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

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

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

(Mark One)
[ X ]    Quarterly  report pursuant to Section 13 or 15(d) of the Securities
         Exchange Act of 1934 for the period ended December 28, 1996

                                       OR

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

Commission file number: 0-24360



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

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

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

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




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

                           Yes     X        No
                                 -----           -----

As of December 28, 1996 there were 8,171,144 shares of the  Registrant's  Common
Stock outstanding.

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<PAGE>


<TABLE>
                                              SPECTRIAN CORPORATION

                                              Form 10-Q

                                              INDEX
<CAPTION>
                                                                                     Page No.

<S>                                                                                      <C>
Cover Page                                                                               1

Index                                                                                    2

PART I - Financial Information

                ITEM 1 - Condensed consolidated financial statements

                   Condensed consolidated balance sheets -
                      March 31, 1996 and December 28, 1996                               3

                   Condensed consolidated statements of operations -
                      three months and nine months ended
                      December 30, 1995 and December 28, 1996                            4

                   Condensed  consolidated  statements of cash flows nine months
                      ended December 30, 1995 and
                      December 28, 1996                                                  5

                   Notes to condensed consolidated financial statements                  6

                ITEM 2 - Management's Discussion and Analysis of Financial
                             Condition and Results of Operations                         8


PART II - Other Information

                ITEM 6 - Exhibits and Reports on Form 8-K                               12

                   Signatures                                                           13
</TABLE>
                                       2
<PAGE>
<TABLE>

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

                                                                        March 31,         December 28,
Assets                                                                     1996               1996
                                                                      ---------------    ----------------
                                                                                           (Unaudited)
<S>                                                                     <C>                   <C>
Current Assets:
   Cash and cash equivalents                                            $      1,163          $    6,207
   Short-term investments                                                      3,002                ----
   Accounts receivable, less allowance for doubtful
      accounts of $339 and $361, respectively                                 11,980              11,403
   Inventories                                                                 7,229              14,333
   Prepaid expenses and other current assets                                     420                 692
                                                                      ---------------    ----------------

        Total current assets                                                  23,794              32,635
Property and equipment, net                                                   32,128              21,579
                                                                      ---------------    ----------------

                                                                           $  55,922           $  54,214
                                                                      ===============    ================

Liabilities and Shareholders' Equity

Current Liabilities:
   Accounts payable                                                       $    6,964          $    8,630
   Accrued liabilities                                                         4,120               5,278
                                                                      ---------------    ----------------

        Total current liabilities                                             11,084              13,908
                                                                      ---------------    ----------------


Shareholders' Equity:
   Common Stock, no par value, 20,000,000 shares authorized;
      8,014,525 and 8,171,144 shares issued and outstanding,
      respectively                                                            51,956              52,866

   Deferred compensation expense                                                (182)               (110)
   Unrealized gains on investments                                                 2                ----
   Accumulated deficit                                                        (6,938)            (12,450)
                                                                      ---------------    ----------------

     Total shareholders' equity                                               44,838              40,306
                                                                      ---------------    ----------------

                                                                           $  55,922           $  54,214
                                                                      ===============    ================
<FN>

The  accompanying  notes are an integral  part of these  condensed  consolidated
financial statements.
</FN>
</TABLE>

                                       3
<PAGE>
<TABLE>

SPECTRIAN CORPORATION AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
(Unaudited)

<CAPTION>
                                                                  Three months ended                   Nine months ended
                                                          December 30,      December 28,        December 30,      December 28,
                                                         ----------------------------------     --------------   ---------------
                                                             1995              1996                1995              1996
                                                             ----              ----                ----              ----
<S>                                                       <C>                <C>                 <C>              <C>      
Revenues:
   Product sales                                          $ 11,644           $ 23,839            $ 51,396          $ 55,404  
   Non-recurring engineering revenues                          628                646               2,288             1,276  
                                                          --------           --------            --------          --------
                                                            12,272             24,485              53,684            56,680
                                                          --------           --------            --------          --------
Costs and expenses:                                                                                                
   Cost of product sales                                     8,203             17,211              33,895            42,341
   Research and development                                  3,611              4,773              10,643            12,836
   Selling, general and administrative                       1,460              2,293               5,612             6,620
                                                          --------           --------            --------          --------
                                                            13,274             24,277              50,150            61,797
                                                          --------           --------            --------          --------
        Operating income (loss)                             (1,002)               208               3,534            (5,117)
                                                                                                                   
