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 November 30, 2002

                                       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 November 30, 2002, there were 16,722,026 shares of the registrant's common
stock outstanding.


<PAGE>
                         PART I - FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS

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


                                                   November 30,     February 28,
                                                      2002             2002
                                                      ----             ----
Assets
Current assets:
  Cash and cash equivalents                        $   74,197       $   98,065
  Short-term investments                               30,291           28,595
  Accounts receivable, net                             24,482           21,828
  Inventories                                          18,259           17,585
  Deferred income taxes                                12,781            8,582
  Other current assets                                  6,191            4,317
-------------------------------------------------------------------------------

       Total current assets                           166,201          178,972
-------------------------------------------------------------------------------

Property, plant and equipment, net                     23,419           24,170
Goodwill                                               30,412                -
Intangible assets, net                                  6,367                -
Investment in Chartered Semiconductor                   2,862            9,992
Deferred income taxes                                  12,177            7,196
Other assets                                            5,673           15,733
-------------------------------------------------------------------------------

                                                   $  247,111       $  236,063
===============================================================================

Liabilities and shareholders' equity
Current liabilities:
  Accounts payable                                 $    6,741       $    8,477
  Deferred income on shipments to distributors          7,555            6,225
  Accrued expenses, income taxes and other
   liabilities                                         11,273            9,289
-------------------------------------------------------------------------------

        Total current liabilities                      25,569           23,991
-------------------------------------------------------------------------------

Other liabilities                                       7,585            6,973

Minority interest in subsidiary                        11,656           11,646

Shareholders' equity:
  Preferred stock                                           -                -
  Common stock                                          1,854            1,728
  Additional paid-in capital                          144,693          119,505
  Retained earnings                                    76,468           84,963
  Treasury stock, at cost                             (23,455)         (13,861)
  Accumulated other comprehensive income                2,741            1,118
-------------------------------------------------------------------------------

        Total shareholders' equity                    202,301          193,453
-------------------------------------------------------------------------------

                                                   $  247,111       $  236,063
===============================================================================

See Notes to Consolidated Financial Statements.

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


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

                                                                   November 30,               November  30,
                                                            ------------------------    ------------------------

                                                               2002          2001          2002          2001
                                                               ----          ----          ----          ----
<S>                                                         <C>           <C>           <C>           <C>
Sales and Revenues:

  Product Sales                                             $  40,293     $  34,644     $ 111,890     $  95,274
  Licensing Revenues                                              305        29,970         1,015        30,565
----------------------------------------------------------------------------------------------------------------
                                                               40,598        64,614       112,905       125,839

Cost of goods sold                                             22,653        24,315        62,777        61,581
----------------------------------------------------------------------------------------------------------------

Gross profit                                                   17,945        40,299        50,128        64,258

Operating expenses:
Research and development                                        8,037         8,793        22,662        24,800
Selling, general and administrative                             9,534         9,896        26,387        25,399
Amortization of intangible assets                                 360             -           807             -
Restructuring costs                                                 -         8,019             -         8,019
----------------------------------------------------------------------------------------------------------------

  Income from operations                                           14        13,591           272         6,040

Interest income                                                   496           813         1,610         2,872
Impairment of investments                                     (16,306)         (419)      (16,306)         (419)
Other income (expense), net                                       (78)          (62)         (100)        1,550
----------------------------------------------------------------------------------------------------------------

Income (loss) before provision for income taxes
  and minority interest                                       (15,874)       13,923       (14,524)       10,043

Provision for (benefit from) income taxes                      (6,854)        4,749        (6,503)        3,313

Minority interest in net income (loss) of subsidiary               12           (21)           10            28
----------------------------------------------------------------------------------------------------------------

Income (loss) from continuing operations                       (9,032)        9,195        (8,031)        6,702

Loss from discontinued operations
  (net of income tax benefits of $69, $64, $260 and $360)        (125)         (116)         (464)         (668)
----------------------------------------------------------------------------------------------------------------


Net income (loss)                                           $  (9,157)    $   9,079     $  (8,495)    $   6,034
================================================================================================================

Basic net income (loss) per share:
  Income (loss) from continuing operations                  $   (0.54)    $    0.57     $   (0.49)    $    0.42
  Loss from discontinued operations                             (0.01)        (0.01)        (0.03)        (0.04)
----------------------------------------------------------------------------------------------------------------

Basic net income (loss) per share                           $   (0.55)    $    0.56     $   (0.52)    $    0.38
================================================================================================================


Diluted net income (loss) per share:
  Income (loss) from continuing operations                  $   (0.54)    $    0.56     $   (0.49)    $    0.40
  Loss from discontinued operations                             (0.01)        (0.01)        (0.03)        (0.04)
----------------------------------------------------------------------------------------------------------------

Diluted net income (loss) per share                         $   (0.55)    $    0.55     $   (0.52)    $    0.36
================================================================================================================

Weighted average common shares outstanding:
  Basic                                                        16,718        16,071        16,472        16,090
  Diluted                                                      16,718        16,525        16,472        16,799

</TABLE>

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

                                                            Nine Months Ended November 30,
                                                            ------------------------------

                                                                2002              2001
                                                            -----------       ------------
<S>                                                         <C>               <C>
Cash flows from operating activities:

 Cash received from customers and licensees                 $ 112,542         $   119,229
 Cash paid to suppliers and employees                        (108,203)            (93,744)
 Interest received                                              1,803               3,806
 Interest paid                                                   (126)               (108)
 Income taxes paid                                               (390)               (556)
------------------------------------------------------------------------------------------

    Net cash provided by operating activities                   5,626              28,627
------------------------------------------------------------------------------------------

Cash flows from investing activities:
  Capital expenditures                                         (4,346)             (3,637)
  Acquisition of Gain Technology Corporation                  (15,669)                  -
  Purchases of short-term investments                         (30,292)             (7,600)
  Sales of short-term investments                              28,785              13,629
  Other                                                           180               3,021
------------------------------------------------------------------------------------------

    Net cash provided by (used for) investing activities      (21,342)              5,413
------------------------------------------------------------------------------------------

Cash flows from financing activities:
  Proceeds from issuance of common stock                        4,716                 686
  Purchases of treasury stock                                 (10,375)             (1,633)
  Repayments of obligations under capital leases and notes
  payable                                                      (2,320)               (703)
------------------------------------------------------------------------------------------

    Net cash used for financing activities                     (7,979)             (1,650)
------------------------------------------------------------------------------------------

Effect of foreign exchange rate changes on cash and cash
equivalents                                                       693                (330)

Net cash used for discontinued operations                        (866)             (1,049)
------------------------------------------------------------------------------------------

Net increase (decrease) in cash and cash equivalents          (23,868)             31,011

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

Cash and cash equivalents at end of period                  $  74,197         $   130,556
==========================================================================================


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

Income (loss) from continuing operations                    $  (8,031)        $     6,702
Adjustments to reconcile income (loss) from continuing
operations to net cash provided by operating activities:
  Depreciation and amortization                                 7,822               9,343
  Gains on sales of investments and property                      (43)             (1,659)
  Asset impairment charges                                     16,306               5,756
  Other adjustments, net                                           36                 116
  Changes in operating assets and liabilities, excluding
  the effect of business acquisitions:
     Accounts receivable                                       (2,880)             (5,295)
     Inventories                                                 (420)             12,024
     Accounts payable and accrued expenses and other
     liabilities                                                 (361)              3,169
     Deferred income taxes                                     (8,166)             (2,309)
     Other changes, net                                         1,363                 780
------------------------------------------------------------------------------------------

Net cash provided by operating activities                   $   5,626         $    28,627
==========================================================================================
</TABLE>

During the nine months ended November 30, 2002, the Company  acquired  $1,876 of
design tools through long-term financing provided by the supplier.

