================================================================================
                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

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

(Mark One)

[X]  Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange
     Act of 1934 for the period ended June 27, 1999

                                       OR

[ ]  Transition  report  pursuant  to  Section  13 or  15(d)  of the  Securities
     Exchange Act of 1934

Commission file number: 0-24360


                              SPECTRIAN CORPORATION
             (Exact name of registrant as specified in its charter)

DELAWARE                                                 77-0023003
(State or other jurisdiction of                          (I.R.S. Employer
incorporation or organization)                           Identification Number)

                               350 West Java Drive
                           Sunnyvale, California 94089
                    (Address of principal executive offices)

                         Telephone Number (408) 745-5400
              (Registrant's telephone number, including area code)


         Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the  Securities  Exchange  Act of
1934  during  the  preceding  12 months  (or for such  shorter  period  that the
registrant was required to file such reports),  and (2) has been subject to such
filing requirements for the past 90 days.

                           Yes _X_                No ___


As of June 27,  1999 there were  10,229,613  shares of the  Registrant's  Common
Stock outstanding.

================================================================================


<PAGE>


                              SPECTRIAN CORPORATION

                                    Form 10-Q

                                      INDEX
                                                                            Page
                                                                             No.

Cover Page                                                                    1

Index                                                                         2

PART I - Financial Information

         ITEM 1 - Condensed consolidated financial statements

            Condensed consolidated balance sheets -
               June 27, 1999 and March 31, 1999                               3

            Condensed consolidated statements of operations and other
              comprehensive income - three months ended June 27, 1999
              and June 28, 1998                                               4

            Condensed consolidated statements of cash flows -
               three months ended June 27, 1999 and June 28, 1998             5

            Notes to condensed consolidated financial statements              6

         ITEM 2 - Management's Discussion and Analysis of Financial
                      Condition and Results of Operations                    10

         ITEM 3 - Quantitative and Qualitative Disclosures about
                      Market Risk                                            20

PART II - Other Information

         ITEM 1 - Legal Proceedings                                          21

         ITEM 4 - Submission of Matters to a Vote of Security Holders        22

         ITEM 6 - Exhibits and Reports on Form 8-K                           22

         Signatures                                                          23

                                       2

<PAGE>


<TABLE>
                                                SPECTRIAN CORPORATION AND SUBSIDIARY
                                                CONDENSED CONSOLIDATED BALANCE SHEETS
                                                  (In thousands, except share data)

<CAPTION>
                                                                                                    June 27,              March 31,
                                                                                                      1999                   1999
                                                                                                    ---------             ---------
                                                                                                              (Unaudited)
<S>                                                                                                 <C>                   <C>
Assets

Current assets:

   Cash and cash equivalents                                                                        $  19,986             $  26,254
   Short-term investments                                                                              35,805                36,417
   Accounts receivable, less allowance for doubtful
      accounts of $391and $388, respectively                                                           17,368                12,983
   Inventories                                                                                         20,493                20,826
   Prepaid expenses and other current assets                                                            3,303                 3,464
                                                                                                    ---------             ---------
        Total current assets                                                                           96,955                99,944
Property and equipment, net                                                                            25,873                28,468
                                                                                                    ---------             ---------
        Total assets                                                                                $ 122,828             $ 128,412
                                                                                                    =========             =========


Liabilities and Stockholders' Equity

Current liabilities:

   Current portion of debt obligations                                                              $   1,479             $   1,603
   Accounts payable                                                                                     8,614                 8,058
   Accrued liabilities                                                                                 13,909                17,884
                                                                                                    ---------             ---------
        Total current liabilities                                                                      24,002                27,545

Debt obligations, net of current portion                                                                4,747                 4,899
                                                                                                    ---------             ---------
        Total liabilities                                                                              28,749                32,444
                                                                                                    ---------             ---------


Stockholders' equity:

   Common stock, $0.001 par value, 20,000,000 shares authorized;
     11,229,613 and 11,102,333 shares issued, respectively;
     10,229,613 and 10,102,333 shares outstanding, respectively                                            11                    10
   Additional paid-in capital                                                                         150,860               149,588
   Treasury stock, 1,000,000 shares of common stock held                                              (14,789)              (14,789)
   Accumulated other comprehensive income (loss)                                                         (403)                  137
   Accumulated deficit                                                                                (41,600)              (38,978)
                                                                                                    ---------             ---------
        Total stockholders' equity                                                                     94,079                95,968
                                                                                                    ---------             ---------
        Total liabilities and stockholders' equity                                                  $ 122,828             $ 128,412
                                                                                                    =========             =========

<FN>
See accompanying notes to condensed consolidated financial statements.
</FN>
</TABLE>

                                                                 3

<PAGE>


                      SPECTRIAN CORPORATION AND SUBSIDIARY
                 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                      AND OTHER COMPREHENSIVE INCOME (LOSS)
                      (In thousands, except per share data)

                                                           Three months ended
                                                         ----------------------
                                                         June 27,      June 28,
                                                           1999          1998
                                                         --------      --------
                                                              (Unaudited)

Revenues                                                 $ 31,484      $ 30,784

Costs and expenses:
   Cost of product sales                                   25,892        27,729
   Research and development                                 4,877         5,954
   Selling, general and administrative                      4,294         3,476
                                                         --------      --------
                                                           35,063        37,159
                                                         --------      --------
     Operating loss                                        (3,579)       (6,375)

Interest income, net                                          989         1,135
                                                         --------      --------
     Loss before income taxes                              (2,590)       (5,240)

Income taxes                                                   32          --
                                                         --------      --------
     Net loss                                              (2,622)       (5,240)

Other comprehensive income (loss):
     Unrealized gain (loss) on short-term
       investments                                           (493)          108
     Reclassification adjustment                              (47)          (16)
                                                         --------      --------

Comprehensive loss                                       $ (3,162)     $ (5,148)
                                                         ========      ========

Basic and diluted net loss per share                     $  (0.26)     $  (0.48)

Shares used in computing per share amounts                 10,176        10,917


See accompanying notes to condensed consolidated financial statements.

                                       4

<PAGE>


<TABLE>
                                                SPECTRIAN CORPORATION AND SUBSIDIARY
                                           CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                                           (In thousands)

<CAPTION>
                                                                                                          Three months ended
                                                                                                       ----------------------------
                                                                                                       June 27,            June 28,
                                                                                                         1999                1998
                                                                                                       --------            --------
Cash flows from operating activities:                                                                          (Unaudited)
<S>                                                                                                    <C>                 <C>
      Net loss                                                                                         $ (2,622)           $ (5,240)
      Adjustments to reconcile net loss to net cash
        used for operating activities:
           Depreciation and amortization                                                                  3,373               2,846
           Equipment retirements, net                                                                        65                 --
           Stock compensation expense                                                                       219                 583
           Changes in operating assets and liabilities:
              Accounts receivable                                                                        (4,385)             (6,193)
              Inventories                                                                                   333              (2,068)
              Prepaid expenses and other assets                                                             161               3,261
              Accounts payable                                                                              556              (3,875)
              Accrued liabilities                                                                        (3,975)             (1,346)
                                                                                                       --------            --------
                 Net cash used for operating activities                                                  (6,275)            (12,032)
                                                                                                       --------            --------

Cash flows from investing activities:
      Proceeds of shortterm investments, net                                                                 72               7,935
      Proceeds from sales of property and equipment                                                          42                 --
      Purchases of property and equipment, net                                                             (884)             (4,506)
                                                                                                       --------            --------
                 Net cash provided by (used for) investing activities                                      (770)              3,429
                                                                                                       --------            --------

Cash flows from financing activities:
      Repayment of debt and capital lease obligations                                                      (276)               (253)
      Proceeds from sales of common stock, net                                                            1,053                 154
                                                                                                       --------            --------
                Net cash provided by (used for) financing activities                                        777                 (99)
                                                                                                       --------            --------

                Net decrease in cash and cash equivalents                                                (6,268)             (8,702)
                Cash and cash equivalents, beginning of period                                           26,254              31,460
                                                                                                       --------            --------
                Cash and cash equivalents, end of period                                               $ 19,986            $ 22,758
                                                                                                       ========            ========

<FN>
See accompanying notes to condensed consolidated financial statements.
</FN>
</TABLE>

                                                                 5

<PAGE>


                      SPECTRIAN CORPORATION AND SUBSIDIARY
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


NOTE 1: Basis of Presentation

         The accompanying  financial statements have been prepared in conformity
with generally accepted accounting principles.  However,  certain information or
footnote  disclosures  normally  included in  financial  statements  prepared in
accordance with generally accepted accounting  principles have been condensed or
omitted  pursuant to the rules and  regulations  of the  Securities and Exchange
Commission.  In the  opinion  of the  management,  the  statements  include  all
adjustments  (which are of a normal and recurring nature) necessary for the fair
presentation  of the financial  information  set forth therein.  These financial
statements should be read in conjunction with the Company's audited consolidated
financial  statements  as set forth on pages F-1 through  F-15 of the  Company's
Annual  Report on Form 10-K for fiscal  year ended March 31,  1999.  The interim
results  presented  herein  are not  necessarily  indicative  of the  results of
operations  that may be expected for the full fiscal year ending March 31, 2000,
or any other future period.


