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, 2002

                                       OR

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

                          Commission file number 0-7422

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                        STANDARD MICROSYSTEMS CORPORATION

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             (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 May 31, 2002,  there were  16,207,474  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 (Unaudited)
(In thousands)

                                                   May 31,       February 28,
                                                    2002            2002
                                                    ----            ----
Assets
Current assets:
  Cash and cash equivalents                      $  96,070       $  98,065
  Short-term investments                            32,790          28,595
  Accounts receivable, net                          21,090          21,828
  Inventories                                       21,292          17,585
  Deferred income taxes                              8,786           8,582
  Other current assets                               5,089           4,317
----------------------------------------------------------------------------

       Total current assets                        185,117         178,972
----------------------------------------------------------------------------

Property, plant and equipment, net                  23,570          24,170
Investment in Chartered Semiconductor                9,956           9,992
Deferred income taxes                                6,886           7,196
Other assets                                        16,842          15,733
----------------------------------------------------------------------------

                                                 $ 242,371       $ 236,063
============================================================================

Liabilities and shareholders' equity
Current liabilities:
  Accounts payable                               $  11,775       $   8,477
  Deferred income on shipments to
   distributors                                      7,009           6,225
  Accrued expenses, income taxes and
   other liabilities                                 8,043           9,289
----------------------------------------------------------------------------

       Total current liabilities                    26,827          23,991
----------------------------------------------------------------------------

Other liabilities                                    6,889           6,973

Minority interest in subsidiary                     11,652          11,646

Shareholders' equity:
  Preferred stock                                     -               -
  Common stock                                       1,764           1,728
  Additional paid-in capital                       123,546         119,505
  Retained earnings                                 85,315          84,963
  Treasury stock, at cost                          (15,675)        (13,861)
  Accumulated other comprehensive
   income                                            2,053           1,118
----------------------------------------------------------------------------

       Total shareholders' equity                  197,003         193,453
----------------------------------------------------------------------------

                                                 $ 242,371       $ 236,063
============================================================================

See Notes to Consolidated Financial Statements.

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


                                                           Three Months Ended
                                                        ------------------------
                                                                 May 31,
                                                        ------------------------
                                                           2002          2001
                                                           ----          ----

Revenues                                               $  34,007      $  30,836

Cost of goods sold                                        18,935         19,060
--------------------------------------------------------------------------------

Gross profit                                              15,072         11,776

Operating expenses:
Research and development                                   6,851          8,442
Selling, general and administrative                        8,194          7,846
--------------------------------------------------------------------------------

  Income (loss) from operations                               27         (4,512)

Interest income                                              581          1,069
Other income (expense), net                                  (15)         1,064
--------------------------------------------------------------------------------

Income (loss) before provision for income taxes
 and minority interest                                       593         (2,379)

Provision for (benefit from) income taxes                    154           (785)

Minority interest in net income of subsidiary                  6             30
--------------------------------------------------------------------------------

Income (loss) from continuing operations                     433         (1,624)

Loss from discontinued operations
 (net of income taxes of $46 and $132)                       (81)          (245)
--------------------------------------------------------------------------------

Net income (loss)                                      $     352      $  (1,869)
================================================================================

Basic net income (loss) per share:
  Income (loss) from continuing operations             $    0.03      $   (0.10)
  Loss from discontinued operations                        (0.01)         (0.02)
--------------------------------------------------------------------------------

Basic net income (loss) per share                      $    0.02      $   (0.12)
================================================================================

Diluted net income (loss) per share:
  Income (loss) from continuing operations             $    0.02      $   (0.10)
  Loss from discontinued operations                        (0.00)         (0.02)
--------------------------------------------------------------------------------

Diluted net income (loss) per share                    $    0.02      $   (0.12)
================================================================================

Weighted average common shares outstanding:
  Basic                                                   16,060         16,102
  Diluted                                                 17,811         16,102

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

                                                    Three Months Ended May 31,
                                                  ------------------------------
                                                     2002                2001
                                                  ----------          ----------


Cash flows from operating activities:
  Cash received from customers and licensees      $  36,239          $   29,432
  Cash paid to suppliers and employees              (34,502)            (33,345)
  Interest received                                     525               1,618
  Interest paid                                         (20)                (41)
  Income taxes paid                                     (70)               (505)
--------------------------------------------------------------------------------