Interest income (expense), net                                 201                (70)                797              (395)
                                                          --------           --------            --------          --------
                                                                                                                   
Income (loss) before income taxes                             (801)               138               4,331            (5,512)
                                                                                                                   
Income tax expense (benefit)                                   (65)              --                   350              --
                                                          --------           --------            --------          --------
                                                                                                                   
Net income (loss)                                         $   (736)          $    138            $  3,981          $ (5,512)
                                                          ========           ========            ========          ========
                                                                                                                   
                                                                                                                   
Net income (loss) per share                               $  (0.09)          $   0.02            $   0.49          $  (0.68)
                                                          ========           ========            ========          ========
                                                                                                                   
Shares used in computing per                                                                                       
   share amounts                                             7,771              8,295               8,147             8,118
                                                          ========           ========            ========          ========
<FN>                                                                                                               
                                                                                                          
The  accompanying  notes are an integral  part of these  condensed  consolidated
financial statements.
</FN>
</TABLE>
                                       4
<PAGE>
<TABLE>

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

                                                                                           Nine months ended
                                                                                 December 30,          December 28,
                                                                               ----------------------------------------
                                                                                     1995                  1996
                                                                                     ----                  ----
<S>                                                                                 <C>                 <C>          
Cash flows from operating activities:
    Net income (loss)                                                               $  3,981            $ (5,512)  
    Adjustments to reconcile net income (loss) to net                                                   
      cash provided by (used for) operating activities:                                                 
        Depreciation and amortization                                                  3,103               4,486
        Stock option compensation expense                                                153                  72
        Tax benefit associated with stock options                                        337                --
        Changes in operating assets and liabilities                                                     
           Accounts receivable                                                         1,801                 577
           Inventories                                                                (2,214)             (7,104)
           Prepaid expenses and other assets                                            (409)               (272)
           Accounts payable                                                           (1,040)              1,666
           Accrued liabilities                                                            73               1,158
                                                                                    --------            --------
              Net cash provided by (used for) operating activities                     5,785              (4,929)
                                                                                    --------            --------
                                                                                                        
Cash used for investing activities:                                                                     
    Purchase of short-term investments                                               (16,123)               --
    Proceeds from sale of short-term investments                                      21,303               3,000
    Purchase of property and equipment                                               (20,090)            (10,355)
    Proceeds from sale of land, building and improvements                               --                16,418
                                                                                    --------            --------
              Net cash provided by (used for) investing activities                   (14,910)              9,063
                                                                                    --------            --------
                                                                                                        
Cash flows from financing activities:                                                                   
    Proceeds from sales of Common Stock, net                                           1,551                 910
                                                                                    --------            --------
             Net cash provided by financing activities                                 1,551                 910
                                                                                    --------            --------
                                                                                                        
             Net increase (decrease) in cash and cash equivalents                     (7,574)              5,044
             Cash and cash equivalents, beginning of period                            8,420               1,163
                                                                                    ========            ========
             Cash and cash equivalents, end of period                               $    846            $  6,207
                                                                                    ========            ========
                                                                                                        
<FN>                                                                                            
The accompanying notes are an integral part of these condensed consolidated financial
statements
</FN>
</TABLE>

                                       5
<PAGE>


                      SPECTRIAN CORPORATION AND SUBSIDIARY
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


