SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549
            --------------------------------------------------------

                                    FORM 10-Q
             -------------------------------------------------------

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

                 For the quarterly period ended August 31, 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  September  30, 2001,  there were  16,071,444  shares of the  registrant's
common stock outstanding.
 <PAGE>
                         PART I - FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS

STANDARD MICROSYSTEMS CORPORATION
AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In thousands, except share and per share data)
<TABLE>
<CAPTION>
                                                                     August 31,     February 28,
                                                                       2001            2001
                                                                       ----            ----
                                                                    (Unaudited)
<S>                                                               <C>              <C>
Assets
Current assets:
  Cash and cash equivalents                                       $    104,465     $    99,545
  Short-term investments                                                  -              9,629
  Accounts receivable, net of allowance for doubtful
    accounts of $375 and $362, respectively                             19,885          16,776
  Inventories                                                           26,366          31,999
  Deferred income taxes                                                 10,618           8,718
  Other current assets                                                   4,684           7,080
------------------------------------------------------------------------------------------------
       Total current assets                                            166,018         173,747
------------------------------------------------------------------------------------------------

Property, plant and equipment, net                                      33,333          35,492
Investment in Chartered Semiconductor                                   11,907          13,001
Deferred income taxes                                                    2,703           2,019
Other assets                                                            13,940          14,839
------------------------------------------------------------------------------------------------

                                                                  $    227,901     $   239,098
================================================================================================

Liabilities and shareholders' equity
Current liabilities:
  Accounts payable                                                $      9,506     $    11,721
  Deferred income on shipments to distributors                           5,619           6,672
  Accrued expenses, income taxes and other liabilities                   6,349           8,972
------------------------------------------------------------------------------------------------

        Total current liabilities                                       21,474          27,365
------------------------------------------------------------------------------------------------

Other liabilities                                                        5,486           5,812

Commitments and contingencies

Minority interest in subsidiary                                         11,655          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 17,178,000 and 17,082,000
    shares, respectively                                                 1,718           1,708
  Additional paid-in capital                                           117,710         116,515
  Retained earnings                                                     76,007          79,052
  Treasury stock, 1,108,000 and 998,000 shares,
    respectively, at cost                                               (9,963)         (8,330)
  Accumulated other comprehensive income                                 3,814           5,370
------------------------------------------------------------------------------------------------

        Total shareholders' equity                                     189,286         194,315
------------------------------------------------------------------------------------------------

                                                                  $    227,901     $   239,098
================================================================================================
</TABLE>

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            Six Months Ended
                                                          --------------------------------------------------------

                                                                  August 31,                   August 31,
                                                          --------------------------------------------------------

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

<S>                                                     <C>             <C>             <C>             <C>
Revenues                                                $  30,389       $  45,897       $  61,225       $  84,116

Cost of goods sold                                         18,206          27,324          37,266          49,804
------------------------------------------------------------------------------------------------------------------

Gross profit                                               12,183          18,573          23,959          34,312

Operating expenses:
Research and development                                    7,565           8,160          16,007          15,370
Selling, general and administrative                         7,657           9,085          15,503          17,490
------------------------------------------------------------------------------------------------------------------

   Income (loss) from operations                           (3,039)          1,328          (7,551)          1,452

  Interest income                                             990           1,473           2,059           2,644
  Other income (expense), net                                 548          24,954           1,612          27,509
------------------------------------------------------------------------------------------------------------------

Income (loss) before provision for income taxes
  and minority interest                                    (1,501)         27,755          (3,880)         31,605

Provision for (benefit from) income taxes                    (651)         10,269          (1,436)         11,693

Minority interest in net income of subsidiary                  19              32              49              40
------------------------------------------------------------------------------------------------------------------

Income (loss) from continuing operations                     (869)         17,454          (2,493)         19,872

Gain on sale of (loss from) discontinued operations
  (net of income taxes of ($164), ($296), and $2,799)        (307)           -               (552)          4,765
------------------------------------------------------------------------------------------------------------------

Net income (loss)                                       $  (1,176)      $  17,454       $  (3,045)      $  24,637
==================================================================================================================

Basic net income (loss) per share:
  Income (loss) from continuing operations              $   (0.05)      $    1.10       $   (0.15)      $    1.26
  Gain on sale of (loss from) discontinued operations       (0.02)           -              (0.04)           0.30
------------------------------------------------------------------------------------------------------------------

