SECURITIES AND EXCHANGE COMMISSION

                             WASHINGTON, D.C. 20549
        -----------------------------------------------------------------

                                    FORM 10-Q

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


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

               For the quarterly period ended August 31, 2000

                                       OR

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

                          Commission file number 0-7422

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


                        STANDARD MICROSYSTEMS CORPORATION

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

              (Exact name of registrant as specified in its charter)

             DELAWARE                                         11-2234952
-------------------------------------------------------------------------------

(State or other jurisdiction of                          (I.R.S. Employer
 incorporation or organization)                          Identification No.)


     80 ARKAY DRIVE, HAUPPAUGE, NEW YORK                  11788
-------------------------------------------------------------------------------

   (Address of principal executive offices)             (Zip Code)



 Registrant's telephone number, including area code: 631-435-6000

     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   ________

As of October 13, 2000 there were 15,954,919 shares of the registrant's common
stock outstanding.

<PAGE>

                         PART I - FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS

STANDARD MICROSYSTEMS CORPORATION
AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In thousands, except share and per share data)

<TABLE>
<CAPTION>
                                                            Aug. 31,    Feb. 29,
                                                              2000        2000
                                                            -------      -------
                                                           (Unaudited)
<S>                                                        <C>          <C>
Assets
Current assets:
  Cash and cash equivalents ..........................   $ 114,632    $  73,405
  Short-term investments .............................       9,629        2,000
  Accounts receivable, net of allowance for doubtful
    accounts of $415 and $480, respectively ..........      24,127       16,559
  Inventories ........................................      17,350       20,051
  Deferred income taxes ..............................       9,721       12,779
  Other current assets ...............................       5,264        9,277
                                                         ---------     --------

       Total current assets ..........................     180,723      134,071
                                                         ---------     --------

Property, plant and equipment, net ...................      35,612       34,137
Investment in Chartered Semiconductor ................      37,725       73,104
Other assets .........................................      19,641       19,196
                                                         ---------     --------

                                                         $ 273,701    $ 260,508
                                                         =========    =========

Liabilities and shareholders' equity
Current liabilities:
  Accounts payable ...................................   $  14,868    $   9,575
  Deferred income on shipments to distributors .......       5,723        5,958
  Accrued expenses, income taxes and other liabilities      17,621        9,522
                                                         ---------    ---------

        Total current liabilities ....................      38,212       25,055
                                                         ---------    ---------

Deferred income taxes ................................       7,197       15,387
Other liabilities ....................................       6,484        6,764

Commitments and contingencies

Minority interest in subsidiary ......................      11,550       11,510

Shareholders' equity:
  Preferred stock, $.10 par value
    authorized 1,000,000 shares, none outstanding ....        --           --
  Common stock, $.10 par value
    authorized 30,000,000 shares,
    issued 16,826,000 and 16,431,000
    shares, respectively .............................       1,683        1,643
  Additional paid-in capital .........................     113,946      112,297
  Retained earnings ..................................      76,760       52,123
  Treasury stock, 918,000 and 671,000 shares,
    respectively, at cost ............................      (7,114)      (4,379)
  Accumulated other comprehensive income .............      24,983       40,108
                                                         ---------    ---------

        Total shareholders' equity ...................     210,258      201,792
                                                         ---------    ---------

                                                         $ 273,701    $ 260,508
                                                         =========    =========

See Notes to Condensed Consolidated Financial Statements.

</TABLE>

<PAGE>

STANDARD MICROSYSTEMS CORPORATION
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
(In thousands, except per share data)

<TABLE>
<CAPTION>
                                                        Three Months Ended      Six Months Ended
                                                            August 31,             August 31,
                                                           2000     1999 *        2000     1999 *
                                                       --------   --------    --------   --------
<S>                                                          <C>        <C>         <C>        <C>

Revenues ............................................   $ 45,897   $ 38,038    $ 84,116   $ 76,183

Cost of goods sold ..................................     27,324     23,200      49,804     47,415
                                                        --------   --------    --------   --------

Gross profit ........................................     18,573     14,838      34,312     28,768

Operating expenses:

Research and development ............................      8,160      5,871      15,370     11,561
Selling, general and administrative .................      9,085      8,332      17,490     16,635
                                                        --------   --------    --------   --------

  Income from operations ............................      1,328        635       1,452        572

  Interest income ...................................      1,473        731       2,644      1,377
  Other income (expense), net .......................     24,954       (119)     27,509       (200)
                                                        --------   --------    --------   --------

