UNITED STATES
                       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, 2004

                                       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 ____

Indicate  by check mark  whether  the  registrant  is an  accelerated  filer (as
defined in Rule 12b-2 of the Exchange Act). Yes _X_ No ____

As of May 31, 2004,  there were  18,417,890  shares of the  registrant's  common
stock outstanding.

<PAGE>
                        Standard Microsystems Corporation

                                    Form 10-Q
                       For the Quarter Ended May 31, 2004

                                Table of Contents



Part I     Financial Information

Item 1     Financial Statements (unaudited):
           Condensed Consolidated Balance Sheets as of May 31, 2004 and February
           29, 2004
           Condensed Consolidated  Statements of Operations for the Three Months
           Ended May 31, 2004 and 2003
           Condensed Consolidated  Statements of Cash Flows for the Three Months
           Ended May 31, 2004 and 2003
           Notes to Condensed Consolidated Financial Statements
Item 2     Management's  Discussion  and  Analysis of Financial  Condition and
           Results of Operations
Item 3     Quantitative and Qualitative Disclosures About Market Risk
Item 4     Controls and Procedures

Part II    Other Information

Item 1     Legal Proceedings
Item 6     Exhibits and Reports on Form 8-K

Signature

<PAGE>
                         PART I - FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS

STANDARD MICROSYSTEMS CORPORATION
AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited)
(In thousands)


                                                     May 31,       February 29,
                                                      2004            2004
                                                      ----            ----
Assets
Current assets:
 Cash and cash equivalents                       $   130,855      $   135,161
 Short-term investments                               27,260           23,136
 Accounts receivable, net                             29,821           21,946
 Inventories                                          23,199           23,162
 Deferred income taxes                                14,748           15,064
 Other current assets                                  8,946            8,549
-------------------------------------------------------------------------------

   Total current assets                              234,829          227,018
-------------------------------------------------------------------------------

Property, plant and equipment, net                    23,295           23,430
Long-term investments                                 11,600           15,600
Goodwill                                              29,595           29,595
Intangible assets, net                                 4,380            4,697
Deferred income taxes                                  6,276            6,493
Other assets                                           3,169            3,192
-------------------------------------------------------------------------------

                                                 $   313,144      $   310,025
===============================================================================

Liabilities and shareholders' equity
Current liabilities:
 Accounts payable                                $    12,661      $    14,679
 Deferred income on shipments to distributors         11,912            7,972
 Accrued expenses, income taxes and other
  liabilities                                         11,654           13,168
-------------------------------------------------------------------------------

   Total current liabilities                          36,227           35,819
-------------------------------------------------------------------------------

Other liabilities                                     11,488           12,104

Shareholders' equity:
 Preferred stock                                           -                -
 Common stock                                          2,024            2,019
 Additional paid-in capital                          182,993          181,830
 Retained earnings                                   101,922           99,010
 Treasury stock, at cost                             (23,454)         (23,454)
 Deferred stock-based compensation                    (2,658)          (1,962)
 Accumulated other comprehensive income                4,602            4,659
-------------------------------------------------------------------------------

   Total shareholders' equity                        265,429          262,102
-------------------------------------------------------------------------------

                                                 $   313,144      $   310,025
===============================================================================

See Notes to Condensed Consolidated Financial Statements.

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


                                                     Three Months Ended
                                              ----------------------------------

                                                           May 31,
                                              ----------------------------------

                                                    2004             2003
                                                    ----             ----

Sales and revenues:
Product sales                                $        50,352    $        42,488
Intellectual property revenues                         2,701                233
--------------------------------------------------------------------------------
                                                      53,053             42,721

Cost of goods sold                                    26,385             22,059
--------------------------------------------------------------------------------

Gross profit                                          26,668             20,662

Operating expenses (income):
Research and development                              10,862              9,101
Selling, general and administrative                   11,852              9,513
Amortization of intangible assets                        317                360
Gains on real estate transactions                          -             (1,444)
--------------------------------------------------------------------------------

Income from operations                                 3,637              3,132

Interest income                                          466                443
Other expense, net                                       (32)              (736)
--------------------------------------------------------------------------------

Income before provision for income
 taxes and minority interest                           4,071              2,839

Provision for income taxes                             1,159                895

Minority interest in net income of
 subsidiary                                                -                 61
--------------------------------------------------------------------------------

Income from continuing operations                      2,912              1,883

Loss from discontinued operations (net
 of income tax benefits of $92)                            -               (164)
--------------------------------------------------------------------------------

Net income                                             2,912              1,719
================================================================================


Basic net income per share:
 Income from continuing operations           $          0.16    $          0.11
 Loss from discontinued operations                         -              (0.01)
--------------------------------------------------------------------------------

 Basic net income per share                             0.16               0.10
================================================================================

Diluted net income per share:
 Income from continuing operations           $          0.15    $          0.11
 Loss from discontinued operations                         -              (0.01)
--------------------------------------------------------------------------------

 Diluted net income per share                           0.15               0.10
================================================================================

Weighted average common shares outstanding:
 Basic                                                18,246             16,793
 Diluted                                              19,790             17,331

The sum of the income (loss) per share amounts may not total due to rounding.

See Notes to Condensed Consolidated Financial Statements.