    Net cash provided by (used for) operating
     activities                                       2,172              (2,841)
--------------------------------------------------------------------------------

Cash flows from investing activities:
  Capital expenditures                               (1,439)             (1,728)
  Sales of property, plant and equipment                  5               2,059
  Sales of long-term investments and options           -                    489
  Purchases of short-term investments               (11,795)             (4,000)
  Sales of short-term investments                     7,600               9,629
  Other                                                 (13)                (30)
--------------------------------------------------------------------------------

    Net cash provided by (used for) investing
     activities                                      (5,642)              6,419
--------------------------------------------------------------------------------

Cash flows from financing activities:
  Proceeds from issuance of common stock              3,890                 406
  Purchases of treasury stock                        (2,595)               -
  Repayments of obligations under capital leases       (264)               (243)
--------------------------------------------------------------------------------

    Net cash used for financing activities            1,031                 163
--------------------------------------------------------------------------------

Effect of foreign exchange rate changes on cash
 and cash equivalents                                   543                (122)

Net cash used for discontinued operation                (99)               (401)
--------------------------------------------------------------------------------

Net increase (decrease) in cash and cash
 equivalents                                         (1,995)              3,218

Cash and cash equivalents at beginning of period     98,065              99,545
--------------------------------------------------------------------------------

Cash and cash equivalents at end of period        $  96,070          $  102,763
================================================================================


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

Income (loss) from continuing operations          $     433          $   (1,624)
Adjustments to reconcile income (loss) from
 continuing operations to net cash provided
 by (used for) operating activities:
  Depreciation and amortization                       2,179               2,892
  Gains on sales of investments and property              5              (1,106)
  Other adjustments, net                                 (6)                  8
  Changes in operating assets and liabilities:
   Accounts receivable                                1,330                (518)
   Inventories                                       (3,631)              4,111
   Accounts payable and accrued expenses and
    other liabilities                                 3,496              (5,156)
   Other changes, net                                (1,634)             (1,448)
--------------------------------------------------------------------------------

Net cash provided by (used for) operating
 activities                                       $   2,172          $   (2,841)
================================================================================

See Notes to Consolidated Financial Statements.
<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, 2002
     and 2001. The February 28, 2002 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, 2002 included in the Company's Annual Report on
     Form 10-K,  as filed on April 26,  2002 with the  Securities  and  Exchange
     Commission.  The results of  operations  for the three months ended May 31,
     2002 are not  necessarily  indicative of the results to be expected for any
     future periods.

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, 2002       Feb. 28, 2002
     ----------------------------------------------------------------

      Raw Materials                 $       507        $        465
      Work in Process                     9,226               5,820
      Finished Goods                     11,559              11,300
     ----------------------------------------------------------------

                                    $    21,292        $     17,585
     ================================================================


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


                                        May 31, 2002     Feb. 28, 2002
     ----------------------------------------------------------------------

      Land                              $     3,434      $      3,434
      Buildings and Improvements             29,300            29,257
      Machinery and Equipment                77,521            76,121
     ----------------------------------------------------------------------
                                            110,255           108,812
      Less: accumulated depreciation         86,685            84,642
      ---------------------------------------------------------------------

                                        $    23,570      $     24,170
     ======================================================================

3.   Net Income (Loss) Per Share

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

                                                Three Months Ended
                                                      May 31,
                                                -------------------
                                                  2002      2001
                                                --------  --------

     Average shares outstanding for
      basic net income (loss) per share           16,060    16,102

     Dilutive effect of stock options              1,751        -
     --------------------------------------------------------------

     Average shares outstanding for
      diluted net income (loss) per share         17,811    16,102
     ==============================================================

     Options  covering 0.1 million shares were excluded from the  computation of
     diluted  net  income  per  share for the three  months  ended May 31,  2002
     because  their  effect  was  antidilutuve.  The  impact of all  outstanding
     options,  covering 4.2 million shares, was excluded from the calculation of
     the net loss per share for the three months ended May 31, 2001.

