<PAGE>
                       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 May 31, 2001

                                       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 June 30, 2001, there were 16,139,553 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)



                                                 May 31,            February 28,
                                                  2001                  2001
                                                 -----                  ----
                                              (Unaudited)

Assets
Current assets:
Cash and cash equivalents                     $   102,763           $   99,545
Short-term investments                              4,000                9,629
Accounts receivable, net of allowance
  for doubtful accounts of $340 and $362,
  respectively                                     17,343               16,776
Inventories                                        27,824               31,999
Deferred income taxes                               9,897                8,718
Other current assets                                5,818                7,080
--------------------------------------------------------------------------------
       Total current assets                       167,645              173,747
--------------------------------------------------------------------------------

Property, plant and equipment, net                 34,885               35,492
Investment in Chartered Semiconductor              12,579               13,001
Deferred income taxes                               1,998                2,019
Other assets                                       15,124               14,839
--------------------------------------------------------------------------------

                                              $   232,231           $  239,098
================================================================================

Liabilities and shareholders' equity
Current liabilities:
  Accounts payable                            $     7,699           $   11,721
  Deferred income on shipments to distributors      6,603                6,672
  Accrued expenses, income taxes and other
  liabilities                                       8,189                8,972
--------------------------------------------------------------------------------
        Total current liabilities                  22,491               27,365
--------------------------------------------------------------------------------

Other liabilities                                   5,648                5,812

Commitments and contingencies

Minority interest in subsidiary                    11,636               11,606

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 17,150,000 and 17,082,000
    shares, respectively                            1,715                1,708
  Additional paid-in capital                      117,061              116,515
  Retained earnings                                77,183               79,052
  Treasury stock, 998,000 and 998,000 shares,
    respectively, at cost                          (8,330)              (8,330)
  Accumulated other comprehensive income            4,827                5,370
--------------------------------------------------------------------------------
        Total shareholders' equity                192,456              194,315
--------------------------------------------------------------------------------
                                              $   232,231           $  239,098
================================================================================

See Notes to Condensed Consolidated Financial Statements.

<PAGE>

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

                                                           Three Months Ended May 31,
                                                           --------------------------

                                                              2001            2000
                                                              ----            ----

<S>                                                          <C>             <C>
Revenues                                                   $  30,836       $  38,219

Cost of goods sold                                            19,060          22,480
-------------------------------------------------------------------------------------

Gross profit                                                  11,776          15,739

Operating expenses:
Research and development                                       8,442           7,210
Selling, general and administrative                            7,846           8,404
-------------------------------------------------------------------------------------

  Income (loss) from operations                               (4,512)            125

Interest income                                                1,069           1,170
Other income, net                                              1,064           2,556
-------------------------------------------------------------------------------------

Income (loss) before provision for income taxes
    and minority interest                                     (2,379)          3,851

Provision for (benefit from) income taxes                       (785)          1,424

Minority interest in net income of subsidiary                     30               8
-------------------------------------------------------------------------------------

Income (loss) from continuing operations                      (1,624)          2,419

Gain on sale of (loss from) discontinued operations
  (net of income taxes of $(132) and $2,799)                    (245)          4,765
-------------------------------------------------------------------------------------

Net income (loss)                                          $  (1,869)      $   7,184
=====================================================================================

Basic net income (loss) per share:
  Income (loss) from continuing operations                 $   (0.10)      $    0.15
  Gain on sale of (loss from)  discontinued operation          (0.02)           0.30
-------------------------------------------------------------------------------------

Basic net income (loss) per share                          $   (0.12)      $    0.45
=====================================================================================

Diluted net income (loss) per share:
  Income (loss) from continuing operations                 $   (0.10)      $    0.14
  Gain on sale of (loss from)  discontinued operation          (0.02)           0.29
-------------------------------------------------------------------------------------

Diluted net income (loss) per share                        $   (0.12)      $    0.43
=====================================================================================

Weighted average common shares outstanding:
  Basic                                                       16,102          15,799
  Diluted                                                     16,102          16,668
</TABLE>

See Notes to Condensed Consolidated Financial Statements
<PAGE>
STANDARD MICROSYSTEMS CORPORATION
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
(In thousands)
<TABLE>
<CAPTION>