<PAGE>
STANDARD MICROSYSTEMS CORPORATION
AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
(In thousands)
<TABLE>
<CAPTION>

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

                                                                    2004                  2003
                                                              ---------------       ---------------

<S>                                                           <C>                  <C>
Cash flows from operating activities:
 Cash received from customers and licensees                   $      50,938        $      44,274
 Cash paid to suppliers and employees                               (52,240)             (42,623)
 Interest received                                                      421                  427
 Interest paid                                                          (39)                 (24)
 Income taxes paid                                                      (44)                (125)
---------------------------------------------------------------------------------------------------

  Net cash provided by (used for) operating
   activities                                                          (964)               1,929
---------------------------------------------------------------------------------------------------

Cash flows from investing activities:
 Capital expenditures                                                (2,902)              (1,602)
 Sales of property, plant and equipment                                   -                7,071
 Sales of long-term investments                                       4,000                1,199
 Purchases of short-term investments                                 (7,130)              (9,022)
 Sales of short-term investments                                      3,006               12,794
 Other                                                                    5                   (9)
---------------------------------------------------------------------------------------------------

  Net cash provided by (used for) investing
   activities                                                        (3,021)              10,431
---------------------------------------------------------------------------------------------------

Cash flows from financing activities:
 Proceeds from issuance of common stock                                 210                   31
 Repayments of obligations under capital
  leases and notes payable                                             (506)                (438)
---------------------------------------------------------------------------------------------------

  Net cash used for financing activities                               (296)                (407)
---------------------------------------------------------------------------------------------------

Effect of foreign exchange rate changes on
 cash and cash equivalents                                              (25)                  85

Cash used for discontinued operation                                      -                 (256)
---------------------------------------------------------------------------------------------------

Net increase (decrease) in cash and cash equivalents                 (4,306)              11,782

Cash and cash equivalents at beginning of period                    135,161               90,025
---------------------------------------------------------------------------------------------------

Cash and cash equivalents at end of period                    $     130,855        $     101,807
===================================================================================================


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

Income from continuing operations                             $       2,912        $       1,883
Adjustments to reconcile income from continuing
operations to net cash provided by (used for)
operating activities:
 Depreciation and amortization                                        2,942                2,750
 Tax benefits from employee stock plans                                  49                    3
 Gains from sales of investments and property, net                        -                 (696)
 Other adjustments, net                                                  (5)                 (67)
 Changes in operating assets and liabilities:
  Accounts receivable                                                (7,960)              (1,739)
  Inventories                                                           (48)              (2,711)
  Accounts payable, deferred income, accrued
  expenses and other liabilities                                        451                2,994
  Current and deferred income taxes                                   1,067                  621
  Other changes, net                                                   (372)              (1,109)
---------------------------------------------------------------------------------------------------

Net cash provided by (used for) operating activities          $        (964)       $       1,929
===================================================================================================
</TABLE>

See Notes to Condensed Consolidated Financial Statements.

<PAGE>

STANDARD MICROSYSTEMS CORPORATION
AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)


1.   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  the  rules  and  regulations  of the
     Securities  and  Exchange   Commission,   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 for all periods presented.

     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 sales and revenues
     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 29, 2004 included in the Company's annual report on
     Form  10-K,  as filed on May 14,  2004  with the  Securities  and  Exchange
     Commission  (SEC). The results of operations for the three months ended May
     31, 2004 are not  necessarily  indicative of the results to be expected for
     any future periods.


2.   Stock-Based Compensation

     The  Company has in effect  several  stock-based  compensation  plans under
     which incentive stock options,  non-qualified  stock options and restricted
     stock awards are granted to employees and directors.  All stock options are
     granted  with  exercise  prices  equal to the fair value of the  underlying
     shares on the date of grant.  The Company  accounts for stock option grants
     in  accordance  with  Accounting  Principles  Board  (APB)  Opinion No. 25,
     "Accounting  for Stock Issued to Employees" and  accordingly  recognizes no
     compensation  expense for the stock  option  grants.  Additional  pro forma
     disclosures as required under Statement of Financial  Accounting  Standards
     (SFAS) No. 123,  "Accounting for Stock-Based  Compensation,"  as amended by
     SFAS No. 148,  "Accounting  for  Stock-Based  Compensation - Transition and
     Disclosure," are detailed below.

     For purposes of pro forma  disclosures,  the estimated fair market value of
     the Company's  options is amortized as an expense over the options' vesting
     periods.  The fair value of each option grant,  as defined by SFAS No. 123,
     is  estimated on the date of grant using the  Black-Scholes  option-pricing
     model. The Black-Scholes  model, as well as other currently accepted option
     valuation  models,  was  developed  to  estimate  the fair  value of freely
     tradable,  fully transferable  options without vesting  restrictions,  that
     significantly  differ from the Company's  stock option awards.  Because the
     Company's  employee  stock  options  have   characteristics   significantly
     different  from  those  of  traded  options,  and  because  changes  in the
     subjective input assumptions can materially affect the fair value estimate,
     in the  opinion  of  management,  the  existing  models do not  necessarily
     provide a  reliable  single  measure of the fair  value of  employee  stock
     options.

     For purposes of pro forma  disclosures,  the estimated fair market value of
     the Company's  options is amortized as an expense over the options' vesting
     periods.  Had  compensation  expense been recorded  under the provisions of
     SFAS No. 123, the  Company's  net income  (loss) and net income  (loss) per
     share would have been the pro forma amounts  indicated below (in thousands,
     except per share data):
<PAGE>
<TABLE>
<CAPTION>


                                                                       Three Months Ended
                                                                             May 31,
                                                                  ---------------------------
                                                                       2004           2003
                                                                  ---------------------------
      <S>                                                              <C>           <C>

      Net income - as reported                                        $ 2,912        $ 1,719
      Add: Stock-based compensation expense included in net
      income, net of taxes - as reported                                  141            204
      Deduct: Stock-based compensation expense determined
      using the fair value method for all awards, net of taxes         (2,421)        (2,436)
     ----------------------------------------------------------------------------------------
      Net income (loss) - pro forma                                   $   632        $  (513)
     ========================================================================================

      Basic net income per share - as reported                        $  0.16        $  0.10
     ========================================================================================
      Diluted net income per share - as reported                      $  0.15        $  0.10
     ========================================================================================
      Basic net income (loss) per share - pro forma                   $  0.03        $ (0.03)
     ========================================================================================
      Diluted net income (loss) per share - pro forma                 $  0.03        $ (0.03)
     ========================================================================================
</TABLE>