4.   Comprehensive Income

     The  Company's  other  comprehensive  income  (loss)  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   classified  as   available-for-sale.   The
     components of the Company's comprehensive income (loss) for the three-month
     periods ended May 31, 2002 and 2001 were as follows (in thousands):


                                                Three Months Ended
                                                      May 31,
                                                -------------------
                                                   2002      2001
                                                 --------  --------

     Net income (loss)                           $   352   $(1,869)
     Other comprehensive income (loss):
     Change in foreign currency translation
      adjustment
                                                     966      (290)
     Change in unrealized gain (loss) on
      investments                                    (31)     (253)
    ---------------------------------------------------------------

     Total comprehensive income (loss)           $ 1,287   $(2,412)
    ===============================================================

5.   Business Restructuring

     In November 2001, the Company's  Board of Directors  approved  management's
     plan to exit the PC chipset business, redirect the Company's resources, and
     increase its focus on leveraging its core technologies toward higher growth
     and higher margin businesses.  This restructuring was announced on December
     3, 2001. The decision to exit this business was based upon an assessment of
     the  PC  chipset  marketplace,   and  management's   conclusions  that  the
     opportunities for  profitability in this marketplace had declined,  and the
     costs of entry had  increased,  to a point where further  investments in PC
     chipset technology were not justified.  As a result of this  restructuring,
     the Company  recorded a charge of $9.0  million in fiscal  2002,  including
     $5.3 million for  impairments in asset values,  $1.3 million for excess and
     obsolete  inventory,  $1.9  million  for  long-term,  non-cancelable  lease
     obligations,  $0.3 million for a workforce reduction of 55 people, and $0.2
     million in other costs.

     The following is a summary of the changes in restructuring  liabilities for
     the three months ended May 31, 2002 (in thousands):

                                 Business      Non-Cash    Cash       Business
                              Restructuring    Charges   Payments  Restructuring
                              Reserve as of                        Reserve as of
                            February 28, 2002                       May 31, 2002
     ===========================================================================

     Workforce reduction            $     2      $  (2)    $    -       $     -
     Non-cancelable lease
      obligations                     1,771          -         97         1,674
     Other charges                      181          2          6           177
     ---------------------------------------------------------------------------

                                    $ 1,954      $   -     $  103       $ 1,851
     ===========================================================================

     The Company completed its  restructuring  program during the fourth quarter
     of fiscal  2002.  Substantially  all of the cash  payments  related  to the
     workforce  reduction  were  made  in  that  period.   Payments  related  to
     non-cancelable  lease obligations will be paid over their respective terms,
     through August 2008.

6.   Discontinued Operations

     The Company has been  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,  one of which has  continued  into  fiscal  2003,  are
     reported  as a  Loss  from  discontinued  operations  on  the  Consolidated
     Statements  of  Operations.  These  costs  totaled  $0.1  million  and $0.4
     million, before applicable income tax benefits, for the three-month periods
     ended May 31, 2002 and 2001, respectively.

7.   Shareholders Equity

     Common Stock  Repurchase  Program - In October 1998, the Company's Board of
     Directors approved a common stock repurchase program,  allowing the Company
     to  repurchase  up to one  million  shares of its common  stock on the open
     market or in private  transactions.  In July 2000,  the  authorization  was
     expanded from one million shares to two million shares. As of May 31, 2002,
     the Company has repurchased  1,428,000  shares of common stock at a cost of
     $15.7 million under this program,  including  90,000 shares  repurchased in
     the first  quarter of fiscal  2003 at a cost of $1.8  million.  The Company
     also paid $0.8 million in early March 2002 to settle 45,000 treasury shares
     acquired  at  the  end  of  February  2002.  The  Company  currently  holds
     repurchased shares as treasury stock, reported at cost.

8.   Subsequent Event - Business Combination

     In April 2002, the Company announced the signing of a definitive  agreement
     to acquire Gain Technology  Corporation (Gain), a developer and supplier of
     high-speed,   high-performance   analog  and  mixed-signal   communications
     integrated circuits and proprietary  intellectual  property cores, based in
     Tucson,  Arizona.  On June 3, 2002,  the  Company  closed the  acquisition,
     acquiring all of Gain's outstanding capital stock by merger in exchange for
     approximately 749,000 shares of SMSC common stock, valued at $17.9 million,
     and  $17.0  million  of cash.  Under  the  terms of the  Merger  Agreement,
     approximately 224,000 of the shares have been placed into an escrow account
     as  security   for  certain   indemnity   obligations   of  Gain's   former
     shareholders.  Up to $17.5 million of additional consideration,  payable in
     SMSC common  stock and cash,  may be issued to Gain's  former  shareholders
     during fiscal 2004 upon satisfaction of certain future  performance  goals.
     The  Company  also  expects to incur  approximately  $1.7  million of costs
     associated with this transaction.