Income before provision for income taxes
  and minority interest .............................     27,755      1,247      31,605      1,749

Provision for income taxes ..........................     10,269        484      11,693        656

Minority interest in net income
 (loss) of subsidiary ...............................         32         (1)         40       --
                                                        --------   --------    --------   --------

Income from continuing operations ...................     17,454        764      19,872      1,093

Gain on sale of discontinued operation
 (net of income taxes of $2,799) ....................       --         --         4,765       --
                                                        --------   --------    --------   --------

Income before cumulative effect of
  change in accounting principle ....................     17,454        764      24,637      1,093

Cumulative effect of change in accounting principle
 (net of income tax benefits of $1,716) .............       --         --          --       (2,924)
                                                        --------   --------    --------   --------

Net income (loss)....................................   $ 17,454   $    764    $ 24,637   $ (1,831)
                                                        ========   ========    ========   ========

Basic net income (loss) per share:
  Income from continuing operations .................   $   1.10   $   0.05    $   1.26   $   0.07
  Gain on sale of discontinued operation ............       --         --          0.30       --
  Cumulative effect of change in accounting principle       --         --          --        (0.19)
                                                        --------   --------    --------   --------

Basic net income (loss) per share ...................   $   1.10   $   0.05    $   1.56   $  (0.12)
                                                        ========   ========    ========   ========

Diluted net income (loss) per share:
  Income from continuing operations .................   $   1.03   $   0.05    $   1.18   $   0.07
  Gain on sale of discontinued operation ............       --         --          0.28       --
  Cumulative effect of change in accounting principle       --         --          --        (0.19)
                                                        --------   --------    --------   --------

Diluted net income (loss) per share .................   $   1.03   $   0.05    $   1.46   $  (0.12)
                                                        ========   ========    ========   ========

Weighted average common shares outstanding:
  Basic .............................................     15,878     15,626      15,840     15,598
  Diluted ...........................................     16,989     15,680      16,868     15,639

* Restated to reflect change in accounting principle.

See Notes to Condensed Consolidated Financial Statements.
</TABLE>

<PAGE>

STANDARD MICROSYSTEMS CORPORATION
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
(In thousands)

<TABLE>
<CAPTION>
                                                                          Six Months Ended
                                                                              August 31,
                                                                             ------------
                                                                         2000          1999 *
                                                                       ---------    ---------
<S>                                                                          <C>          <C>
Cash flows from operating activities:
  Cash received from customers .....................................   $  76,178    $  76,716
  Cash paid to suppliers and employees .............................     (66,711)     (69,840)
  Interest received ................................................       2,085        1,361
  Interest paid ....................................................        (116)        (150)
  Income taxes paid  ...............................................      (4,660)      (1,152)
                                                                       ---------     ---------

    Net cash provided by operating activities ......................       6,776        6,935
                                                                       ---------     ---------

Cash flows from investing activities:
  Capital expenditures .............................................      (5,847)      (4,025)
  Sales of investments, principally Chartered Semiconductor ........      36,868         --
  Purchases of short-term investments ..............................     (10,632)      (6,000)
  Sales of short-term investments ..................................       3,003         --
  Other ............................................................         435          415
                                                                       ---------     ---------

    Net cash provided by (used for) investing activities ...........      23,827       (9,610)
                                                                       ---------     ---------

Cash flows from financing activities:
  Proceeds from issuance of common stock ...........................       1,304          295
  Purchases of treasury stock ......................................      (2,735)        --
  Repayments of obligations under capital leases ...................        (452)        (417)
                                                                       ---------     ---------
    Net cash used for financing activities .........................      (1,883)        (122)
                                                                       ---------     ---------

Effect of foreign exchange rate changes on cash and cash equivalents         132          576

Net cash provided by (used for) discontinued operation .............      12,375       (3,132)
                                                                       ---------     ---------

Net increase (decrease) in cash and cash equivalents ...............      41,227       (5,353)

Cash and cash equivalents at beginning of period ...................      73,405       68,071
                                                                       ---------     ---------

Cash and cash equivalents at end of period .........................   $ 114,632    $  62,718
                                                                       =========     =========

Reconciliation of income from continuing operations
to net cash provided by operating activities:

Income from continuing operations ..................................   $  19,872    $   1,093
Adjustments to reconcile income from continuing operations
 to net cash provided by operating activities:
  Depreciation and amortization ....................................       5,908        4,902
  Gains on sales of investments ....................................     (27,597)        --
  Other adjustments, net ...........................................        (172)         471
  Changes in operating assets and liabilities:
    Accounts receivable ............................................      (6,858)       2,921
    Inventories ....................................................       2,760       (5,735)
    Accounts payable and accrued expenses and other liabilities ....       5,606        4,393
    Other changes, net .............................................       7,257       (1,110)
                                                                       ---------    ---------

Net cash provided by operating activities ..........................   $   6,776    $   6,935
                                                                       =========    =========
* Restated to reflect change in accounting principle.