See Notes to Consolidated Financial Statements.

<PAGE>


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


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 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  revenue  and
     expenses during the reporting period.  Actual results may differ from those
     estimates,   and  such   differences  may  be  material  to  the  financial
     statements.  These condensed  consolidated  financial  statements should be
     read in conjunction with the audited consolidated  financial statements for
     the year ended February 28, 2002 included in the Company's Annual Report on
     Form 10-K,  as filed on April 26,  2002 with the  Securities  and  Exchange
     Commission.  The results of operations  for the three and nine months ended
     November  30,  2002 are not  necessarily  indicative  of the  results to be
     expected for any future periods.

2.   Balance Sheet Data

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

                                                 Nov. 30, 2002     Feb. 28, 2002
     ---------------------------------------------------------------------------

      Raw materials                              $      826        $     465
      Work in process                                 6,896            5,820
      Finished goods                                 10,537           11,300
     ---------------------------------------------------------------------------

                                                 $   18,259        $  17,585
     ===========================================================================


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

                                                 Nov. 30, 2002     Feb. 28, 2002
     ---------------------------------------------------------------------------

      Land                                       $    3,434        $   3,434
      Buildings and improvements                     29,663           29,257
      Machinery and equipment                        80,877           76,121
     ---------------------------------------------------------------------------
                                                    113,974          108,812
      Less: accumulated depreciation                 90,555           84,642
     ---------------------------------------------------------------------------

                                                 $   23,419        $  24,170
     ===========================================================================


3.   Net Income (Loss) Per Share

     Basic net income (loss) per share is calculated using the  weighted-average
     number of common shares outstanding  during the period.  Diluted net income
     (loss) per share is calculated using the weighted-average  number of common
     shares  outstanding  during the period,  plus the dilutive effect of shares
     issuable through stock options.
<PAGE>

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

                                                 Three Months Ended          Nine Months Ended
                                                    November 30,                November 30,
                                             -----------------------------------------------------
                                                2002         2001            2002        2001
                                             -----------  ----------     -----------   ---------

      <S>                                        <C>         <C>             <C>         <C>
      Average shares outstanding for
        basic net income (loss) per share        16,718      16,071          16,472      16,090
      Dilutive effect of stock options                -         454               -         709
      --------------------------------------------------------------------------------------------

      Average shares outstanding for
        diluted net income (loss) per share      16,718      16,525          16,472      16,799
      ============================================================================================
</TABLE>

     The Company  reported a loss from  continuing  operations for the three and
     nine month periods ended November 30, 2002, and accordingly,  the effect of
     stock options was  antidilutive  for those  periods and therefore  excluded
     from the  calculation  of average shares  outstanding  used for diluted net
     income (loss) per share.

     Stock options  excluded from the  computation  of diluted net income (loss)
     per share  because  their  effect  was  antidilutive  were as  follows  (in
     thousands):

                                          Three Months Ended   Nine Months Ended
                                             November 30,         November 30,
                                          --------------------------------------
                                            2002      2001      2002     2001
                                          --------  --------  -------- --------

      Number of shares under options
        excluded from the computation
        of diluted net income (loss)
        per share                          5,011     2,644     4,732    1,715
      ==========================================================================


4.   Comprehensive Income (Loss)

     The  Company's  other  comprehensive  income  (loss)  consists  of  foreign
     currency translation adjustments from those subsidiaries not using the U.S.
     dollar as their  functional  currency,  and unrealized  gains and losses on
     equity investments classified as available-for-sale.  The components of the
     Company's  comprehensive income (loss) for the three and nine month periods
     ended November 30, 2002 and 2001 were as follows (in thousands):
<TABLE>
<CAPTION>


                                                         Three Months Ended            Nine Months Ended
                                                            November 30,                  November 30,
                                                   ----------------------------------------------------------
                                                       2002           2001           2002           2001
                                                   -------------  -------------  -------------  -------------
     <S>                                             <C>            <C>            <C>            <C>
     Net income (loss)                               $ (9,157)      $  9,079       $ (8,495)      $  6,034
        Other comprehensive income (loss):
        Change in foreign currency  translation
          adjustment                                     (509)           (92)         1,209           (593)
        Change in unrealized loss on marketable
          equity securities, net of taxes                  22         (1,471)           (18)        (1,407)
        Reclassification adjustment for loss on
          marketable equity security included in
          net loss, net of taxes                        3,542              -            432              -
     --------------------------------------------------------------------------------------------------------

       Total comprehensive income (loss)             $ (6,102)      $  7,516       $ (6,872)      $  4,034
     ========================================================================================================
</TABLE>

     During the three months ended  November 30, 2002,  as discussed  more fully
     within Note 12, the Company  recorded a charge for an  other-than-temporary
     impairment  in the  value  of its  equity  investment  in  publicly  traded
     Chartered Semiconductor  Manufacturing,  Ltd. This investment is classified
     as  available-for-sale,  and temporary  changes in its market value, net of
     income taxes, are included within the Company's Other comprehensive  income
     (loss), and are also presented  cumulatively as an unrealized gain or loss,
     net of income taxes, within Accumulated other  comprehensive  income (loss)
     on the Company's  Consolidated  Balance  Sheets.  The amounts  presented as
     reclassification  adjustments in the preceding  table represent the amounts
     previously reported within Other comprehensive  income (loss) as unrealized
     losses  on this  investment,  net of income  taxes,  for the three and nine
     months ended November 30, 2002, respectively.

5.   Business Acquisition

     In June 2002, the Company  acquired all of the outstanding  common stock of
     Gain Technology Corporation (Gain), a developer and supplier of high-speed,
     high-performance analog and mixed-signal communications integrated circuits
     and proprietary intellectual property cores, based in Tucson, Arizona. Gain
     now operates as SMSC Analog  Technology  Center,  Inc. (ATC).  Through this
     acquisition,   the  Company  has  significantly  enhanced  its  analog  and
     mixed-signal  capabilities,  by  adding  35 highly  skilled  engineers  and
     designers,  acquiring several new products,  and expanding its intellectual
     property portfolio.