     This  transaction  will be  accounted  for  using  the  purchase  method of
     accounting in accordance with Statement of Financial  Accounting  Standards
     (SFAS) No. 141, Business Combinations. The Company's preliminary allocation
     of the  purchase  consideration  includes  approximately  $7.1  million  of
     intangible assets acquired from Gain,  excluding  goodwill,  and a one-time
     charge of $0.1 million for purchased  in-process  research and development,
     which is expected to be recorded in the second  quarter of fiscal 2003. The
     Company is currently  finalizing this  allocation,  based upon  independent
     appraisals and management's estimates and judgments.

9.   New Accounting Pronouncements

     In July 2001, the Financial Accounting Standards Board issued SFAS No. 141,
     Business  Combinations,  and SFAS No. 142,  Goodwill  and Other  Intangible
     Assets.  SFAS No. 141 requires the use of the purchase method of accounting
     for all  business  combinations  initiated  after  June 30,  2001,  thereby
     eliminating use of the  pooling-of-interests  method.  SFAS No.142 requires
     goodwill and certain other intangible assets to be tested for impairment at
     least  annually  and  written  down only when  determined  to be  impaired,
     replacing  the previous  accounting  practice of ratably  amortizing  these
     items over their  estimated  useful  lives.  Intangible  assets  other than
     goodwill  that have a finite life are  amortized  over their useful  lives.
     This  statement  applies  to  existing  goodwill  and  intangible   assets,
     beginning  with fiscal years starting after December 15, 2001. The adoption
     of these  pronouncements did not impact the Company's results of operations
     or financial position.

     In  August  2001,  the FASB  issued  SFAS No.  143,  Accounting  for  Asset
     Retirement  Obligations.  This Statement addresses financial accounting and
     reporting  for  obligations  associated  with the  retirement  of  tangible
     long-lived  assets and the associated asset retirement costs. It applies to
     legal obligations  associated with the retirement of long-lived assets that
     result from the acquisition,  construction, development and (or) the normal
     operation of a long-lived asset, except for certain obligations of lessees.
     SFAS No. 143 is effective for financial  statements issued for fiscal years
     beginning  after June 25, 2002. The Company  currently does not expect this
     pronouncement  to have any impact on its results of operations or financial
     position.

     In  October  2001,  the  FASB  issued  SFAS  No.  144,  Accounting  for the
     Impairment or Disposal of Long-lived Assets.  This statement  establishes a
     single accounting model,  based upon the framework  established in SFAS No.
     121,  Accounting for the Impairment of Long-Lived Assets and for Long-Lived
     Assets to be Disposed of, for  long-lived  assets to be disposed of by sale
     and  addressed  significant   implementation   issues.  This  statement  is
     effective   for  fiscal   years   beginning   after   December   15,  2001.
     Implementation  of  this  pronouncement  did not  have  any  impact  on the
     Company's results of operations or 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
Consolidated  Financial  Statements  and  footnotes  thereto  contained  in this
report.


Overview
--------

Description of Business

Standard  Microsystems  Corporation  (the  Company  or SMSC) is a  designer  and
worldwide supplier of advanced digital and analog  Input/Output (I/O) system and
connectivity  solutions  for a  broad  range  of  communications  and  computing
applications in the areas of Advanced I/O,  Connectivity,  Local Area Networking
and Embedded Control Systems.  The Company is a fabless  semiconductor  supplier
whose  products  are  manufactured  by  third  party  world-class  semiconductor
foundries and  assemblers.  To insure the highest product  quality,  the Company
conducts  a  significant  portion  of  its  final  testing  requirements  in the
Company's own state-of-the-art testing operation.

The  Company  is  prominent  as  the  world's   leading   supplier  of  Advanced
Input/Output   (I/O)  integrated   circuits  for  desktop  and  mobile  personal
computers.  Advanced I/O circuits contain a variety of individual  functions and
unique I/O  controllers  delivered in a single  package,  including  floppy disk
control,  keyboard control and BIOS, parallel and serial port control, and often
flash  memory,  infrared  communications  support,  a real  time  clock,  system
management and power management.