See Notes to Consolidated Financial Statements.

</TABLE>

<PAGE>

STANDARD MICROSYSTEMS CORPORATION
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



1.       Basis of Presentation

     The  unaudited  interim  consolidated   financial  statements  reflect  all
     adjustments  (consisting  of only normal and recurring  adjustments)  which
     are, in the opinion of management, necessary to present a fair statement of
     the Company's  financial  position as of, and results of operations for the
     three  and  six  month  periods  ended,  August  31,  2000.  The  financial
     statements  should be read in  conjunction  with the summary of significant
     accounting policies and notes to consolidated financial statements included
     in the Company's  Annual Report on Form 10-K filed with the  Securities and
     Exchange Commission for the fiscal year ended February 29, 2000.

     Certain fiscal 2000 items have been reclassified to conform with the fiscal
     2001 presentation.

2.       Accounting Change - Recognition of Revenue on Shipments to Distributors

      In the fourth quarter of fiscal 2000,  the Company  changed its accounting
      method  for the  recognition  of  revenue on  shipments  to  distributors.
      Recognition   of  revenue  and  related   gross  profit  on  shipments  to
      distributors  is now deferred until the  distributor  resells the product.
      This  change  was  made  with an  effective  date of March  1,  1999  (the
      beginning of fiscal 2000).  The results of  operations  and cash flows for
      the three and six month  periods  ended August 31, 1999 have been restated
      to reflect this accounting change.

      Management  of the Company  believes that this  accounting  change is to a
      preferable method because it better aligns reported results with,  focuses
      the Company on, and allows investors to better understand, end-user demand
      for the products SMSC sells through distribution.

3.       Balance Sheet Data

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

                                                        Aug. 31,        Feb. 29,
                                                          2000            2000
                                                    ------------   -------------

        Raw Material  . ........................         $   576        $    361
        Work in Process ........................          11,334          11,146
        Finished Goods . .......................           5,440           8,544
                                                      ----------   -------------
                                                         $17,350        $ 20,051
                                                     ===========   =============

     Property, plant and equipment consists of the following (in thousands):

                                                             Aug. 31,   Feb. 29,
                                                               2000       2000
                                                             --------   --------

        Land .....................................           $  3,434   $  3,434
        Buildings and Improvements ...............             31,123     30,097
        Machinery and Equipment ..................             75,811     70,196
                                                             --------   --------
                                                              110,368    103,724
        Less: accumulated depreciation ...........             74,756     69,587
                                                             --------   --------
                                                             $ 35,612   $ 34,137
                                                             ========   ========


4.       Net Income (Loss) Per Share

      Basic  net  income  (loss)  per share is based  upon the  weighted-average
      number of common shares outstanding during the period.  Diluted net income
      (loss) per share is  computed  using the  weighted-average  common  shares
      outstanding  during the period plus the dilutive effect of shares issuable
      through stock options and warrants.  The shares used in calculating  basic
      and  diluted  net income  (loss) per share are  reconciled  as follows (in
      thousands):


                                            Three Months Ended  Six Months Ended
                                                 August 31,        August 31,
                                                 ----------        ----------

                                                 2000     1999    2000     1999
                                               ------   ------   ------   ------
      Average shares outstanding for
       basic net income (loss) per share ...   15,878   15,626   15,840   15,598
      Dilutive effect of stock options .....    1,111       54    1,028       41
                                               ------   ------   ------   ------
      Average shares outstanding for
       diluted net income (loss) per share .   16,989   15,680   16,868   15,639
                                               ======   ======   ======   ======

5.       Comprehensive Income

      The Company's  other  comprehensive  income  consists of foreign  currency
      translation  adjustments from those subsidiaries not using the U.S. dollar
      as their functional currency, and unrealized gains and losses on long-term
      equity investments.  The components of the Company's  comprehensive income
      (loss) for the three and six month  periods ended August 31, 2000 and 1999
      were as follows (in thousands):


                                           Three Months Ended   Six Months Ended
                                                August 31,         August 31,
                                                ----------         ----------

                                                 2000    1999    2000      1999
                                               ------  ------   ------   ------

