disclosure
controls and procedures. Based on that evaluation, our CEO and PAO, concluded that
our disclosure controls and procedures are effective as of the end of the first
quarter of 2004, including for purposes of ensuring that all material
information required to be filed in this report has been made known to our
management, including the CEO and PAO, in a timely fashion.

There has not been any
change in our internal controls over financial reporting during the first
quarter of 2004 that has materially affected, or is reasonably likely to
materially affect, our internal control over financial reporting.

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|PART II - OTHER INFORMATION
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SIGNATURES

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

|                       | SILICONIX INCORPORATED                | 
|---------------------- | ------------------------------------- | 
|                       |                                       | 
|                       |                                       | 
|                       | /s/ King Owyang                       | 
|                       |                                       | 
|                       | King Owyang                           | 
|                       | President and Chief Executive Officer | 
|                       |                                       | 
|                       | /s/ William M. Clancy                 | 
|                       |                                       | 
|                       | William M. Clancy                     | 
|                       | Principal Accounting Officer          | 
|                       |                                       | 
|Date:     May 10, 2004 |                                       | 
|                       |                                       | 

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