The Company serves the USB  connectivity  market with its family of connectivity
products,  which provide  solutions using both USB 1.1 and USB 2.0 technologies.
Embedded   Networking   products   are   designed   to   serve  a   variety   of
machine-to-machine  communications  applications,  such as set-top  boxes,  home
gateway products, printers and wireless communication interfaces.

The Company's headquarters are in Hauppauge,  New York, and SMSC operates design
and validation centers in New York, Austin, Texas, San Jose, California, Tucson,
Arizona and Phoenix,  Arizona and has sales offices in the United States, Europe
and Taiwan.  The Company  conducts  most of its business in the Japanese  market
through its majority-owned subsidiary, SMSC Japan.

Business Restructuring

In November 2001, the Company's Board of Directors approved management's plan to
exit the PC chipset business, redirect the Company's resources, and increase its
focus on leveraging its core technologies toward higher growth and higher margin
businesses.  As a result,  the Company  discontinued  further  investments in PC
chipset development activities.  This restructuring was announced on December 3,
2001.

The  decision  to exit this  business  was based  upon an  assessment  of the PC
chipset  marketplace,  and management's  conclusions that the  opportunities for
profitability  in this  marketplace  had  declined,  and the  costs of entry had
increased,  to a point where further  investments in PC chipset  technology were
not  justified.  In addition to the  changing  market  prospects  for PC chipset
products, the ongoing, unprecedented semiconductor market downturn had prevented
the Company from producing  profits while continuing its significant  investment
in PC chipset products.

As a result of this restructuring, the Company recorded a charge of $9.0 million
in fiscal 2002,  including $5.3 million for  impairments  in asset values,  $1.3
million  for  excess  and  obsolete  inventory,   $1.9  million  for  long-term,
non-cancelable  lease obligations,  $0.3 million for a workforce reduction of 55
people, and $0.2 million in other costs. The Company completed its restructuring
program during the fourth quarter of fiscal 2002.  Substantially all of the $0.3
million in cash payments  related to the workforce  reduction  were made in that
period.  Payments related to the  non-cancelable  lease obligations will be paid
over their  respective  terms,  through  August 2008.  Substantially  all of the
remaining restructuring costs were non-cash costs.

By virtue of this  restructuring,  the Company has redeployed  certain resources
previously  devoted to chipset  marketing and  development  programs back to its
core technologies in high-speed  communications and computing applications.  The
restructuring   also  reduced  the  Company's  annual   operating   expenses  by
approximately  $7 million,  but had minimal impact on current  product sales, as
the Company had yet to achieve significant product sales of PC chipset products.

Business Acquisition

In April 2002,  the Company  announced the signing of a definitive  agreement to
acquire  Gain  Technology  Corporation  (Gain),  a  developer  and  supplier  of
high-speed,  high-performance analog and mixed-signal  communications integrated
circuits and proprietary  intellectual property cores, based in Tucson, Arizona.
On June 3, 2002,  the Company  closed the  acquisition,  acquiring all of Gain's
outstanding  capital stock in exchange for approximately  749,000 shares of SMSC
common stock,  valued at $17.9  million,  and $17.0  million of cash.  Under the
terms of the Merger  Agreement,  approximately  224,000 of the shares  have been
placed into an escrow account as security for certain  indemnity  obligations of
Gain's former  shareholders.  Up to $17.5  million of additional  consideration,
payable  in  SMSC  common  stock  and  cash,  may be  issued  to  Gain's  former
shareholders  during fiscal 2004 upon satisfaction of certain future performance
goals. The Company also expects to incur  approximately $1.7 of costs associated
with this transaction.

This  transaction  will be accounted for using the purchase method of accounting
in accordance with Statement of Financial  Accounting  Standards (SFAS) No. 141,
Business  Combinations.  The  Company's  preliminary  allocation of the purchase
consideration  includes approximately $7.1 million of intangible assets acquired
from  Gain,  excluding  goodwill,  and a  one-time  charge of $0.1  million  for
purchased in-process research and development,  which is expected to be recorded
in the second quarter of fiscal 2003. The Company is currently  finalizing  this
allocation,  based upon independent  appraisals and  management's  estimates and
judgments.