      Net income (loss)                      $ 17,454  $  764 $ 24,637  $(1,831)

      Other comprehensive income (loss):
      Change in foreign currency translation
      adjustment                                   83   1,286      257      962

      Change in unrealized gain on investments (9,210)    268  (15,381)     349
                                               ------  ------  -------   ------

      Total comprehensive income (loss)       $ 8,327 $ 2,318  $ 9,513  $  (520)
                                              ======= =======  =======  =======


6.       Investments

     The  Company  has  an  equity   interest   in   Singapore-based   Chartered
     Semiconductor Manufacturing Ltd. (Chartered),  acquired in fiscal 1996 at a
     cost of $19.9 million.  In October 1999,  shares of Chartered began trading
     publicly on the  Singapore  stock  exchange,  and also began trading on the
     NASDAQ stock market as American  Depository  Shares,  or ADSs. As of August
     31, 2000, the Company held approximately  444,000 Chartered ADSs, which are
     reported on the  Consolidated  Balance Sheet at $37.7  million,  based upon
     their closing price on the NASDAQ stock market on that date.

     The  significant  increase in other income (net) reported for the three and
     six months ended August 31, 2000  reflects  gains of realized on sales of a
     portion of the Company's investment in Chartered,  as well as proceeds from
     sales of call options  covering a portion of its Chartered  stock holdings.
     The gains  totaled  $21.9  million and $24.2  million for the three and six
     month periods ended August 31, 2000, respectively,  while proceeds from the
     sales of call options  were $1.8  million and $2.1 million  during the same
     periods. There are no outstanding call options as of August 31, 2000.

7.       Investment by Intel Corporation

      In March 1997, the Company and Intel  Corporation  (Intel)  entered into a
      Common Stock and Warrant Purchase  Agreement (the Agreement) whereby Intel
      purchased  approximately 1,543,000 of newly issued shares of the Company's
      common stock for $9.50 per share, or  approximately  $14.7 million.  Intel
      also  received a three-year  warrant to purchase an  additional  1,543,000
      shares at varying prices through March 18, 2000.

      In March  2000,  as provided  for in the  warrant,  Intel  executed a "net
      exercise",  whereby Intel  received  approximately  200,000  shares of the
      Company's common stock, which was equal in fair value to the excess of the
      warrant's  market  value  over  its  exercise  value,  as  defined  in the
      Agreement.  The Company immediately  repurchased these 200,000 shares from
      Intel for  approximately  $1.9 million  under its common stock  repurchase
      program. This warrant is now fully exercised.

8.       Common Stock Repurchase Program

     In October 1998, the Company's Board of Directors authorized the Company to
     repurchase up to one million  shares of its common stock on the open market
     or in  private  transactions.  In July  2001,  the  authorization  from the
     Company's Board was expanded from one million shares to two million shares.
     The Company  repurchased 248,000 shares of its stock for approximately $2.7
     million  during  the first  half of fiscal  2001,  including  approximately
     200,000 shares purchased from Intel Corporation as described in Note 7. As
     of August 31,  2000,  the Company  has  repurchased  918,000  shares of its
     common,  stock, at a cost of $7.1 million,  under this program. The Company
     currently holds repurchased shares as treasury stock, reported at cost.

9.       Discontinued Operation

     In June 1999,  the  Company  sold the assets of its Foundry  Business  Unit
     (FBU) to  privately  held Inertia  Optical  Technology  Applications,  Inc.
     (IOTA) of Newark,  NJ. The transaction was effected through IOTA's purchase
     of the  FBU's  assets  from the  Company,  in  exchange  for 38% of  IOTA's
     outstanding  common stock. The combined FBU and IOTA businesses now operate
     as Standard MEMS, Inc. (SMI).

     During the first  quarter of fiscal 2001,  the Company sold the majority of
     its  ownership  interest  in SMI and  realized  an  after-tax  gain of $4.8
     million,  which appears as a Gain on sale of discontinued  operation on the
     Consolidated  Statement of  Operations  for the six months ended August 31,
     2000.  This sale of SMI stock reduced the Company's  ownership  interest in
     SMI below 5%,  satisfying its prior  commitment to reduce its SMI ownership
     below 20%.

10.       Recent Accounting Pronouncements

      In June 2000, the Financial Accounting Standards Board issued Statement of
      Financial  Accounting Standards No. 138, Accounting for Certain Derivative
      Instruments and Certain Hedging  Activities  (SFAS 138), which is required
      to be  adopted in years  beginning  after June 15,  2000.  This  statement
      amends Statement of Financial Accounting Standards No. 133, Accounting for
      Derivative  Instruments and Hedging  Activities,  and defers its effective
      date by one year. The Company is currently  evaluating the impact that the
      adoption of SFAS 138 will have on its results of operations  and financial
      position.

