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

                                  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 QUARTERLY PERIOD ENDED JULY 2, 2000,

                                       OR

[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE
    Act of 1934 FOR THE TRANSITION PERIOD FROM __________ TO __________.

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 Identification Number)
  incorporation or organization)



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

                         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 August 7, 2000 there were  10,959,833  shares of the  Registrant's  Common
Stock outstanding.

================================================================================
<PAGE>

<TABLE>

                                       SPECTRIAN CORPORATION

                                             FORM 10-Q

                                               INDEX

                                  FOR QUARTER ENDED JULY 2, 2000

<CAPTION>

                                                                                              Page
                                                                                              ----
                                  PART I - FINANCIAL INFORMATION
<S>      <C>                                                                                <C>

ITEM 1   Financial Statements

         Condensed Consolidated Balance Sheets - July 2, 2000 and March 31, 2000........        3

         Condensed Consolidated Statements Of Operations - Three Months Ended July 2,
             2000 and June 27, 1999.....................................................        4

         Condensed Consolidated Statements of Cash Flows - Three Months Ended
             July 2, 2000 and June 27, 1999 ............................................        5

         Notes to Condensed Consolidated Financial Statements...........................        6

ITEM 2   Management's Discussion and Analysis of Financial Condition and Results of
             Operations.................................................................       12

ITEM 3   Quantitative and Qualitative Disclosures about Market Risk.....................       23


                                    PART II - OTHER INFORMATION

ITEM 1   Legal Proceedings..............................................................       25

ITEM 6   Exhibits and Reports on Form 8-K...............................................       25

         Signatures.....................................................................       26
</TABLE>


                                                 2
<PAGE>



                         PART I - FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS
<TABLE>

                                       SPECTRIAN CORPORATION AND SUBSIDIARIES
                                       CONDENSED CONSOLIDATED BALANCE SHEETS
                                         (In thousands, except share data)
                                                    (Unaudited)
<CAPTION>

                                                                                    July 2,            March 31,
                                                                                     2000               2000 (1)
                                                                                     ----               --------
<S>                                                                             <C>                 <C>
ASSETS

CURRENT ASSETS:
   Cash and cash equivalents                                                     $     11,179         $     11,553
   Short-term investments                                                              31,220               36,027
   Accounts receivable, less allowance for doubtful
     accounts of $420 and $420, respectively                                           27,328               23,817
   Inventories                                                                         34,584               34,542
   Prepaid expenses and other current assets                                            6,162                4,400
                                                                                 ------------         ------------

     Total current assets                                                             110,473              110,339

Property and equipment, net                                                            18,980               19,668
Other assets                                                                            1,268                1,268
                                                                                 ------------         ------------

     Total assets                                                                $    130,721         $    131,275
                                                                                 ============         ============

LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES:
   Accounts payable                                                              $     19,316         $     16,416
   Accrued liabilities                                                                 12,810               13,793
   Current portion of debt and capital lease obligations                                  982                  730
                                                                                 ------------         ------------

     Total current liabilities                                                         33,108               30,939

Debt and capital lease obligations, net of current portion                                959                1,351
                                                                                 ------------         ------------

     Total liabilities                                                                 34,067               32,290
                                                                                 ------------         ------------

Contingencies (Note 9)

STOCKHOLDERS' EQUITY:
   Preferred stock,  $0.001 par value,  5,000,000 shares  authorized;  none
      issued and outstanding, respectively                                               --                   --
   Common  stock, $0.001  par  value, 20,000,000  shares authorized;
      11,948,721 and 11,859,507  shares  issued,  respectively; 10,948,721
      and 10,859,507 shares outstanding, respectively                                      12                   12
   Additional paid-in capital                                                         160,625              160,117
   Treasury stock, 1,000,000 shares of common stock held                              (14,789)             (14,789)
   Deferred compensation expense                                                          (91)                (937)
   Accumulated other comprehensive loss                                                  (502)                (617)
   Accumulated deficit                                                                (48,601)             (44,801)
                                                                                 ------------         ------------

     Total stockholders' equity                                                        96,654               98,985
                                                                                 ------------         ------------

     Total liabilities and stockholders' equity                                  $    130,721         $    131,275
                                                                                 ============         ============
<FN>
(1)  Derived from the March 31, 2000 audited  balance sheet included in the 2000
     Annual Report on Form 10-K of Spectrian Corporation.

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

                                       3

<PAGE>


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

<CAPTION>
                                                            Three Months Ended
                                                         -----------------------
                                                         July 2,        June 27,
                                                           2000           1999
                                                           ----           ----

<S>                                                      <C>           <C>
NET REVENUES                                             $ 42,190      $ 31,484
                                                         --------      --------

COSTS AND EXPENSES:
  Cost of revenues                                         35,268        25,892
  Research and development                                  5,601         4,877
  Selling, general and administrative                       5,660         4,294
                                                         --------      --------
     Total costs and expenses                              46,529        35,063
                                                         --------      --------

OPERATING LOSS                                             (4,339)       (3,579)

INTEREST INCOME                                               597         1,147
INTEREST EXPENSE                                              (46)         (158)
                                                         --------      --------

LOSS BEFORE INCOME TAXES                                   (3,788)       (2,590)

INCOME TAXES                                                   12            32
                                                         --------      --------

NET LOSS                                                 $ (3,800)     $ (2,622)
                                                         ========      ========

NET INCOME (LOSS) PER SHARE:

  Basic and diluted                                      $  (0.35)     $  (0.26)
                                                         ========      ========

SHARES USED IN COMPUTING PER SHARE AMOUNTS:

  Basic and diluted                                        10,916        10,176
                                                         ========      ========

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


                                       4
<PAGE>
<TABLE>

                                       SPECTRIAN CORPORATION AND SUBSIDIARIES
                                  CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                                   (In thousands)
                                                    (Unaudited)
<CAPTION>

                                                                                      Three Months Ended
                                                                                  ---------------------------
                                                                                  July 2,            June 27,
                                                                                   2000               1999
                                                                                   ----               ----
<S>                                                                             <C>               <C>
CASH FLOWS FROM OPERATING ACTIVITIES:

    Net loss                                                                     $ (3,800)         $ (2,622)
    Adjustments to reconcile net loss to net
      cash used in operating activities:
        Depreciation and amortization                                               2,928             3,373
        Loss on sale of property and equipment, net                                     5                65
        Provision  for excess and obsolete  inventories  and  write-down  to          322               454
           market
        Stock option compensation expense                                             139               219
        Changes in operating assets and liabilities:
          Accounts receivable                                                      (3,511)           (4,385)
          Inventories                                                                (364)             (121)
          Prepaid expenses and other current assets                                (1,762)              161
          Accounts payable                                                          2,900               556
          Accrued liabilities                                                        (983)           (3,975)
                                                                                 --------          --------
             Net cash used in operating activities                                 (4,126)           (6,275)
                                                                                 --------          --------