Results of Operations
---------------------

Revenues

The  Company's  revenues  for the three  months  ended May 31,  2002 were  $34.0
million, compared to $30.8 million for the three months ended May 31, 2001. This
increase  reflects  higher unit volume  shipments in the first quarter of fiscal
2003,  driven by Advanced I/O product  design-wins  achieved in fiscal 2002. The
Company  believes it increased  its Advanced I/O market share during fiscal 2002
on the strength of these key  design-wins.  Partially  offsetting this increased
Advanced I/O revenue was a decrease in embedded products  revenues,  compared to
the prior year's first quarter,  as the ongoing  technology  slump  continues to
restrain demand for the broad applications  served by these products,  including
networking and telecommunications applications.  However, revenues from embedded
products have now increased for three  consecutive  fiscal  quarters,  signaling
that demand for the Company's embedded products has begun to recover.

Revenues  from  customers  outside  of North  America  accounted  for 89% of the
Company's  revenues in the first  quarter of fiscal  2003,  consistent  with the
prior year's first quarter.  The Company expects that  international  shipments,
particularly  to the Asia and Pacific Rim region,  will  continue to represent a
significant portion of its revenues.

From time to time,  several key customers can account for a significant  portion
of the Company's  revenues.  Revenues from one customer  represented 19% for the
three  months  ended May 31,  2002,  and 18% for the three  months ended May 31,
2001, of the Company's  revenues for those respective  periods.  Revenues from a
second customer represented 17% for the three months ended May 31, 2002, and 11%
for the three  months ended May 31, 2001,  of the  Company's  revenues for those
respective  periods.  Revenues  from a  third  customer  represented  10% of the
Company's  revenues  the three  months  ended May 31,  2002.  No other  customer
represented  more  than 10% of the  Company's  revenues  in those  periods.  The
Company  expects  that  its  key  customers  will  continue  to  account  for  a
significant portion of its revenues for the remainder of fiscal 2003 and for the
foreseeable future.

Gross Profit

Gross profit for the first quarter of fiscal 2003 was $15.1 million, or 44.3% of
revenues, compared to $11.8 million, or 38.2% of revenues reported for the first
quarter of fiscal 2002.

This  improvement  in gross profit  reflects the  combination  of lower  product
costs,  new product  introductions,  and an increase in unit  production.  Also,
revenues for the first  quarter of fiscal 2003 include  several new Advanced I/O
devices,  and, as is typical of this family of products,  these products command
higher  gross  profit  margins  than  mature  products.   Finally,  record  unit
production  during the first quarter of fiscal 2003  resulted in more  efficient
use of fixed overhead costs.

Research and Development Expenses

The Company's research and development expenses (R&D) consist of circuit design,
development  and  validation,  product  engineering,  software  development  and
related support  activities.  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,  which, in turn, drive the
Company's opportunities for future growth.

Research and  development  expenses were $6.9 million for the three months ended
May 31, 2002,  compared to $8.4 million for the three months ended May 31, 2001.
The prior  year's  first  quarter  included  the  impact of  engineering  staff,
prototype  costs and  other  development  costs  associated  with the  Company's
then-active  investment  in PC chipset  development  programs.  The  decrease in
fiscal 2003's first  quarter R&D reflects the impact of the  Company's  November
2001 business  restructuring,  whereby the Company  discontinued  its PC chipset
development and reduced its annual R&D expenses by approximately $5.0 million.

Selling, General and Administrative Expenses

Selling, general and administrative expenses were $8.2 million, or approximately
24% of revenues,  in the first quarter of fiscal 2003, compared to $7.8 million,
or  approximately  25% of  revenues,  in  the  first  quarter  of  fiscal  2002.
Contributing  to the dollar  increase in the current  year's first  quarter,  as
compared  to the prior  year's  first  quarter,  were  higher  variable  selling
expenses  associated  with increased  product sales.  Partially  offsetting this
increase was the impact of the Company's  November 2001 business  restructuring,
which  reduced  annual   selling,   general  and   administrative   expenses  by
approximately $0.9 million.