<PAGE>

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


The  following  discussion  should  be read in  conjunction  with the  Company's
unaudited  consolidated  financial statements and footnotes thereto contained in
Item 1 of this report.

Overview

Standard Microsystems  Corporation (the Company or SMSC) is a worldwide designer
and supplier of metal-oxide-semiconductor/very-large-scale-integrated (MOS/VLSI)
circuits for the personal computer (PC) and related industries.  Currently,  the
Company is  prominent  as the world's  leading  supplier of  input/output  (I/O)
integrated  circuits.  I/O  circuits  perform  many  of the  basic  input/output
functions required in a personal computer or an embedded application,  including
keyboard  control and BIOS,  floppy disk  control and serial and  parallel  port
control.  The Company also  supplies  integrated  circuits for embedded  control
systems, local area networking applications and connectivity  applications.  The
Company's products are manufactured by world-class  semiconductor  foundries and
assemblers.

In recent years,  the majority of the Company's  revenues have been derived from
supplying  I/O  circuits to the PC  marketplace.  Strategically,  the Company is
introducing a line of System  Controller  Hubs based upon its I/O technology and
is pursuing broader product offerings,  particularly for USB connectivity, and a
line of chipsets.

Chipsets are advanced  integrated  circuits  used within a personal  computer or
similar   application   to  control   the  flow  of   information   between  the
microprocessor,  memory  modules,  graphics  controllers  and  other  peripheral
devices.  A chipset is  typically  comprised  of two primary  devices - a memory
controller  (sometimes  referred to as the north  bridge) and an I/O  controller
(sometimes referred to as the south bridge).

Results of Operations

The Company's operating results for the three and six month periods ended August
31, 1999 have been restated to reflect the Company's change in accounting policy
for the  recognition of revenue on shipments of products to  distributors.  This
change was made in the fourth quarter of fiscal 2000,  with an effective date of
March 1, 1999.

Revenues

Revenues for the second quarter of fiscal 2001 were $45.9  million,  an increase
of approximately 20% above revenues of $38.0 for the corresponding  year-earlier
quarter.  This  increase  was  driven  by  an  increase  in  unit  shipments  of
approximately 4 million units, partially offset by declining selling prices.

Revenues for the six months ended August 31, 2000 were $84.1  million,  compared
to $76.2 million  reported for the six months ended August 31, 1999.  Consistent
with the second quarter's  revenue  comparison,  this revenue increase  resulted
from higher unit shipments across most product lines,  partially offset by lower
average selling prices.

Gross Profit

Gross profit  increased to $18.6 million,  or 40.5% of revenues,  for the second
quarter of fiscal 2001, compared to $14.8 million, or 39.0% of revenues, for the
corresponding  year-earlier  quarter.  For the six months ended August 31, 2000,
gross profit was $34.3 million, or 40.8% of revenues, compared to $28.8 million,
or 37.8% of revenues in the prior year's first six months.  This  improvement in
gross  profit,  in both the three and six month  periods,  was  attributable  to
improved  manufacturing  efficiencies,  better utilization of overhead resulting
from higher unit  shipments,  and a shift in product mix to products with higher
gross margins.

Operating Expenses

Research and  development  spending  was $8.2 million for the second  quarter of
fiscal  2001,  an increase of $2.2  million,  or 39%,  over $5.9 million for the
corresponding  year-earlier  quarter.  For the six months ended August 31, 2000,
research  and  development  expenses  were $15.4  million,  an  increase of $3.8
million, or 33%, over $11.6 million for the first six months of the prior fiscal
year. The spending  increases  reflect continued hiring of engineering staff and
new  product  development  costs.  The  Company  continues  to focus most of its
incremental   research  and  development  efforts  on  its  chipset  development
programs.

The  Company  expects  spending  for  research  and  development  to continue to
increase,  as it  continues  to execute its ongoing  development  programs.  The
Company is also  committed to exploring  new markets and  improving  its product
design  methodologies  in an effort to increase  revenues and reduce costs.  The
Company's  ongoing  commitment  to research  and  development  is  essential  to
maintaining  product  leadership  in  existing  product  lines and to  providing
innovative product offerings.