Basic net income (loss) per share                       $   (0.07)      $    1.10       $   (0.19)      $    1.56
==================================================================================================================

Diluted net income (loss) per share:
  Income (loss) from continuing operations              $   (0.05)      $    1.03       $   (0.15)      $    1.18
  Gain on sale of (loss from) discontinued operations       (0.02)           -              (0.04)           0.28
------------------------------------------------------------------------------------------------------------------

Diluted net income (loss) per share                     $   (0.07)      $    1.03       $   (0.19)      $    1.46
==================================================================================================================

Weighted average common shares outstanding:
  Basic                                                    16,107          15,878          16,098          15,840
  Diluted                                                  16,107          16,989          16,098          16,868
</TABLE>

See Notes to Condensed Consolidated Financial Statements.
<PAGE>
STANDARD MICROSYSTEMS CORPORATION
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
(In thousands)
<TABLE>
<CAPTION>
                                                                           Six Months Ended August 31,
                                                                        --------------------------------
                                                                            2001                2000
                                                                        ------------        ------------

<S>                                                                     <C>                 <C>
Cash flows from operating activities:
  Cash received from customers                                          $   56,103          $    76,178
  Cash paid to suppliers and employees                                     (61,352)             (66,711)
  Interest received                                                          2,996                2,085
  Interest paid                                                                (77)                (116)
  Income taxes paid                                                           (514)              (4,660)
--------------------------------------------------------------------------------------------------------

    Net cash provided by (used for) operating activities                    (2,844)               6,776
--------------------------------------------------------------------------------------------------------

Cash flows from investing activities:
  Capital expenditures                                                      (2,630)              (5,847)
  Sales of property, plant and equipment                                     2,047                  499
  Sales of long-term investments and options                                 1,132               36,369
  Purchases of short-term investments                                       (4,000)             (10,632)
  Sales of short-term investments                                           13,629                3,003
  Other                                                                        (52)                 435
--------------------------------------------------------------------------------------------------------

    Net cash provided by investing activities                               10,126               23,827
--------------------------------------------------------------------------------------------------------

Cash flows from financing activities:
  Proceeds from issuance of common stock                                       675                1,304
  Purchases of treasury stock                                               (1,633)              (2,735)
  Repayments of obligations under capital leases                              (491)                (452)
--------------------------------------------------------------------------------------------------------

    Net cash used for financing activities                                  (1,449)              (1,883)
--------------------------------------------------------------------------------------------------------

Effect of foreign exchange rate changes on cash and cash equivalents           (44)                 132

Net cash provided by (used for) discontinued operation                        (869)              12,375
--------------------------------------------------------------------------------------------------------

Net increase in cash and cash equivalents                                    4,920               41,227

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

Cash and cash equivalents at end of period                              $  104,465          $   114,632
========================================================================================================


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

Income (loss) from continuing operations                                $   (2,493)         $    19,872
Adjustments to reconcile income (loss) from continuing operations
to net cash provided by (used for) operating activities:
  Depreciation and amortization                                              6,005                5,908
  Gains on sales of investments                                             (1,689)             (27,597)
  Other adjustments, net                                                        62                 (172)
  Changes in operating assets and liabilities:
    Accounts receivable                                                     (3,194)              (6,858)
    Inventories                                                              5,582                2,760
    Accounts payable and accrued expenses and other liabilities             (6,001)               5,606
    Other changes, net                                                      (1,116)               7,257
--------------------------------------------------------------------------------------------------------

Net cash provided by (used for) operating activities                    $   (2,844)         $     6,776
========================================================================================================
</TABLE>

See Notes to Condensed 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 and six  months  ended
     August 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 and six months ended
     August  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):

<TABLE>
<CAPTION>
                                        Aug. 31, 2001           Feb. 28, 2001
     ---------------------------------------------------------------------------
<S>                                     <C>                     <C>

     Raw Materials                      $    481                $    558
     Work in  Process                     15,286                  22,859
     Finished Goods                       10,599                   8,582
     ---------------------------------------------------------------------------

                                        $ 26,366                $ 31,999
     ===========================================================================
</TABLE>

     Property, plant and equipment consists of the following (in thousands):
<TABLE>
<CAPTION>

                                        Aug. 31, 2001           Feb. 28, 2001
     ---------------------------------------------------------------------------
<S>                                     <C>                     <C>