NOTE 2: Balance Sheet Components

Balance sheet components are as follows:

                                                         June 27,      March 31,
                                                           1999          1999
                                                          -------       -------
(In thousands)                                                 (Unaudited)

Inventories:
   Raw materials                                          $ 7,769       $ 9,100
   Work in progress                                         5,987         5,701
   Finished goods                                           6,737         6,025
                                                          -------       -------
                                                          $20,493       $20,826
                                                          =======       =======

Property and equipment:
   Machinery and equipment                                $58,553       $58,322
   Land, building and improvements                          2,722         2,736
   Leasehold improvements                                   2,000         1,957
                                                          -------       -------
                                                           63,275        63,015
   Less accumulated depreciation and
      amortization                                         37,402        34,547
                                                          -------       -------
                                                          $25,873       $28,468
                                                          =======       =======

Accrued liabilities:
   Employee compensation and benefits                     $ 3,257       $ 4,672
   Warranty                                                 8,400         9,473
   Other accrued liabilities                                2,252         3,739
                                                          -------       -------
                                                          $13,909       $17,884
                                                          =======       =======

                                       6

<PAGE>


NOTE 3: Recent Accounting Pronouncements

         In June 1998, the Financial Accounting Standards Board issued Statement
of Financial  Accounting  Standards ("SFAS") No. 133,  Accounting for Derivative
Instruments  and Hedging  Activities.  SFAS No. 133  establishes  accounting and
reporting standards for derivative  instruments and for hedging  activities.  It
requires  that  an  entity   recognize  all  derivatives  as  either  assets  or
liabilities in the statement of financial position and measure those instruments
at fair value.  The  accounting  for  changes in the fair value of a  derivative
depends on the intended use of the  derivative  and the  resulting  designation.
Under SFAS No. 133, an entity that elects to apply hedge  accounting is required
to establish at the  inception of the hedge the method it will use for assessing
the  effectiveness  of the hedging  derivative and the measurement  approach for
determining  the  ineffective  aspect  of  the  hedge.  Those  methods  must  be
consistent  with the entity's  approach to managing  risk.  The Company does not
currently engage in hedging  activities.  The Company will adopt SFAS No. 133 in
its fiscal year 2001.


NOTE 4: Short-Term Investments

         The Company considers all liquid  investments with an original maturity
of three months or less to be cash equivalents.  The cash equivalents  consisted
of commercial paper and U.S. government securities as of June 27, 1999.

         The Company has classified its  investments in certain debt  securities
as "available-for-sale,  and records such investments at fair market value, with
unrealized  gains and losses reported as a separate  component of  stockholders'
equity.   Realized   gains  and  losses  are   determined   using  the  specific
identification  method.  Interest income is recorded using an effective interest
rate, with the associated premium or discount amortized to interest income.

<TABLE>
         As of  June  27,  1999  and  March  31,  1999,  short-term  investments
classified as available-for-sale securities were as follows (unaudited):

<CAPTION>
                                                                                  Amortized           Unrealized             Fair
                  As of June 27, 1999                                               Cost              Gain (Loss)            Value
                  -------------------                                             --------           ------------           --------
                                                           (In thousands)
<S>                                                                               <C>                  <C>                  <C>
Government bonds & notes                                                          $ 14,292             $   (100)            $ 14,192
Corporate bonds & notes                                                             40,393                 (303)              40,090
                                                                                  --------             --------             --------
                                                                                    54,685                 (403)              54,282
Less amounts classified as cash equivalents                                         18,478                   (1)              18,477
                                                                                  --------             --------             --------
                                                                                  $ 36,207             $   (402)            $ 35,805
                                                                                  ========             ========             ========

     Contractual maturity dates, 1 to 5 years                                                                               $ 35,805
                                                                                                                            ========

                                                                                  Amortized           Unrealized             Fair
                 As of March 31, 1999                                               Cost              Gain (Loss)            Value
                 --------------------                                             --------           ------------           --------
                                                           (In thousands)
Government bonds & notes                                                          $  8,973             $     81             $  9,054
Corporate bonds & notes                                                             48,936                   56               48,992
                                                                                  --------             --------             --------
                                                                                    57,909                  137               58,046
Less amounts classified as cash equivalents                                         21,629                   --               21,629
                                                                                  --------             --------             --------
                                                                                  $ 36,280             $    137             $ 36,417
                                                                                  ========             ========             ========

     Contractual maturity dates, 1 to 5 years                                                                               $ 36,417
                                                                                                                            ========
</TABLE>

                                                                  7

<PAGE>


NOTE 5: Per Share Computation

         Basic net income per share is computed by dividing net income available
to  common  stockholders  by  the  weighted-average   number  of  common  shares
outstanding  for the period.  Diluted net income per share is computed using the
weighted  average  number  of  common  and  dilutive  common  equivalent  shares
outstanding  during the period.  Common  equivalent shares include the effect of
stock  options.  For the three  months  ended June 27,  1999 and June 28,  1998,
common equivalent shares of 157,335 and 229,955, respectively, were not included
for the  calculation  of  diluted  net loss per  share as they  were  considered
antidilutive.


NOTE 6: Legal Proceedings

         Since December 23, 1997, a number of complaints have been filed against
the Company and certain of its  officers in the Federal  Court for the  Northern
District of California that allege  violations of the federal  securities  laws.
Similar  complaints  have been  filed in  California  state  court  that  allege
violations of California  state  securities laws and California  common law. The
complaints have been consolidated in the federal and state courts, respectively.
The  plaintiffs  in both the federal and state  lawsuits  purport to represent a
class of persons who  purchased the  Company's  securities  during the period of
July 17, 1997 through  October 23, 1997. The complaints  allege that the Company
and certain of its officers misled the investing  public regarding the financial
prospects  of the  Company.  The  Company  believes  that  the  allegations  are
completely without merit and will vigorously defend itself.


NOTE 7: Segment Information

         Under the management approach, the Company has broken down its business
into  two   operations   based  upon  product  type,   Amplifier   Products  and
Semiconductor  Products.  The Semiconductor Products operation derives virtually
all of its revenues from sales to the Amplifier operation. The Company allocates
operating  expenses to these segments but does not allocate  interest income and
expense.  Corporate  expenses are allocated to the operating  segments  based on
predetermined  annual allocation methods.  Inter-segment  elimination is made in
the  consolidation  of the  two  product  segments  in the  Company's  financial
statements.  Inventories  and  property  and  equipment  are  reported  upon  by
operation. No other assets and liabilities are reported separately.

         The Company  operated  and reported its  financial  information  as one
vertical  integrated  unit in fiscal 1999. Not until the  commencement of fiscal
2000  did  the  Company  measure  performance  by  Amplifier  and  Semiconductor
segments.  Given this, it is not practicable to report  comparative  information
for the prior periods as it was not available.

                                       8

<PAGE>


June 27, 1999 (In thousands):

                                                 Semi-
                                    Amplifier   conductor   Other*     Total
                                    ---------   ---------   ------     -----
Revenue, external                   $ 31,471    $     13    $   --     $ 31,484
Revenue, inter-segment                   --        4,223      (4,223)       --
Amortization & depreciation            1,372         628       1,373      3,373
Pre-tax income (loss)                 (4,034)       (272)      1,684     (2,622)
Inventories                           14,713       5,780        --       20,493
Property & equipment, net              6,955       4,856      14,062     25,873


* Data in the other  column  included  corporate  elimination  of  inter-segment
revenue,  expenses,  pre-tax  income and assets that were not  allocated  to the
operating sements.