Selling,  general and  administrative  expenses were $9.1  million,  or 19.8% of
revenues,  in the current year second quarter,  as compared to $8.3 million,  or
21.9% of revenues, in the corresponding prior year quarter. Selling, general and
administrative  expenses for the current six month period were $17.5 million, or
20.8% of revenues,  compared to $16.6  million,  or 21.8% of  revenues,  for the
prior year six month  period.  The  increases in the three and six month periods
resulted  from higher  commissions  and  incentives  associated  with the higher
revenues in those periods, as well as increased compensation costs.

Selling,  general and  administrative  expenses include  compensation and fringe
benefit costs related to field sales,  marketing and  administrative  personnel,
commissions and incentive  expenses,  advertising and promotional  expenditures,
and legal and other professional service fees. Also included in selling, general
and administrative expenses are costs related to field application engineers who
stimulate  demand by assisting  customers in the selection and proper use of the
Company's products.

Other Income and Expense

Interest income  increased to $1.5 million and $2.6 million in the three and six
month periods ended August 31, 2000, respectively,  compared to $0.7 million and
$1.4 million in the corresponding year earlier periods.  These increases reflect
higher cash and cash equivalent balances available for investment in the current
year.

Other income (net),  totaled $25.0 million in the second quarter of fiscal 2001,
compared  to  other  expenses  (net)  of  $0.1  million  in  the   corresponding
year-earlier  quarter.  Corresponding  other income  (net) of $27.5  million and
other  expense  (net) of $0.2  million were reported for the first six months of
fiscal 2001 and fiscal 2000,  respectively.  The  significant  increase in other
income (net) in the current year periods  reflects  gains realized on sales of a
portion of the Company's investment in Singapore-based  Chartered  Semiconductor
Manufacturing  Ltd.  (Chartered)  during  fiscal 2001,  as well as proceeds from
sales of call options  covering a portion of its Chartered stock  holdings.  The
gains  totaled  $21.9  million  and  $24.2  million  for the three and six month
periods ended August 31, 2000,  respectively,  while  proceeds from the sales of
call options were $1.8 million and $2.1 million  during the same periods.  There
are no outstanding call options as of August 31, 2000.

Income Taxes

The  Company's  effective  income tax rate for the second  quarter and first six
months of fiscal 2001 was 37%,  consistent  with the effective tax rate incurred
for the year ended February 29, 2000.  Generally,  the Company's income tax rate
includes  the  federal,  state and foreign  statutory  tax rates,  the impact of
certain permanent  differences between the book and tax accounting  treatment of
certain expenses, the impact of tax-exempt income and various tax credits.

Discontinued Operations

The Company  realized an after-tax  gain of $4.8 million in the first quarter of
fiscal  2001  associated  with the  sale of most of its  ownership  interest  in
Standard MEMS,  Inc.  (SMI).  SMI was created  through the June 1999 sale of the
assets of the  Company's  Foundry  Business Unit to Inertia  Optical  Technology
Applications,  Inc. in exchange  for a 38%  interest in the  resulting  combined
operation, which was renamed Standard MEMS, Inc. This transaction is reported as
a Gain on the sale of discontinued  operation on the  Consolidated  Statement of
Operations for the first six months of fiscal 2001.

Cumulative Effect of Change in Accounting Principle

The net loss for the first  six  months of fiscal  2000  reflects  an  after-tax
charge of $2.9 million, or $0.19 per diluted share, for the cumulative effect on
all prior years of the  Company's  change in  accounting  principle  for revenue
recognition on sales of products to  distributors.  This  accounting  change was
implemented  in the fourth  quarter of fiscal 2000,  with an  effective  date of
March 1, 1999 (the beginning of fiscal 2000). The Company now defers revenue and
gross profit on sales to distributors until the distributor resells the product.

Liquidity and Capital Resources

The Company's cash and cash equivalents increased to $114.6 million as of August
31, 2000,  from $73.4  million as of February  29, 2000.  The Company also holds
short-term  investments  of $9.6  million at August 31,  2000,  compared to $2.0
million at February 29, 2000.

For the fist six months of fiscal  2001,  $6.8  million of cash was  provided by
operating activities,  $23.8 million was provided by investing  activities,  and
$1.9 million was consumed in financing activities.  Most of the cash provided by
investing  activities resulted from the aforementioned sales of Chartered stock.
During the first quarter of fiscal 2001, the Company also received $12.4 million
in cash from the sale of a majority of its  investment in SMI, which is reported
within Net cash provided by discontinued operation in the Consolidated Statement
of Cash Flows.