CASH FLOWS FROM INVESTING ACTIVITIES:

    Purchase of short-term investments                                               --              (4,984)
    Proceeds from sale and maturities of short-term investments                     4,922             5,056
    Purchase of property and equipment                                             (2,245)             (884)
    Proceeds from sale of property and equipment                                     --                  42
                                                                                 --------          --------
             Net cash provided by (used in) investing activities                    2,677              (770)
                                                                                 --------          --------

CASH FLOWS FROM FINANCING ACTIVITIES:

    Repayment of debt and capital lease obligations                                  (140)             (276)
    Proceeds from sales of common stock, net                                        1,215             1,053
                                                                                 --------          --------
             Net cash provided by financing activities                              1,075               777
                                                                                 --------          --------

NET DECREASE IN CASH AND CASH EQUIVALENTS                                            (374)           (6,268)

CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD                                     11,553            26,254
                                                                                 --------          --------
CASH AND CASH EQUIVALENTS, END OF PERIOD                                         $ 11,179          $ 19,986
                                                                                 ========          ========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:

    Cash paid for interest                                                       $     46          $    158
                                                                                 ========          ========
    Cash paid for income taxes                                                   $     12          $     32
                                                                                 ========          ========

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


                                       5

<PAGE>


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

1.       BASIS OF PRESENTATION

         The accompanying  unaudited condensed consolidated financial statements
of Spectrian  Corporation and  subsidiaries  ("Spectrian" or the "Company") 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-22 of the  Company's  Annual  Report on Form 10-K for the fiscal year
ended March 31, 2000. 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, 2001, or any other future period.

2.       BALANCE SHEET COMPONENTS

         Balance sheet components are as follows (in thousands):

                                                            July 2,    March 31,
                                                              2000        2000
                                                              ----        ----

       Inventories:
            Raw materials                                    $16,609   $16,763
            Work in progress                                  10,652    10,353
            Finished goods                                     7,323     7,426
                                                             -------   -------
                                                             $34,584   $34,542
                                                             =======   =======

       Property and equipment:
            Machinery and equipment                          $60,309   $58,322
            Software                                           4,265     4,248
            Leasehold improvements                             3,806     3,781
                                                             -------   -------
                                                              68,380    66,351

            Less accumulated depreciation and amortization    49,400    46,683
                                                             -------   -------
                                                             $18,980   $19,668
                                                             =======   =======

       Accrued liabilities:
            Employee compensation and benefits               $ 3,858   $ 4,310
            Warranty                                           7,208     7,123
            Restructuring                                        869       996
            Other accrued liabilities                            875     1,364
                                                             -------   -------
                                                             $12,810   $13,793
                                                             =======   =======

3.       RECENT ACCOUNTING PRONOUNCEMENTS

         In June 1998, the Financial Accounting Standards Board issued Statement
of  Financial   Accounting   Standards  No.  133,   "Accounting  for  Derivative
Instruments  and Hedging  Activities"  ("SFAS 133").  SFAS 133 established a new
model for accounting for derivative and hedging  activities.  In July,  1999 the
Financial  Accounting  Standards  Board  issued  SFAS No.  137  "Accounting  for
Derivative  Instruments and Hedging  Activities - Deferral of the Effective Date
of FASB Statement No. 133" ("SFAS 137"). SFAS 137 deferred the effective date of
SFAS 133 until the first fiscal year beginning  after June 15, 2000. SFAS 133 is
not expected to have any material impact on the Company's consolidated financial
statements.

                                       6
<PAGE>

                     SPECTRIAN CORPORATION AND SUBSIDIARIES
        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
                                   (Unaudited)

         In December 1999, the Securities and Exchange  Commission  issued Staff
Accounting Bulletin: No. 101 "Revenue Recognition in Financial Statements" ("SAB
101").  SAB 101  summarizes  certain of the Staff's views in applying  generally
accepted accounting  principles to revenue recognition in financial  statements.
The  Company  has until the  fourth  quarter of fiscal  2001 to comply  with the
guidance in SAB 101. SAB 101 is not expected to have any material  impact on the
Company's consolidated financial statements.

         In  March  2000,  the  Financial   Accounting  Standards  Board  issued
Interpretation No. 44 ("FIN 44") "Accounting for Certain Transactions  involving
Stock  Compensation" an  interpretation  of APB Opinion No. 25. FIN 44 clarifies
the application of Opinion 25 for (a) the definition of employee for purposes of
applying  Opinion 25, (b) the criteria for determining  whether a plan qualifies
as  a  non  compensatory  plan,  (c)  the  accounting   consequence  of  various
modifications  to the terms of a previously fixed stock option or award, and (d)
the  accounting  for an  exchange  of stock  compensation  awards in a  business
combination.  FIN 44 is effective  July 1, 2000, but certain  conclusions  cover
specific  events that occur after either December 15, 1998, or January 12, 2000.
The adoption of certain provisions prior to July 1, 2000 did not have a material
effect.  The Company  believes that the adoption of the remaining  provisions of
FIN 44 will not have a material  effect on its financial  position or results of
operations.

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 investment grade, interest-bearing commercial paper and money market funds as
of July 2, 2000.

         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.

         As  of  July  2,  2000  and  March  31,  2000,  short-term  investments
classified as available-for-sale securities were as follows (in thousands):

<TABLE>
<CAPTION>

                                                   Amortized       Unrealized          Fair
                     As of July 2, 2000               Cost        Gain (Loss)          Value
                     ------------------               ----        -----------          -----
<S>                                                <C>              <C>             <C>

     Government bonds & notes                       $ 11,101        $   (137)        $ 10,964
     Corporate bonds & notes                          24,775            (365)          24,410
                                                    --------        --------         --------

                                                      35,876            (502)          35,374
     Less amounts classified as cash equivalents       4,154            --              4,154
                                                    --------        --------         --------

     Short-term investments                         $ 31,722        $   (502)        $ 31,220
                                                    ========        ========         ========

     Contractual maturity dates:
          1 to 5 years                                                               $ 31,220
                                                                                     ========
</TABLE>

                                       7

<PAGE>
<TABLE>

                     SPECTRIAN CORPORATION AND SUBSIDIARIES
        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
                                   (Unaudited)

<CAPTION>
                                                                     Unrealized    Fair
                  As of March 31, 2000            Amortized Cost     Gain (Loss)   Value
                  --------------------            --------------     -----------   -----
<S>                                                   <C>           <C>           <C>

      Government bonds & notes                         $ 14,599      $   (166)    $ 14,433
      Commercial paper                                   29,545          (451)      29,094
                                                       --------      --------     --------

                                                         44,144          (617)      43,527
      Less amounts classified as cash equivalents         7,500          --          7,500
                                                       --------      --------     --------

      Short-term investments                           $ 36,644      $   (617)    $ 36,027
                                                       ========      ========     ========

          Contractual maturity dates, less than 1 year                            $  3,500
          Contractual maturity dates, 1 to 5 years                                  32,527
                                                                                  --------
                                                                                  $ 36,027
                                                                                  ========
</TABLE>

5.       PER SHARE COMPUTATION

         Basic net income  (loss) per share is computed  by dividing  net income
(loss) available to common stockholders by the weighted-average number of common
shares  outstanding  for the  period.  Diluted  net  income  (loss) per share is
computed using the weighted  average number of common and  potentially  dilutive
common  shares  outstanding  during the period using the treasury  stock method.
Potentially  dilutive common shares include the effect of stock options. For the
three months ended July 2, 2000 and June 27, 1999, 3,215,071 and 2,651,352 stock
options were not included for the  calculation  of diluted net loss per share as
they were considered antidilutive due to the net loss the Company experienced in
these fiscal periods.