     The  Company  acquired  ATC for  initial  consideration  of $36.1  million,
     consisting of  approximately  749,000 shares of SMSC common stock valued at
     $17.9  million,  $16.6  million  of cash (net of cash  acquired),  and $1.6
     million of direct acquisition costs,  including legal, banking,  accounting
     and valuation fees. The value of the SMSC common stock was determined using
     the stock's market value for a reasonable  period before and after the date
     the  terms  of the  acquisition  were  announced.  Up to $17.5  million  of
     additional  consideration,  payable in SMSC common  stock and cash,  may be
     issued to ATC's former shareholders during fiscal 2004 upon satisfaction of
     certain future performance goals. Any additional consideration paid will be
     recorded as goodwill.

     In  accordance  with the  provisions  of Statement of Financial  Accounting
     Standards  (SFAS) No. 141,  Business  Combinations,  the purchase price was
     allocated to the estimated fair values of assets  acquired and  liabilities
     assumed,  as set forth in the following  table. The fair values assigned to
     intangible  assets and in-process  research and development were determined
     with the assistance of a third-party appraisal.

     (in thousands)
     ----------------------------------------------------------------

     Current assets                                        $   1,575
     Property, plant and equipment                             1,114
     Deferred income taxes                                     1,033
     Other assets                                                 41
     Goodwill                                                 30,412
     Current technologies                                      6,179
     Other intangible assets                                     908
     ----------------------------------------------------------------
     Total assets acquired                                    41,262

     Current liabilities                                       3,358
     Long-term obligations                                     1,356
     Other liabilities                                           535
     ----------------------------------------------------------------
     Total liabilities assumed                                 5,249

     Net assets acquired                                      36,013
     In-process research and development                          87
     ----------------------------------------------------------------

     Total initial consideration                           $  36,100
     ================================================================


     The amounts  allocated  to current  technologies  are being  amortized on a
     straight-line  basis over their estimated  useful life of six years.  Other
     intangible  assets are also being amortized on a  straight-line  basis over
     their respective  estimated useful lives, ranging from one to ten years. In
     accordance  with  the  provisions  of SFAS  No.  142,  Goodwill  and  Other
     Intangible  Assets,  the $30.4  million  assigned to  goodwill  will not be
     amortized.  Further  information  regarding  goodwill and other  intangible
     assets is provided within Note 9 included herein.

     The amount assigned to in-process research and development relates to those
     ongoing projects that have not yet proven to be commercially  feasible, and
     for which no  alternative  future  use  currently  exists  for the  related
     technology.  This  charge is  included  within the  Company's  consolidated
     operating results for the nine months ended November 30, 2002.

     The pro forma  results of  operations  set forth  below give  effect to the
     acquisition  of ATC as if it had occurred at the  beginning of fiscal 2002.
     Pro forma  data is subject to certain  assumptions  and  estimates,  and is
     presented for informational purposes only. This data does not purport to be
     indicative  of the  results  that  would  have  actually  occurred  had the
     acquisition  occurred on the basis described  above, nor do they purport to
     be indicative of future operating results.
<PAGE>


                                                  Nine Months Ended
                                                    November 30,
                                               -----------------------
     (in thousands, except per share data)       2002           2001
                                               -----------------------

     Revenues                                  $ 114,143     $ 130,899
     Net income (loss)                            (9,338)        4,531
     =================================================================

     Basic net income (loss) per share         $   (0.54)    $    0.27
     =================================================================
     Diluted net income (loss) per share       $   (0.54)    $    0.26
     =================================================================


6.   Business Restructuring

     In November 2001, the Company's  Board of Directors  approved  management's
     plan to exit the PC chipset business, redirect the Company's resources, and
     increase its focus on leveraging its core technologies toward higher growth
     and higher margin businesses.  This restructuring was announced on December
     3, 2001. The decision to exit this business was based upon an assessment of
     the  PC  chipset  marketplace,   and  management's   conclusions  that  the
     opportunities for profitability in this marketplace had declined,  and that
     the costs of entry had increased,  to a point where further  investments in
     PC chipset technology were not justified.

     As a result of this  restructuring,  the Company  recorded  $9.3 million of
     restructuring  charges in the third  quarter of fiscal 2002.  These charges
     included $1.3 million for excess and obsolete  inventory  classified within
     cost  of  goods  sold,  and  $8.0  million  of  other  restructuring  costs
     classified  within  operating   expenses  on  the  Company's   Consolidated
     Statements of  Operations.  These other  restructuring  costs included $5.3
     million for  impairments  in asset  values,  $1.9  million  for  long-term,
     non-cancelable lease obligations, $0.3 million for a workforce reduction of
     55 people,  and $0.5  million for other  costs.  The $0.5 million for other
     costs was  subsequently  adjusted to $0.2 million in the fourth  quarter of
     fiscal 2002.

     The following is a summary of the changes in restructuring  liabilities for
     the nine months ended November 30, 2002 (in thousands):

                              Business                             Business
                            Restructuring                        Restructuring
                            Reserve as of    Non-Cash   Cash     Reserve as of
                            Feb. 28, 2002    Charges   Payments  Nov. 30, 2002
     ---------------------------------------------------------------------------

      Workforce reduction      $     2       $  (2)     $   -       $     -
      Non-cancelable lease
       obligations               1,771           -        297         1,474
      Other charges                181           2         20           163
     ---------------------------------------------------------------------------

                               $ 1,954       $   -      $ 317       $ 1,637
     ===========================================================================

     The Company  completed its  restructuring  program during the quarter ended
     February 28, 2002.  Substantially  all of the cash payments  related to the
     workforce  reduction  were  made  in  that  period.   Payments  related  to
     non-cancelable  lease  obligations will be paid over their respective terms
     through August 2008.


7.   Discontinued Operations

     The Company has been  involved in several  legal  actions  relating to past
     divestitures  of divisions  and business  units.  These  divestitures  were
     accounted for as discontinued operations, and accordingly, costs associated
     with these  actions,  one of which has  continued  into  fiscal  2003,  are
     reported  as a  Loss  from  discontinued  operations  on  the  Consolidated
     Statements  of  Operations.  These  costs  totaled  $0.1  million  and $0.5
     million, after applicable income tax benefits, for the three and nine month
     periods ended  November 30, 2002,  respectively,  and $0.1 million and $0.7
     million,  after applicable income tax benefits, for the corresponding prior
     year periods.


8.   Shareholders' Equity

     In July 2002, the Company's Board of Directors  approved an increase in the
     number of shares authorized for repurchase under the Company's common stock
     repurchase  program by one million  shares,  bringing  the total  number of
     shares  authorized for repurchase under the program to three million.  This
     program allows the Company to repurchase  shares of its common stock on the
     open market or in private transactions.