During the first six months of fiscal 2001, the Company incurred $5.8 million in
capital  expenditures,  the majority of which was expended for  production  test
equipment and the expansion of the Company's production test operation. Over the
next twelve  months,  the Company plans to continue to expand its test operation
and also expects to invest in  intellectual  property  used in the design of its
products.  Fiscal 2001  capital  expenditures  are  expected to exceed the $10.5
million of such expenditures incurred in fiscal 2000.

Accounts  receivable  increased to $24.1 million at August 31, 2000, compared to
$16.6 million at February 29, 2000,  primarily resulting from higher revenues in
the second quarter of fiscal 2000 ($45.9 million) compared to the fourth quarter
of  fiscal  2000  ($33.9  million).   The  Company's  accounts   receivable  are
substantially all current as of August 31, 2000.

During the first six  months of fiscal  2001,  the  Company's  inventories  were
reduced by approximately $2.7 million. Slightly lower than expected shipments in
the  fourth  quarter  of  fiscal  2000 had  contributed  to a modest  growth  in
inventories  as of February 29, 2000.  The general  increase in shipments in the
first half of fiscal 2001,  combined  with a tightening of  semiconductor  wafer
manufacturing  capacity,  contributed to this inventory  decline.  Overall,  the
Company's  inventory  turnover  was  slightly in excess of 5 times for the first
half of fiscal 2001.

The  increase in accounts  payable,  from $9.6  million at February  29, 2000 to
$14.9  million at August 31, 2000,  resulted  from a higher  amount of materials
purchased  in August  2000,  as compared to  February of 2000.  The  increase in
accrued expenses and other  liabilities,  from $9.5 million at February 29, 2000
to $17.6 million at August 31, 2000,  principally reflects an increase in income
taxes payable.

The Company holds an equity interest in Chartered of  approximately  444,000 ADS
shares as of August 31, 2000. The estimated  market value of this  investment at
August 31, 2000 is $37.7 million,  based on Chartered's  closing market price on
the NASDAQ stock market as of that date.  As  mentioned  previously,  during the
first  half of fiscal  2001,  the  Company  sold a portion  of this  investment,
generating cash of $33.5 million.  The Company will continue to consider selling
portions of this investment, should market conditions be considered  acceptable.
In addition,  during the first six months of fiscal 2001,  the Company sold call
options  covering a portion of its  investment in Chartered for proceeds of $2.1
million.

The Company has considered in the past,  and will continue to consider,  various
possible  transactions  to  secure  necessary  foundry  manufacturing  capacity,
including equity investments in, prepayments to, or deposits with foundries,  in
exchange  for  guaranteed  capacity  or other  arrangements  which  address  the
Company's manufacturing requirements.

In October 1998,  the  Company's  Board of Directors  authorized  the Company to
repurchase up to one million shares of its common stock on the open market or in
private  transactions.  In July 2001, the authorization from the Company's Board
was  expanded  from one  million  shares  to two  million  shares.  The  Company
repurchased  248,000 shares of its stock for  approximately  $2.7 million during
the  first  half of  fiscal  2001.  As of  August  31,  2000,  the  Company  has
repurchased 918,000 shares of its common stock, at a cost of $7.1 million, under
this program.

The Company believes that its existing cash, cash equivalents and investments on
hand,  together with cash that it expects to generate from its operations,  will
be sufficient  to meet future  operating and capital needs for at least the next
twelve months.

Other Factors That May Affect Future Operating Results

The Company's operating results are subject to general economic conditions and a
variety of risks characteristic of the semiconductor and related industries. For
a further  discussion of such risks,  see "Other  Factors That May Affect Future
Operating  Results" included within Part I, Item 1 - "Business" in the Company's
Annual Report on Form 10-K filed with the Securities and Exchange Commission for
the fiscal year ended February 29, 2000.
<PAGE>

ITEM 3.   QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Interest  Rate Risk - As of August  31,  2000,  the  Company's  $9.6  million of
short-term  investments  consisted of  investments  in corporate  and  municipal
obligations  with  maturities  of  between  three and twelve  months.  If market
interest rates were to increase immediately and uniformly by 10% from the levels
at August 31, 2000, the fair value of these short-term investments would decline
by an immaterial  amount. The Company generally expects to hold its fixed income
investments  until maturity and therefore would not expect operating  results or
cash flows to be  affected to any  significant  degree by the effect of a sudden
change in market interest rates on short-term investments.

Equity  Price  Risk - The  Company  is  exposed  to an equity  price risk on its
investment  in Chartered  Semiconductor  Manufacturing,  Ltd. and several  other
publicly traded equity  investments.  For every 10% adverse change in the market
value of Chartered  Semiconductor  common stock,  the Company would experience a
decrease of approximately  $3.8 million to its August 31, 2000 investment value.
The Company has sold call options on this  security in the past and may do so in
the future to reduce some of this market risk.