June 28, 1998 (In thousands):
                                                                         Total
                                                                       --------
Revenue                                                                $ 30,784
Amortization & depreciation                                               2,846
Pre-tax income (loss)                                                    (5,240)
Inventories                                                              17,430
Property & equipment, net                                                34,436


         Revenue  from  unaffiliated  customers  by  geographic  region  were as
follows:


                                          Three months            Fiscal year
                                             ended                   ended
                                         June 27, 1999          March 31, 1999
                                         -------------          --------------
Canada                                           54%                    57%
United States                                     8%                    16%
Europe                                           24%                    13%
Korea                                            14%                    14%
                                         ------------           ------------
Total                                           100%                   100%
                                         ============           ============

                                       9

<PAGE>


                      SPECTRIAN CORPORATION AND SUBSIDIARY

                     Management's Discussion and Analysis of
                  Financial Condition and Results of Operations


         Certain  statements in this  "Management's  Discussion  and Analysis of
Financial  Condition and Results of Operations" are forward looking  statements.
These forward looking statements include, but are not limited to: the statements
in the second  paragraph of "Overview"  regarding  outsourcing and in the fourth
paragraph  regarding the impact on the Company of a loss of a major OEM customer
and the impact of currency fluctuations on future revenues; the statements under
"Revenues" regarding future revenue growth; the statements in the last paragraph
under "Liquidity and Capital Resources" concerning renewal of the revolving line
of  credit  and  statements  regarding  the  anticipated  spending  for  capital
additions for the remainder of fiscal 2000 and the  sufficiency of the Company's
available   resources   to  meet   working   capital  and  capital   expenditure
requirements;   and  the  statements  in  "Factors  Affecting  Future  Operating
Results." The forward looking  statements  contained herein are based on current
expectations and entail various risks and uncertainties  that could cause actual
results  to differ  materially  from those  expressed  in such  forward  looking
statements.

Overview

         The Company  designs,  manufactures  and markets  highly  linear single
carrier  and  multicarrier  power  amplifiers  that  support  a broad  range  of
worldwide analog and digital wireless transmissions  standards,  including AMPS,
TDMA,  CDMA,  TACS and GSM. The Company,  founded in 1984 to perform  design and
engineering services,  first entered the commercial amplifier market in 1988 and
shipped its first cellular power amplifiers in 1990. The Company's  revenues are
now derived  primarily  from sales to a limited  number of OEMs in the  wireless
infrastructure  equipment  market, in particular  Northern Networks  ("Nortel").
During fiscal 1999, the Company  transitioned  the assembly of its higher volume
amplifier products to a contract manufacturer but continues to operate its own 4
inch wafer  fabrication  facility  and  manufacture  certain  of its  low-volume
products.  As a result of its wafer fabrication facility and other manufacturing
infrastructure,  the Company has a higher  level of fixed costs and is dependent
upon substantial  revenue to achieve  profitability.  In fiscal 1999, the fourth
quarter of fiscal 1998 and the first quarter of fiscal 1997, product orders fell
sharply resulting in substantial losses in those fiscal periods. There can be no
assurance that the Company will not experience such fluctuation in the future.

         During fiscal 1999,  the Company  utilized a contract  manufacturer  to
produce its high volume  amplifier  products on a turnkey basis but continues to
assemble,  test,  package and ship its lower  volume  amplifier  products at its
manufacturing  facilities  located in  Sunnyvale,  California.  The  reasons for
utilizing a contract  manufacturer were to decrease the Company's  manufacturing
overhead  and  costs  of  its  products,  increase  flexibility  to  respond  to
fluctuations  in product  demand and to leverage the strengths of the contract's
manufacturer focus on high volume, high quality manufacturing. The transitioning
costs of  manufacturing  activities to the contract  manufacturer in fiscal 1999
were higher than the savings from costs of products,  which  adversely  affected
the Company's  gross margin for fiscal 1999. The Company does not expect that it
will achieve  significant cost savings,  if any, from outsourcing certain of its
manufacturing activities until late in fiscal 2000.

         The development and pilot  production of the Company's  latest cellular
multicarrier  product  platform was completed in fiscal 1999. It is  anticipated
that this product family will move into full production during fiscal 2000.

         During the three months ended June 27, 1999,  Nortel and LG Information
& Communications  ("LGIC")  accounted for approximately 83% and 12% of revenues,
respectively. For the three months ended June 28, 1998, Nortel and Qualcomm Inc.
("QUALCOMM") accounted for approximately 78% and 14% of revenues,  respectively.
The Company's business,  financial condition and results of operations have been
materially  adversely  affected  in the past by  anticipated  orders  failing to
materialize and by deferrals or  cancellations  of orders as a result of changes
in OEM  requirements.  If the Company were to lose Nortel or any other major OEM
customer,  or if  orders by Nortel  or any  other  major  OEM  customer  were to
otherwise materially decrease either in unit quantity or in price, the Company's
business,  financial  condition  and results of  operations  would be materially
adversely  affected.  In addition,  the

                                       10

<PAGE>


financial  market turmoil and an economic  downturn in Korea may have a material
adverse  effect on the Company's  sales of its products to LGIC, an OEM based in
Korea,  because a majority  of the  Company's  products  ordered by LGIC to date
relate to the  build-out  of the Korean PCS  system.  Furthermore,  because  the
Company's products are priced in U.S. dollars,  the currency  instability in the
Korean  and other  Asian  financial  markets  may have the  effect of making the
Company's  products  more  expensive  to LGIC than those of other  manufacturers
whose  products  are  priced  in one  of the  affected  Asian  currencies,  and,
therefore,  for this and other reasons LGIC may reduce  future  purchases of the
Company's products.

         The Company's  semiconductor  vertical  integration  strategy entails a
number  of  risks,  including  a high  level of fixed and  variable  costs,  the
management of complex  processes,  dependence on a single source of supply and a
strict regulatory  environment.  During periods of low demand,  high fixed wafer
fabrication  costs are likely to have a material adverse effect on the Company's
operations.  In addition,  the Company's strategy of frequently  introducing and
rapidly  expanding the manufacture of new products to meet evolving OEM customer
and wireless  service  provider needs has caused the Company to experience  high
materials and  manufacturing  costs,  including  high scrap and material  waste,
significant material  obsolescence,  labor inefficiencies,  high overtime hours,
inefficient material procurement and an inability to realize economies of scale.

         The  market  for  the  Company's  products  is  becoming   increasingly
competitive.  The Company  began selling its power  amplifier  products in South
Korea, as well as directly to cellular  service  providers where its competitors
are already established as suppliers.  In addition, the Company competes with at
least one amplifier  manufacturer for business from Nortel. This competition has
resulted in, and will continue to result in reduced  average  selling prices for
the Company's products, which accordingly will negatively impact gross margins.

Results of Operations

         The  following  table  sets  forth for the  periods  indicated  certain
statement of operations  data of the Company  expressed as a percentage of total
revenues and gross margin on sales.


                                                          Three Months Ended
                                                       -------------------------
                                                       June 27,         June 28,
                                                         1999            1998
                                                        -----            -----
                                                              (Unaudited)
Revenue                                                 100.0%           100.0%
                                                        -----            -----
Cost and expenses:
   Cost of product sales                                 82.2             90.1
   Research and development                              15.5             19.3
   Selling, general and administrative                   13.6             11.3
                                                        -----            -----
      Total costs and expenses                          111.3            120.7
                                                        -----            -----
      Operating loss                                    (11.3)           (20.7)
Interest income, net                                      3.1              3.7
                                                        -----            -----
      Loss before income taxes                           (8.2)           (17.0)
Income taxes                                              0.1               --
                                                        -----            -----
         Net loss                                       (8.3%)          (17.0%)
                                                        =====            =====
Gross margin on sales                                   17.8%             9.9%


         Revenues.  The Company's revenues increased 2% to $31.5 million for the
three months  ended June 27, 1999 from $30.8  million for the three months ended
June 28, 1998.  The increase in revenue was primarily due to higher  demands for
HPA and GSM 2G combined  with new  products,  WLL and MCPA.  This was  partially
offset by softening demand for TDMA products.

         Cost of Sales.  Cost of Sales consists  primarily of turnkey  amplifier
costs for the Company's higher volume products,  internal amplifier assembly and
test costs for its lower volume  products and new products,  raw  materials,

                                       11

<PAGE>


RF semiconductor  fabrication costs,  overhead and warranty costs. The Company's
cost of sales  decreased by 7% to $25.9  million for the three months ended June
27, 1999 from $27.7  million for the three  months  ended June 28,  1998.  Gross
margin on sales was 18% for the three  months ended June 27, 1999 as compared to
10% for the three  months  ended June 28,  1998.  The  increase in gross  margin
reflects  reduced  operations  spending and product cost  reduction  initiatives
being aggressively pursued to improve margins in the face of declining prices.