3.   Balance Sheet Data

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


                                            May 31, 2004        Feb. 29, 2004
     -------------------------------------------------------------------------

      Raw materials                        $        836        $         910
      Work in process                            14,514               13,202
      Finished goods                              7,849                9,050
     -------------------------------------------------------------------------

                                           $     23,199        $      23,162
     =========================================================================

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

                                            May 31, 2004        Feb. 29, 2004
     -------------------------------------------------------------------------

      Land                                 $      1,570        $       1,570
      Buildings and improvements                 21,042               20,842
      Machinery and equipment                    92,146               90,195
      ------------------------------------------------------------------------
                                                114,758              112,607
      Less: accumulated depreciation             91,463               89,177
      ------------------------------------------------------------------------

                                           $     23,295        $      23,430
      ========================================================================


4.   Net Income Per Share

     Basic net income per share is calculated using the weighted-average  number
     of common  shares  outstanding  during the  period.  Diluted net income per
     share is  calculated  using the  weighted-average  number of common  shares
     outstanding  during  the  period,  plus the  dilutive  effect  of  unvested
     restricted stock awards and shares issuable through stock options.

     The shares used in  calculating  basic and diluted net income per share for
     the Condensed  Consolidated  Statements of Operations  included within this
     report are reconciled as follows (in thousands):
<PAGE>


                                                       Three Months Ended
                                                            May 31,
                                                  ----------------------------
                                                     2004           2003
                                                  ------------- --------------

     Average shares outstanding for
      basic net income per share                       18,246         16,793

     Dilutive effect of stock options and
      unvested restricted stock awards                  1,544            538
     -------------------------------------------------------------------------

     Average shares outstanding for
      diluted net income per share                     19,790         17,331
     =========================================================================


     Stock  options  covering  0.2  million  and  2.9  million  shares  for  the
     three-month  periods  ended  May 31,  2004  and  2003,  respectively,  were
     excluded from the computation of average shares outstanding for diluted net
     income per share because their effects were anti-dilutive.


5.   Comprehensive Income

     The  Company's  other  comprehensive  income  consists of foreign  currency
     translation  adjustments from those  subsidiaries not using the U.S. dollar
     as their  functional  currency,  and unrealized  gains and losses on equity
     investments  classified  as  available-for-sale.   The  components  of  the
     Company's  comprehensive income for the three months ended May 31, 2004 and
     2003 were as follows (in thousands):


                                                          Three Months Ended
                                                               May 31,
                                                      --------------------------
                                                         2004          2003
                                                      ----------     ----------

     Net income                                           $  2,912     $  1,719
     Other comprehensive income:
     Change in foreign currency  translation
      adjustment                                               (53)          38
     Change in unrealized gain (loss) on marketable
      equity securities, net of taxes                           (4)          14
     Reclassification adjustment for loss on marketable
      equity security included in net income, net of
      taxes                                                      -          665
     ---------------------------------------------------------------------------

     Total comprehensive income                           $  2,855     $  2,436
     ===========================================================================

     During the three months ended May 31, 2003,  the Company sold its remaining
     equity  investment  in Chartered  Semiconductor  Manufacturing,  Ltd.  This
     investment was classified as  available-for-sale,  and temporary changes in
     its market value,  net of income taxes,  were included within the Company's
     Other  comprehensive   income,  and  were  presented   cumulatively  as  an
     unrealized  gain or loss,  net of income taxes,  within  Accumulated  other
     comprehensive  income on the Company's  Consolidated  Balance  Sheets.  The
     amount  presented as a  reclassification  adjustment in the preceding table
     represents the amount previously reported within Other comprehensive income
     as an unrealized loss on this investment,  net of income taxes, through the
     applicable reporting dates.


6.   Agreements with Intel Corporation

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

     In September  2003, the Company and Intel  announced that they had enhanced
     their intellectual property and business relationship. The companies agreed
     to collaborate on certain future  Input/Output  (I/O) and sensor  products,
     and Intel agreed to use the Company's devices on certain current and future
     generations of Intel products. In addition, the Company agreed to limit its
     rights,  under its 1987 patent cross-license with Intel, to manufacture and
     sell Northbridge products and Intel Architecture  Microprocessors on behalf
     of  third  parties.  The  companies  also  terminated  an  Investor  Rights
     Agreement  between  them,  which had been entered into in  connection  with
     Intel's 1997 acquisition of 1,543,000 shares of the Company's common stock.
     Under this agreement,  Intel had certain information,  corporate governance
     and other rights with respect to the activities of the Company.
<PAGE>

     In respect of this relationship, Intel will pay to the Company an aggregate
     amount of $75  million,  of which $20 million and $2.5 million was paid and
     recognized  as  Intellectual  property  revenue  in the  third  and  fourth
     quarters  of  fiscal  2004,  respectively,  and $2.5  million  was paid and
     recognized as Intellectual  property revenue in the first quarter of fiscal
     2005. Of the remaining  amount,  $5 million will be paid during the balance
     of calendar year 2004,  $10 million will be paid in calendar year 2005, $11
     million will be paid in calendar year 2006, and $12 million will be paid in
     each of  calendar  years 2007 and 2008.  Such  amounts are payable in equal
     quarterly  installments  within  each  calendar  year,  and are  subject to
     possible  reduction,  in a manner  and to an  extent  to be  agreed  by the
     parties, based upon the companies'  collaboration and sales, facilitated by
     Intel, of certain future new products of the Company.


7.   Business Restructuring

     In December 2001, the Company  announced a restructuring  plan for its exit
     from the PC chipset business.

     The  Company's  reserve  related to this  restructuring  declined from $1.0
     million at February 29, 2004 to $0.9  million at May 31,  2004,  reflecting
     payments against  previously  reserved  non-cancelable  lease  obligations,
     which will continue  through their  respective  lease terms through  August
     2008.