NOTE 1: Basis of Presentation

The  accompanying  financial  statements  have been prepared in conformity  with
generally  accepted  accounting  principles.  However,  certain  information  or
footnote  disclosures  normally  included in  financial  statements  prepared in
accordance with generally accepted accounting  principles have been condensed or
omitted  pursuant to the rules and  regulations  of the  Securities and Exchange
Commission.  In the  opinion  of the  management,  the  statements  include  all
adjustments  (which are of a normal and recurring nature) necessary for the fair
presentation  of the financial  information  set forth therein.  These financial
statements should be read in conjunction with the Company's audited consolidated
financial statements as incorporated by reference in the Company's Form 10-K for
fiscal year ended March 31, 1996. 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, 1997, or any other future period.


NOTE 2: Balance Sheet Components

Balance sheet components are as follows:

                                                 March 31,     December 28,
                                                  1996             1996
                                              -------------   ---------------
                                                     (In thousands)
Inventories:
   Raw materials                                $ 1,512          $ 7,972 
   Work in process                                5,285            4,842
   Finished goods                                 1,076              875
                                                -------          -------
                                                $ 7,229          $14,333
                                                =======          =======
                                                                
Property and equipment:                                         
   Machinery and equipment                      $26,053          $34,921
   Land, building and improvements               15,682             --
   Furniture and fixtures                         1,342            1,447
   Leasehold improvements                           927              964
                                                -------          -------
                                                 44,004           37,332
   Less accumulated depreciation and                            
      amortization                               11,876           15,753
                                                -------          -------
                                                $32,128          $21,579
                                                =======          =======
                                                                
Accrued liabilities:                                            
   Employee compensation and benefits           $ 2,673          $ 2,804
   Warranty                                         699            1,410
   Other accrued liabilities                        748            1,064
                                                -------          -------
                                                $ 4,120          $ 5,278
                                                =======          =======
                                                                
                                        6
<PAGE>                                                   


NOTE 3: Revenue Recognition

The Company recognizes product sales upon shipment and concurrently  accrues for
expected warranty expenses.  Repair and service revenues are recognized when the
service is performed.

Non-recurring   engineering  revenues  relate  to  customer  funded  development
projects and are deferred and recognized upon completion of project  milestones.
The Company is under no  obligation to repay funds once related  milestones  are
achieved. Costs associated with such customer funded research and development of
$1.1  million and  $429,000  for the three  months  ended  December 30, 1995 and
December 28, 1996, respectively,  and $3.1 million and $1.6 million for the nine
months ended December 30, 1995 and December 28, 1996, respectively, are included
in research and development expense.


NOTE 4: Earnings Per Share Computation

Net income (loss) per share has been computed using the weighted  average number
of outstanding  shares of Common Stock and common  equivalent  shares from stock
options  outstanding  (when dilutive  using the treasury  stock method).  Common
Stock  options are assumed to be  exercised  and the  proceeds  used to buy back
Common Stock at the fair market value (the treasury  stock  method).  Due to the
net losses  incurred  during the three month period ending December 30, 1995 and
the nine month period ending December 28, 1996, Common Stock options outstanding
would be  antidilutive  and are therefore not included in the earnings per share
calculation.


NOTE 5: Bank Borrowings and Debt

During the three month period  ending  December  29, 1996,  the Company sold and
leased  back its  principle  facilities  located  at 350 West Java Drive and 160
Gibraltar Court in Sunnyvale,  California.  Prior to the sale, the Company had a
term loan of $5.9 million  outstanding,  secured by this real estate, as well as
borrowings  under a  revolving  line of  credit of $6.0  million.  Both of these
obligations  were  paid in full  with  the  proceeds  of the  real  estate  sale
transaction.

In January 1997, the Company borrowed $6.0 million against a Term Loan,  secured
by substantially all of the Company's capital equipment.  Under the terms of the
agreement,  which expires  January 2002, the Company is required to make monthly
payments  against the loan,  plus  interest at a rate equal to the Treasury Rate
plus  2.75%.  Under the terms of the  agreement,  the  Company  is  required  to
maintain certain minimum net worth and other specific  financial  ratios.  As of
January 27, 1997, the Company was in conformance with these covenants.