                                                                                  Three Months Ended May 31,
                                                                              ---------------------------------

                                                                                  2001               2000
                                                                              -------------       -------------


Cash flows from operating activities:
<S>                                                                                <C>                <C>
  Cash received from customers                                                $     29,432        $    35,793
  Cash paid to suppliers and employees                                             (33,345)           (31,141)
  Interest received                                                                  1,618              1,084
  Interest paid                                                                        (41)               (60)
  Income taxes paid                                                                   (505)              (582)
---------------------------------------------------------------------------------------------------------------

    Net cash provided by (used for) operating activities                            (2,841)             5,094
---------------------------------------------------------------------------------------------------------------

Cash flows from investing activities:
  Capital expenditures                                                              (1,728)            (3,276)
  Sales of property, plant and equipment                                             2,059                197
  Sales of long-term investments and options                                           489              3,509
  Purchases of short-term investments                                               (4,000)            (1,003)
  Sales of short-term investments                                                    9,629              2,000
  Other                                                                                (30)               (33)
---------------------------------------------------------------------------------------------------------------

    Net cash provided by investing activities                                        6,419              1,394
---------------------------------------------------------------------------------------------------------------

Cash flows from financing activities:
  Proceeds from issuance of common stock                                               406                291
  Purchases of treasury stock                                                          -               (2,017)
  Repayments of obligations under capital leases                                      (243)              (224)
--------------------------------------------------------------------------------------------------------------

    Net cash provided by (used for) financing activities                               163             (1,950)
--------------------------------------------------------------------------------------------------------------

Effect of foreign exchange rate changes on cash and cash equivalents                  (122)               103

Net cash provided by (used for) discontinued operation                                (401)            12,399
---------------------------------------------------------------------------------------------------------------

Net increase in cash and cash equivalents                                            3,218             17,040

Cash and cash equivalents at beginning of period                                    99,545             73,405
---------------------------------------------------------------------------------------------------------------

Cash and cash equivalents at end of period                                    $    102,763        $    90,445
===============================================================================================================


Reconciliation of income (loss) from continuing operations to net cash
provided by (used for) operating activities:

Income (loss) from continuing operations                                      $     (1,624)       $     2,419
Adjustments to reconcile income (loss) from continuing operations to
net cash provided by (used for) operating activities:
  Depreciation and amortization                                                      2,892              2,817
  Gains on sales of investments                                                     (1,106)            (2,621)
  Other adjustments, net                                                                 8                103
  Changes in operating assets and liabilities:
    Accounts receivable                                                               (518)              (103)
    Inventories                                                                      4,111              3,793
    Accounts payable and accrued expenses and other liabilities                     (5,156)            (1,689)
    Other changes, net                                                              (1,448)               375
---------------------------------------------------------------------------------------------------------------

Net cash provided by (used for) operating activities                          $     (2,841)       $     5,094
===============================================================================================================
</TABLE>

Certain items shown have been reclassified to conform with the fiscal 2002
presentation.

<PAGE>

STANDARD MICROSYSTEMS CORPORATION
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



1.   Organization and Basis of Presentation

     The accompanying  unaudited condensed consolidated financial information of
     Standard Microsystems  Corporation and subsidiaries,  referred to herein as
     "SMSC" or "the  Company",  has been prepared in accordance  with  generally
     accepted  accounting  principles and reflects all  adjustments,  consisting
     only of normal  recurring  adjustments,  which in management's  opinion are
     necessary  to state fairly the  Company's  financial  position,  results of
     operations and cash flows as of and for the three months ended May 31, 2001
     and 2000. The February 28, 2001 Consolidated Balance Sheet was derived from
     audited financial statements on that date.