8.   Discontinued Operations

     The Company  had been  involved in an  arbitration  proceeding  with Accton
     Technology Corporation (Accton) and SMC Networks, Inc. (Networks), relating
     to claims  associated with the October 1997 purchase of a majority interest
     in Networks by Accton from SMSC.  This  divestiture  was accounted for as a
     discontinued operation, and accordingly, costs associated with this action,
     net of income taxes, were reported within Loss from discontinued operations
     on the  Consolidated  Statements  of  Operations.  These costs totaled $0.2
     million for the three months ended May 31, 2003,  after  applicable  income
     tax benefits.  This action was settled  during the fourth quarter of fiscal
     2004.


9.   Goodwill and Intangible Assets

     The  Company's  June  2002  acquisition  of  Tucson,   Arizona-based   Gain
     Technology   Corporation  included  the  acquisition  of  $7.1  million  of
     finite-lived  intangible  assets  and  $29.6  million  of  goodwill,  after
     adjustments.  In  accordance  with the  provisions  of SFAS No.  142,  this
     goodwill is not amortized,  but is tested for impairment in value annually,
     as well as when an event  or  circumstance  occurs  indicating  a  possible
     impairment in its value.

     All finite-lived  intangible  assets are being amortized on a straight-line
     basis  over  their  estimated  useful  lives.  Existing  technologies  were
     assigned an estimated  useful life of six years.  Customer  contracts  were
     assigned useful lives of between one and ten years (with a weighted average
     life  of  approximately  seven  years),  and  non-compete  agreements  were
     assigned useful lives of two years. The weighted average useful life of all
     intangible assets is approximately six years.

     As of May 31,  2004 and  February  29,  2004,  the  Company's  finite-lived
     intangible assets consisted of the following (in thousands):

<TABLE>
<CAPTION>

                                        May 31, 2004                    February 29, 2004
     ------------------------------------------------------------------------------------------
                                                 Accumulated                     Accumulated
                                     Cost        Amortization        Cost        Amortization
     ------------------------------------------------------------------------------------------
     <S>                             <C>              <C>            <C>               <C>

     Existing technologies           $ 6,179          $ 2,060        $ 6,179           $ 1,802
     Customer contracts                  326               65            326                57
     Non-compete agreements              410              410            410               359
     ------------------------------------------------------------------------------------------

                                     $ 6,915          $ 2,535        $ 6,915           $ 2,218

     ==========================================================================================
</TABLE>
<PAGE>

     Estimated future intangible asset amortization expense for the remainder of
     fiscal 2005 and thereafter, is as follows (in thousands):

     Period                                     Amount
     -------------------------------------------------

     Remainder of fiscal 2005                  $   797
     Fiscal 2006                                 1,062
     Fiscal 2007                                 1,062
     Fiscal 2008                                 1,062
     Fiscal 2009                                   290
     Fiscal 2010 and thereafter                    107
     =================================================


10.  Real Estate Transactions

     During the quarter ended May 31, 2003, the Company sold certain portions of
     its Hauppauge,  New York real estate  holdings,  for aggregate  proceeds of
     $7.0 million,  net of transaction costs. These transactions  resulted in an
     aggregate  gain of $1.7 million,  $1.4 million of which related to property
     in which the Company has no continued  interest and was  recognized  within
     the Company's fiscal 2004 first quarter operating results, and $0.3 million
     of which  related to  property  that the  Company  has leased back from the
     purchaser  and  was  therefore  deferred.   This  deferred  gain  is  being
     recognized  within the Company's  operating  results as a reduction in rent
     expense on a straight-line  basis over a 30-month period  beginning in June
     2003,  consistent with the term of the lease. The Company's  remaining rent
     obligation over the term of this lease is approximately $0.5 million.


11.  Retirement Plans

     The Company maintains an unfunded Supplemental Executive Retirement Plan to
     provide senior  management with retirement,  disability and death benefits.
     The Company's subsidiary, SMSC Japan, also maintains an unfunded retirement
     plan, which provides its employees and directors with separation  benefits,
     consistent with customary practices in Japan.  Benefits under these defined
     benefit plans are based upon various service and compensation  factors. The
     Company  is the  beneficiary  of life  insurance  policies  that  have been
     purchased  as  a  method  of  partially   financing   benefits   under  the
     Supplemental  Executive Retirement Plan. The following table sets forth the
     components of the  consolidated  net periodic pension expense for the three
     months ended May 31, 2004 and 2003, respectively (in thousands):


                                                        Three Months Ended
                                                              May 31,
                                                    --------------------------
                                                        2004         2003
     -------------------------------------------------------------------------

     Service cost - benefits earned                      $   72        $   66
     Interest cost on projected benefit obligations         106           102
     Net amortization and deferral                           72            68
     -------------------------------------------------------------------------

     Net periodic pension expense                        $  250        $  236
     =========================================================================


12.  Litigation

     In June  2003,  SMSC was  named  as a  defendant  in a patent  infringement
     lawsuit filed by Analog  Devices,  Inc. (ADI) in the United States District
     Court for the District of Massachusetts  (Analog Devices,  Inc. v. Standard
     Microsystems  Corporation,  Case Number 03 CIV 11216).  The  Complaint,  as
     amended,  alleges that some of the Company's  products infringe one or more
     of three of ADI's  patents,  and seeks  injunctive  relief and  unspecified
     damages.  In September  2003,  the Company  filed an Answer in the lawsuit,
     denying   ADI's   allegations   and  raising   affirmative   defenses   and
     counterclaims.   The  Company  is  vigorously  defending  the  lawsuit  and
     collecting  evidence  to  support  its  defenses  to  infringement  and its
     allegations  of patent  invalidity  and  unenforceability.  Although  it is
     premature  to assess the outcome of the  litigation,  the Company  believes
     that the allegations against it are without merit.