6.       SEGMENT INFORMATION

         Under the management approach, the Company has broken down its business
into two  operating  segments  based upon product type:  Amplifier  Division and
Semiconductor Division,  which operates under the tradename of UltraRF.  UltraRF
derives  substantially all of its revenues from sales to the Amplifier Division.
The Company allocates operating expenses to these segments but does not allocate
interest income and expense,  other income,  net, the provision for income taxes
and certain corporate  operating  expenses.  Corporate expenses are allocated to
the  operating  segments  based  on  predetermined  annual  allocation  methods.
Appropriate  intersegment  eliminations  are  made in the  consolidation  of the
Company's  consolidated  financial  statements.  Segment  assets,  which include
inventories and property and equipment, are reported upon by operation. No other
assets and liabilities are reported separately.

<TABLE>
Consolidated Statement of Operations Data - fiscal 2001:
<CAPTION>

                                                     Three Months Ended July 2, 2000
                                           ------------------------------------------------
                                           Amplifier      UltraRF       Other*        Total
                                           ---------      -------       ------        -----
<S>                                     <C>            <C>         <C>            <C>
Net revenues, external                  $    41,937    $     253   $      --      $  42,190
Net revenues, intersegment                      --         7,186       (7,186)          --
Amortization and depreciation                 1,440          690          798         2,928
Income (loss) before income taxes       $    (4,475)   $     497   $      190     $  (3,788)

<FN>
*Data in the "Other" column represents the elimination of intersegment revenues,
interest income and expense,  other income, net, the provision for income taxes,
certain   unallocated   corporate   expenses  and  corporate   amortization  and
depreciation that is subsequently allocated to the operating segments.
</FN>
</TABLE>

                                       8

<PAGE>

                     SPECTRIAN CORPORATION AND SUBSIDIARIES
        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
                                   (Unaudited)

<TABLE>
Consolidated Balance Sheet Data:
<CAPTION>

                                                                         July 2, 2000
                                                   -----------------------------------------------------------
                                                   Amplifier         UltraRF           Other           Total
                                                   ---------         -------           -----           -----
<S>                                                 <C>              <C>              <C>              <C>
Segment Assets                                     $ 31,798          $14,747          $ 7,019          $ 53,564
Expenditures for additions to long-lived assets    $    634          $ 1,448          $   163          $  2,245


<CAPTION>
Consolidated Statement of Operations Data - fiscal 2000:

                                                                Three Months Ended June 27, 1999
                                                    ----------------------------------------------------------
                                                   Amplifier         UltraRF           Other*          Total
                                                   ---------         -------           ------          -----
<S>                                                <C>               <C>              <C>              <C>
Net revenues, external                             $ 31,471          $    13          $  --            $ 31,484
Net revenues, intersegment                              --             4,223           (4,223)             --
Amortization and depreciation                         1,372              628            1,373             3,373
Income (loss) before income taxes                  $ (4,034)         $  (272)         $ 1,716          $ (2,590)

<FN>
*Data in the "Other" column represents the elimination of intersegment revenues,
interest income and expense,  other income, net, the provision for income taxes,
certain   unallocated   corporate   expenses  and  corporate   amortization  and
depreciation that is subsequently allocated to the operating segments.
</FN>

<CAPTION>
Consolidated Balance Sheet Data:

                                                                         March 31, 2000
                                                   -----------------------------------------------------------
                                                   Amplifier         UltraRF           Other           Total
                                                   ---------         -------           -----           -----
<S>                                                <C>               <C>              <C>              <C>
Segment Assets                                     $ 32,142          $ 13,605         $ 8,463          $ 54,210

</TABLE>

Geographic Segment Data:

         Revenue  from   unaffiliated   customers  by  geographic  region  as  a
percentage of revenues were as follows:

                                             Three Months Ended
                                          --------------------------
                                          July 2,          June  27,
                                           2000               1999
                                           ----               ----
Canada                                     35%                 54%
United States                              34%                  8%
France                                     25%                 24%
South Korea                                 5%                 14%
Other countries                             1%                 --%

         The Company's  long-lived assets are located in the following countries
(in thousands):

                                          July 2,            March 31,
                                           2000                 2000
                                           ----                 ----

United States                            $ 17,249           $ 18,226
Thailand                                    1,315              1,218
South Korea                                   416                224
                                         --------           --------
                                         $ 18,980           $ 19,668
                                         ========           ========

                                       9

<PAGE>

                     SPECTRIAN CORPORATION AND SUBSIDIARIES
        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
                                   (Unaudited)

7.       Discontinued manufacturing operations and Related Restructuring Charges

         During fiscal 1999, the Company  transitioned  the assembly and test of
its  higher  volume  single  carrier  power  amplifier  products  to a  contract
manufacturer  located in Thailand on a turnkey basis.  During the fourth quarter
of fiscal 2000, the Company  decided to transfer the remaining  power  amplifier
production in Sunnyvale, California, to the contract manufacturer. In connection
with the decision,  the Company  recognized in fiscal 2000 an approximately $1.0
million   restructuring   charge  for  estimated   severance  costs  related  to
organizational  changes and a planned reduction in work force.  Approximately 90
employees  engaged  in  manufacturing  and  production   related  functions  are
anticipated to be terminated as a result of the restructuring.  At July 2, 2000,
approximately   twenty-one   employees  had  been  terminated  pursuant  to  the
restructuring.   The  Company   anticipates  that  the  restructuring   will  be
substantially completed in the third quarter of fiscal 2001. The following table
represents  the  restructuring  activity  that took place up to July 2, 2000 (in
thousands):


                                                             Reduction in
                                                              Workforce
                                                              ---------

      Balance at March 31, 2000                                $    996
      Cash payment of severance costs                              (127)
                                                               --------

      Balance at July 2, 2000                                  $    869
                                                               ========

         The  balance  of the  restructuring  accrual  is  included  in  current
liabilities on the condensed consolidated balance sheets.