     The  preparation  of financial  statements  in  conformity  with  generally
     accepted  accounting  principles  requires management to make estimates and
     assumptions  that affect the reported amounts of assets and liabilities and
     the  disclosure of  contingent  assets and  liabilities  at the date of the
     financial  statements,  as well as the  reported  amounts  of  revenue  and
     expenses during the reporting period.  Actual results may differ from those
     estimates,   and  such   differences  may  be  material  to  the  financial
     statements.  These condensed  consolidated  financial  statements should be
     read in conjunction with the audited consolidated  financial statements for
     the year ended February 28, 2001 included in the Company's Annual Report on
     Form  10-K,  as filed on May 25,  2001  with the  Securities  and  Exchange
     Commission.  The results of  operations  for the three months ended May 31,
     2001 are not  necessarily  indicative of the results to be expected for any
     future periods.

     Certain fiscal 2001 items have been  reclassified  to conform to the fiscal
     2002 presentation.


2.   Balance Sheet Data

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

                                                   May 31, 2001    Feb. 28, 2001
     ---------------------------------------------------------------------------

       Raw Materials                              $        552     $        558
       Work in Process                                  16,610           22,859
       Finished Goods                                   10,662            8,582
     ---------------------------------------------------------------------------

                                                  $     27,824     $     31,999
     ===========================================================================
      Property, plant and equipment consists of the following (in thousands):

                                                   May 31, 2001    Feb. 28, 2001
     ---------------------------------------------------------------------------

       Land                                       $      3,434     $       3,434
       Buildings and Improvements                       29,347            29,540
       Machinery and Equipment                          84,870            82,794
     ---------------------------------------------------------------------------
                                                       117,651           115,768
       Less: accumulated depreciation                   82,766            80,276
     ---------------------------------------------------------------------------
                                                  $     34,885     $      35,492
     ===========================================================================

3.   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.

     The shares used in  calculating  basic and  diluted  net income  (loss) per
     share are reconciled as follows (in thousands):

                                                         Three Months Ended
                                                               May 31,
                                                    ---------------------------
                                                        2001           2000
                                                    ------------- -------------

     Average shares outstanding for
      basic net income (loss) per share                16,102        15,799

     Dilutive effect of stock options                    -              869
     ---------------------------------------------------------------------------

     Average shares outstanding for
      diluted net income (loss) per share              16,102        16,668
     ===========================================================================

     The Company  reported a net loss from  continuing  operations  in the first
     quarter of fiscal 2002,  and  accordingly,  the effect of stock options was
     anti-dilutive and therefore excluded from the calculation of average shares
     outstanding for diluted net income (loss) per share.

4.   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  month  periods  ended May 31,  2001 and 2000 were as
     follows (in thousands):

                                                         Three Months Ended
                                                               May 31,
                                                    ----------------------------
                                                        2001           2000
                                                    ------------- --------------

  Net income  (loss)                                  $  (1,869)     $ 7,184
  Other  comprehensive  income  (loss):
    Change in foreign currency translation
    adjustment                                             (290)         174
    Change in unrealized gain on investments               (253)      (6,172)
   -----------------------------------------------------------------------------

  Total comprehensive loss                            $  (2,412)     $ 1,186
  ==============================================================================


5.   Discontinued Operations

     The  Company  is  involved  in  several  legal  actions  relating  to  past
     divestitures  of divisions  and business  units.  These  divestitures  were
     accounted for as discontinued operations, and accordingly, costs associated
     with these actions totaling  $377,000 during the three months ended May 31,
     2001, before  applicable  income taxes of $132,000,  are reported as a Loss
     from discontinued operations on the Consolidated Statement of Operations.

     During the first  quarter of fiscal 2001,  the Company sold the majority of
     its  ownership  interest in Standard  MEMS,  Inc. and realized an after-tax
     gain of  $4,765,000,  which  appears  as a Gain  on  sale  of  discontinued
     operations on the Consolidated Statement of Operations for the three months
     ended May 31, 2000.  Standard MEMS,  Inc. was organized in June 1999,  upon
     the Company's sale of the assets of its former Foundry Business Unit to New
     Jersey-based IOTA, Inc.

6.   Sales of Facilities

     During the first quarter of fiscal 2002, the Company sold two underutilized
     facilities.  Combined  proceeds  from these sales were  $2,105,000,  before
     related  expenses,  and  the  sales  resulted  in a  net  pre-tax  gain  of
     approximately $600,000.