13.  Recent Accounting Pronouncements

     In December 2003, the Financial  Accounting  Standards Board (FASB) revised
     SFAS  No.  132,   "Employers'   Disclosures   about   Pensions   and  Other
     Postretirement  Benefits."  The revised  SFAS No. 132  requires  additional
     disclosures about plan assets,  benefit  obligations,  cash flows,  benefit
     costs  and  other  relevant  information  related  to  pensions  and  other
     postretirement  benefits.  It also requires certain  disclosures related to
     pensions  and other  postretirement  benefits to be  included in  quarterly
     filings,  which are included  within Note 11 to the Condensed  Consolidated
     Financial Statements included within this report.


     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
     Condensed  Consolidated Financial Statements and notes thereto contained in
     this report.

     Portions  of this  report  may  contain  forward-looking  statements  about
     expected  future events and  financial  and operating  results that involve
     risks and  uncertainties.  These include the timely  development and market
     acceptance of new products; the impact of competitive products and pricing;
     the effect of changing  economic  conditions in domestic and  international
     markets;  changes  in  customer  order  patterns,  including  loss  of  key
     customers,  order cancellations or reduced bookings; and excess or obsolete
     inventory and variations in inventory  valuation,  among others. Words such
     as  "believe,"  "expect,"  "anticipate"  and similar  expressions  identify
     forward-looking statements. Such statements are qualified in their entirety
     by the inherent risks and uncertainties surrounding future expectations and
     may not reflect the potential impact of any future acquisitions, mergers or
     divestitures.

     SMSC competes in the  semiconductor  industry,  which has historically been
     characterized by intense competition,  rapid technological change, cyclical
     market patterns, price erosion and periods of mismatched supply and demand.
     In addition,  sales of many of the  Company's  products  depend  largely on
     sales of personal computers (PCs) and peripheral devices, and reductions in
     the rate of growth of the PC and peripheral  device markets could adversely
     affect its operating  results.  SMSC conducts  business  outside the United
     States  and is  subject  to tariff  and  import  regulations  and  currency
     fluctuations, which may have an effect on its business. All forward-looking
     statements  speak  only as of the  date  hereof  and  are  based  upon  the
     information  available to SMSC at this time. Such information is subject to
     change, and the Company may not inform, or be required to inform, investors
     of such  changes.  These  and  other  risks  and  uncertainties,  including
     potential  liability  resulting  from  pending  or future  litigation,  are
     detailed  from time to time in the  Company's  reports  filed with the SEC.
     Investors are advised to read the Company's  Annual Report on Form 10-K and
     quarterly  reports  on Form 10-Q  filed  with the SEC,  particularly  those
     sections entitled "Other Factors That May Affect Future Operating Results,"
     for a more complete discussion of these and other risks and uncertainties.

     Overview
     --------

     Description of Business

     SMSC provides semiconductor systems solutions for high-speed  communication
     and computing  applications.  Through the  integration of its  leading-edge
     digital,   mixed-signal   and  analog  design   capabilities  and  software
     expertise,  SMSC  delivers  complete  solutions  that  monitor  and  manage
     computing systems and connect peripherals to computers and to one another.

     The Company addresses  computing,  communications and consumer  electronics
     markets  through  world-leading   positions  in  Input/Output  and  non-PCI
     Ethernet  products,  innovations  in  USB2.0  and other  high-speed  serial
     solutions,  and integrated networking products employed in a broad range of
     applications.

     SMSC is a fabless semiconductor  supplier,  whose products are manufactured
     by  world-class  third-party  semiconductor  foundries and  assemblers.  To
     ensure 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 based in  Hauppauge,  New York  with  operations  in North
     America,  Taiwan, Japan, Korea, China and Europe. SMSC operates engineering
     design centers in New York, Arizona and Texas.

     New Brand Identity and Corporate Image

     On April 26,  2004,  SMSC was honored to open the Nasdaq  stock  market and
     concurrently  unveiled a new global brand  identity,  including a new logo,
     tagline - "Success  by  Design,"  and  website  design at its  www.smsc.com
     homepage.  Through its  communication  initiatives,  the Company is placing
     renewed emphasis on building  awareness of its market  leadership  position
     and  capabilities  to serve its  customers.  The new  "Success  by  Design"
     tagline underscores the Company's mission of being an essential  ingredient
     that fuels its customers' success.  This tagline highlights SMSC's culture,
     which is deliberate  in the manner in which it seeks to ensure  success for
     its customers and stakeholders.


     Critical Accounting Policies and Estimates
     ------------------------------------------

     This  discussion  and analysis of the  Company's  financial  condition  and
     results of operations is based upon the  unaudited  condensed  consolidated
     financial  statements included in this report,  which have been prepared in
     accordance  with  accounting  principles for interim  financial  statements
     generally  accepted in the United  States.  The  preparation  of  financial
     statements in conformity  with  generally  accepted  accounting  principles
     requires  management  to make  estimates  and  assumptions  that affect the
     reported  amount of assets and  liabilities  and  disclosure  of contingent
     assets and  liabilities  at the date of the  financial  statements  and the
     reported  amount of sales and revenues and  expenses  during the  reporting
     period.

     The Company  believes that the critical  accounting  policies and estimates
     listed below are  important to the  portrayal  of the  Company's  financial
     condition and operating results,  and require critical management judgments
     and  estimates  about  matters  that  are  inherently  uncertain.  Although
     management  believes that its judgments and estimates are  appropriate  and
     reasonable,  actual future results may differ from these estimates,  and to
     the extent that such  differences are material,  future reported  operating
     results may be affected.

     o Revenue recognition
     o Inventory valuation
     o Determination of the allowance for doubtful accounts receivable
     o Valuation of long-lived assets
     o Accounting for deferred income tax assets
     o Legal contingencies

     Further   information   regarding   these   policies   appears  within  the
     "Management's Discussion and Analysis of Financial Condition and Results of
     Operations"  included in the  Company's  annual report on Form 10-K for the
     fiscal year ended  February  29,  2004 filed with the SEC on May 14,  2004.
     During the three-month period ended May 31, 2004, there were no significant
     changes to any critical accounting policies or to the related estimates and
     judgments involved in applying these policies.