8.       Comprehensive Income

         Statement  of  Financial   Accounting   Standard  No.  130  (SFAS  130)
"Reporting Comprehensive Income" establishes rules for the reporting and display
of comprehensive income and its components.  The following are the components of
comprehensive income (loss) (in thousands):


                                                           Three Months Ended
                                                          ----------------------
                                                          July 2,      June  27,
                                                           2000          1999
                                                           ----          ----
             Net loss                                     $(3,800)     $(2,622)
             Unrealized gain (loss) on marketable
               securities                                     115         (540)
                                                          -------      -------
             Comprehensive loss                           $(3,685)     $(3,162)
                                                          =======      =======


         The components of accumulated other  comprehensive  loss are as follows
         (in thousands):


                                                         July 2,    March 31
                                                           2000       2000
                                                           ----       ----
             Unrealized loss on marketable securities     $(502)     $(617)
                                                          =====      =====

                                       10

<PAGE>

                     SPECTRIAN CORPORATION AND SUBSIDIARIES
        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
                                   (Unaudited)

9.       Litigation

         On May 19, 2000, the Company announced that it had reached a settlement
         in principle of the shareholder  class action lawsuits which were filed
         in the  United  States  District  Court for the  Northern  District  of
         California  and the Superior Court of the State of California for Santa
         Clara  County.  The terms of the  settlement  will not have a  material
         adverse  effect on the  Company's  financial  position or results  from
         operations. The final settlement agreement is subject to Court approval
         and class notice provisions.

10.      Line of Credit


         The Company has a revolving line of credit of $10.0 million with a bank
         collateralized  by the majority of the  Company's  assets.  The line of
         credit  expires  on June  30,  2001.  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. The master agreement also has certain
         restrictions on other  indebtedness  and the payment of dividends.  The
         Company  was in default of  certain of the  covenants  and the bank has
         granted a waiver of the default  effective  through September 30, 2000.
         The amount  available to borrow at July 2, 2000 was $10.0 million.  The
         Company  can borrow at either  (i) a  variable  rate equal to the prime
         rate or (ii) a fixed  rate  equal to 200 basis  points  above the LIBOR
         rate,  which  at  July 2,  2000 was 9.5% and 8.79%,  respectively.  The
         Company had no borrowings under the line of credit at July 2, 2000.

                                       11
<PAGE>


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

         The statements contained in this Quarterly Report on Form 10-Q that are
not purely  historical  are  forward-looking  statements  within the  meaning of
Section 27A of the  Securities Act of 1933 (the  `'Securities  Act") and Section
21E of the  Securities  Exchange  Act of 1934 (the  "Exchange  Act"),  including
statements  regarding  Spectrian  Corporation's  ("the  Company")  expectations,
hopes,  intentions or strategies  regarding  the future.  When used herein,  the
words  `'may,"  `'will,"  `'expect,"  `'anticipate,"  `'continue,"  `'estimate,"
`'project,"   `'intend"  and  similar   expressions  are  intended  to  identify
forward-looking  statements  within the  meaning of the  Securities  Act and the
Exchange Act. Forward-looking  statements include:  statements regarding events,
conditions  and financial  trends that may affect the Company's  future plans of
operations, business strategy, results of operations and financial position. All
forward-looking  statements  included in this document are based on  information
available  to the  Company  on the  date  hereof,  and the  Company  assumes  no
obligation  to  update  any  such  forward-looking  statements.   Investors  are
cautioned  that any  forward-looking  statements  are not  guarantees  of future
performance and are subject to risks and  uncertainties  and that actual results
may differ materially from those included within the forward-looking  statements
as a result of various  factors.  These  forward-looking  statements are made in
reliance  upon the safe harbor  provision of The Private  Securities  Litigation
Reform Act of 1995.  Factors that could cause or contribute to such  differences
include,  but are not  limited  to,  those  described  below,  under the heading
"Factors  Affecting  Future  Operating  Results" and elsewhere in this Quarterly
Report on Form 10-Q.

Overview

         Spectrian  designs,  manufacturers and markets high-power RF amplifiers
and semiconductor devices, for the global wireless communications  industry. The
Company's  power  amplifiers  support a broad range of  transmission  standards,
including  AMPS,  TDMA,  CDMA,  PCS, GSM, WLL, and IMT-2000.  Spectrian's  power
amplifiers  are utilized as part of the  infrastructure  for both wireless voice
and data networks. The Company's power amplifiers boost the power of a signal so
that  it can  reach a  wireless  phone  or  other  device  within  a  designated
geography.  The Company's  semiconductor  devices are key  components of a power
amplifier.

         UltraRF,  the  tradename  for  the  Company's  semiconductor  division,
operates its own wafer  fabrication  facility  that  utilizes  bipolar and LDMOS
technologies.  This  facility is capable of  processing  MOS  devices  with gold
metallization.  Using this fabrication  facility,  UltraRF produces  high-power,
high-performance LDMOS RF power semiconductors,  which are one critical enabling
component in the design and manufacture of second and third generation  wireless
infrastructure  equipment.  In addition to its own unique designs,  UltraRF also
produces functional equivalents to some devices provided by other manufacturers.

         For the three months ended July 2, 2000,  Nortel  Networks  Corporation
("Nortel") and Verizon Communications ("Verizon"),  formed by the merger of Bell
Atlantic and GTE  Corporation,  accounted for  approximately  61% and 28% of net
revenues,  respectively. For the three months ended June 27, 1999, Nortel and LG
Information & Communications,  Inc. ("LGIC") accounted for approximately 83% and
12% of net 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.  In the year ended March 31,
1999 ("fiscal  1999") and the first and fourth  quarters of the year ended March
31, 2000 ("fiscal 2000"),  product orders fell sharply  resulting in substantial
losses in those fiscal periods.  There can be no assurance that the Company will
not experience such  fluctuations in the future.  In September 1999, the Company
announced  that it expected  that it would not be  developing  new  products for
Nortel but would  continue  to supply  Nortel  with  existing  products.  If the
Company  is  unable to find  other  customers  to  generate  demand  for its new
products,  the Company's revenues may be materially  adversely affected.  If the
Company  were to lose  Nortel,  Verizon or any other major OEM  customer,  or if
orders by Nortel,  Verizon 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.

         During the three  months  ended July 2, 2000 and June 27,  1999,  sales
outside of the United States were 66% and 92%, respectively. The Company expects
that international  sales will continue to account for a significant  percentage
of the  Company's  net revenues for the  foreseeable  future.  Financial  market
turmoil,  economic  downturn,  consolidation  or merger of customers,  and other
changes  in  business  conditions  in any of the  Company's  current  or  future
markets,  such as South Korea and France,  may have a material adverse effect on
the Company's sales of its products. Furthermore, because the Company's products
are priced in U.S. dollars, currency fluctuations and

                                       12


<PAGE>

ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
         OF OPERATIONS (CONTINUED)

instability in the financial markets that are served by the Company may have the
effect of making  the  Company's  products  more  expensive  than those of other
manufacturers  whose  products are priced in the local  currency of the customer
and may result in reduced revenues for the Company.