Foreign Currency Risk - The Company has international sales and expenditures and
is therefore  subject to certain  foreign  currency rate  exposure.  The Company
conducts a  significant  amount of its business in Asia.  In order to reduce the
risk from fluctuation in foreign exchange rates,  most of the Company's  product
sales and all of its  arrangements  with its foundry,  test and assembly vendors
are  denominated in U.S.  dollars.  Transactions  in the Japanese market made by
Toyo Microsystems  Corporation  (TMC), the Company's  majority owned subsidiary,
are  denominated in Japanese yen. The Company has never received a cash dividend
(repatriation of cash) from TMC nor does it expect to receive such a dividend in
the near  future.  The  Company  has not entered  into any  significant  foreign
currency hedging activities.



<PAGE>

PART II - OTHER INFORMATION

ITEM 1.  Legal Proceedings

In fiscal 1998,  the Company  sold an 80.1%  interest in SMC  Networks,  Inc., a
then-newly  formed  subsidiary  comprised  of its former  local area  networking
division,  to an affiliate of  Taiwan-based  Accton  Technology  Corporation for
approximately  $40.2  million  cash,  $2.0  million of which was placed  into an
escrow account.

In December 1998,  Accton  notified the Company and the escrow agent of Accton's
intention  to seek  indemnification  and  damages  from the Company in excess of
$10.0 million by reason of alleged misrepresentations and inadequate disclosures
relating  to the  transaction  and  other  alleged  breaches  of  covenants  and
representations in the related  agreements.  Based upon those  allegations,  the
escrow account was not released to the Company as scheduled in January 1999.

As previously  reported in the Company's annual report on Form 10-K for the year
ended February 29, 2000,  the Company filed an action against Accton  Technology
Corporation, SMC Networks, Inc. and other parties (collectively,  Accton as used
hereinafter)  in January 1999 in the Supreme Court of New York (the Action) but,
in  November  1999,  the Court  stayed the Action and  directed  the  parties to
arbitration.  In June 2000, the court denied SMSC's motion  requesting the court
to  stay  arbitration  of  certain  claims  which  the  Company  believes  to be
non-arbitrable.  The parties are now proceeding  with  arbitration  and, in July
2000, the Company asserted  various claims against Accton,  including claims for
fraud, improper transfer of profits,  mismanagement,  breach of fiduciary duties
and payment default.

The  Company  remains  confident  that it  negotiated  and fully  performed  its
obligations  under the  Agreements  with Accton in good faith and  considers the
claims against it to be without merit. The Company will vigorously defend itself
against the allegations made by Accton and,  although it is not possible at this
time to assess the likelihood of any liability being  established,  expects that
the outcome  will not be material to the  Company.  Furthermore,  the Company is
pursuing  recovery  of damages  and other  relief  from  Accton  pursuant to the
Company's claims,  but the likelihood of any such recovery also cannot currently
be established.

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

The  following  matters  were  submitted  to a vote of  security  holders at the
registrant's annual meeting of shareholders which was held on July 18, 2000.

(1)    The following were elected directors,  each receiving the number of votes
       set opposite their respective name:

                                                            Broker
                              For            Withheld      Non-Votes

Robert M. Brill            14,111,905         119,078        -0-
James J. Boyle             14,124,462         106,521        -0-

(2)   The 2000 Stock Option Plan was approved and adopted by the following vote:

                                                                          Broker
                             For             Against       Abstain    Non-Votes

                           7,644,601       2,027,297        31,747       -0-



(3) The selection of Arthur Andersen LLP as the Company's  auditors for the year
ended February 28, 2001 was ratified by the following vote:

                                                                          Broker
                             For             Against       Abstain    Non-Votes

                          14,160,402          42,523        28,058       -0-


ITEM 6.  Exhibits and Reports on Form 8-K

(a)    Exhibits

        Exhibit 27 - Financial Data Schedule

(b)    Reports on Form 8-K

        None.

<PAGE>




                   SIGNATURE

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.

                 STANDARD MICROSYSTEMS CORPORATION

                           (Registrant)


DATE:  October 13, 2000       /S/     Andrew M. Caggia
                                   ------------------------

                                      (Signature)
                                    Andrew M. Caggia

                     Senior Vice President - Finance (duly  authorized  officer)
                     and Chief Financial Officer (principal financial officer)