Other Income and Expense

Interest  income of $0.6  million in the first  quarter of fiscal 2003  declined
from $1.1 million reported in the first quarter of fiscal 2002, reflecting lower
interest rates on short-term  investments during the current year period.  Other
income  (expense),  net, was negligible in the first quarter of fiscal 2003, but
totaled $1.1 million in the first quarter of fiscal 2002. The fiscal 2002 figure
included  gains of $0.6  million  realized  from  the sale of two  underutilized
facilities  and a gain of $0.5  million  realized on the sale of a portion of an
equity  investment,  partially  offset by $0.1  million  of  interest  and other
expenses.

Income Taxes

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
treatment of certain  expenses,  the impact of tax-exempt income and various tax
credits.

The Company recorded a provision for income taxes from continuing operations for
the three months ended May 31, 2002 at its  expected  effective  rate for fiscal
2003 of approximately 26%. By comparison,  the effective income tax benefit rate
was  approximately  33% for the three months  ended May 31,  2001.  The expected
effective  income  tax rate for fiscal  2003  primarily  reflects  the impact of
tax-exempt interest income and income tax credits anticipated for fiscal 2003.

Discontinued Operations

The  Company  has been  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,  one of which has  continued  into fiscal 2003,  are reported as a Loss
from discontinued operations on the Consolidated Statements of Operations. These
costs totaled $0.1 million,  before applicable income tax benefits, in the first
quarter of fiscal 2003,  compared to $0.4 million,  before applicable income tax
benefits, in the first quarter of fiscal 2002.


Liquidity and Capital Resources
-------------------------------

The Company currently  finances its operations through a combination of existing
resources and cash generated by operations.

The Company's cash, cash  equivalents  and short-term  investments  increased to
$128.9  million as of May 31, 2002,  compared to $126.7  million at February 28,
2002. The Company had $158.3 million of working capital,  and a current ratio of
6.9  to  1,  at  May  31,  2002,  compared  to  $155.0  million  and  7.5  to 1,
respectively, at February 28, 2002. The Company had no bank debt at May 31, 2002
or February 28, 2002.

Operating  activities  generated  $2.2  million of cash in the first  quarter of
fiscal  2003.  Fiscal 2003  operating  cash flow was  impacted by a $3.6 million
increase in inventories,  as the Company stages for higher revenues  anticipated
in the second  quarter of fiscal  2003,  substantially  offset by a related $3.5
million increase in accounts payable, accrued expenses and other liabilities.

Capital  spending  during  the first  quarter of fiscal  2003 was $1.4  million.
Capital  expenditures  in fiscal 2003 are  expected  to exceed the $4.5  million
incurred in fiscal 2002, but will depend upon, among other factors, the level of
economic  recovery,  if any, in the high  technology  sector during this period.
Visibility  regarding  the  level of that  recovery  is still  unclear.  Capital
expenditures are typically incurred to support the Company's  semiconductor test
operation and to acquire  hardware,  software and other tools used in the design
of the  Company's  products.  There were no  material  commitments  for  capital
expenditures as of May 31, 2002.

The  Company  generated  $1.0  million of cash in its net  financing  activities
during the three months ended May 31, 2002. This activity included  purchases of
90,000 shares treasury stock for $1.8 million under its common stock  repurchase
program,  and the payment of $0.8  million in early March 2002 to settle  45,000
treasury  shares  acquired at the end of February  2002. As of May 31, 2002, the
Company held 1,428,000 shares of treasury stock, at a cost of $15.7 million. The
exercise of stock options by employees and directors  generated  $3.9 million of
cash during the first quarter of fiscal 2003.

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.  As  noted in the  Business  Acquisition
section of this discussion,  the Company  recently  completed the acquisition of
Gain  Technology  Corporation  for a combination  of SMSC common stock and $17.0
million of cash.  From time to time,  in the ordinary  course of  business,  the
Company  may  again  evaluate   potential   acquisitions  of  or  investment  in
complementary  businesses,  products or technologies and utilize cash to acquire
or  invest  in  such  businesses  or  products,  or  obtain  the  right  to  use
complementary technologies owned by third parties.

The Company expects that its cash,  cash  equivalents,  short-term  investments,
cash flows from  operations  and its  borrowing  capacity  will be sufficient to
finance the Company's  operating and capital  requirements for at least the next
12 months.