         In Sunnyvale,  California,  the Company manufactures  low-volume single
carrier and multicarrier power amplifier products, and services all of its power
amplifier products. In addition, the Company operates a four-inch  semiconductor
wafer fabrication  facility and semiconductor  assembly and testing operation in
Sunnyvale, California. During fiscal 1999, the Company transitioned the assembly
and test of its higher  volume  single  carrier  power  amplifier  products to a
contract  manufacturer located in Thailand on a turnkey basis. In the year ended
March 31, 2001  ("fiscal  2001"),  the Company  plans to transfer the  remaining
power  amplifier  production  in  Sunnyvale to the  contract  manufacturer.  The
Company utilizes contract manufacturing to decrease the Company's  manufacturing
overhead  and costs of its  products,  to  increase  flexibility  to  respond to
fluctuations  in product  demand and to leverage  the  strengths of the contract
manufacturer's  focus on high volume,  high quality  manufacturing.  The cost of
transitioning  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  anticipates
that its gross  margin  will be  adversely  affected  in fiscal  2001 during the
transition  of  the  remaining  power  amplifier   production  to  the  contract
manufacturer.   As  a  result  of  its  wafer  fabrication  facility  and  other
manufacturing  and development  infrastructure,  the Company has a high level of
fixed costs and is dependent  upon  substantial  revenue to achieve and maintain
profitability.

         The Company's semiconductor  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  for  certain
components and services, 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 is 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  merchant  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.

                                       13

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

                                            Three months ended
                                            July 2,     June 27,
                                             2000        1999
                                             ----        ----

NET REVENUES                                100.0%      100.0%
                                            -----       -----
COSTS AND EXPENSES:
  Cost of revenues                           83.6        82.2
  Research and development                   13.3        15.5
  Selling, general and administrative        13.4        13.6
                                            -----       -----
     Total costs and expenses               110.3       111.3
                                            -----       -----
OPERATING LOSS                              (10.3)      (11.3)

INTEREST INCOME                               1.4         3.6
INTEREST EXPENSE                             (0.1)       (0.5)
                                            -----       -----
LOSS BEFORE INCOME TAXES                     (9.0)       (8.2)

INCOME TAXES                                   --         0.1
                                            -----       -----

NET LOSS                                     (9.0)%      (8.3)%
                                            =====       =====

GROSS MARGIN ON SALES                        16.4%       17.8%
                                            =====       =====

         Net Revenues. The Company's revenues increased 34% to $42.2 million for
the three  months  ended July 2, 2000 from $31.5  million  for the three  months
ended June 27, 2000. The growth in revenue was primarily due to higher demand in
the single carrier power amplifier  ("SCPA")  products,  primarily new Broadband
products,  and  achieving  volume  shipments  of  the  new  multi-channel  power
amplifier  ("MCPA")  products.  SCPA revenues,  including the new single carrier
Broadband  products,  increased  8% to $33.2  million for the three months ended
July 2, 2000 from $30.7  million for the three months ended June 27, 1999.  MCPA
revenues  increased  1,018% to $8.7  million for the three  months ended July 2,
2000 from $0.8  million  for the  three  months  ended  June 27,  1999.  UltraRF
revenues  from  external  customers  increased to $0.3 million from none for the
three months ended July 2, 2000 and June 27, 1999, respectively.

         Cost of  Revenues.  Cost of  revenues  consists  primarily  of  turnkey
amplifier costs for the Company's  higher volume  products,  internal  amplifier
assembly and test costs for its lower volume and new products,  radio  frequency
("RF")  semiconductor  fabrication,  assembly  and test  costs,  raw  materials,
manufacturing  overhead  and  warranty  costs.  The  Company's  cost of revenues
increased  by 36% to $35.3  million for the three months ended July 2, 2000 from
$25.9 million for the three months ended June 27, 2000. The increase on a dollar
basis  for the three  months  ended  July 2,  2000 was due to higher  production
volumes associated with the increased revenues.

         Gross  margin on sales was 16% for the three  months ended July 2, 2000
as compared to 18% for the three  months  ended June 27,  1999.  The decrease in
gross margin reflects a change in product mix and declining average sales prices
in certain  volume  products which were  partially  offset by cost  improvements
resulting from lower per unit  manufacturing  costs driven by higher  production
volumes,  product cost reduction initiatives,  and the increased use of contract
manufacturing.

         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 increased by 15% to
$5.6  million in the three  months  ended July 2, 2000 from $4.9  million in the
three  months ended June 27, 1999.  As a  percentage  of revenues,  R&D expenses
declined to 13% of revenues  for the three months ended July 2, 2000 as compared
to 16% of revenues for the three months ended June 27, 1999. The increase in R&D
expenses on a dollar basis reflects new product development initiatives required
to meet current and future market and customer requirements. The decrease in R&D
expenses on percentage of revenues basis reflects  substantially  higher revenue
levels.

         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

                                       14


<PAGE>

ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
         OF OPERATIONS (CONTINUED)

independent sales  representatives,  professional  fees and other expenses.  The
Company's  SG&A  expenses  increased  by 32% to $5.7 million in the three months
ended July 2, 2000 from $4.3 million in the three months ended June 27, 1999. As
a percentage  of  revenues,  SG&A  expenses  declined to 13% of revenues for the
three  months  ended July 2, 2000 as compared  to 14% of revenues  for the three
months ended June 27, 1999.  The increase in SG&A expenses on a dollar basis was
principally  due to increased  commissions,  marketing  efforts to diversify the
customer  base,  creation of the  UltraRF  sales  force and  network,  and added
maintenance and support for the new enterprise resource planning ("ERP") system.
The  decrease  in  SG&A  expenses  on  percentage  of  revenues  basis  reflects
substantially higher revenue levels.

          Interest  Income.  Interest  income for the three months ended July 2,
2000 decreased to $0.6 million from $1.1 million for the three months ended June
27, 1999. The decrease in interest income  resulted from lower  interest-bearing
investment  balances  associated  with reduced  average cash and cash equivalent
balances.

         Interest  Expense.  Interest expense for the three months ended July 2,
2000  decreased  to $46,000  from  $158,000  for the three months ended June 27,
1999.  The decrease in interest  expense  resulted  from  substantially  reduced
average borrowings levels.

         Income Taxes.  Due to the losses incurred by the Company in prior years
and the related net operating loss carryforwards  available to the Company,  the
Company did not record an income tax expense except for the minimum state income
tax expense for the three months ended July 2, 2000.