7.   New Accounting Pronouncements

     In June 1998, the Financial  Accounting  Standards Board (FASB) issued SFAS
     No. 133, Accounting for Derivative Instruments and Hedging Activities. This
     statement  establishes  accounting  and reporting  standards for derivative
     instruments,  and for hedging  activities.  SFAS No.  133,  as amended,  is
     effective for all fiscal  quarters of fiscal years beginning after June 15,
     2000.

     The  Company  does not  presently  make use of any  significant  derivative
     instruments, and therefore this new accounting pronouncement did not have a
     material effect on its consolidated financial statements.


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

This  discussion  should be read in  conjunction  with the  unaudited  condensed
consolidated  financial  statements and related notes included in Item 1 of this
Quarterly Report, and the audited  consolidated  financial  statements,  related
notes and  Management's  Discussion  and  Analysis  for the  fiscal  year  ended
February 28, 2001, contained in the Company's 2001 Annual Report.

The following  discussion and analysis may contain  forward-looking  statements.
These forward-looking  statements are based upon information currently available
to management and are subject to certain risks and uncertainties.  Actual future
results  could  differ  significantly  from those  expressed or implied by these
forward-looking  statements.  These  risks and  uncertainties  include,  without
limitation,  those described within this discussion,  and also under the heading
"Other Factors That May Affect Future  Operating  Results"  within the Company's
report on Form 10-K filed with the Securities and Exchange Commission on May 25,
2001.

Overview

The Company's  fiscal 2002 first quarter results were adversely  impacted by the
combination  of a  demand  slowdown  in the  markets  served  by  the  Company's
products,  and  excess  customer  inventories.  The  semiconductor  industry  in
general, which is historically a highly cyclical industry,  began experiencing a
slowing of demand  during the  latter  part of  calendar  2000,  as  unfavorable
economic conditions in the U.S.,  including reduced consumer  confidence,  began
weakening demand for computers,  communications  devices, and related equipment,
all of which significantly impact  semiconductor  demand. This economic downturn
has spread more broadly during the first part of calendar  2001.  Forecasts of a
recovery in  semiconductor  demand are widely  uncertain at this point, and some
industry  analysts  are  forecasting  as  much  as a 20%  decline  in  worldwide
semiconductor  revenues in 2001,  compared to 2000.  The impact of these current
economic  conditions  is manifested  in the  Company's  first quarter  operating
results.

During the first  quarter,  to better  align  expenses  with  near-term  revenue
expectations,  the Company  implemented  an aggressive  cost-control  program to
limit the impact of reduced revenue on profitability. Actions include a two week
shut down of its test facility in Hauppauge,  New York;  mandatory paid vacation
for  U.S.   employees   during  the  second  fiscal  quarter;   closure  of  its
Massachusetts design center; and the sale of two underutilized facilities.

The Company  expects  second quarter  revenues and operating  results to improve
slightly over the corresponding first quarter results. The Company believes that
it is well  positioned to capitalize on its targeted growth  opportunities  when
semiconductor demand returns to its historical growth rates.

Revenues

Revenues  for the first  quarter of fiscal  2002 were $30.8  million,  declining
approximately  19%  below  revenues  of  $38.2  million  for  the  corresponding
year-earlier  quarter.  This  decrease  reflects  the  impact of both lower unit
shipments as well as lower selling  prices.  Approximately  70% of the Company's
revenues were derived from sales of PC products,  and 30% from sales of Embedded
products, in both periods.

International revenues represented  approximately 87% and 71% of revenues in the
first quarters of fiscal 2002 and fiscal 2001,  respectively.  Revenues from the
Asia and Pacific Rim region were 77% of total  revenues in the first  quarter of
fiscal 2002, compared to 63% in the year-earlier  quarter. This region continues
to represent the dominant location for the Company's  shipments,  reflecting the
region's  high  concentration  of  the  world's  electronics  manufacturing  and
assembly activity.

Gross Profit

Gross profit was $11.8 million,  or 38.2% of revenues,  for the first quarter of
fiscal  2002,  compared  to  $15.8  million,  or  41.2%  of  revenues,  for  the
corresponding   year-earlier   quarter.   This   decline  in  gross  profit  was
attributable to reductions in average selling prices, driven by the current soft
economic environment, which were not fully offset by reductions in manufacturing
costs.