                                       7
<PAGE>

                      SPECTRIAN CORPORATION AND SUBSIDIARY

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

Overview

     Spectrian   provides   highly   linear   power   amplifiers   to   wireless
communications  infrastructure  original equipment  manufacturers  ("OEMs"). The
Company  designs,  manufactures,  and markets  single  carrier and  multicarrier
amplifiers  that  support  a  broad  range  of  worldwide   analog  and  digital
transmission standards, including AMPS, TDMA, CDMA, TACS, GSM and DCS-1800.

      Spectrian's customers include many of the world's largest manufacturers of
wireless infrastructure equipment,  including Northern Telecom, as well as other
equipment manufacturers in emerging wireless markets. The Company's revenues are
derived from a limited number of OEM customers and products.  In recent periods,
sales to Northern  Telecom and its  affiliates as a percentage of total revenues
have fluctuated significantly.  During the three months ended December 28, 1996,
Northern Telecom Limited,  Qualcomm  Incorporated  and Matra  Communication,  in
which Northern Telecom has an equity investment,  accounted for 61%, 13% and 12%
of the Company's total revenues,  respectively. The concentration of sales among
a limited number of OEM customers, in particular Northern Telecom, has increased
the volatility of the Company's revenues and results of operations.  The Company
expects that it will continue to experience  volatility in customer orders,  but
it is working to  diversify  its customer  base to reduce this risk.  As part of
this  diversification  strategy,  the  Company  is  seeking  to enter the Korean
marketplace as well as to begin selling directly to cellular  service  providers
in addition to its current OEM  business.  There can be no  assurance,  however,
that the Company  will be  successful  in selling its  products  into the Korean
market or directly to cellular service providers.

       The  Company's  business,  financial  condition and results of operations
have  been  materially  adversely  affected  in  the  past  by  the  failure  of
anticipated orders to materialize and by deferrals or cancellations of orders as
a result of changes in OEM requirements.  Fluctuating  demand from the Company's
largest customer, delays in the availability for sale of new products, and scrap
and   inefficiencies   associated  with  introducing  these  new  products  into
manufacturing have caused  significant  revenue and net income volatility during
the current fiscal year.  Results during the nine months ended December 28, 1996
were also impacted by redundant  costs  associated with developing the Company's
new 4-inch wafer  fabrication  facility while still maintaining its 3-inch wafer
facility.  The Company expects these redundant costs to continue into the fourth
quarter  of  fiscal  1997,  when  the full  qualification  of the  4-inch  wafer
fabrication  facility  is  anticipated.   In  addition,   the  Company  incurred
significant  manufacturing costs during the nine months ended December 28, 1996,
primarily due to  inefficiencies  associated  with the transition of several new
products from development  into  production.  These higher costs for new product
introductions are expected to continue for at least the next six months.

     The  marketplace  for  the  Company's  products  is  becoming  increasingly
competitive.  The Company  currently faces  competition  from HP-Avantek for its
largest customer,  Northern Telecom and its affiliates.  Further, as the Company
seeks to diversify  its customer  base to reduce risk, it must enter new markets
where its competitors are already established. In particular,  several companies
have been selling in the Korean  marketplace  and  directly to cellular  service
providers prior to Spectrian pursuing these opportunities.  This competition has
resulted in, and will result in, reduced  average sales prices for the Company's
products, which accordingly will negatively impact gross margins.

       In an effort to  improve  the  Company's  liquidity,  Spectrian  sold and
leased back its main facilities located in Sunnyvale, California on November 19,
1996.  Proceeds from the sale of the facility were  approximately  $16.4 million
net of fees,  commissions and closing costs. The Company agreed to leaseback the
facility  for a term of 15  years,  with  options  to  extend  the lease for two
additional five year periods.