Recent Accounting Pronouncements

         In June 1998, the Financial Accounting Standards Board issued Statement
of  Financial   Accounting   Standards  No.  133,   "Accounting  for  Derivative
Instruments  and Hedging  Activities"  ("SFAS 133").  SFAS 133 established a new
model for accounting for derivative and hedging  activities.  In July,  1999 the
Financial  Accounting  Standards  Board  issued  SFAS No.  137  "Accounting  for
Derivative  Instruments and Hedging  Activities - Deferral of the Effective Date
of FASB Statement No. 133" ("SFAS 137"). SFAS 137 deferred the effective date of
SFAS 133 until the first fiscal year beginning  after June 15, 2000. SFAS 133 is
not expected to have any material impact on the Company's consolidated financial
statements.

         In December 1999, the Securities and Exchange  Commission  issued Staff
Accounting Bulletin: No. 101 "Revenue Recognition in Financial Statements" ("SAB
101").  SAB 101  summarizes  certain of the Staff's views in applying  generally
accepted accounting  principles to revenue recognition in financial  statements.
The  Company  has until the  fourth  quarter of fiscal  2001 to comply  with the
guidance in SAB 101. SAB 101 is not expected to have any material  impact on the
Company's consolidated financial statements.

         In  March  2000,  the  Financial   Accounting  Standards  Board  issued
Interpretation No. 44 ("FIN 44") "Accounting for Certain Transactions  involving
Stock  Compensation" an  interpretation  of APB Opinion No. 25. FIN 44 clarifies
the application of Opinion 25 for (a) the definition of employee for purposes of
applying  Opinion 25, (b) the criteria for determining  whether a plan qualifies
as  a  non  compensatory  plan,  (c)  the  accounting   consequence  of  various
modifications  to the terms of a previously fixed stock option or award, and (d)
the  accounting  for an  exchange  of stock  compensation  awards in a  business
combination.  FIN 44 is effective  July 1, 2000, but certain  conclusions  cover
specific  events that occur after either December 15, 1998, or January 12, 2000.
The adoption of certain provisions prior to July 1, 2000 did not have a material
effect.  The Company  believes that the adoption of the remaining  provisions of
FIN 44 will not have a material  effect on its financial  position or results of
operations.

Liquidity and Capital Resources

         The Company has  financed  its growth  through  sales of common  stock,
private sales of equity  securities,  capital  equipment  leases,  bank lines of
credit and cash flows from operations. Principal sources of liquidity at July 2,
2000 consisted of cash,  cash  equivalents  and short-term  investments of $42.4
million and bank borrowing arrangements.

                                       15

<PAGE>

ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
         OF OPERATIONS (CONTINUED)

         The Company has a revolving line of credit of $10.0 million with a bank
collateralized  by the  majority  of the  Company's  assets.  The line of credit
expires on June 30, 2001. 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.  The
master  agreement also has certain  restrictions on other  indebtedness  and the
payment of dividends. The Company was in default of certain of the covenants and
the bank has granted a waiver of the default  effective  through  September  30,
2000.  The amount  available  to borrow at July 2, 2000 was $10.0  million.  The
Company can borrow at either (i) a variable rate equal to the prime rate or (ii)
a fixed rate equal to 200 basis  points  above the LIBOR rate,  which at July 2,
2000 was 9.5% and 8.79%,  respectively.  The Company had no borrowings under the
line of credit at July 2, 2000.

         In  January  1997,  the  Company  borrowed  $6.0  million  under a term
collaterized  by  certain  capital  equipment.  Under  the  terms  of  the  loan
agreement,  which  expires in January  2002,  the  Company is required to make a
series of uneven monthly  principal  payments  ranging from $42,000 to $136,000,
plus  interest at a rate of 9.1%,  and must  maintain  certain  minimum  working
capital,  net worth and  other  specific  ratios  for which the  Company  was in
compliance as of July 2, 2000.

         The  Company's  working  capital  decreased  by $2.0  million  to $77.4
million as of July 2, 2000 from $79.4 million as of March 31, 2000. The decrease
was primarily  attributable to a $5.2 million decrease in cash, cash equivalents
and short-term  investments,  a $2.9 million increase in accounts payable, which
were partially offset by a $3.5 million increase in accounts receivable,  a $1.8
million  increase  in prepaid  expenses  and other  current  assets,  and a $1.0
million decrease in accrued liabilities.  The Company's  short-term  investments
were principally invested in investment grade, interest-bearing securities.

         Cash used by  operations  was $4.1  million for the three  months ended
July 2, 2000 compared to cash used by operations for the three months ended June
27, 1999 of $6.3  million.  Cash used by  operations  for the three months ended
July 2, 2000 was  principally  the  result of a $3.8  million  net loss,  a $3.5
million  increase in accounts  receivable,  which  increased  as a result of the
timing of  shipments  late in the quarter,  a $1.8  million  increase in prepaid
expenses  and other  current  assets  and a $1.0  million  reduction  in accrued
liabilities  which were partially  offset by a $2.9 million increase in accounts
payable,   which  increased   proportionately   with  production   levels,   and
depreciation and amortization of $2.9 million.

         The Company's  investing  activities during the three months ended July
2, 2000  provided cash of  approximately  $2.6 million as compared to using $0.8
million of cash during the comparable period in the prior year. Cash provided by
investing  activities  during  the three  months  ended  July 2,  2000  resulted
primarily  from $4.9 million in proceeds from sale and  maturities of short-term
investments which were partially offset by $2.2 million in additions to property
and  equipment.  Capital  additions  for the  three  months  ended  July 2, 2000
included  manufacturing  test and production  equipment  required to support new
products  and  test  equipment  to  support  various  research  and  development
projects.

         The Company's  financing  activities during the three months ended July
2, 2000 provided cash of approximately $1.1 million as compared to cash provided
of $0.8 million during the comparable period in the prior year. Cash provided by
financing  activities  during the three months ended July 2, 2000 was the result
of $1.2  million in  proceeds  from the  issuance of common  stock,  through the
exercise of employee  stock options and employee  stock  purchase plan activity,
which was  partially  offset by $0.1 million in  repayments  of debt and capital
lease obligations.

         The Company  anticipates  spending  approximately $7.3 million over the
next three  months for  capital  additions  primarily  to support  manufacturing
production  and  test  requirements  and  development  projects.  Based  on  the
Company's current working capital  position,  the cash flows the Company expects
to generate from the remainder of fiscal 2001 operations, and the available line
of credit,  the Company believes that sufficient  resources will be available to
meet the Company's cash  requirements for at least the next twelve 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.