Operating Expenses

Research and  development  spending  was $8.4  million for the first  quarter of
fiscal  2002,  an increase of $1.2  million,  or 17%,  over $7.2 million for the
corresponding  year-earlier quarter. The increase reflects hiring of engineering
staff and new product  development  costs,  including  masks and tooling  costs,
prototype wafers and development circuit boards.

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.  Over the past  several  years,  the Company has
appreciably increased its investment in research and development,  which current
management  believes  had been  under-funded,  and is now better  positioned  to
pursue development opportunities. The Company is also committed to exploring new
markets and improving its product design  methodologies in an effort to increase
revenues and reduce costs.

Selling,  general and  administrative  expenses were $7.8  million,  or 25.4% of
revenues,  in the current year first  quarter,  as compared to $8.4 million,  or
22.0% of revenues,  in the corresponding prior year quarter.  This decrease,  in
dollars,  reflects lower  commissions and other direct selling costs  associated
with lower revenues, as well as lower incentive compensation costs. The increase
in expenses as a percentage of revenues reflects the impact of lower revenues in
the current year's first quarter as compared to the prior year's first quarter.

Other Income and Expense

Interest  income was $1.1  million and $1.2  million in the three month  periods
ended  May 31,  2001 and 2000,  respectively.  The  slight  decline  reflects  a
combination  of  generally  lower  interest  rates and a shift in the  Company's
investment  portfolio  towards  tax-exempt  municipal  securities  in the  first
quarter of fiscal  2002,  partially  offset by higher  cash and cash  equivalent
balances available for investment.

Other income  (net),  totaled $1.1 million in the first  quarter of fiscal 2002,
compared  to $2.6  million in the first  quarter  of fiscal  2001.  The  current
quarter's  other income  includes gains totaling $0.6 million on the sale of two
underutilized facilities, as well as gains realized on sales of long-term equity
investments.  Other income (net) in the first quarter of the prior year includes
gains of $2.3 million realized on sales of a portion of the Company's investment
in Singapore-based  Chartered Semiconductor  Manufacturing Ltd. (Chartered),  as
well as $0.3 million of proceeds from sales of related call options.

Income Taxes

The Company's effective income tax rate for the first quarter of fiscal 2002 was
33.0%,  compared  to 37.0% for the  year-earlier  quarter.  The  decrease in the
effective tax rate reflects a higher proportion of tax-free interest income as a
component  of  overall  profitability  in  fiscal  2002  than  in  fiscal  2001.
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 is involved in several legal actions  relating to past  divestitures
of divisions  and business  units.  These  divestitures  were  accounted  for as
discontinued  operations,  and accordingly,  costs associated with these actions
totaling  $0.2  million,  net of  income  taxes,  are  reported  as a Loss  from
discontinued operations on the Consolidated Statement of Operations.

During the first  quarter of fiscal  2001,  the Company sold the majority of its
ownership interest in Standard MEMS, Inc. and realized an after-tax gain of $4.8
million. Standard MEMS, Inc. was organized in June 1999, upon the Company's sale
of the assets of its former Foundry Business Unit to New Jersey-based IOTA, Inc.

Liquidity and Capital Resources

The Company's cash,  cash  equivalents  and short-term  investments  were $106.8
million as of May 31, 2001, compared to $109.2 million as of February 28, 2001.

During the first three months of fiscal  2002,  operating  activities  used $2.8
million of cash, while investing  activities and financing  activities  provided
$6.4  million  and $0.2  million of cash,  respectively.  The cash  consumed  by
operating  activities  primarily  reflects  the  impact  of the  operating  loss
incurred for the  quarter.  Sales of  underutilized  real estate  provided  $2.1
million of the cash provided by investing activities during the quarter.

During the first  quarter of fiscal 2002,  the Company  invested $1.7 million in
capital expenditures,  the majority of which was for equipment for the Company's
production test operation.  Total fiscal 2002 capital  expenditures are expected
to be at similar  levels to the $14.6 million of such  expenditures  incurred in
fiscal 2001.