                                       8
<PAGE>

Results of Operations

Three Month and Nine Month Periods Ended December 30, 1995 and December 28, 1996

Revenues.  The Company  generates  product  sales revenue from the sale of power
amplifiers,  primarily  to OEMs in cellular and other  markets,  as well as from
amplifier  repair and  service.  A portion  of the  Company's  revenues  is also
generated  through  non-recurring  engineering  ("NRE") revenues which represent
funding from the Company's OEM customers for specific development projects.  The
Company's revenues increased by 99% from $12.3 million in the three months ended
December 30, 1995 to $24.5 million in the three months ended  December 28, 1996,
primarily  driven by  increased  shipments of Personal  Communications  Services
("PCS") amplifiers for both CDMA and GSM protocols as well as increases in sales
of existing cellular amplifier products.  The Company's revenues increased by 6%
from $53.7  million in the nine months ended  December 30, 1995 to $56.7 million
in the nine months ended December 28, 1996, primarily  attributable to increased
shipments of Personal  Communications  Services ("PCS") amplifiers for both CDMA
and GSM protocols.

    The Company's  revenues are derived  primarily  from a limited number of OEM
customers  and  products.  During the three  months  ended  December  28,  1996,
Northern Telecom Limited,  Qualcomm  Incorporated  and Matra  Communication,  in
which Northern Telecom has an equity investment,  accounted for 61%, 13% and 12%
of revenues,  respectively. If the Company were to lose a major OEM customer, in
particular  Northern  Telecom,  or if  orders by a major  OEM  customer  were to
otherwise decrease,  the Company's business,  financial condition and results of
operations would be materially adversely affected.


Cost  of  Product  Sales.  Cost  of  product  sales  consists  primarily  of raw
materials,  RF transistor  fabrication costs, amplifier assembly and test costs,
overhead and warranty  costs,  and does not include costs incurred in connection
with NRE revenues.  The Company's  cost of product sales  increased by 110% from
$8.2 million in the three months ended December 30, 1995 to $17.2 million in the
three  months  ended  December 28, 1996.  The  Company's  cost of product  sales
increased by 25% from $33.9  million in the nine months ended  December 30, 1995
to $42.3 million in the nine months ended December 28, 1996.

    Gross margin on product sales  decreased  from 30% in the three month period
ended  December  30, 1995 to 28% in the three month  period  ended  December 28,
1996,  primarily due to  inefficiencies,  scrap and high  material  costs on new
products coming out of development  into  production,  as well as warranty costs
associated with the Company's first generation  multicarrier  products. The cost
of  scrapping  wafers and  transistors  for the  Company's  newer  products  was
particularly  high  during  the  period  and was  exacerbated  by the  Company's
continued   reliance  on  its  older  3-inch  wafer  fabrication   facility  for
production.  Gross margin on product sales  decreased from 34% in the nine month
period ended  December  30, 1995 to 24% in the nine month period ended  December
28,  1996,  primarily  due to  inefficiencies  and  high  material  costs on new
products coming out of development into production and warranty costs associated
with the Company's first generation multicarrier products.

    Due to an unusually  large number of new products  introduced in fical 1997,
the Company has experienced high manufacturing  costs,  including high scrap and
material waste,  significant material obsolescence,  labor inefficiencies,  high
overtime  hours,  inefficient  material  procurement,  an inability to recognize
economies of scale,  and high costs  associated with the transition of these new
products from  development into production.  The Company's  manufacturing  costs
have  historically been volatile and have had a material adverse effect on gross
margins.  Although the Company has initiated actions to reduce its manufacturing
costs,  any failure to achieve these  reductions  could have a material  adverse
effect on the Company's business, financial condition and results of operations.