     As of November  30, 2002,  the Company has  repurchased  approximately  1.8
     million  shares  of  common  stock at a cost of $23.5  million  under  this
     program,  including 481,000 shares  repurchased in the first nine months of
     fiscal 2003 at a cost of $9.6  million.  The Company also paid $0.8 million
     in early March 2002 to settle 45,000 treasury shares acquired at the end of
     February 2002. The Company currently holds  repurchased  shares as treasury
     stock, reported at cost.


9.   Goodwill and Intangible Assets

     In July 2001, the Financial Accounting Standards Board issued SFAS No. 142,
     Goodwill and Other  Intangible  Assets.  SFAS No.142 requires  goodwill and
     certain  other  intangible  assets to be  tested  for  impairment  at least
     annually and written down only when  determined  to be impaired,  replacing
     the previous  accounting  practice of ratably  amortizing  these items over
     their estimated  useful lives.  Intangible  assets other than goodwill that
     have a finite life are amortized  over their useful lives.  This  statement
     applies to existing goodwill and intangible  assets,  beginning with fiscal
     years starting after December 15, 2001.

     As discussed  within Note 5, the Company's  June 2002  acquisition  of Gain
     Technology   Corporation  included  the  acquisition  of  $7.1  million  of
     finite-lived intangible assets and $30.4 million of goodwill. 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 value.

     As of November 30,  2002,  the  Company's  finite-lived  intangible  assets
     consisted of the following (in thousands):

                                             Accumulated
                                  Cost       Amortization           Net
     ----------------------------------------------------------------------

     Existing technologies      $  6,179       $   515          $  5,664
     Customer contracts              498           102               396
     Non-compete agreements          410           103               307
     ----------------------------------------------------------------------

                                $  7,087       $   720          $  6,367
     ======================================================================

     All finite-lived  intangible  assets are being amortized on a straight-line
     basis over their estimated useful lives.  Existing  technologies  have been
     assigned an estimated  useful life of six years.  Customer  contracts  have
     been  assigned  useful  lives of between one and ten years (with a weighted
     average life of approximately seven years), and non-compete agreements have
     been assigned useful lives of two years.  The weighted  average useful life
     of all  intangible  assets is  approximately  six years.  Estimated  future
     intangible asset amortization expense for the remainder of fiscal 2003, and
     for the five fiscal years thereafter, is as follows (in thousands):

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

     Remainder of fiscal 2003       $   360
     Fiscal 2004                      1,310
     Fiscal 2005                      1,114
     Fiscal 2006                      1,062
     Fiscal 2007                      1,062
     Fiscal 2008                      1,062
     =========================================


10.  Technology and Patent License Agreement 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  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,  the two  companies  announced a  technology  exchange
     agreement  (the   Agreement)  that  would  allow  SMSC  to  accelerate  its
     then-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  provided,  among  other
     things,  for Intel to transfer  certain  intellectual  property  related to
     Intel  chipset  architectures  to SMSC,  and  continues to provide SMSC the
     opportunity to supply Intel chipset  components  along with its own chipset
     solutions.  The Agreement also limited SMSC's rights regarding Northbridges
     and Intel Architecture Microprocessors under the 1987 agreement.

     The  Agreement  included  provisions  for  its  termination  under  certain
     circumstances. Under one such provision, beginning in the third year of the
     Agreement  and  annually  thereafter,  SMSC could  elect to  terminate  the
     Agreement  should SMSC not achieve  certain minimum chipset revenue amounts
     set forth in the  Agreement,  unless Intel paid SMSC an amount equal to the
     shortfall  between the minimum  revenue  amount and the actual  revenue for
     that period.  Upon the  Agreement  terminating  under this  provision,  the
     limitations  imposed by the Agreement on the  Northbridge  rights under the
     1987 agreement would terminate immediately,  and the limitations imposed by
     the Agreement on the  microprocessor  rights under the 1987 agreement would
     terminate 12 months  later.  Should Intel elect to make the revenue  amount
     shortfall  payment,  the provisions of the Agreement  would remain in force
     for the  subsequent  12-month  period,  for which another  minimum  revenue
     amount would be applicable,  and at the end of which a similar  termination
     event would arise.  Minimum chipset  revenue amounts were $30 million,  $45
     million, and $60 million for the 12 months ending September 21, 2001, 2002,
     and 2003,  respectively,  increasing  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 twelve months ended September 21, 2001.
     In November 2001, the Company  received a $29.6 million payment from Intel,
     which was  reported  as  licensing  revenue on the  Company's  Consolidated
     Statements of Operations in the three-month period ended November 30, 2001.

     In September 2002,  SMSC notified Intel of a chipset  revenue  shortfall of
     approximately $44.9 million for the 2002 twelve-month period. Intel did not
     make a payment to SMSC of that  shortfall  within the time frame  specified
     within the  Agreement,  and SMSC gave Intel  notice of  termination  of the
     Agreement in accordance with the terms thereof.  The Company and Intel have
     commenced  discussions  regarding their various  corporate and intellectual
     property relationships,  including under the Agreement.  However, there can
     be no assurance as to the outcome of those discussions.


11.  Litigation

     The  Company  is subject to  various  lawsuits  and claims in the  ordinary
     course of business.  While the outcome of these matters cannot currently be
     determined,  management  believes that their ultimate  resolution  will not
     have a material effect on the Company's operations or financial position.

     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 $38.2 million
     in  cash,  plus  an  additional  $2.0  million,  which  was  placed  in  an
     interest-bearing  escrow  account as security for the  Company's  indemnity
     obligations under the agreement, and which was scheduled for release to the
     Company in January  1999.  The  Company's  19.9%  minority  interest in SMC
     Networks, Inc. carried an original cost of $8.5 million. Further discussion
     regarding this investment appears within Note 12, included herein.

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


12.  Impairment Of Investments

     During the three months  ended  November  30,  2002,  the Company  recorded
     non-cash charges  totaling $16.3 million for declines in value,  considered
     to be  other-than-  temporary,  of its equity  investments in SMC Networks,
     Inc. and Chartered Semiconductor Manufacturing Ltd. (Chartered).

     As described within Note 11, the Company's investment in SMC Networks, Inc.
     is a residual minority equity interest in a non-public company sold by SMSC
     in 1997. Based upon a valuation  analysis performed by the Company with the
     assistance of a third party during the third  quarter of fiscal 2003,  this
     investment,  which  carried an  original  cost of $8.5  million,  was fully
     written off.
<PAGE>

     The Company also recorded a $7.8 million  impairment  charge for its equity
     investment in Chartered,  a publicly traded company, based upon a sustained
     reduction in  Chartered's  stock price  performance.  This  investment  was
     written down to its market value of $2.9 million as of November 30, 2002.

     Following these charges, the remaining $2.9 million investment in Chartered
     stock represents the only material investment in equity securities of other
     companies on the Company's Consolidated Balance Sheet.