     Land                               $  3,434                $  3,434
     Buildings and Improvements           29,470                  29,540
     Machinery and Equipment              85,899                  82,794
     ---------------------------------------------------------------------------
                                         118,803                 115,768
     Less: accumulated depreciation       85,470                  80,276
     ---------------------------------------------------------------------------
                                        $ 33,333                $ 35,492
     ===========================================================================
</TABLE>

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):
<TABLE>
<CAPTION>

                                              Three Months Ended            Six Months Ended
                                                  August 31,                    August 31,
                                          -----------------------------------------------------
                                              2001         2000           2001         2000
                                          ------------ ------------   ------------ ------------
<S>                                          <C>          <C>            <C>          <C>

     Average shares outstanding for
      basic net income (loss) per share      16,107       15,878         16,098       15,840

     Dilutive effect of stock options         -            1,111          -            1,028
     ------------------------------------------------------------------------------------------

     Average shares outstanding for
      diluted net income (loss) per share    16,107       16,989         16,098       16,868
     ==========================================================================================
</TABLE>

     The Company reported a net loss from continuing operations in the three and
     six month periods  ended August 31, 2001,  and  accordingly,  the effect of
     stock options was anti-dilutive and therefore excluded from the calculation
     of average shares outstanding used 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 and six month  periods  ended August 31, 2001 and 2000
     were as follows (in thousands):
<TABLE>
<CAPTION>


                                                   Three Months Ended              Six Months Ended
                                                       August 31,                      August 31,
                                                -------------------------------------------------------
                                                    2001         2000            2001          2000
                                                -----------  ------------    ------------  ------------

<S>                                              <C>           <C>             <C>          <C>
     Net income (loss)                           $(1,176)      $ 17,454        $(3,045)     $ 24,637
      Other comprehensive income (loss):
      Change in foreign currency  translation
      adjustment                                     141             83           (149)          257
      Change in unrealized gain on investments
                                                  (1,154)        (9,210)        (1,407)      (15,381)
     --------------------------------------------------------------------------------------------------

     Total comprehensive income (loss)           $(2,189)      $  8,327        $(4,601)     $  9,513
     ==================================================================================================
</TABLE>


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 are reported as a Loss from  discontinued  operations on
     the Consolidated Statement of Operations.  These costs totaled $471,000 and
     $848,000,  before  applicable income tax benefits of $164,000 and $296,000,
     for the three and six month periods ended August 31, 2001, respectively.

     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 six months
     ended August 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,  which is included within Other income  (expense),
     net.

7.   New 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 impaired,  replacing the current accounting practice
     of ratably  amortizing these items.  Intangible  assets other than goodwill
     that have a finite life will be  amortized  over their useful  lives.  This
     statement will apply to existing goodwill and intangible assets,  beginning
     with fiscal years starting  after December 15, 2001.  Early adoption of the
     statement will be permitted for companies with fiscal years beginning after
     March 15, 2001, for which first quarter financial  statements have not been
     issued. The Company currently does expect these  pronouncements to have any
     impact on its results of operations or financial position.

8.   Technology and Patent License Agreements with Intel Corporation

     In 1987, as previously announced, the Company and Intel Corporation (Intel)
     entered into an  agreement  providing  for,  among other  things,  a broad,
     worldwide,  non-exclusive patent  cross-license  between the two companies,
     covering  manufacturing  processes and  products,  thereby  providing  each
     company access to the other's current and future patent portfolios.

     In September 1999, as previously  reported,  the two companies  announced a
     technology  exchange  agreement  (the  Agreement)  that would allow SMSC to
     accelerate its ongoing  development of  Intel-compatible  chipset products.
     Chipset  products  are  integrated   circuits  that  communicate  with  the
     microprocessor  (CPU) and  assist in  controlling  the flow of  information
     within a personal computer or similar application.  The Agreement provides,
     among other things,  for Intel to transfer  certain  intellectual  property
     related to Intel  chipset  architectures  to SMSC,  and  provides  SMSC the
     opportunity to supply Intel chipset  components  along with its own chipset
     solutions.  The Agreement also limits SMSC's rights regarding  Northbridges
     and  Intel  Architecture  Microprocessors  under  the 1987  agreement.