                                       16

<PAGE>

ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
         OF OPERATIONS (CONTINUED)

Factors Affecting Future Operating Results

         Customer Concentration;  Dependence on Nortel and Verizon. The wireless
infrastructure  equipment  market is  dominated by a small number of large OEMs,
including Ericsson, Lucent, Motorola, Nortel, Verizon and Siemens. The Company's
revenues are derived  primarily from sales to a limited number of these OEMs, in
particular,  Nortel and Verizon.  Furthermore, a substantial portion of revenues
from  Nortel in the past has  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 a supply
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.  This  agreement  allows  Nortel to change  the  product  mix
requirements, which can significantly affect the Company's gross margins, and to
change requested delivery dates without  significant  financial  consequences to
Nortel,  which affect the Company's  ability to  efficiently  manage  production
schedules and inventory  levels and to accurately  forecast  product  sales.  In
September  1999,  the Company  announced  that it expected  that it would not be
developing  products for Nortel but that it will  continue to supply Nortel with
existing products.  There can be no assurance that Nortel will purchase existing
products from 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
Verizon, 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.  If the  Company's  current or new  customers do not
generate sufficient demand for the Company's new products replacing prior demand
from  Nortel,  the  Company's  business  financial   condition  and  results  of
operations could be materially adversely affected.  Further, if the Company were
to lose  Nortel  or any  other  major  OEM  customer,  or if orders by Nortel or
Verizon 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,  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,
Verizon and other major OEM customers in future  periods,  which could result in
declining average sales prices and gross margins 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  related  gross
margins  which  vary  significantly   based  upon  product  mix;   subcontractor
performance; 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 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 the past has caused significant fluctuations in the
Company's  product  sales.  There can be no assurance  that the Company will not
experience such fluctuations in the future. The Company does not believe that it
will have the  annual  revenue  growth it  experienced  in fiscal  2000,  in the
future,  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

                                       17
<PAGE>

ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
         OF OPERATIONS (CONTINUED)

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.

         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  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.

         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.  Power
amplifiers  as  complex  as  those  offered  by  the  Company  often   encounter
development delays and may contain  undetected defects or failures.  The Company
has from time to time in the past experienced  product quality,  performance and
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 relating
to the Company's product quality,  performance and reliability will not occur in
the future that may have a material  adverse  effect on the Company's  business,
financial condition and results of operations.

         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.  In addition,  these manufacturers could decide to sell amplifiers to
other wireless  equipment OEMs. If this should occur,  the competition for power
amplifiers would significantly increase and could have a material adverse effect
on the Company's business, financial condition and results of operations.

         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  power  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.

         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  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. A softening of demand in the markets served by the Company or a failure
of 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

                                       18


<PAGE>

ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
         OF OPERATIONS (CONTINUED)

become obsolete or fail to gain widespread commercial acceptance,  the Company's
business may be materially adversely affected.

         Sole  or  Limited  Sources  of  Materials  and  Services.  The  Company
currently  procures from single sources certain  components and services for its
products  including,  but not  limited  to,  turnkey  amplifier  assemblies  and
specialized  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  during the third fiscal quarter of 1999 and
will transfer the remaining power amplifier  production  during fiscal 2001 to a
contract manufacturer.  The Company issues non-cancelable purchase orders to the
contract  manufacturer 60 days in advance of requested delivery which is greater
than the committed  delivery schedule of some of its customers,  such as Nortel.
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 manufacturer, 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.

         Risks of International  Sales. The Company operates in an international
market and  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, representatives and customers, reduced protection of
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,
consequently,  on the  Company's  business,  financial  condition and results of
operations.

         The  Company  anticipates  that  turmoil in  financial  markets and the
deterioration of the underlying  economic  conditions in certain countries where
the Company has  significant  sales 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  funding of wireless  infrastructure  by  domestic  governments,
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 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  countries
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

                                       19

<PAGE>

ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
         OF OPERATIONS (CONTINUED)

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  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.  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 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

                                       20

<PAGE>

ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
         OF OPERATIONS (CONTINUED)

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.

         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  and growth  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,  motivate, manage and retain new employees successfully,  especially in
the  highly  competitive  northern  California  job  market,  to  integrate  new
employees into its overall operations and 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.  The  competition  for such personnel is intense.  The
Company  has  experienced  loss of key  employees  in the past and  could in the
future.  Such losses could have a material  adverse  effect on the  Company.  On
March 31, 2000, the Company employed Mr. Thomas H. Waechter as its President and
Chief  Executive  Officer.  There can be no  assurance  that Mr.  Waechter  will
operate  effectively with existing management nor that he will be able to retain
or attract  additional  executive officers as needed. As a result of the plan to
discontinue  manufacturing  operations in Sunnyvale,  California,  and the other
restructuring  activities,  several key executives will cease to be employees of
the Company.

                                       21


<PAGE>

ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
         OF OPERATIONS (CONTINUED)

         The Company's  ability to manage its growth will require it to continue
to invest in its  operational,  financial and  management  information  systems,
procedures and controls.  The Company can give no assurance that it will be able
to manage its growth  effectively.  Failure to manage growth  effectively  would
have a material adverse effect on the Company's  business,  financial  condition
and  results of  operations.  The  Company  may,  from time to time,  pursue the
acquisition  of other  companies,  assets or product  lines that  complement  or
expand its existing  business.  The Company may also, from time to time,  pursue
divestitures of existing  operations.  Acquisitions and  divestitures  involve a
number of risks that could  adversely  affect the Company's  operating  results.
These risks  include the diversion of  management's  attention  from  day-to-day
business,  the  difficulty  of combining and  assimilating  the  operations  and
personnel  of the acquired  companies,  charges to the  Company's  earnings as a
result of the  purchase of  intangible  assets,  and the  potential  loss of key
employees as a result of an acquisition.  Should any acquisition  take place, we
can give no assurance  that this  acquisition  will not materially and adversely
affect the  Company or that any such  acquisition  will  enhance  the  Company's
business.

         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  quarterly and
annual operating results, customer concentration,  the timing difference between
Nortel's requested delivery dates and its vendor purchase commitments to support
the customer's delivery  requirements,  reliance on international  markets,  the
absence  of the  economies  of  scale  achieved  by  some  of  its  competitors,
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, estimates and recommendations, news reports regarding the Company,
its competitors and its markets,  governmental  regulatory action,  developments
with respect to patents or  proprietary  rights,  announcements  of  significant
acquisitions  or  strategic  partnerships  by the  Company  or its  competitors,
announcements  of  significant  divestitures  of existing  businesses or product
lines,  general  market  conditions and other  factors.  In addition,  the stock
market in general,  and the market prices for power amplifier  manufacturers  in
particular,  have experienced  extreme volatility that is often unrelated to the
operating  performance  of these  companies.  These  broad  market and  industry
fluctuations  may  adversely  affect the price of the  Company's  common  stock,
regardless of actual  operating  performance.  The market price of the Company's
Common Stock has fluctuated significantly in the past.