13.  New Accounting Pronouncements

     In June 2002, the Financial Accounting Standards Board issued SFAS No. 146,
     Accounting for Exit or Disposal Activities.  SFAS No. 146 requires that the
     liabilities  for costs  associated  with an exit or  disposal  activity  be
     recognized at their fair values when the  liabilities  are incurred.  Under
     previous  guidance,  liabilities  for certain exit costs were recognized at
     the date that  management  committed  to an exit plan,  which is  generally
     before the actual liabilities are incurred.  SFAS No. 146 is effective only
     for exit or disposal  activities  initiated  after  December 31, 2002.  The
     Company does not currently  expect the adoption of this statement to have a
     material impact on its financial statements.

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


The  following  discussion  should  be read in  conjunction  with the  Company's
Consolidated  Financial  Statements  and  footnotes  thereto  contained  in this
report.


Overview
--------

Description of Business

Standard  Microsystems  Corporation  (the  Company  or SMSC) is a  designer  and
worldwide  supplier of advanced  digital and analog  Input/Output  (I/O)  system
solutions and  connectivity  solutions for a broad range of  communications  and
computing  applications in the areas of Advanced I/O,  Connectivity,  Local Area
Networking and Embedded Control Systems. The Company is a fabless  semiconductor
supplier   whose   products  are   manufactured   by  third  party   world-class
semiconductor  foundries and assemblers.  To 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  prominent  as the leading  supplier of Advanced  I/O  integrated
circuits  for desktop  and mobile  personal  computers.  Advanced  I/O  circuits
contain a variety of individual  functions and unique I/O controllers  delivered
in a single package,  including floppy disk control,  keyboard control and BIOS,
parallel   and  serial  port   control,   and  often  flash   memory,   infrared
communications   support,  a  real  time  clock,  system  management  and  power
management.

The Company serves the Universal Serial Bus (USB)  connectivity  market with its
family of connectivity products,  which provide solutions using both USB 1.1 and
USB 2.0  technologies.  Embedded  networking  products  are  designed to serve a
variety  of  Embedded  Control  Systems  in  machine-to-machine   communications
applications,  such as  set-top  boxes,  home  gateway  products,  printers  and
wireless base stations.

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

Business Acquisition

In June 2002, the Company  acquired all of the outstanding  common stock of Gain
Technology   Corporation   (Gain),  a  developer  and  supplier  of  high-speed,
high-performance analog and mixed-signal  communications integrated circuits and
proprietary  intellectual  property cores,  based in Tucson,  Arizona.  Gain now
operates  as  SMSC  Analog  Technology   Center,   Inc.,  (ATC).  Total  initial
consideration  paid for the acquisition of ATC was approximately  $36.1 million,
consisting of approximately  749,000 shares of SMSC common stock valued at $17.9
million,  $16.6 million of cash, and $1.6 million of direct  acquisition  costs.
Through this acquisition,  the Company has significantly enhanced its analog and
mixed-signal capabilities,  by adding 35 highly skilled engineers and designers,
acquiring  several  new  products,   and  expanding  its  intellectual  property
portfolio.

The Company's new GT3200 device,  acquired through the ATC  acquisition,  is the
first in a family of high-performance analog physical layer (PHY) and high-speed
serial data  communication  devices  specifically  designed  for the new USB 2.0
connectivity  standard.  It is fully  certified  by the  USB-IF  consortium  and
complements  the Company's new line of Hi-Speed USB 2.0 products,  which include
the  USB97C201/202  family of True  Speed  ATA/ATAPI/CF  Bridge  Controller  for
external disk drives,  the USB97C210  Memory Card Controller for USB memory card
readers and the USB97C242 Flash Drive Controller.

Leveraging  ATC's  assets and  expertise,  the  Company is  pursuing  additional
product  opportunities in high-speed,  high-performance  serial  transceiver and
wireless integrated circuit (IC) markets.

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

Revenues

Revenues  for the three and nine  months  ended  November  30,  2002 were  $40.6
million and $112.9 million,  respectively,  compared to $64.6 million and $125.8
million for the corresponding year-earlier periods, respectively.

Both the three and nine month  periods in the prior  fiscal year were  favorably
impacted  by a special  license  payment of $29.6  million  received  from Intel
Corporation  (Intel) as provided  for in the  Company's  September  1999 chipset
agreement with Intel. Further details regarding this payment are provided within
Note 10 to the Consolidated  Financial  Statements  included within this report.
Excluding this special  license  payment,  revenues were $35.0 million and $96.2
million for the three and nine months ended November 30, 2001, respectively.

Excluding the special license payment in fiscal 2002,  revenues increased in the
three and nine-month  periods ended November 30, 2002, by $5.6 million and $16.7
million,  or 16% and  17%,  respectively,  over the  corresponding  year-earlier
periods.  These  increases in revenues  reflect higher unit volume  Advanced I/O
product shipments, driven by new design-wins achieved with several key customers
in fiscal 2002 and fiscal  2003.  The  Company  believes  it has  increased  its
Advanced  I/O market  share  during  fiscal  2003 on the  strength  of these key
design-wins. In addition, revenues from the Company's Embedded products for both
the three and  nine-month  periods  ended  November  30,  2002  exceed  revenues
achieved in the comparable  fiscal 2002 periods.  Embedded product revenues have
increased for four consecutive fiscal quarters, continuing to signal that demand
for these products has begun to recover,  following a prolonged  slump.  Several
key new USB products,  mentioned above, and Ethernet  connectivity products have
also contributed to the improved Embedded product revenues.

Revenues from  customers  outside of North America  accounted for 91% and 90% of
the Company's  revenues for the three and nine-month  periods ended November 30,
2002, respectively. Excluding the impact of the special license payment received
in November 2001,  revenues from customers outside of North America were 92% and
90% for the corresponding prior-year periods,  respectively. The Company expects
that international  shipments,  particularly to the Asia and Pacific Rim region,
will continue to represent a significant portion of its revenues.

From time to time,  several key customers can account for a significant  portion
of the  Company's  revenues.  The Company  expects that its key  customers  will
continue to account for a significant  portion of its revenues for the remainder
of fiscal 2003 and for the foreseeable future.


Gross Profit

Gross profit for the three months ended November 30, 2002 was $17.9 million,  or
44.2% of revenues,  compared to $40.3  million,  or 62.4% of  revenues,  for the
three  months ended  November  30, 2001.  Gross profit for the nine months ended
November 30, 2002 was $50.1  million,  or 44.4% of  revenues,  compared to $64.3
million, or 51.1% of revenues, for the nine months ended November 30, 2001.

Gross  profit in both the  three  and  nine-month  periods  in fiscal  2002 were
favorably  impacted by the $29.6 million special license payment,  and adversely
impacted by $1.3 million in inventory charges related to the Company's  November
2001  business  restructuring.  Excluding  these  items,  gross profit was $12.0
million, or 34.3% of revenues (as adjusted for the special license payment), and
$35.9  million,  or 37.3% of  adjusted  revenues,  for the three and  nine-month
periods ended November 30, 2001, respectively.