         Research and  Development.  Research and development  ("R&D")  expenses
include the cost of designing,  developing or reducing the manufacturing cost of
amplifiers and RF semiconductors. The Company's R&D expenses decreased by 18% to
$4.9  million in the three  months  ended June 27, 1999 from $6.0 million in the
three months ended June 28, 1998. The decrease in R&D expenses  reflects reduced
expensed  materials  costs due to the completion of and rolling out the new MCPA
products in fiscal 2000.

         Selling,    General   and   Administrative.    Selling,   general   and
administrative  ("SG&A")  expenses include  compensation and benefits for sales,
marketing,  senior management and administrative personnel,  commissions paid to
independent sales  representatives,  professional  fees and other expenses.  The
Company's  SG&A  expenses  increased by 24% to $4.3 million for the three months
ended  June 27,  1999 as  compared  to the three  months  ended  June 28,  1998.
Increases in SG&A expenses are principally due to added maintenance and supports
for the new ERP system.

         Interest Income  (Expense),  Net.  Interest  income,  net for the three
months  ended June 27, 1999 was $1.0  million  compared to $1.1  million for the
three months ended June 28,  1998.  The decrease in net interest  income was the
result of interest income earned on substantially lower cash balances.

         Income Taxes. Due to the losses incurred in the first quarter of fiscal
2000,  the Company did not record an income tax expense except the minimum state
income tax expense for the three months ended June 27, 1999.

Liquidity and Capital Resources

         The Company has financed its growth through its initial public offering
in August 1994, a public equity offering in August 1997, private sales of equity
securities,  capital equipment leases,  bank lines of credit and cash flows from
operations.  Cash used by operations was $6.3 million for the three months ended
June 27, 1999  compared to cash used by  operations  for the three  months ended
June 28, 1998 of $12.0  million.  The decline in cash used by  operations in the
three  months  ended June 27,  1999 was  principally  a result of an increase in
Accounts  Receivable  in line with  revenue  growth  and  reductions  in accrued
liabilities.

         As of June 27, 1999,  the Company had working  capital of $73.0 million
including $55.8 million in cash, cash equivalents and short-term investments. In
addition,  the Company has a revolving  line of credit of $10.0  million  with a
bank secured by the  majority of the  Company's  assets.  Under the terms of the
master agreement  governing this credit  instrument,  the Company is required to
maintain certain minimum working  capital,  net worth,  profitability  and other
specific financial ratios.

         In January  1997,  the Company  borrowed $6.0 million under a term loan
secured by certain capital  equipment.  The loan, which expires in January 2002,
requires  the  payment  of monthly  principal  plus  interest  and is subject to
certain minimum working capital,  net worth and other specific financial ratios.
The Company was in compliance with these covenants as of June 27, 1999. In March
1997, the Company also secured a $3.2 million real estate loan, which expires in
April  2007,  for the  purchase  of a light  industrial  building  for its  then
projected future facilities expansion.

         Additions to property and  equipment  were net of $0.9 million and $4.5
million  for  the  three   months  ended  June  27,  1999  and  June  28,  1998,
respectively.  Capital  additions  for the  three  months  ended  June 27,  1999
included  manufacturing  test and production  equipment  required to support new
products  and  test  equipment  to  support  various  research  and  development
projects.

         The Company  anticipates  spending  approximately  $10 million over the
next twelve months for capital additions primarily to support manufacturing test
requirements,  development  projects  and  facilities  expansion.  Based  on the
Company's current working capital  position,  the cash flows the Company expects
to generate from the remainder of fiscal 2000  operations and the available line
of credit the Company  expects to renew,  the Company  believes that  sufficient
resources will be available to meet the Company's cash requirements for at least
the next twelve

                                       12

<PAGE>


months.  Cash  requirements  for future  periods  will  depend on the  Company's
profitability,  timing  and  level  of  capital  expenditures,  working  capital
requirements and rate of growth.

Factors Affecting Future Operating Results

         Customer   Concentration;    Dependence   on   Nortel.   The   wireless
infrastructure equipment market is dominated by a small number of large original
equipment manufacturers ("OEMs"),  including Ericsson,  Lucent, Motorola, Nortel
and Siemens AG. The  Company's  revenues are derived  primarily  from sales to a
limited  number of these OEMs, in  particular,  Nortel.  During the three months
ended June 27, 1999, Nortel,  Nortel Matra, and LGIC accounted for approximately
59%, 24% and 13% of revenues,  respectively.  During the three months ended June
28, 1998,  Nortel,  QUALCOMM,  and Nortel Matra accounted for approximately 66%,
14% and 12% of revenues,  respectively.  Furthermore,  a substantial  portion of
revenues  from Nortel in fiscal 1999,  fiscal 1998 and fiscal 1997 resulted from
sales of a limited  number of the Company's  products.  The Company's  business,
financial  condition and results of operations  have been  materially  adversely
affected  in the  past by  anticipated  orders  failing  to  materialize  and by
deferrals or cancellations of orders as a result of changes in OEM requirements.
The Company and Nortel have an  agreement,  renegotiated  annually,  pursuant to
which Nortel commits to purchase a certain volume of its annual power  amplifier
requirements  for specified  prices from the Company.  There can be no assurance
that Nortel will continue to enter into contracts with the Company in the future
or otherwise agree to purchase the same or similar levels of its power amplifier
requirements  from the Company or purchase its power  amplifier  requirements at
the same or similar  pricing.  Any  reduction  in the level of  purchases of the
Company's  amplifiers by Nortel,  or any material  reduction in pricing  without
significant  offsets,  would have a  material  adverse  effect on the  Company's
business, financial condition and results of operations. Further, if the Company
were to lose Nortel or any other major OEM  customer,  or if orders by Nortel or
any  other  major  OEM  customer  were to  otherwise  materially  decrease,  the
Company's  business,  financial  condition  and results of  operations  would be
materially  adversely  affected.  In addition,  the financial market turmoil and
economic  downturn in Korea may have a material  adverse effect on the Company's
sales of its products to LGIC, an OEM based in Korea,  because a majority of the
Company's products ordered by LGIC to date relate to the build-out of the Korean
PCS system.  In  addition,  because the  Company's  products  are priced in U.S.
dollars,  the  currency  instability  in the  Korean and other  Asian  financial
markets may have the effect of making the Company's  products more  expensive to
LGIC than those of other  manufacturers  whose products are priced in one of the
affected Asian currencies,  and, therefore,  LGIC may reduce future purchases of
the Company's products. In addition, wireless infrastructure equipment OEMs have
come under increasing price pressure from wireless service  providers,  which in
turn has resulted in downward  pricing pressure on the Company's  products.  The
Company  expects to incur  increasing  pricing  pressures  from Nortel and other
major OEM customers in future periods,  which could result in declining  average
sales prices for the Company's products.

         Fluctuations in Operating Results.  The Company's  quarterly and annual
results have in the past been,  and will continue to be,  subject to significant
fluctuations  due to a number of  factors,  any of which  could  have a material
adverse  effect on the Company's  business,  financial  condition and results of
operations.  In  particular,  the Company's  results of operations are likely to
vary due to the timing,  cancellation,  delay or  rescheduling  of OEM  customer
orders  and  shipments;  the timing of  announcements  or  introductions  of new
products by the Company, its competitors or their respective OEM customers;  the
acceptance  of such  products by wireless  equipment  OEMs and their  customers;
relative variations in manufacturing efficiencies, yields and costs; competitive
factors  such  as  the   pricing,   availability,   and  demand  for   competing
amplification  products;  changes  in average  sales  prices  and  product  mix;
variations  in  operating  expenses;   changes  in  manufacturing  capacity  and
variations in the utilization of this capacity;  shortages of key supplies;  the
long sales cycles associated with the Company's customer specific products;  the
timing and level of product and process development costs;  changes in inventory
levels;  and, most recently,  the relative strength or weakness of international
financial  markets.  Anticipated orders from the Company's OEM customers have in
the past failed to  materialize  and delivery  schedules  have been  deferred or
canceled  as a result of changes in OEM  customer  requirements  and the Company
expects this pattern to continue as customer requirements continue to change and
industry   standards   continue   to  evolve.   Reduced   demand  for   wireless
infrastructure  equipment  in fiscal  1999 and the latter  part of fiscal  1998,
caused  significant  fluctuations  in the  Company's  product  sales during that
period of time as a result  of  softening  demand in the TDMA,  GSM and CDMA PCS
markets.  There can be no assurance  that the Company will not  experience  such
fluctuations in the future,  and, in fact, the Company experienced a significant
reduction in product  revenue in fiscal 1999.  The Company does not believe that
demand for its products will return to fiscal 1998 levels during fiscal 2000, if
at all,  or that the  Company  will  have

                                       13

<PAGE>


the revenue  levels and growth it experienced in fiscal 1998 during fiscal 2000,
if  at  all.  The  Company   establishes  its  expenditure  levels  for  product
development and other  operating  expenses based on its expected  revenues,  and
expenses are  relatively  fixed in the short term.  As a result,  variations  in
timing of revenues can cause  significant  variations  in  quarterly  results of
operations.  There can be no assurance  that the Company will be profitable on a
quarter to quarter  basis in the  future.  The Company  believes  that period to
period  comparisons of its financial results are not necessarily  meaningful and
should not be relied upon as an indication of future performance. Due to all the
foregoing  factors,  it is likely  that in some future  quarter or quarters  the
Company's revenues or operating results will not meet the expectations of public
stock  market  analysts or  investors.  In such event,  the market  price of the
Company's Common Stock would be materially adversely affected.