         Legal  Proceedings.  On May 19, 2000, the Company announced that it had
reached a settlement in principle of the shareholder class action lawsuits which
were filed in the United  States  District  Court for the  Northern  District of
California  and the Superior  Court of the State of  California  for Santa Clara
County.  The terms of the settlement will not have a material  adverse effect on
the  Company's  financial  position  or  results  from  operations.   The  final
settlement agreement is subject to Court approval and class notice provisions.

         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.

Additional Factors Affecting Future Operating Results of UltraRF

                                       22

<PAGE>

ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
         OF OPERATIONS (CONTINUED)

         Capacity  Constraints.  UltraRF's  facilities  have a level of capacity
beyond which it cannot cost effectively  produce its products.  Although UltraRF
is not  currently  approaching  those  constraints,  it may be unable to further
expand its business if it fails to plan and build sufficient  capacity.  UltraRF
may attempt to increase its  capacity by  converting  its  existing  facility to
accommodate  equipment  that uses  six-inch  wafers.  UltraRF  does not have any
experience  processing  six-inch  wafers in  UltraRF's  fabrication  facilities.
UltraRF may be required to redesign its processes and  procedures  substantially
to accommodate the larger wafers. As a result,  implementing additional capacity
for six-inch  wafers may take longer than  planned,  which could harm  UltraRF's
results of operations.  The process of converting to six-inch  wafers must begin
substantially  prior to receiving  actual customer  demand for products.  If the
customer demand for products is not realized or implementation takes longer than
planned,  the  results  will have a  material  adverse  effect on the  Company's
business, financial condition and results of operations.

         Risks Associated with UltraRF's Wafer and Device Fabrication. UltraRF'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  for  certain
components and services, and a strict regulatory environment.  During periods of
low  demand,  high fixed wafer  fabrication  costs are likely to have a material
adverse  effect on  UltraRF'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 UltraRF will be able
to achieve  acceptable  production yields in the future. In addition,  UltraRF'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,  the  loss  of key  employees  dedicated  to the  wafer  and  device
fabrication  facilities,  or any failure to maintain acceptable wafer and device
production  levels could have a material  adverse effect on UltraRF's  business,
financial condition and results of operations.

         Risks Associated with Development of LDMOS RF. UltraRF's business could
be  adversely  affected  by its failure to develop and market its LDMOS RF power
transistors   competitively   UltraRF   sells  its   products   in  an  industry
characterized by rapid technological  changes,  frequent new product and service
introductions and evolving industry standards.  UltraRF can provide no assurance
that its  development  efforts  will  result in  commercially  successful  LDMOS
products in a timely or cost-effective  manner, if at all. UltraRF's competitors
are also expected to develop and sell devices suitable for these markets and may
produce  devices with superior  performance to UltraRF's  planned  developments.
Failure by UltraRF to develop  competitive  devices could  adversely  affect its
business.

         Risks Associated with  Relationship  with the Company.  UltraRF's close
relationship  with the Company  could limit  UltraRF's  potential to do business
with the  Company's  competitors.  The Company  currently is  UltraRF's  largest
customer,  and  UltraRF  expects  to  have  a  variety  of  ongoing  contractual
relationships  with the Company.  UltraRF  cannot  predict  whether  existing or
potential  customers who are  competitors of the Company will be deterred by the
existence of such a  relationship  between the Company and UltraRF.  If they are
deterred, UltraRF's future growth could be hindered.

         Risks  Associated  with  the  Cyclical  Nature  of  the   Semiconductor
Industry.  From  time  to  time,  the  semiconductor  industry  has  experienced
significant  downturns and wide fluctuations in product supply and demand.  This
cyclicality has led to significant imbalances in demand and production capacity.
It has also accelerated the decrease of average selling prices per unit. UltraRF
may experience periodic  fluctuations in its future financial results because of
these or other industry-wide conditions.


ITEM 3.   QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

         The  Company  develops  products  in the United  States and markets 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

                                       23


<PAGE>

ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
         OF OPERATIONS (CONTINUED)

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 less than one year to greater than 10 years.  The table below  presents the
amounts  and  related  weighted  interest  rates  of  the  Company's  short-term
investments at July 2, 2000 and March 31, 2000 (dollars in thousands).

                                            July 2,      March 31,
                                             2000          2000
                                             ----          ----

            Average fixed interest rate         5.9%         6.0%
                                            =======      =======

            Amortized cost                  $31,722      $36,644
                                            =======      =======
            Fair value                      $31,220      $36,027
                                            =======      =======

            Contractual maturity dates:
                 Less than 1 year           $  --        $ 3,500
                 1 to 5 years                31,220       32,527
                                            -------      -------
                                            $31,220      $36,027
                                            =======      =======

                                       24

<PAGE>

                           PART II - OTHER INFORMATION

         ITEM 1.  LEGAL PROCEEDINGS


         On May 19, 2000, the Company announced that it had reached a settlement
in principle of the  shareholder  class action  lawsuits which were filed in the
United States  District  Court for the Northern  District of California  and the
Superior Court of the State of California  for Santa Clara County.  The terms of
the  settlement  will  not  have a  material  adverse  effect  on the  Company's
financial position or results from operations. The final settlement agreement is
subject to Court approval and class notice provisions.

         ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

         (a)      Exhibits

                  Exhibit
                   Number                       Description
                   ------  -----------------------------------------------------

                  3.6      Amended and Restated Bylaws of Spectrian  Corporation
                           (a Delaware Corporation) dated June 9, 2000

                  10.46    Sublease  Agreement by and between American Microwave
                           Technology and the Registrant dated May 31, 2000.

                  21.1     Subsidiaries of the Registrant

                  27.1     Financial Data Schedule.

         (b)      Reports on Form 8-K.  The  Company did not file any Reports on
                  Form 8-K during the quarter ended July 2, 2000.


                                       25

<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.



                                                     SPECTRIAN CORPORATION
                                                     ---------------------
                                                         (Registrant)




Dated: August 11, 2000                        By:   /s/  MICHAEL D. ANGEL
                                                    -------------------------
                                                     Michael D. Angel
                                                 Executive Vice President,
                                                Finance and Administration,
                                           Chief Financial Officer and Secretary
                                             (Authorized Officer and Principal
                                             Financial and Accounting Officer)


                                       26
<PAGE>

<TABLE>

                                INDEX TO EXHIBITS


<CAPTION>

   Exhibits                                 Description
   -------- -------------------------------------------------------------------------------
<S>   <C>
        3.6 Amended and Restated  Bylaws of Spectrian  Corporation (a Delaware  Corporation)
            dated June 9, 2000

      10.46 Sublease  Agreement  by  and  between  American  Microwave  Technology  and  the
            Registrant dated May 31, 2000.

       21.1 Subsidiaries of the Registrant

       27.1 Financial Data Schedule
</TABLE>

                                       27