The  improvement  in gross profit in fiscal 2003,  after  adjusting  fiscal 2002
gross  profit  for the  special  items  discussed  in the  preceding  paragraph,
reflects the combination of lower product costs, new product  introductions,  an
increase  in unit  production,  and the  impact  of $1.6  million  of  inventory
obsolescence  charges recorded in the third quarter of fiscal 2002, unrelated to
the November 2001 restructuring,  resulting from reduced customer demand. Record
unit  production  during the first nine months of fiscal 2003 has  resulted in a
more efficient use of fixed manufacturing overhead costs, which also contributed
to higher margins.


Research and Development Expenses

The Company's research and development expenses (R&D) consist of circuit design,
development  and  validation,  product  engineering,  software  development  and
related support  activities.  The Company's  ongoing  commitment to research and
development is essential to maintaining  product  leadership in existing product
lines and to providing  innovative product offerings,  which, in turn, drive the
Company's opportunities for future growth.

R&D expenses  were $8.0 million and $22.7  million for the three and nine months
ended  November  30,  2002,  respectively,  compared  to $8.8  million and $24.8
million for the three and nine months ended November 30, 2001, respectively.

R&D  expenses  for the three and  nine-month  periods  ended  November  30, 2002
reflect increased expenses associated with the June 2002 acquisition of ATC, and
reduced  expenditures  for  PC  chipset  development  resulting  from  Company's
November 2001 restructuring. That restructuring, further details regarding which
appear within Note 6 to the Consolidated  Financial  Statements  included within
this report,  among other things,  reduced R&D expenses for  engineering  staff,
prototype  costs and other  development  activities  associated  with PC chipset
development programs.


Selling, General and Administrative Expenses

Selling,  general  and  administrative  expenses  were  $9.5  million  and $26.4
million,  or 23.5% and 23.4% of revenues,  for the three and nine-month  periods
ended November 30, 2002,  respectively.  These expenses  compare to $9.9 million
and  $25.4  million,   or  28.3%  and  26.2%  of  revenues  for  the  respective
year-earlier periods, excluding the $29.6 million special license payment.

Selling, general and administrative expenses declined by a modest amount for the
three-month  period  ending  November  30,  2002,  compared to the year  earlier
period, due to lower  professional fees and lower accruals for incentives.  This
was partially offset by additional  selling,  general and  administrative  costs
associated with the operation of ATC, and incremental  selling costs  associated
with higher product revenues in the current year's three month period.
<PAGE>

Selling,  general and administrative  expenses for the current nine-month period
were  higher  than  the  corresponding  year-earlier  period  due to  additional
selling,  general and administrative costs associated with the operation of ATC,
and incremental selling costs associated with the higher product revenues in the
current nine-month period.  Partially  offsetting these increases was the impact
of the  Company's  November 2001 business  restructuring,  which reduced  annual
selling, general and administrative expenses by approximately $0.9 million.


Amortization of Intangible Assets

For the three and nine months  ended  November 30,  2002,  the Company  recorded
amortization  expenses  of $0.4  million  and $0.8  million,  respectively,  for
intangible assets associated with the June 2002 acquisition of ATC.


Impairment of Investments

During the three months ended November 30, 2002, the Company  recorded  non-cash
charges  totaling  $16.3  million  for  declines  in  value,  considered  to  be
other-than-  temporary,  of its equity  investments  in SMC  Networks,  Inc. and
Chartered Semiconductor Manufacturing Ltd. (Chartered).

As described within Note 12 to the Consolidated Financial Statements included in
this  report,  the  Company's  investment  in SMC  Networks,  Inc. is a residual
minority  equity  interest in a non-public  company sold by SMSC in 1997.  Based
upon a valuation  analysis  performed  by the Company with the  assistance  of a
third party during the third  quarter of fiscal  2003,  this  investment,  which
carried an original cost of $8.5 million, was fully written off.

The Company also recorded a $7.8 million impairment charge for its investment in
Chartered,  a publicly  traded  company,  based upon a  sustained  reduction  in
Chartered's  stock price  performance.  This  investment was written down to its
market value of $2.9 million as of November 30, 2002.

Following  these  charges,  the remaining  $2.9 million  investment in Chartered
stock  represents  the only material  investment  in equity  securities of other
companies on the Company's Consolidated Balance Sheet.

The Company  recorded a charge of $0.4  million  during the three  months  ended
November  30,  2001 for an  impairment  in value of an  equity  investment  in a
privately held company.


Restructuring Costs

In November 2001, the Company's Board of Directors approved management's plan to
exit the PC chipset business, redirect the Company's resources, and increase its
focus on leveraging its core technologies toward higher growth and higher margin
businesses.  The decision to exit this  business was based upon an assessment of
the PC chipset marketplace,  and management's conclusions that the opportunities
for  profitability in this marketplace had declined,  and the costs of entry had
increased,  to a point where further  investments in PC chipset  technology were
not justified.

As a  result  of this  restructuring,  the  Company  recorded  $9.3  million  of
restructuring  charges  in the third  quarter  of  fiscal  2002.  These  charges
included $1.3 million for excess and obsolete  inventory  classified within cost
of goods sold, and $8.0 million of other  restructuring  costs classified within
operating expenses on the Company's Consolidated Statements of Operations. These
other restructuring costs included $5.3 million for impairments in asset values,
$1.9 million for long-term, non-cancelable lease obligations, $0.3 million for a
workforce  reduction of 55 people,  and $0.5  million for other costs.  The $0.5
million for other costs was subsequently  adjusted to $0.2 million in the fourth
quarter of fiscal 2002.


Other Income and Expense

Interest  income of $0.5 million and $1.6  million for the three and  nine-month
periods ended  November 30, 2002,  respectively,  declined from $0.8 million and
$2.9 million reported for the corresponding year-earlier periods,  respectively,
reflecting lower interest rates on short-term investments.

Other income (expense), net, was negligible for the three and nine-month periods
ended November 30, 2002 and for the three-month  period ended November 30, 2001.
For the nine-month period ending November 30, 2001, other income (expense), net,
totaled $1.6 million and included  gains of $0.6 million  realized from the sale
of two underutilized facilities and gains of $1.1 million realized on sales of a
portion of an equity  investment,  partially  offset by $0.1 million of interest
and other expenses.


Provision For (Benefit From) Income Taxes

The Company  recorded  income tax benefits  from  continuing  operations of $6.9
million and $6.5 million, for the three and nine months ended November 30, 2002,
respectively, compared to income tax provisions on continuing operations of $4.7
million and $3.3  million,  respectively,  for the three and nine  months  ended
November 30, 2001.

The Company  recorded a benefit for income taxes from continuing  operations for
the nine months ended  November 30, 2002 at its expected  effective  tax benefit
rate for fiscal  2003 of  approximately  39.0%.  In  addition,  during the three
months  ended  November  30,  2002,  the Company  recorded  tax benefits of $0.8
million for lower than previously expected tax liabilities attributable to prior
fiscal years.  By comparison,  the effective  income tax rate was  approximately
33.0% for the nine months ended November 30, 2001. The expected effective income
tax benefit rate for fiscal 2003  primarily  reflects  the impact of  tax-exempt
interest income and income tax credits anticipated for fiscal 2003.