         Internal  Amplifier  Design and  Production  Capabilities  of OEMs. The
Company  believes that a majority of the present  worldwide  production of power
amplifiers is captive within the manufacturing  operations of wireless equipment
OEMs,  many of  which  have  chosen  not to  purchase  amplifiers  from  outside
suppliers.  The Company also  believes  that those OEMs that purchase from third
party  amplifier  vendors are reluctant to switch once committed to a particular
merchant  vendor.  Consequently,  the Company has only limited  opportunities to
increase revenues by replacing  internal OEM amplifier  production or displacing
other merchant amplifier suppliers.  Moreover,  given the limited  opportunities
for merchant RF amplifier  suppliers,  any decision by an OEM to employ a second
source  merchant  supplier  for a product  currently  purchased  from a merchant
supplier may reduce the existing merchant supplier's ability to maintain a given
level of product sales to such OEM or, possibly, to retain the OEM as a customer
due to price competition from the second source merchant supplier.  There can be
no assurance  that the Company's  major OEM customers  will continue to rely, or
increase  their  reliance,  on the Company as an  external  source of supply for
their  power  amplifiers,  or that other  wireless  equipment  OEMs will  become
customers  of  the  Company.  If the  major  wireless  infrastructure  equipment
suppliers do not purchase or continue to purchase  their power  amplifiers  from
merchant suppliers, the Company's business,  results of operations and financial
condition  will be materially  adversely  affected.  For example,  the Company's
failure to reach an agreement  with Nortel that  provides for similar  levels of
purchases could have a material adverse effect on the Company.

         Rapid Technological Change; Evolving Industry Standards;  Dependence on
New Products. The markets in which the Company and its OEM customers compete are
characterized by rapidly changing  technology,  evolving industry  standards and
continuous  improvements  in products and services.  In particular,  because the
Company's  strategy  of  rapidly  bringing  to market  products  customized  for
numerous and evolving RF modulation  standards requires developing and achieving
volume production of a large number of distinct products,  the Company's ability
to rapidly design and produce individual products for which there is significant
OEM  customer  demand will be a critical  determinant  of the  Company's  future
success.  For example,  continued  softening  of demand in the TDMA,  GSM or PCS
markets or  failure of another  modulation  standard  in which the  Company  has
invested substantial development resources may have a material adverse effect on
the  Company's  business,  financial  condition  and results of  operations.  No
assurance can be given that the Company's  product  development  efforts will be
successful,  that  its new  products  will  meet  customer  requirements  and be
accepted or that its OEM  customers'  product  offerings  will achieve  customer
acceptance.  If a  significant  number of  development  projects,  including the
Company's  new  multicarrier  products,  do not  result  in  substantial  volume
production  or if  technologies  or standards  supported by the Company's or its
customers'  products  become  obsolete  or fail to  gain  widespread  commercial
acceptance, the Company's business may be materially adversely affected.

         Risks  Associated  with  Internal  Wafer and  Device  Fabrication.  The
Company's  operation of its wafer and device  fabrication  facilities  entails a
number  of  risks,  including  a high  level of fixed and  variable  costs,  the
management of complex  processes,  dependence on a single source of supply and a
strict regulatory  environment.  During periods of low demand,  high fixed wafer
fabrication  costs are likely to have a material adverse effect on the Company's
business,  financial  condition  and  results  of  operations.  The  design  and
fabrication  of  RF  semiconductors  is a  complex  and  precise  process.  Such
manufacturing  is sensitive to a wide variety of factors,  including  variations
and  impurities  in  the  raw  materials,   quality  control  of  the  packages,
difficulties  in the  fabrication  process,  performance  of  the  manufacturing
equipment,  defects in the masks used to print circuits on a wafer and the level
of contaminants in the manufacturing environment. As a result of these and other
factors,  semiconductor  manufacturing yields from time to time in the past have
suffered, and there can be no assurance that the Company will be able to achieve
acceptable production yields in the future. In addition, the Company's wafer and
device  fabrication  facility  represents  a  single  point  of  failure  in its
manufacturing  process that would be costly and time consuming to replace if its
operation were interrupted.  The interruption of wafer fabrication operations or

                                       14

<PAGE>


the loss of employees  dedicated to the wafer and device fabrication  facilities
could  have a  material  adverse  effect on the  Company's  business,  financial
condition and results of operations.  Any failure to maintain  acceptable  wafer
and  device  production  levels,  will  have a  material  adverse  effect on the
Company's business, financial condition and results of operations.

         Product Quality,  Performance and Reliability. The Company expects that
its customers will continue to establish  demanding  specifications for quality,
performance  and  reliability  that must be met by the  Company's  products.  RF
semiconductors  as  complex  as those  offered by the  Company  often  encounter
development  delays and may contain  undetected  defects or failures  when first
introduced or after commencement of commercial  shipments.  The Company has from
time to time in the past experienced product quality, performance or reliability
problems.  In addition,  multicarrier power amplifiers have a higher probability
of  malfunction  than single carrier power  amplifiers  because of their greater
complexity. There can be no assurance that defects or failures will not occur in
the  future  relating  to  the  Company's   product  quality,   performance  and
reliability that may have a material  adverse effect on the Company's  business,
financial condition and results of operations.

         Sole  or  Limited  Sources  of  Materials  and  Services.  The  Company
currently  procures from single sources certain  components and services for its
products including turnkey amplifier assemblies,  subassemblies,  cast housings,
printed  circuit boards and  specialized RF  components.  The Company  purchases
these  products,  components  and services on a purchase  order basis,  does not
carry  significant  inventories  of  these  components  and  does  not  have any
long-term  supply  contracts  with its sole  source  vendors.  Furthermore,  the
Company began outsourcing assembly of some of its higher volume power amplifiers
to a contract  manufacturer during the third quarter of fiscal 1999. The Company
issues  non-cancelable  purchase orders to the contract  manufacturer 60 days in
advance for requested  deliverable.  The Company's  reliance on sole sources for
certain  components  and its migration to an outsourced,  turnkey  manufacturing
strategy entail certain risks including  reduced control over the price,  timely
delivery,  reliability  and quality of the  components.  If the Company  were to
change any of its sole  source  vendors or contract  manufacturers,  the Company
would be required to requalify the  components  with each new vendor or contract
manufacturer,  respectively.  Any  inability  of the  Company  to obtain  timely
deliveries  of  components  or assembled  amplifiers  of  acceptable  quality in
required  quantities or a significant  increase in the prices of components  for
which  the  Company  does not have  alternative  sources  could  materially  and
adversely  affect the  Company's  business,  financial  condition and results of
operations.  The Company has occasionally  experienced difficulties in obtaining
some components,  and no assurance can be given that shortages will not occur in
the future.

         Declining  Average  Sales  Prices.  The  Company has  experienced,  and
expects to  continue  to  experience,  declining  average  sales  prices for its
products.  Wireless  infrastructure  equipment  manufacturers  have  come  under
increasing  price pressure from wireless  service  providers,  which in turn has
resulted in downward  pricing pressure on the Company's  products.  In addition,
competition among merchant suppliers has increased the downward pricing pressure
on the Company's products. Since wireless infrastructure equipment manufacturers
frequently  negotiate supply  arrangements far in advance of delivery dates, the
Company  often must commit to price  reductions  for its  products  before it is
aware of how,  or if,  cost  reductions  can be  obtained.  To offset  declining
average sales prices,  the Company  believes that it must achieve  manufacturing
cost reductions.  If the Company is unable to achieve such cost reductions,  the
Company's  gross  margins  will  decline,  and such decline will have a material
adverse  effect on the Company's  business,  financial  condition and results of
operations.