     The  Agreement  includes  provisions  for  its  termination  under  certain
     circumstances. Under one such provision, beginning in the third year of the
     Agreement  and  annually  thereafter,  SMSC  can  elect  to  terminate  the
     Agreement  should SMSC not achieve  certain minimum chipset revenue amounts
     set forth in the  Agreement,  unless Intel pays SMSC an amount equal to the
     shortfall  between the minimum  revenue  amount and the actual  revenue for
     that period.  Should the  Agreement  terminate  under this  provision,  the
     limitations  imposed by the Agreement on the  Northbridge  rights under the
     1987 agreement  terminate  immediately,  and the limitations imposed by the
     Agreement on the microprocessor  rights under the 1987 agreement  terminate
     12 months later.  Should Intel elect to make the revenue  amount  shortfall
     payment,  the  provisions  of the  Agreement  will  remain in force for the
     subsequent  12-month period,  for which another minimum revenue amount will
     be  applicable,  and at the end of which a  similar  termination  event may
     arise.  Minimum chipset revenue amounts are $30 million,  $45 million,  and
     $60 million for the 12 months ending  September 21, 2001,  2002,  and 2003,
     respectively,  and  increase  by 10% for each  succeeding  12-month  period
     following 2003, until expiration of the Agreement in July 2007.

     In September 2001,  SMSC notified Intel of a chipset  revenue  shortfall of
     approximately  $29.6 million for the 2001 12-month period.  Intel's payment
     of  this  amount,  if so  elected,  must  occur  within  60  days  of  this
     notification. There can be no assurance whatsoever that Intel will elect to
     pay this revenue shortfall, or any future revenue shortfalls, to SMSC under
     the Agreement.
 <PAGE>

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
Annual Report on Form 10-K filed with the Securities and Exchange  Commission on
May 25, 2001.


Revenues

Revenues for the second quarter of fiscal 2002 were $30.4  million,  compared to
$45.9 million for the corresponding year-earlier quarter. This decrease reflects
the impact of both lower unit  shipments as well as lower  selling  prices.  The
Company's fiscal 2002 results have been adversely  impacted by a demand slowdown
in the markets served by the Company's products.  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.  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
calendar 2001.

Revenues for the six months ended August 31, 2001 were $61.2  million,  compared
to $84.1 million  reported for the six months ended August 31, 2000.  Consistent
with the second quarter's  revenue  comparison,  this revenue decrease  resulted
from lower unit shipments and lower average selling prices.

International  revenues  represented  approximately 91% and 75% of the Company's
revenues for the second  quarters of fiscal 2002 and fiscal 2001,  respectively.
Revenues from Asia and the Pacific Rim region were 77% of total revenues for the
second quarter of fiscal 2002, compared to 59% in the year-earlier quarter. Asia
and the Pacific Rim region continues to represent the dominant  location for the
Company's  shipments,  reflecting the region's high concentration of the world's
electronic manufacturing and assembly activity.


Gross Profit

Gross profit was $12.2 million, or 40.1% of revenues,  for the second quarter of
fiscal  2002,  compared  to  $18.6  million,  or  40.5%  of  revenues,  for  the
corresponding  year-earlier  quarter.  For the six months ended August 31, 2001,
gross profit was $24.0 million, or 39.1% of revenues, compared to $34.3 million,
or 40.8% of  revenues,  in the  prior  year's  first  six  months.  The  Company
implemented  aggressive cost reduction  programs in the second quarter of fiscal
2002 that  helped  gross  margins  remain  comparable  to gross  margins for the
year-earlier  period,  despite lower average selling  prices.  For the first six
months of fiscal 2002, the slight decline in gross profit percentage compared to
the prior year period was  attributable to reductions in average selling prices,
which were not fully offset by  reductions  in  manufacturing  costs,  as well a
shift in product mix towards certain lower margined Advanced I/O devices.


Operating Expenses

Research and  development  spending  was $7.6 million for the second  quarter of
fiscal  2002,  compared  to  $8.2  million  for the  corresponding  year-earlier
quarter.  For the six months  ended August 31,  2001,  research and  development
expenses were $16.0  million  compared to $15.4 million for the first six months
of the prior fiscal year.  These  fluctuations  generally  reflect the timing of
certain  development  expenditures  including  prototypes,  masks and consulting
services.