Discontinued Operations

The  Company  has been  involved  in  several  legal  actions  relating  to past
divestitures of divisions and business units.  These divestitures were accounted
for as discontinued  operations,  and  accordingly,  costs associated with these
actions,  one of which has  continued  into fiscal 2003,  are reported as a Loss
from discontinued operations on the Consolidated Statements of Operations. These
costs  totaled $0.1 million and $0.5 million for the three and nine months ended
November 30, 2002,  respectively,  compared to $0.1 million and $0.7 million for
the  corresponding  year-earlier  periods,  respectively,  all after  applicable
income tax benefits.


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

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

The Company's cash, cash  equivalents  and short-term  investments  decreased to
$104.5  million as of November 30, 2002,  compared to $126.7 million at February
28, 2002. This decrease reflects, among other things, $15.7 million of cash used
for the  acquisition  of ATC, and $10.4  million used for  purchases of treasury
stock.

Operating  activities  generated  $5.6 million of cash for the nine months ended
November 30, 2002.  Investing  activities consumed $21.3 million of cash for the
same  period,  including,  among other  things,  the $15.7  million  used in the
acquisition of ATC, $4.3 million used for capital  expenditures and $1.5 million
for net purchases of short-term investments.  Financing activities consumed $8.0
million of cash during the first nine months of fiscal 2003, including the $10.4
million for  purchases  of treasury  stock and $2.3  million for debt  payments,
partially  offset by $4.7  million  generated  from the issuance of common stock
through exercises of stock options.

The  Company's  inventories  were $18.3 million at November 30, 2002 compared to
$17.6 at February  28,  2002.  Inventories  decreased  by $5.7  million from the
August 31, 2002 level of $24.0  million.  The  Companies  inventories  typically
increase  during the first half of the fiscal year in  anticipation of increased
demand  during the second half of the year for  personal  computers  and related
equipment.

Capital  expenditures  for the nine  months  ended  November  30, 2002 were $4.3
million.  Capital  expenditures are typically  incurred to support the Company's
semiconductor  test operation and to acquire hardware,  software and other tools
used in the design of the Company's products. There were no material commitments
for capital expenditures as of November 30, 2002.

The Company completed its acquisition of ATC in June 2002, which resulted in the
use of  approximately  $15.7  million of cash. Up to $17.5 million of additional
consideration,  payable in SMSC  common  stock and cash,  may be issued to ATC's
former  shareholders  during  fiscal 2004 upon  satisfaction  of certain  future
performance  goals.  Through  this  acquisition,  the  Company  assumed  certain
long-term  obligations  of ATC,  including  long-term  obligations  to  vendors,
unsecured notes payable and obligations under capital leases.

During the nine months ended  November 30, 2002, the Company  purchased  481,000
shares of treasury  stock at a cost of $9.6 million  under its stock  repurchase
program. The Company also paid $0.8 million in early March 2002 to settle 45,000
treasury  shares  acquired at the end of February  2002.  The  exercise of stock
options by employees  and  directors  generated  $4.7 million of cash during the
same nine-month period.

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


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

In June 2002,  the  Financial  Accounting  Standards  Board issued SFAS No. 146,
Accounting  for Exit or  Disposal  Activities.  SFAS No. 146  requires  that the
liabilities for costs associated with an exit or disposal activity be recognized
at their fair values when the liabilities are incurred. Under previous guidance,
liabilities  for certain exit costs were  recognized at the date that management
committed to an exit plan, which is generally before the actual  liabilities are
incurred.  SFAS  No.  146 is  effective  only for  exit or  disposal  activities
initiated  after  December 31, 2002.  The Company does not currently  expect the
adoption  of  this  statement  to  have  a  material  impact  on  its  financial
statements.


ITEM 3.   QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK


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

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

As of November 30, 2002, the Company's  $30.3 million of short-term  investments
consisted  primarily of  investments  in  corporate,  government  and  municipal
obligations  with  maturities  of  between  three and twelve  months.  If market
interest  rates were to increase  immediately  and  uniformly by 10 percent from
levels at November  30,  2002,  the fair value of these  short-term  investments
would decline by an immaterial amount. The Company generally expects to hold its
fixed  income  investments  until  maturity  and,  therefore,  would not  expect
operating  results or cash flows to be affected to any  significant  degree by a
sudden change in market interest rates on short-term investments.

Equity  Price  Risk - The  Company  is  exposed  to an equity  price risk on its
investment in Chartered Semiconductor Manufacturing, Ltd. (Chartered). For every
10% adverse  change in the market value of Chartered  common stock,  the Company
would  experience a decrease of  approximately  $0.3 million in its November 30,
2002 investment value. The Company recorded a non-cash charge of $7.8 million in
the third  quarter  of fiscal  2003 for a decline  in value of this  investment,
considered  to be  other-than-temporary,  based upon a  sustained  reduction  in
Chartered's stock price  performance.  Following this charge, the remaining $2.9
million investment in Chartered stock represents the only material investment in
equity  securities  of other  companies on the  Company's  Consolidated  Balance
Sheet.  The Company has sold call options  covering this  investment in the past
and may do so in the future to reduce some of this market risk.  No call options
were sold covering  this  investment  during the nine months ended  November 30,
2002.

Foreign Currency Risk - The Company has international sales and expenditures and
is,  therefore,  subject to certain foreign currency rate exposure.  The Company
conducts a  significant  amount of its business in Asia.  In order to reduce the
risk from fluctuation in foreign exchange rates,  most of the Company's  product
sales and all of its  arrangements  with its foundry,  test and assembly vendors
are denominated in U.S. dollars. Transactions in the Japanese market made by the
Company's  majority-owned  subsidiary,  SMSC Japan,  are denominated in Japanese
yen. SMSC Japan  purchases a significant  amount of its products for resale from
Standard Microsystems  Corporation in U.S. dollars, and from time to time enters
into  forward  exchange   contracts  to  hedge  against  currency   fluctuations
associated with these product  purchases.  During March 2002, SMSC Japan entered
into a contract with a Japanese  financial  institution to purchase U.S. dollars
to meet a portion of its U.S. dollar denominated product purchase  requirements.
Gains and losses on this contract have not been not significant. The contract is
scheduled to expire in March 2003.

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


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

As a supplier of semiconductors,  the Company competes in a challenging business
environment,  which is characterized by intense competition, rapid technological
change and cyclical  business  patterns.  Except for the historical  information
contained  herein,  the matters  discussed  in this  report are  forward-looking
statements. The Company faces a variety of risks and uncertainties in conducting
its business,  some of which are out of its control, and any of which, were they
to occur, could impair the Company's operating performance.  For a more detailed
discussion  of risk factors,  please refer to the Company's  report on Form 10-K
filed with the Securities and Exchange Commission on April 26, 2002.