         Risks of International  Sales.  Sales outside of the United States were
92%,  75% and 84% for the three  months  ended June 27,  1999,  the three months
ended June 28, 1998 and fiscal  1999,  respectively.  The Company  expects  that
international sales will continue to account for a significant percentage of the
Company's  total  revenues for the  foreseeable  future.  These sales  involve a
number of inherent risks, including imposition of government controls,  currency
exchange  fluctuations,  potential insolvency of international  distributors and
representatives  or customers,  reduced  protection  for  intellectual  property
rights in some countries,  the impact of recessionary  environments in economies
outside  the  United  States,   political   instability  and  generally   longer
receivables  collection periods, as well as tariffs and other trade barriers. In
addition,   because  substantially  all  of  the  Company's  foreign  sales  are
denominated in U.S.  dollars,  increases in the value of the dollar  relative to
the local currency would increase the price of the Company's products in foreign
markets and make the Company's products relatively more expensive and less price
competitive  than  competitors'  products  that are priced in local  currencies.
There can be no assurance  that these  factors will not have a material  adverse
effect on the Company's future  international  sales and,

                                       15

<PAGE>


consequently,  on the  Company's  business,  financial  condition and results of
operations.  The Company anticipates that the current turmoil in Asian financial
markets and the deterioration of the underlying  economic  conditions in certain
Asian countries may have an impact on its sales to customers located in or whose
projects are based in those countries due to the impact of currency fluctuations
on the relative price of the Company's  products and  restrictions on government
spending  imposed  by the  International  Monetary  Fund  (the  "IMF")  on those
countries  receiving  the IMF's  assistance.  In  addition,  customers  in those
countries  may  face  reduced  access  to  working  capital  to  fund  component
purchases, such as the Company's products, due to higher interest rates, reduced
bank lending due to contractions in the money supply or the deterioration in the
customer's  or its bank's  financial  condition or the inability to access local
equity financing.  A substantial  majority of the Company's products are sold to
OEMs who incorporate  the Company's  products into systems sold and installed to
end-user customers. These OEMs are not required by contract and do not typically
provide the Company  with  information  regarding  the  location and identity of
their end-user customers,  and, therefore,  the Company is not able to determine
what  portion  of  its  product  sales  have  been  or  future  orders  will  be
incorporated  into OEM sales to  end-users  in those Asian  countries  currently
experiencing   financial   market  turmoil  and/or   deterioration  of  economic
conditions. Furthermore, a large portion of the Company's existing customers and
potential new customers are servicing new markets in developing  countries  that
the Company's customers expect will deploy wireless communication networks as an
alternative to the construction of a wireline infrastructure.  If such countries
decline to construct  wireless  communication  systems,  or construction of such
systems is delayed for any reason,  including  business and economic  conditions
and changes in economic stability due to factors such as increased inflation and
political  turmoil,  such  delays  could have a material  adverse  effect on the
Company's business, financial condition and results of operations.

         Reliance upon Growth of Wireless Services. Sales of power amplifiers to
wireless infrastructure  equipment suppliers have in the past accounted, and are
expected  in the  future to  account,  for  substantially  all of the  Company's
product sales. Demand for wireless infrastructure  equipment is driven by demand
for wireless  service.  Although demand for power amplifiers has grown in recent
years,  if demand for  wireless  services  fails to increase or  increases  more
slowly than the Company or its OEM customers currently anticipate, the Company's
business,  financial condition and results of operations would be materially and
adversely affected.

         Market for the Company's Products Is Highly  Competitive.  The wireless
communications  equipment industry is extremely competitive and is characterized
by rapid technological change, new product development and product obsolescence,
evolving  industry  standards and  significant  price erosion over the life of a
product.  The  ability  of the  Company  to  compete  successfully  and  sustain
profitability  depends in part upon the rates at which  wireless  equipment OEMs
incorporate the Company's  products into their systems and the Company  captures
market share from other merchant  suppliers.  The Company's major OEM customers,
including  Nortel,   LGIC  and  QUALCOMM,   continuously   evaluate  whether  to
manufacture  their own  amplification  products  or purchase  them from  outside
sources. There can be no assurance that these OEM customers will incorporate the
Company's  products  into their systems or that in general they will continue to
rely, or expand their  reliance,  on external  sources of supply for their power
amplifiers.   These  customers  and  other  large   manufacturers   of  wireless
communications  equipment  could  also  elect to enter the  merchant  market and
compete  directly with the Company,  and at least one OEM, NEC, has already done
so. Such increased  competition could materially  adversely affect the Company's
business, financial condition and results of operations.

         The  Company's  principal   competitors  in  the  market  for  wireless
amplification  products  provided by merchant  suppliers  currently  include AML
Communications,   Amplidyne,   Microwave   Power  Devices,   NEC  and  Powerwave
Technologies.  No assurance can be given that the Company's competitors will not
develop new  technologies or enhancements to existing  products or introduce new
products that will offer superior price or performance  features compared to the
Company's products.

         Uncertain Protection of Intellectual Property. The Company's ability to
compete  successfully and achieve future revenue growth will depend, in part, on
its ability to protect its proprietary technology and operate without infringing
the rights of others.  The Company has a policy of seeking patents on inventions
resulting from its ongoing research and development activities.  The Company has
been  awarded  29  United  States  patents,  and  has 18  United  States  patent
applications  pending,  including 5 that have been  allowed but not yet formally
issued.  The Company also has been awarded 4 foreign  patents and has 15 foreign
patent  applications  pending.  There  can be no  assurance  that the  Company's
pending  patent  applications  will be  allowed  or that the  issued or  pending
patents will not be challenged or circumvented  by competitors.  Notwithstanding
the Company's active pursuit of patent

                                       16

<PAGE>


protection,  the Company  believes that the success of its business depends more
on the collective  value of its patents,  specifications,  computer aided design
and modeling  tools,  technical  processes and employee  expertise.  The Company
generally  enters into  confidentiality  and  nondisclosure  agreements with its
employees,  suppliers,  OEM customers, and potential customers and limits access
to and  distribution of its  proprietary  technology.  However,  there can be no
assurance that such measures will provide adequate  protection for the Company's
trade secrets or other  proprietary  information,  or that the  Company's  trade
secrets  or  proprietary  technology  will  not  otherwise  become  known  or be
independently  developed by  competitors.  The failure of the Company to protect
its proprietary technology could have a material adverse effect on its business,
financial condition and results of operations.

         Risk  of  Third  Party  Claims  of  Infringement.   The  communications
equipment  industry  is  characterized  by  vigorous  protection  and pursuit of
intellectual  property  rights or positions,  which have resulted in significant
and often  protracted and expensive  litigation.  Although there is currently no
pending intellectual property litigation against the Company, the Company or its
suppliers  may from time to time be  notified  of claims that the Company may be
infringing patents or other intellectual property rights owned by third parties.
If it is  necessary  or  desirable,  the  Company may seek  licenses  under such
patents  or  other  intellectual  property  rights.  However,  there  can  be no
assurance  that  licenses  will be  offered  or that the  terms  of any  offered
licenses will be acceptable to the Company. The failure to obtain a license from
a third party for technology  used by the Company or otherwise  secure rights to
use such technology could cause the Company to incur substantial liabilities, to
suspend the manufacture of products or expend  significant  resources to develop
noninfringing  technology.  There can be no assurance  that the Company would be
successful  in such  development  or that such  licenses  would be  available on
reasonable  terms,  if at  all.  In the  event  that  any  third  party  makes a
successful  claim  against the Company or its  customers and either a license is
not made available to the Company on commercially  reasonable terms or a "design
around" is not  practicable,  the Company's  business,  financial  condition and
results of operations would be materially adversely affected.  Furthermore,  the
Company may initiate claims or litigation against third parties for infringement
of  the  Company's  proprietary  rights  or to  establish  the  validity  of the
Company's proprietary rights.  Litigation by or against the Company could result
in  significant  expense to the Company and divert the efforts of the  Company's
technical and management personnel,  whether or not such litigation results in a
favorable  determination  for the Company.  In the event of an adverse result in
any such litigation,  the Company could be required to pay substantial  damages,
indemnify  its  customers,  cease the  manufacture,  use and sale of  infringing
products,  expend  significant  resources to develop  noninfringing  technology,
discontinue  the use of certain  processes or obtain  licenses to the infringing
technology.