Recent Accounting Pronouncements
---------------------------------

In July 2001,  the  Financial  Accounting  Standards  Board issued  Statement of
Financial Accounting Standards (SFAS) No. 141, Business  Combinations,  and SFAS
No. 142, Goodwill and Other Intangible Assets.  SFAS No. 141 requires the use of
the purchase method of accounting for all business combinations  initiated after
June 30, 2001, thereby eliminating use of the pooling-of-interests  method. SFAS
No.142 requires  goodwill and certain other  intangible  assets to be tested for
impairment  at least  annually  and  written  down  only when  determined  to be
impaired, replacing the previous accounting practice of ratably amortizing these
items over their estimated useful lives.  Intangible  assets other than goodwill
that have finite lives are  amortized  over their useful lives.  This  statement
applies to existing goodwill and intangible assets,  beginning with fiscal years
beginning  after  December 15,  2001.  These  pronouncements  did not impact the
Company's results of operations or financial condition.

In August 2001, the FASB issued SFAS No. 143,  Accounting  for Asset  Retirement
Obligations.  This Statement  addresses  financial  accounting and reporting for
obligations associated with the retirement of tangible long-lived assets and the
associated asset retirement  costs. It applies to legal  obligations  associated
with the  retirement  of  long-lived  assets that  result from the  acquisition,
construction,  development and (or) the normal operation of a long-lived  asset,
except  for  certain  obligations  of  lessees.  SFAS No. 143 is  effective  for
financial  statements issued for fiscal years beginning after June 25, 2002. The
Company  currently does not expect this  pronouncement to have any impact on its
results of operations or financial condition.

In October 2001, the FASB issued SFAS No. 144,  Accounting for the Impairment or
Disposal of Long-lived  Assets.  This statement  establishes a single accounting
model, based upon the framework  established in SFAS No. 121, Accounting for the
Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed of, for
long-lived  assets  to  be  disposed  of  by  sale  and  addressed   significant
implementation  issues.  This statement is effective for fiscal years  beginning
after  December 15,  2001.  This  pronouncement  did not  materially  impact the
Company's results of operations or financial condition.

<PAGE>
ITEM 3.   QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK


Financial Market Risks
----------------------

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,  2002,  the  Company's  $32.8  million of  short-term  investments
consisted  primarily of  investments  in  corporate,  government  and  municipal
obligations  with  maturities  of  between  three and twelve  months.  If market
interest  rates were to increase  immediately  and  uniformly by 10 percent from
levels at May 31, 2002,  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 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 $1.0 million to its May 31, 2002 investment value. The Company has
sold call  options  covering  this  investment  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 the
Company's  majority-owned  subsidiary,  SMSC Japan,  are denominated in Japanese
yen. SMSC Japan  purchases a significant  amount of its products for resale from
Standard Microsystems  Corporation in U.S. dollars, and from time to time enters
into  forward  exchange   contracts  to  hedge  against  currency   fluctuations
associated with these product  purchases.  During March 2002, SMSC Japan entered
into a contract with a Japanese  financial  institution to purchase U.S. dollars
to meet a portion of its U.S. dollar denominated product purchase  requirements.
Gains  and  losses  on this  contract  were not  significant.  The  contract  is
scheduled to expire in March 2003.

The Company has never received a cash dividend  (repatriation of cash) from SMSC
Japan nor does it expect to receive such a dividend in the near future.


Other Factors That May Affect Future Operating Results
------------------------------------------------------

As a supplier of semiconductors,  the Company competes in a challenging business
environment,  which is characterized by intense competition, rapid technological
change and cyclical  business  patterns.  Except for the historical  information
contained  herein,  the matters  discussed  in this  report are  forward-looking
statements. The Company faces a variety of risks and uncertainties in conducting
its business,  some of which are out of its control, and any of which, were they
to occur, could impair the Company's operating performance.  For a more detailed
discussion  of risk factors,  please refer to the Company's  report on Form 10-K
filed with the Securities and Exchange Commission.

<PAGE>

PART II - OTHER INFORMATION


ITEM 6.   Exhibits and Reports on Form 8-K

(a)  Exhibits

     None.

(b)  Reports on Form 8-K

     During the three month  period  ended May 31,  2002,  the  Company  filed a
     Current  Report  on  Form  8-K  under  Item  4 -  Changes  in  Registrant's
     Certifying Accountant, dated April 30, 2002 and filed on May 7, 2002.


<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 2,  2002                       /S/   Andrew M. Caggia
                                           -----------------------
                                                   (Signature)

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