Selling,  general and administrative  expenses were $7.7 million for the current
year's  second  quarter  compared to $9.1  million  for the prior year  quarter.
Selling,  general and  administrative  expenses for the current six-month period
were $15.5  million,  compared  to $17.5  million  for the prior year  six-month
period.  The reductions in fiscal 2002,  compared to fiscal 2001,  reflect lower
commission and incentive costs  associated  with the lower revenues  reported to
date in fiscal 2002.

The  Company  implemented  cost  reduction  and  control  measures in the second
quarter of fiscal 2002 that included  certain  one-time cost savings.  While the
Company has implemented  various on-going cost reduction and avoidance programs,
certain one-time cost reductions  achieved in the second quarter will not repeat
in the third quarter.


Other Income and Expense

Interest  income was $1.0  million and $2.1  million in the three and  six-month
periods ended August 31, 2001,  respectively,  compared to $1.5 million and $2.6
million in the corresponding year-earlier periods. These decreases reflect lower
interest rates on cash and short-term  cash equivalent  investments  held by the
Company.

Other  income  (net)  totaled  $0.5  million  and $1.6  million in the three and
six-month periods ended August 31, 2001, respectively, compared to $25.0 million
and $27.5 million in the corresponding  year-earlier periods. Other income (net)
for the three and six month periods ended August 31, 2001, includes gains on the
sale of long-term equity  investments and, for the six month period,  includes a
gain of $0.6 million on the sale of two underutilized facilities.

Other income (net) for the three and six month  periods  ending  August 31, 2000
includes  gains  realized on sales of a portion of the  Company's  investment in
Singapore-based Chartered Semiconductor  Manufacturing Ltd. (Chartered), as well
as proceeds from sales of call options covering a portion of its Chartered stock
holdings.  The gains  totaled  $21.9 million and $24.2 million for the three and
six month periods ended August 31, 2000, respectively, while proceeds from sales
of call options were $1.8 million and $2.1 million for the same periods.


Income Taxes

The Company recorded tax benefits of $0.7 million and $1.4 million for the three
month and six month periods  ending August 31, 2001,  respectively,  compared to
tax provisions of $10.3 million and $11.7 million in the comparable year-earlier
periods.  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 $0.3 million and $0.6 million,  net of income taxes,  for the three and
six-month periods ending August 31, 2001,  respectively,  are reported as a Loss
from discontinued operations on the Consolidated Statement of Operations.

During the  six-month  period  ending  August 31,  2000,  the  Company  sold 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.


Technology and Patent License Agreements with Intel Corporation

In 1987,  as previously  announced,  the Company and Intel  Corporation  (Intel)
entered into an agreement providing for, among other things, a broad, worldwide,
non-exclusive   patent  cross-license   between  the  two  companies,   covering
manufacturing  processes and products,  thereby providing each company access to
the other's current and future patent portfolios.

In  September  1999,  as  previously  reported,  the two  companies  announced a
technology   exchange  agreement  (the  Agreement)  that  would  allow  SMSC  to
accelerate its ongoing development of Intel-compatible chipset products. Chipset
products are integrated circuits that communicate with the microprocessor  (CPU)
and assist in controlling the flow of information  within a personal computer or
similar  application.  The Agreement provides,  among other things, for Intel to
transfer certain intellectual property related to Intel chipset architectures to
SMSC, and provides SMSC the opportunity to supply Intel chipset components along
with  its own  chipset  solutions.  The  Agreement  also  limits  SMSC's  rights
regarding  Northbridges and Intel  Architecture  Microprocessors  under the 1987
agreement.

The  Agreement   includes   provisions   for  its   termination   under  certain
circumstances.  Under one such  provision,  beginning  in the third  year of the
Agreement  and annually  thereafter,  SMSC can elect to terminate  the Agreement
should SMSC not achieve certain minimum chipset revenue amounts set forth in the
Agreement,  unless Intel pays SMSC an amount equal to the shortfall  between the
minimum  revenue  amount  and the actual  revenue  for that  period.  Should the
Agreement  terminate  under  this  provision,  the  limitations  imposed  by the
Agreement  on  the  Northbridge  rights  under  the  1987  agreement   terminate
immediately,  and the limitations imposed by the Agreement on the microprocessor
rights under the 1987 agreement terminate 12 months later. Should Intel elect to
make the revenue amount shortfall payment,  the provisions of the Agreement will
remain in force for the subsequent  12-month  period,  for which another minimum
revenue amount will be applicable, and at the end of which a similar termination
event may arise.  Minimum chipset revenue amounts are $30 million,  $45 million,
and $60 million for the 12 months  ending  September 21, 2001,  2002,  and 2003,
respectively,  and increase by 10% for each succeeding 12-month period following
2003, until expiration of the Agreement in July 2007.