         Government  Regulation  of  Communications  Industry.  Radio  frequency
transmissions and emissions,  and certain equipment used in connection therewith
are regulated in the United States, Canada and throughout the rest of the world.
Regulatory  approvals  generally  must be obtained by the Company in  connection
with the manufacture and sale of its products, and by wireless service providers
to operate the  Company's  products.  The United States  Federal  Communications
Commission (the "FCC") and regulatory  authorities  abroad  constantly review RF
emission  issues  and  promulgate  standards  based  on  such  reviews.  If more
stringent RF emission regulations are adopted, the Company and its OEM customers
may be required to alter the manner in which radio  signals are  transmitted  or
otherwise alter the equipment  transmitting such signals, which could materially
adversely affect the Company's  products and markets.  The enactment by federal,
state, local or international governments of new laws or regulations or a change
in the  interpretation of existing  regulations could also materially  adversely
affect  the  market  for  the  Company's  products.   Although  deregulation  of
international  communications  industries  along with radio  frequency  spectrum
allocations  made  by the  FCC  have  increased  the  potential  demand  for the
Company's  products by providing users of those products with  opportunities  to
establish  new  wireless  personal  communications  services,  there  can  be no
assurance that the trend toward deregulation and current regulatory developments
favorable to the promotion of new and expanded personal  communications services
will  continue  or that other  future  regulatory  changes  will have a positive
impact on the Company.  The increasing  demand for wireless  communications  has
exerted pressure on regulatory  bodies worldwide to adopt new standards for such
products,  generally following extensive  investigation of and deliberation over
competing  technologies.  The  delays  inherent  in this  governmental  approval
process have in the past caused,  and may in the future cause, the cancellation,
postponement or rescheduling of the  installation of  communications  systems by
the  Company's  OEM  customers.  These  delays have had in the past,  and in the
future  may have,  a  material  adverse  effect on the sale of  products  by the
Company to such OEM customers.

                                       17

<PAGE>


         Environmental  Regulations.  The  Company  is  subject  to a variety of
local,  state and federal  governmental  regulations  relating  to the  storage,
discharge, handling, emission, generation,  manufacture and disposal of toxic or
other  hazardous  substances  used to manufacture  the Company's  products.  The
Company  believes that it is currently in  compliance  in all material  respects
with such  regulations  and that it has  obtained  all  necessary  environmental
permits  to conduct  its  business.  Nevertheless,  the  failure to comply  with
current or future  regulations  could result in the  imposition  of  substantial
fines on the Company, suspension of production,  alteration of its manufacturing
processes or cessation of operations.  Compliance  with such  regulations  could
require  the  Company to acquire  expensive  remediation  equipment  or to incur
substantial  expenses.  Any failure by the Company to control the use, disposal,
removal or storage of, or to adequately  restrict the discharge of, or assist in
the cleanup of,  hazardous  or toxic  substances,  could  subject the Company to
significant  liabilities,  including joint and several liabilities under certain
statutes.  The imposition of such liabilities could materially  adversely affect
the Company's business, financial condition and results of operations.

         Management  of  Growth;  Dependence  on Key  Personnel.  The  Company's
business has placed,  and is expected to continue to place, a significant strain
on the  Company's  personnel,  management  and other  resources.  The  Company's
ability to manage any future  growth  effectively  will  require it to  attract,
train, motivate, manage and retain new employees successfully,  to integrate new
employees  into its  overall  operations  and in  particular  its  manufacturing
operations, to retain the continued service of its key technical,  marketing and
management personnel, and to continue to improve its operational,  financial and
management  information  systems.  Although the Company has employment contracts
with several of its executive  officers,  these  agreements do not obligate such
individuals  to remain in the  employment  of the Company.  The Company does not
maintain key person life insurance on any of its key technical personnel. During
the three months ended June 27, 1999, the Executive Vice President,  Finance and
Administration,  Chief Financial Officer and Secretary resigned. The Company has
contracted with an executive recruiting firm to search for qualified candidates.
In the interim,  the Company has elected  Henry C.  Montgomery,  an  experienced
financial   professional,   as  its  Executive  Vice   President,   Finance  and
Administration,  Chief Financial Officer and Secretary. The competition for such
personnel is intense. The Company has experienced loss of key employees and such
losses could have a material adverse effect on the Company.

         Volatility  of Stock  Price.  The market  price of the shares of Common
Stock has been and is likely to continue to be highly volatile,  and is affected
significantly  by  factors  such  as  fluctuations  in the  Company's  operating
results,  announcements of technological innovations,  new customer contracts or
new products by the Company or its  competitors,  announcements by the Company's
customers   regarding   their  business  or  prospects,   changes  in  analysts'
expectations,  governmental  regulatory  action,  developments  with  respect to
patents or proprietary  rights,  general market conditions and other factors. In
addition,  the stock market has from time to time experienced  significant price
and volume  fluctuations  that are  unrelated to the  operating  performance  of
particular  companies.  The  market  price of the  Company's  Common  Stock  has
fluctuated  significantly  in the past.  During  fiscal  1998,  the market price
fluctuated  from a low of $10.75 to a high of $66.375.  During fiscal 1999,  the
market price of the Company's Common Stock fluctuated from a low of $8 to a high
of $20.675.  On August 6, 1999, the last reported sale price of the Common Stock
as reported on the NASDAQ National Market was $11.375.

         Pending  Litigation.  Since  December 23, 1997, a number of  complaints
have been filed  against the Company and certain of its  officers in the Federal
Court for the Northern  District of  California  that allege  violations  of the
federal  securities laws. Similar complaints have been filed in California State
court that allege  violations of California State securities laws and California
common  law.  The  complaints  have been  consolidated  in the federal and state
courts,  respectively.  The  plaintiffs  in both the federal and state  lawsuits
purport to represent a class of persons who purchased  the Company's  securities
during the period of July 17, 1997  through  October 23,  1997.  The  complaints
allege that the Company and certain of its officers misled the investing  public
regarding the financial prospects of the Company.  The Company believes that the
allegations  are  completely  without merit and will  vigorously  defend itself.
Certain   provisions  of  the  Company's   Certificate  of   Incorporation   and
indemnification  agreements  between the Company  and its  officers  require the
Company to advance to such  officers  ongoing  legal  expenses of defending  the
suits and may require the Company to indemnify them against  judgments  rendered
on certain claims.  The Company expects to incur  significant  legal expenses on
its behalf and on behalf of such officers in connection with this litigation. In
addition,  defending this  litigation  has resulted and will likely  continue to
result in the diversion of management's attention from the day to day operations
of the Company's business.  Although the Company does not believe that it or any
of its officers has engaged in any  wrongdoing,  there can be no assurance  that
this stockholder  litigation will be resolved in the Company's favor. An adverse
result,  settlement or prolonged

                                       18

<PAGE>


litigation  could  have a material  adverse  effect on the  Company's  business,
financial condition and results of operations.

         Shareholder  Rights  Plan;  Issuance of Preferred  Stock.  The Board of
Directors of the Company adopted a Shareholder  Rights Plan in October 1996 (the
"Rights  Plan").  Pursuant to the Rights Plan,  the Board declared a dividend of
one Preferred  Stock Purchase Right per share of Common Stock (the "Rights") and
each such Right has an exercise price of $126.00.  The Rights become exercisable
upon the occurrence of certain  events,  including the  announcement of a tender
offer or exchange offer for the Company's  Common Stock or the  acquisition of a
specified  percentage  of the  Company's  Common  Stock  by a third  party.  The
exercise  of the  Rights  could  have  the  effect  of  delaying,  deferring  or
preventing a change in control of the Company,  including,  without  limitation,
discouraging  a proxy  contest or making more  difficult  the  acquisition  of a
substantial  block of the Company's  Common Stock.  These  provisions could also
limit the price that investors  might be willing to pay in the future for shares
of the Company's Common Stock. The Board of Directors has the authority to issue
up to 5,000,000  shares of  undesignated  Preferred  Stock and to determine  the
powers,   preferences  and  rights  and  the   qualifications,   limitations  or
restrictions   granted  to  or  imposed  upon  any  wholly  unissued  shares  of
undesignated  Preferred Stock and to fix the number of shares  constituting  any
series and the designation of such series, without any further vote or action by
the  Company's  stockholders.  For example,  in  connection  with the  Company's
Shareholder  Rights Plan,  the Board of Directors  designated  20,000  shares of
Preferred Stock as Series A Participating  Preferred Stock although none of such
shares have been  issued.  The  Preferred  Stock  could be issued  with  voting,
liquidation,  dividend  and other  rights  superior  to those of the  holders of
Common Stock. The issuance of Preferred Stock under certain  circumstances could
have the effect of delaying,  deferring or preventing a change in control of the
Company.