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

     Sales and Revenues

     Sales and  revenues  for the three  months  ended May 31,  2004 were  $53.1
     million,  consisting  of $50.4 million of product sales and $2.7 million of
     intellectual  property  revenues,  compared to sales and  revenues of $42.7
     million for the prior-year quarter, consisting of $42.5 million of products
     sales and $0.2 million of intellectual  property revenues.  The increase in
     product sales of $7.9 million, or 18.6%, reflects increased demand for both
     PC I/O and non-PC I/O  products.  Sales of PC I/O products  increased  from
     $27.8  million  in  the   prior-year   quarter  to  $30.2  million  in  the
     current-year  quarter,   reflecting  the  impact  of  new  design-wins  and
     increased  worldwide  demand for PCs.  Sales of non-PC I/O products,  which
     include networking and connectivity products,  increased from $14.7 million
     in the  prior-year  quarter to $20.2 million in the  current-year  quarter,
     reflecting the impact of new design-wins,  broader product  offerings,  and
     the Company's ongoing focus on aggressively identifying and pursuing market
     opportunities in its non-PC I/O product lines. Sales of non-PC I/O products
     grew to 40% of total product sales in the current-year quarter, compared to
     35% in the prior-year quarter.

     Product  sales  from  customers  outside  of North  America  accounted  for
     approximately   88%  and  90%  of  the  Company's  product  sales  for  the
     three-month periods ended May 31, 2004 and 2003, respectively,  the largest
     potion of which was to the Asia and Pacific Rim region. The Company expects
     that  international  shipments,  particularly  to the Asia and  Pacific Rim
     region,  will  continue to represent a  significant  portion of its product
     sales.

     Intellectual property revenues for the three months ended May 31, 2004 were
     $2.7  million,   compared  to  $0.2  million  for  the  prior-year  period.
     Intellectual  property revenues for the current-year  period include a $2.5
     million payment from Intel Corporation, as more fully described within Note
     6 to the Condensed Consolidated Financial Statements.


     Gross Profit

     Gross profit for the three months ended May 31, 2004 was $26.7 million,  or
     50.3% of sales and revenues,  compared to $20.7 million,  or 48.4% of sales
     and  revenues,   for  the  three  months  ended  May  31,  2003.  Excluding
     intellectual property revenues, gross profit was $24.0 million, or 47.6% of
     product  sales,  for the  quarter  ended May 31,  2004,  compared  to $20.4
     million,  or 48.1% of product sales,  for quarter ended May 31, 2003. Gross
     profit  dollars from product  sales,  excluding the impact of  intellectual
     property  revenues,  increased by $3.5 million,  or 17.3%,  compared to the
     year-earlier  quarter. The slight decline in gross profit margin percentage
     on product sales in the  current-year  period results from a product mix in
     the  prior  year  quarter  that  was  skewed  towards  several  high-margin
     products.  The  Company's  gross  profit  margin,   excluding  intellectual
     property  revenues,  increased  from 45.1% in the fourth  quarter of fiscal
     2004 to the current quarter's 47.6%.

     Newly introduced  products generally command higher average selling prices,
     which  typically  decline  over product  life  cycles,  due to  competitive
     pressures and other factors. In order to offset declines in average selling
     prices,   the  Company   continually   works  to   incorporate   additional
     functionality  and value to its  products,  and to reduce  the costs of its
     products,   through  product  and  manufacturing   design  changes,   yield
     improvements,  manufacturing  efficiencies  and lower costs negotiated with
     subcontract manufacturers.


     Research and Development Expenses

     R&D expenses were $10.9  million,  or 20.5% of sales and revenues,  for the
     three  months  ended May 31, 2004,  compared to $9.1  million,  or 21.3% of
     sales and  revenues,  for the three months ended May 31, 2003.  This dollar
     increase reflects the impact of engineering staff additions, investments in
     advanced   semiconductor   design  tools,   higher  costs  associated  with
     development  programs in advanced  semiconductor  technologies,  and higher
     costs for contract design services.


     Selling, General and Administrative Expenses

     Selling,  general and administrative  expenses were $11.9 million, or 22.3%
     of sales and revenues, for the three months ended May 31, 2004, compared to
     $9.5  million,  or also 22.3% of sales and  revenues,  for the three months
     ended May 31 2003.  The dollar  increase  reflects the impact of additional
     staff  added to expand  the  Company's  sales and  marketing  capabilities,
     associated recruitment and relocation costs, as well as incremental selling
     costs,  primarily sales commissions and incentives,  associated with higher
     product sales in the current year's first quarter.  During the three months
     ended May 31, 2004 the Company incurred higher professional fees associated
     with litigation than the prior-year  period,  and also incurred  additional
     costs associated with its April 2004 launch and promotion of its new global
     brand identity and corporate image campaign.


     Amortization of Intangible Assets

     The Company recorded amortization expenses of $0.3 million and $0.4 million
     for the  three  months  ended  May 31,  2004 and  2003,  respectively,  for
     intangible assets associated with the June 2002 acquisition of Gain.


     Gains on Real Estate Transactions

     During the quarter ended May 31, 2003, the Company sold certain portions of
     its Hauppauge,  New York real estate  holdings,  for aggregate  proceeds of
     $7.0 million,  net of transaction costs. These transactions  resulted in an
     aggregate  gain of $1.7 million,  $1.4 million of which related to property
     in which the Company has no continued  interest and was  recognized  within
     the Company's fiscal 2004 first quarter operating results, and $0.3 million
     of which  related to  property  that the  Company  has leased back from the
     purchaser  and  was  therefore  deferred.   This  deferred  gain  is  being
     recognized  within the Company's  operating  results as a reduction in rent
     expense on a straight-line  basis over a 30-month period  beginning in June
     2003,  consistent with the term of the lease. The Company's  remaining rent
     obligation over the term of this lease is approximately $0.5 million.