ITEM 4.   CONTROLS AND PROCEDURES

(a)  Evaluation of Disclosure Controls and Procedures

Disclosure  controls  and  procedures  are  designed to ensure that  information
required to be  disclosed in the reports  filed or submitted  under the Exchange
Act is recorded,  processed,  summarized  and reported,  within the time periods
specified  in the SEC's  rules and forms.  Disclosure  controls  and  procedures
include,  without  limitation,  controls and procedures  designed to ensure that
information required to be disclosed in the reports filed under the Exchange Act
is accumulated  and  communicated  to management,  including the Chief Executive
Officer and Chief Financial Officer,  as appropriate,  to allow timely decisions
regarding required disclosure.

Within the 90 days prior to the filing of this report,  the Company  carried out
an evaluation, under the supervision and with the participation of the Company's
management,  including the Company's Chief Executive Officer and Chief Financial
Officer,  of the  effectiveness  of the design and  operation  of the  Company's
disclosure  controls  and  procedures.  Based  upon  and as of the  date of that
evaluation,  the Chief Executive  Officer and Chief Financial  Officer concluded
that the Company's  disclosure  controls and  procedures are effective to ensure
that  information  required to be disclosed in the reports the Company files and
submits under the Exchange Act is recorded,  processed,  summarized and reported
as and when required.


(b)  Changes in Internal Controls

There were no changes in the  Company's  internal  controls or in other  factors
that could have significantly  affected those controls subsequent to the date of
the Company's most recent evaluation.
<PAGE>

PART II - OTHER INFORMATION


ITEM 6.   Exhibits and Reports on Form 8-K

(a)  Exhibits

     99.1  Certifications of Chief Executive Officer and Chief Financial Officer
     pursuant to Section 906 of the Sarbanes-Oxley Act Of 2002.


(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: January 14, 2003                     /s/  Andrew M. Caggia
                                           ----------------------
                                                (Signature)

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










<PAGE>

                                 CERTIFICATIONS


          I, Steven J. Bilodeau, certify that:

          1. I have  reviewed  this  quarterly  report on Form 10-Q of  Standard
Microsystems Corporation;

          2. Based on my knowledge,  this quarterly  report does not contain any
untrue  statement of a material fact or omit to state a material fact  necessary
to make the  statements  made,  in light of the  circumstances  under which such
statements  were made, not misleading with respect to the period covered by this
quarterly report;

          3.  Based  on  my  knowledge,  the  financial  statements,  and  other
financial  information included in this quarterly report,  fairly present in all
material respects the financial condition,  results of operations and cash flows
of the  registrant  as of, and for,  the  periods  presented  in this  quarterly
report;

          4. The registrant's other certifying officer and I are responsible for
establishing and maintaining  disclosure  controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

          a) designed  such  disclosure  controls and  procedures to ensure that
material  information  relating to the  registrant,  including its  consolidated
subsidiaries, is made known to us by others within those entities,  particularly
during the period in which this quarterly report is being prepared;

          b) evaluated the effectiveness of the registrant's disclosure controls
and  procedures  as of a date  within 90 days prior to the  filing  date of this
quarterly report (the "Evaluation Date"); and

          c)  presented  in this  quarterly  report  our  conclusions  about the
effectiveness of the disclosure  controls and procedures based on our evaluation
as of the Evaluation Date;

          5. The  registrant's  other  certifying  officer and I have disclosed,
based on our most recent evaluation,  to the registrant's auditors and the audit
committee  of  registrant's  board  of  directors  (or  persons  performing  the
equivalent function):

          a) all significant deficiencies in the design or operation of internal
controls  which  could  adversely  affect  the  registrant's  ability to record,
process,  summarize  and  report  financial  data  and have  identified  for the
registrant's auditors any material weaknesses in internal controls; and

          b) any fraud,  whether or not material,  that  involves  management or
other  employees  who  have a  significant  role  in the  registrant's  internal
controls; and

          6. The registrant's  other certifying  officer and I have indicated in
this quarterly report whether or not there were significant  changes in internal
controls or in other factors that could  significantly  affect internal controls
subsequent to the date of our most recent  evaluation,  including any corrective
actions with regard to significant deficiencies and material weaknesses.

Date: January 14, 2003                      By: /s/ Steven J. Bilodeau
                                            --------------------------
                                                   (signature)

                                            Steven J. Bilodeau
                                            Chairman of the Board, President and
                                            Chief Executive Officer



<PAGE>




          I, Andrew M. Caggia, certify that:

          1. I have  reviewed  this  quarterly  report on Form 10-Q of  Standard
Microsystems Corporation;

          2. Based on my knowledge,  this quarterly  report does not contain any
untrue  statement of a material fact or omit to state a material fact  necessary
to make the  statements  made,  in light of the  circumstances  under which such
statements  were made, not misleading with respect to the period covered by this
quarterly report;

          3.  Based  on  my  knowledge,  the  financial  statements,  and  other
financial  information included in this quarterly report,  fairly present in all
material respects the financial condition,  results of operations and cash flows
of the  registrant  as of, and for,  the  periods  presented  in this  quarterly
report;

          4. The registrant's other certifying officer and I are responsible for
establishing and maintaining  disclosure  controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

          a) designed  such  disclosure  controls and  procedures to ensure that
material  information  relating to the  registrant,  including its  consolidated
subsidiaries, is made known to us by others within those entities,  particularly
during the period in which this quarterly report is being prepared;

          b) evaluated the effectiveness of the registrant's disclosure controls
and  procedures  as of a date  within 90 days prior to the  filing  date of this
quarterly report (the "Evaluation Date"); and

          c)  presented  in this  quarterly  report  our  conclusions  about the
effectiveness of the disclosure  controls and procedures based on our evaluation
as of the Evaluation Date;

          5. The  registrant's  other  certifying  officer and I have disclosed,
based on our most recent evaluation,  to the registrant's auditors and the audit
committee  of  registrant's  board  of  directors  (or  persons  performing  the
equivalent function):

          a) all significant deficiencies in the design or operation of internal
controls  which  could  adversely  affect  the  registrant's  ability to record,
process,  summarize  and  report  financial  data  and have  identified  for the
registrant's auditors any material weaknesses in internal controls; and

          b) any fraud,  whether or not material,  that  involves  management or
other  employees  who  have a  significant  role  in the  registrant's  internal
controls; and

          6. The registrant's  other certifying  officer and I have indicated in
this quarterly report whether or not there were significant  changes in internal
controls or in other factors that could  significantly  affect internal controls
subsequent to the date of our most recent  evaluation,  including any corrective
actions with regard to significant deficiencies and material weaknesses.

Date: January 14, 2003                      By: /s/ Andrew M. Caggia
                                            -------------------------
                                                   (signature)

                                            Andrew M. Caggia
                                            Senior Vice President - Finance
                                            and Chief Financial Officer