In  September  2001,  SMSC  notified  Intel of a chipset  revenue  shortfall  of
approximately  $29.6 million for the 2001 12-month  period.  Intel's  payment of
this  amount,  if so elected,  must occur  within 60 days of this  notification.
There can be no assurance  whatsoever  that Intel will elect to pay this revenue
shortfall, or any future revenue shortfalls, to SMSC under the Agreement.


Liquidity and Capital Resources

The Company's cash,  cash  equivalents  and short-term  investments  were $104.5
million as of August 31,  2001,  compared to $109.2  million as of February  28,
2001.

During  the first six  months of fiscal  2002,  operating  activities  used $2.8
million  of  cash,  while  investing  activities  provided  $10.1  million,  and
financing  activities  consumed $1.4 million.  Discontinued  operations consumed
$0.9 million of cash.

The cash consumed by operating  activities  primarily reflects the impact of the
operating  loss  incurred  for the first six  months  of fiscal  2002.  The cash
provided by investment  activities includes $9.6 million (net) from the maturity
of  short-term   investments,   as  well  as  $2.1  million  from  the  sale  of
underutilized  real  estate  and $1.1  million  from sales of  long-term  equity
investments.  Also during this six-month  period,  the Company purchased 110,000
shares of treasury stock for $1.6 million.

The purchases of capital equipment were $2.6 million for the first six months of
fiscal 2002. Total fiscal 2002 capital expenditures are now expected to be below
the $14.6 million of such expenditures incurred in fiscal 2001.

Accounts  receivable  increased to $19.9  million at August 31, 2001 compared to
$16.8  million at February 28,  2001.  The  Company's  accounts  receivable  are
substantially  all  current as of August 31,  2001.

The  Company's  inventories  decreased  by  approximately  $5.6 million to $26.4
million during the first six months of fiscal 2002. This reduction  reflects the
Company's continued  realignment of inventories with current demand. The decline
in accounts payable,  from $11.7 million at February 28, 2001 to $9.5 million at
August 31 2001, resulted from a lower volume of inventory purchases.

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 August 31, 2001, all of the Company's short-term investments have original
maturities  of  three  months  of less  and  are  therefore  classified  as cash
equivalents.   The  Company  periodically  holds  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% 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  $1.2 million to its August 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.
<PAGE>

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

The  following  matters  were  submitted  to a vote of  security  holders at the
registrant's annual meeting of shareholders which was held on July 11, 2001.

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

                                                                Broker
                                  For           Withheld        Non-Votes
                                  ---           --------        ---------

        James R. Berrett        15,747,187       292,694           --

        Andrew M. Caggia        15,740,231       299,650           --

        Ivan T. Frisch          15,747,369       292,512           --

(2)  Amendments  to the Plan for  Deferred  Compensation  in  Common  Stock  for
     Outside Directors was approved and adopted by the following vote:

                                                                       Broker
                          For            Against        Abstain        Non-Votes
                          ---            -------        -------        ---------
                       14,509,160       1,127,338       403,383           --

(3)  The 2001  Director  Stock  Option  Plan was  approved  and  adopted  by the
     following vote:

                                                                       Broker
                          For            Against        Abstain        Non-Votes
                          ---            -------        -------        ---------
                        9,527,578       2,150,308       402,626        3,959,369

(4)  The 2001 Stock Option and Restricted Stock Plan was approved and adopted by
     the following vote:

                                                                       Broker
                          For            Against        Abstain        Non-Votes
                          ---            -------        -------        ---------
                        7,692,967       3,985,138       402,407        3,959,369

(5)  The selection of Arthur Andersen LLP as the Company's auditors for the year
     ended February 28, 2002 was ratified by the following vote:

                                                                       Broker
                          For            Against        Abstain        Non-Votes
                          ---            -------        -------        ---------
                       16,001,873          22,611        15,397           --
<PAGE>

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:   October 12,  2001                      /S/    Andrew M. Caggia
                                               ------------------------
                                                     (Signature)

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