Accounts  receivable  increased  slightly  to  $17.3  million  at May 31,  2001,
compared  to  $16.8  million  at  February  28,  2001.  The  Company's  accounts
receivable are substantially all current as of May 31, 2001.

During  the first  three  months  of  fiscal  2002,  the  Company's  inventories
decreased  by  approximately  $4.2  million  to $27.8  million.  This  reduction
generally reflects efforts to align inventories with current demand.  Typically,
the Company  requires  several  months to respond to  unanticipated  declines in
demand,  as had occurred during the fourth quarter of fiscal 2001, and bring its
inventories in line with current demand forecasts.  The Company believes that it
is well-positioned to meet short-term customer demand.

The decline in accounts payable, from $11.7 million at February 28, 2001 to $7.7
million at May 31 2001,  resulted from a lower volume of inventory  purchased in
May 2001, as compared to February 2001.

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.

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 28, 2001.
<PAGE>


ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Interest  Rate Risk - The  Company's  exposure  to  interest  rate risk  relates
primarily to its investment  portfolio.  The primary  objective of the Company's
investment  portfolio  management is to invest  available cash while  preserving
principal  and  meeting  liquidity  needs.  In  accordance  with  the  Company's
investment policy,  investments are placed with high credit-quality  issuers and
the amount of credit exposure to any one issuer is limited.

As of May 31,  2001,  the  Company's  $4.0  million  of  short-term  investments
consisted of  fixed-income  investments  in corporate and municipal  obligations
with maturities of between three and twelve months.  These securities,  like all
fixed  income  instruments,  are subject to interest  rate risk and will vary in
value as market  interest  rates  fluctuate.  If market  interest  rates were to
increase  immediately  and uniformly by 10% from the levels at May 31, 2001, the
fair  value of these  short-term  investments  would  decline  by an  immaterial
amount.  The Company has the ability 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.

Equity  Price  Risk - The  Company  is  exposed  to an equity  price risk on its
investment in Chartered  Semiconductor  Manufacturing,  Ltd. and 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 $1.3 million to its May 31, 2001 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 October 2000,  Standard  Microsystems  Corporation  was named as a defendant,
along with  several  other  semiconductor  suppliers,  in a patent  infringement
lawsuit filed by U.S.  Philips  Corporation in the United States  District Court
for the  Southern  District  of New York (U.S.  Philips  Corporation  v.  Analog
Devices, Inc., et al, Case Number 00 CIV. 7426). The Complaint filed in the suit
alleges that some of the Company's  products  infringe one Philips  patent,  and
seeks injunctive  relief and unspecified  damages.  The Company has reviewed and
investigated  the  allegations  in the  complaint  and believes that the suit is
without  merit.  The Company has filed its answer in the Court and is contesting
these allegations vigorously.

In October 1997,  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  Accton  Technology  Corporation  (Accton).  In
consideration for the sale, the Company received $40.2 million in cash, of which
$2.0 million was placed in an escrow  account,  scheduled for release in January
1999, to secure the Company's indemnity obligations under the agreement.

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
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. In
January 1999, SMSC filed an action in the Supreme Court of New York (the Action)
against Accton, SMC Networks, Inc. and other parties, seeking the release of the
escrow  account to the  Company on the grounds  that  Accton's  allegations  are
without merit, and seeking payment of  approximately  $1.6 million (the majority
of which is included within other assets on the Company's  Consolidated  Balance
Sheet at  February  28,  2001) owed to the  Company  by SMC  Networks,  Inc.  In
November  1999,  the Court  issued an order  staying the Action and directed the
parties  to  arbitration  under  the  arbitration  provisions  of  the  original
transaction  agreements.  In July 2000,  the  Company  asserted  various  claims
against Accton and its affiliates, including claims for fraud, improper transfer
of profits,  mismanagement,  breach of fiduciary duties and payment default. The
parties are now proceeding with arbitration of this dispute.

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 is  vigorously  defending
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 6.  Exhibits and Reports on Form 8-K

(a)  Exhibits

     None.


(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


DATE:  July 13, 2001          /S/  Andrew M. Caggia
                               ------------------------
                                   (Signature)

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