Year 2000 Readiness

         Many  installed  computer  programs were written using a two-digit date
field rather than four digit fields to define the applicable year. Such computer
programs  utilizing a two digit date  fields may  recognize a date using "00" as
the year 1900 rather than the year 2000 (the "Year 2000  Issue").  The Year 2000
Issue could potentially result in a system failure or in miscalculations causing
disruptions of operations,  including among other things, a temporary  inability
to  process  transactions,  send  invoices  or  engage in other  similar  normal
business activities.

         The  Company  has taken  steps to  address  the Year 2000  Issue in the
following  three areas:  1) the  Company's  internal  systems,  2) the Company's
products and 3) the Company's  suppliers.  All networks,  desktops,  application
servers and operating  systems have been found compliant  and/or  remediation is
complete.  With respect to business applications software, the Company installed
a new enterprise wide computer software system in July 1998 that has been tested
and is Year 2000  compliant.  The Company also  initiated a project in September
1998 to  assess  the  extent of the Year 2000  Issue in the  remaining  business
systems  and  in  the  embedded   systems  used  its  product   development  and
manufacturing operations.  The remaining business systems have been assessed and
remediation is ninety-nine  percent complete.  Until very recently the Company's
products did not contain embedded systems to which Year 2000 compliance would be
necessary.  The Company's  latest  multicarrier  product does include date stamp
functionality and has been determined to be Year 2000 compliant.  All of the new
products are being manufactured using only hardware,  software, or firmware that
is currently  Year 2000  compliant.  In addition,  certain of the  materials and
supplies  critical to  production  and  delivery of the  Company's  products are
furnished by a limited  number of suppliers,  and in some cases a sole supplier.
Surveys have been sent to all  suppliers.  Key  suppliers to the Company and its
contract manufacturer,  GSS/Array Technology, have been identified and are being
targeted  for  follow-up   audit  and   development  of  contingency   plans  as
appropriate. At this time, the Company estimates that the costs of the Year 2000
Issue assessment and required remedial work will be less than $350,000 in total.
Any  necessary  remedial work is planned to be completed by the end of September
1999.

         The Company  believes that failure to adequately  complete all remedial
work  necessary  to resolve the Year 2000 Issue could have a material  impact on
operating expenses,  but that the effect on revenues would not be material.  The
most likely effect of failures related to the Year 2000 Issue would be:

         1) Business  systems--Overtime  work required of Company  employees and
the temporary use of outside  resources,  to repair failed  software and process
transactions manually until repairs are completed.

                                       19

<PAGE>


         2) Embedded  systems--Overtime  work  required of Company  employees to
shift work from machines and  processes  with failures to machines that continue
to operate properly, and the temporary use of outside resources to repair failed
machines and processes.  Also, there could be delays in product delivery where a
product is dependent on a single production line.

         3) Company  products--Overtime  work  required of Company  employees to
deliver corrections to any new or existing products.

         4)  Contract  Manufacturer--Spectrian  will  reactivate  its  Sunnyvale
production   facility  to  bridge  the  shortfall  in  the  event  the  contract
manufacturer  cannot  produce and deliver  products.  A  predefined  quantity of
buffer stock will offset the Sunnyvale facility's ramp up period.

         The Company  believes these failures to be unlikely.  Periodic  updates
regarding  the Year 2000  status are  provided to both the  Company's  executive
staff and the  Audit  Committee  of the Board of  Directors.  The  Company  also
recognizes the need for contingency planning,  and expects to have such plans in
place by September 1999. These plans could include  stockpiling of components or
semi-finished products to avoid product shipment delays.


ITEM 3 Quantitative and Qualitative Disclosures about Market Risk

         The  Company  develops  products  in the  United  States and market its
products  in North  America,  Europe  and the  Asia-Pacific  region.  Thus,  the
financial  results  could be  affected  by  factors  such as  changes in foreign
currency exchange rates or weak economic  conditions in foreign markets.  As all
sales are currently made in U.S.  dollars,  a strengthening  of the dollar could
make the Company's products less competitive in foreign markets.

         The  Company's  exposure  to market  rate risk for  changes in interest
rates relate  primarily to its investment  portfolio.  The Company does not hold
derivative financial instruments in its investment portfolio. The Company places
its investments  with high quality  institutions and limits the amount of credit
exposure to any one issuer.  The Company is averse to principal loss and ensures
the safety and  preservation of its invested funds by limiting  default,  market
and  reinvestment  risk. The Company  classifies  its short-term  investments as
"fixed-rate" if the rate of return on such instruments  remains fixed over their
term.  These  "fixed-rate"   investments   include  fixed-rate  U.S.  government
securities and corporate  obligations  with  contractual  maturity dates ranging
from 1 to 5 years.  The table below  presents  the amounts and related  weighted
interest rates of our short-term investments at June 27,1999 and March 31, 1999.


                                                         June 27,      March 31,
                                                           1999           1999
                                                          -------       -------
Average fixed interest rate                                   6.3%          6.6%
Amortized cost                                            $36,207       $36,280
Fair value                                                $35,805       $36,417
                                                          -------       -------
   Contractual maturity dates 1 to 5 years                $35,805       $36,417
                                                          -------       -------


                                       20

<PAGE>


PART II - OTHER INFORMATION


ITEM 1: Legal Proceedings

         Since December 23, 1997, a number of complaints have been filed against
the Company and certain of its  officers in the Federal  Court for the  Northern
District of California that allege  violations of the federal  securities  laws.
Similar  complaints  have been  filed in  California  state  court  that  allege
violations of California  state  securities laws and California  common law. The
complaints have been consolidated in the federal and state courts, respectively.
The  plaintiffs  in both the federal and state  lawsuits  purport to represent a
class of persons who  purchased the  Company's  securities  during the period of
July 17, 1997 through  October 23, 1997. The complaints  allege that the Company
and certain of its officers misled the investing  public regarding the financial
prospects  of the  Company.  The  Company  believes  that  the  allegations  are
completely without merit and will vigorously defend itself.

                                       21

<PAGE>


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

         On July 15, 1999, the Company held its Annual  Meeting of  Stockholders
for which it solicited votes by proxy pursuant to proxy  solicitation  materials
first  distributed  on  or  about  June  15,  1999.  The  following  is a  brief
description of the matters voted on at the meeting and a statement of the number
of votes cast for and against and the number of abstentions.

1.       Election  of  Garrett A.  Garrettson,  James A.  Cole,  Martin  Cooper,
         Charles D. Kissner,  Robert W. Shaner and Robert C. Wilson as directors
         of the Company until the next Annual Meeting of  Stockholders  or until
         their successors are elected.

         NOMINEE                               IN FAVOR                 WITHHELD
         -------                               --------                 --------
         Garrett A. Garrettson                 8,538,576                 606,879
         James A. Cole                         8,543,196                 602,259
         Martin Cooper                         8,542,296                 603,159
         Charles D. Kissner                    8,549,296                 596,159
         Robert W. Shaner                      8,501,920                 643,535
         Robert C. Wilson                      8,550,096                 595,359

2.       The amendment of the 1994  Director  Option Plan to increase the number
         of shares of Common Stock  reserved for issuance  thereunder  by 60,000
         shares:

         FOR: 7,676,843   AGAINST: 1,295,520   ABSTAIN: 173,092   NON-VOTES: -0-

3.       The  amendment  of the 1992 Stock Plan to increase the number of shares
         of Common Stock reserved for issuance thereunder by 450,000:

         FOR: 5,623,769   AGAINST: 3,349,621   ABSTAIN: 172,065   NON-VOTES: -0-

4.       The  ratification  of  the  appointment  of  KPMG  LLP  as  independent
         accountants of the Company for the fiscal year ending March 31, 2000:

         FOR: 9,109,218   AGAINST:    26,010   ABSTAIN:  10,227   NON-VOTES: -0-


ITEM 6:  Exhibits and Reports on Form 8-K

                  (a)      Exhibits

       27.1 Financial Data Schedule

                                       22

<PAGE>


                                   SIGNATURES

         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.


Dated: August 10, 1999

                                                  SPECTRIAN CORPORATION
                                                     (Registrant)

                                                /S/ HENRY C. MONTGOMERY
                                    --------------------------------------------
                                                  Henry C. Montgomery
                                        Executive Vice President, Finance and
                                     Administration, Chief Financial Officer and
                                          Secretary (Principal Financial and
                                                    Accounting Officer)


                                INDEX TO EXHIBITS

                                                                   Sequentially
   Exhibits                                                        Numbered Page
   --------                                                        -------------
 27.1 Financial Data Schedule                                            24

                                       23