     Other Income and Expense

     During the  quarter  ended May 31,  2003,  the Company  sold its  remaining
     equity investment in Chartered Semiconductor Manufacturing, Ltd., realizing
     losses of $0.7 million,  which are included within Other expense,  net, for
     that period.


     Provision For Income Taxes

     The  Company's  effective  income  tax rate  primarily  reflects  statutory
     Federal and state income tax rates,  adjusted for the impact of  tax-exempt
     interest income and anticipated income tax credits.

     The Company's $1.2 million  provision for income taxes for the three months
     ended May 31, 2004 reflects an expected  fiscal 2005  effective tax rate of
     28.5%.  The $0.9  million  provision  for income taxes for the three months
     ended May 31,  2003  resulted  in an  effective  tax rate of 31.5% for that
     period.

     As of May 31, 2003,  the  Company's  expected its  effective tax rate to be
     approximately  30.0% for fiscal 2004,  excluding  the tax effect on unusual
     and infrequently occurring  transactions,  which are recorded in the period
     in which the transactions occur. Operating results for the first quarter of
     fiscal 2004 included  unusual and  infrequently  occurring  real estate and
     equity  security  sale  transactions  that,  net,  provided $0.7 million of
     pre-tax  income.  Taxes  on those  transactions  were  provided  for at the
     Company's  approximate  36.0%  incremental  income tax rate,  the result of
     which  was an  overall  effective  income  tax rate of  31.5% in the  first
     quarter of fiscal 2004.

     The  reduction  in the  Company's  expected  effective  income tax rate for
     fiscal  2005,  compared to  expectations  at May 31, 2003 for fiscal  2004,
     reflects higher anticipated income tax credits in fiscal 2005.

<PAGE>


     Discontinued Operations

     The Company  had been  involved in an  arbitration  proceeding  with Accton
     Technology Corporation (Accton) and SMC Networks, Inc. (Networks), relating
     to claims  associated with the October 1997 purchase of a majority interest
     in Networks by Accton from SMSC.  The  divestiture  was  accounted for as a
     discontinued operation, and accordingly, costs associated with this action,
     net of income taxes, were reported within Loss from discontinued operations
     on the  Consolidated  Statements  of  Operations.  These costs totaled $0.2
     million for the three months ended May 31, 2003,  after  applicable  income
     tax benefits.  This action was settled  during the fourth quarter of fiscal
     2004.


     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 liquid  investments  (including
     marketable  securities  with  maturities in excess of one year) were $169.7
     million as of May 31,  2004,  compared to $173.9  million at  February  29,
     2004,  a decrease  of $4.2  million.  The  Company's  operating  activities
     consumed $1.0 million of cash during the first quarter of fiscal 2005,  due
     in part to a banking  holiday on the final day of the first quarter,  which
     delayed approximately $2.7 million of accounts receivable  collections from
     being credited to the Company's accounts until June 1. Operating activities
     for the first quarter of fiscal 2004 generated $1.9 million of cash.

     The Company's  inventories  were $23.2 million at May 31, 2004,  level with
     inventories at February 29, 2004. Inventories at the Company's distributors
     increased  during the  quarter,  as  evidenced  by the increase in Deferred
     income on shipments to distributors  from $8.0 million at February 29, 2004
     to $11.9 million at May 31, 2004. This increase in distributor  inventories
     reflects higher anticipated product demand during the second quarter.

     Accounts  receivable  increased  from $21.9 million at February 29, 2004 to
     $29.8 million at May 31, 2004,  an increase of $7.9 million.  This increase
     reflects the combination of the one-day delay in cash collections discussed
     two paragraphs  earlier,  higher product sales and a reduction in unclaimed
     pricing credits by  distributors.  SMSC accrues a liability for distributor
     pricing credits when the distributor  earns such credits,  but the issuance
     of the  actual  credit  memo  to the  distributor  is  dependent  upon  the
     distributor's  submission  of an  appropriate  claim  to  SMSC.  Delays  in
     distributors'  claims  for these  credits  typically  results in lower than
     expected  accounts  receivable  balances,  since the delays  result in full
     collections for certain  invoices against which the distributor is actually
     entitled  to,  but has not yet  claimed,  a pricing  credit.  Overall,  the
     Company's accounts receivable portfolio remains almost entirely current.

     Capital  expenditures  for the three  months  ending May 31, 2004 were $2.9
     million,  and were  predominantly  for production test  equipment.  Capital
     expenditures  for the three  months  ended May 31, 2003 were $4.8  million,
     including $4.3 million in advanced design tools,  $3.2 million of which was
     financed on a short-term basis by the supplier with payment terms extending
     throughout  fiscal 2004. The $3.2 million  obligation  was reported  within
     Accounts payable at May 31, 2003.

     The  Company  anticipates  that  capital  expenditures  in fiscal 2005 will
     exceed those incurred during fiscal 2004, due in part to the Company's plan
     to begin  construction of an addition to its primary facility in Hauppauge,
     New York,  during  fiscal 2005.  The current plan is to expand the facility
     from its current 80,000 square feet to  approximately  200,000 square feet,
     allowing  consolidation of the Company's Hauppauge operations into a single
     facility during fiscal 2006. There were no material commitments for capital
     expenditures as of May 31, 2004.

     For income tax  purposes,  the  Company  has $12.4  million of federal  net
     operating loss  carryforwards that are available to offset ordinary taxable
     income  generated in fiscal 2005 and beyond.  In addition,  several capital
     losses  realized  during fiscal 2004 will be carried back to offset capital
     gains  realized in previous  fiscal  years,  which is expected to result in
     claims for  approximately  $5.3 million of federal income tax refunds later
     in fiscal 2005.

     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 may also
     consider utilizing cash to acquire or invest in complementary businesses or
     products  or to obtain the right to use  complementary  technologies.  From
     time to time, in the ordinary course of business,  the Company may evaluate
     potential  acquisitions  of or investment in such  businesses,  products or
     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 and thereafter for the foreseeable future.


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

     In December  2003, the FASB revised SFAS No. 132,  "Employers'  Disclosures
     about Pensions and Other Postretirement Benefits." The revised SFAS No. 132
     requires  additional  disclosures about plan assets,  benefit  obligations,
     cash  flows,  benefit  costs  and other  relevant  information  related  to
     pensions  and  other  postretirement  benefits.  It also  requires  certain
     disclosures  related to pensions  and other  postretirement  benefits to be
     included in quarterly  filings,  which are  included  within Note 11 to the
     Condensed Consolidated Financial Statements included within this report.


     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 SMSC'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, 2004, the Company's $38.9 million of short-term and long-term
     investments consisted primarily of investments in corporate, government and
     municipal obligations with maturities of between three months and two years
     at acquisition.  If market interest rates were to increase  immediately and
     uniformly by 10 percent from levels at May 31, 2004, the Company  estimates
     that the fair value of these  short-term  and long-term  investments  would
     decline by an  immaterial  amount.  The Company  generally  expects to hold
     these investments until maturity and, therefore, would not expect operating
     results or cash flows to be affected to any significant  degree by a sudden
     change in market interest rates.

     Equity  Price Risk - The  Company  has no  material  investments  in equity
     securities of other companies on its  Consolidated  Balance Sheet as of May
     31, 2004.

     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
     and the Pacific Rim region. 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.  Most  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 SMSC in U.S.  dollars,  and from time to time has entered  into
     forward  exchange   contracts  to  hedge  against   currency   fluctuations
     associated  with these product  purchases.  No such contracts were executed
     during either  fiscal 2004 or the first  quarter of fiscal 2005,  and there
     are no obligations under any such contracts as of May 31, 2004.

     The Company has never received a cash dividend  (repatriation of cash) from
     SMSC Japan.

     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  annual  report on Form 10-K for the fiscal
     year  ended  February  29,  2004  filed with the  Securities  and  Exchange
     Commission on May 14, 2004.


     ITEM 4.   CONTROLS AND PROCEDURES

     The Company has carried out an evaluation  under the  supervision  and with
     the  participation  of  the  Company's  management,   including  the  Chief
     Executive Officer and Chief Financial Officer,  of the effectiveness of the
     design and operation of the Company's  disclosure  controls and procedures.
     There  are  inherent  limitations  to the  effectiveness  of any  system of
     disclosure  controls and  procedures,  including the  possibility  of human
     error and the  circumvention  or overriding of the controls and procedures.
     Accordingly,  even  effective  disclosure  controls and procedures can only
     provide reasonable  assurance of achieving their control objectives.  Based
     upon the  Company's  evaluation,  the  Chief  Executive  Officer  and Chief
     Financial  Officer have concluded  that, as of May 31, 2004, the disclosure
     controls and procedures are effective to provide reasonable  assurance that
     information required to be disclosed in the reports the Company files under
     the  Exchange Act is recorded,  processed,  summarized  and reported as and
     when required.

     There has been no change in the Company's  internal  control over financial
     reporting  during the Company's  fiscal quarter covered by this report that
     has materially affected,  or is reasonably likely to materially affect, the
     Company's internal control over financial reporting.
<PAGE>
     PART II - OTHER INFORMATION


     ITEM 1.   Legal Proceedings

     In June  2003,  SMSC was  named  as a  defendant  in a patent  infringement
     lawsuit filed by Analog  Devices,  Inc. (ADI) in the United States District
     Court for the District of Massachusetts  (Analog Devices,  Inc. v. Standard
     Microsystems  Corporation,  Case Number 03 CIV 11216).  The  Complaint,  as
     amended,  alleges that some of the Company's  products infringe one or more
     of three of ADI's  patents,  and seeks  injunctive  relief and  unspecified
     damages.  In September  2003,  the Company  filed an Answer in the lawsuit,
     denying   ADI's   allegations   and  raising   affirmative   defenses   and
     counterclaims.   The  Company  is  vigorously  defending  the  lawsuit  and
     collecting  evidence  to  support  its  defenses  to  infringement  and its
     allegations  of patent  invalidity  and  unenforceability.  Although  it is
     premature  to assess the outcome of the  litigation,  the Company  believes
     that the allegations against it are without merit.


     ITEM 6.   Exhibits and Reports on Form 8-K

     (a) Exhibits

         10.1 * -  Amendment  to the Plan for  Deferred  Compensation  in Common
         Stock for Outside Directors, dated April 7, 2004.

         31.1 -  Certification  of  Chief  Executive  Officer  pursuant  to Rule
         13a-14(a) (17 CFR 240.13a-14(a)), as adopted pursuant to Section 302 of
         the Sarbanes-Oxley Act of 2002.

         31.2 -  Certification  of  Chief  Financial  Officer  pursuant  to Rule
         13a-14(a) (17 CFR 240.13a-14(a)), as adopted pursuant to Section 302 of
         the Sarbanes-Oxley Act of 2002.

         32.1 -  Certifications  of Chief Executive  Officer and Chief Financial
         Officer  pursuant to 18 U.S.C.  Section  1350,  as adopted  pursuant to
         Section 906 of the Sarbanes-Oxley Act of 2002.

         * Indicates a management contract or compensatory plan or arrangement.


     (b) Reports on Form 8-K

         On April 12, 2004, SMSC filed a report on Form 8-K pursuant to which it
         furnished a press  release  announcing  the  Company's  fourth  quarter
         fiscal 2004 operating results.

<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, 2004                            By:  /s/   Andrew M. Caggia
                                               -----------------------------
                                                    (Signature)

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