Research and Development.  Research and development expenses include the cost of
designing, developing or cost reducing amplifiers and RF transistors,  including
the cost associated with NRE revenues.  NRE funding  received from OEM customers
may be  greater  or less  than  the  related  development  costs.  Research  and
development   also  includes  the  expenses   associated  with  the  design  and
qualification expenses of the Company's new 4-inch wafer fabrication facility.

   The Company's  research and development  expenses  increased by 32% from $3.6
million in the three months ended December 30, 1995 to $4.8 million in the three
months ended December 28, 1996. The Company's research and development  expenses


                                       9
<PAGE>


increased by 21% from $10.6  million in the nine months ended  December 30, 1995
to $12.8  million in the nine months ended  December  28, 1996.  The increase in
research and  development  spending in both periods is attributable to increased
spending on development of the Company's 4-inch wafer  fabrication  facility and
increased spending on semiconductor research and development.

     Research and  development  expenses as a percentage  of revenues  decreased
from 29% in the three months ended December 30, 1995 to 19% for the three months
ended  December  28, 1996,  reflecting  the  Company's  decision to continue the
investment  in product  development,  despite lower  revenues,  during the three
month period ended  December 30, 1995.  Research and  development  expenses as a
percentage of revenues  increased from 20% in the nine months ended December 30,
1995 to 23% for the nine  months  ended  December  28,  1996.  The  increase  in
research  and  development  spending as a  percentage  of revenues  reflects the
Company's  increased  spending for the development of the Company's 4-inch wafer
fabrication facility.

Selling,  General  and  Administrative.   Selling,  general  and  administrative
expenses  include  compensation  and  benefits  for  sales,  marketing,   senior
management and administrative  personnel,  commissions paid to independent sales
representatives,  professional fees and other expenses.  The Company's  selling,
general and  administrative  expenses  increased by 57% from $1.5 million in the
three months  ended  December 30, 1995 to $2.3 million in the three months ended
December  28,  1996,  primarily  due to  increases  in sales and  administrative
headcount  and  related  compensation.   The  Company's  selling,   general  and
administrative  expenses  increased  by 18% from $5.6 million in the nine months
ended  December 30, 1995 to $6.6  million in the nine months ended  December 28,
1996,  primarily  due to increases  in sales and  administrative  headcount  and
related compensation and outside services for information systems support.

    Selling,  general and  administrative  expenses as a percentage  of revenues
decreased  from 12% in the three  months  ended  December 30, 1995 to 9% for the
three  months ended  December  28, 1996  reflecting  the  Company's  decision to
continue sales and  administrative  spending,  despite the lower revenues during
the  three  month  period  ended  December  30,  1995.   Selling,   general  and
administrative  expenses as a percentage of revenues  increased  from 10% in the
nine months ended  December  30, 1995 to 12% for the nine months ended  December
28, 1996 reflecting increases in sales and administrative  headcount and related
compensation as well as the continued spending.

Interest Income  (Expense),  Net. Net interest income for the three months ended
December 30, 1995 was $201,000  compared to net interest  expense of $70,000 for
the three months  ended  December  28,  1996.  Net interest  income for the nine
months ended December 30, 1995 was $797,000  compared to net interest expense of
$395,000  for the nine  months  ended  December  28,  1996.  The change from net
interest  income to net  interest  expense from period to period was a result of
the Company's lower cash balances and the interest associated with incurring $12
million of debt during fiscal 1997 and subsequently repaying the obligation with
proceeds derived from a facility sale and leaseback.

Income  Taxes.  The  Company  recorded  an income tax benefit of $65,000 for the
three month period ended  December 30, 1995  reflecting  the net loss during the
period.  No tax  provision  was made during the three months ended  December 28,
1996 due to the loss in the current nine month  period ended  December 28, 1996.
The December 30, 1995 effective tax rate of 8% reflects the use of net operating
loss  carryforwards.  At March 31,  1996,  the Company had federal and state net
operating loss carryforwards for tax reporting  purposes of approximately  $25.0
million and $9.0 million,  respectively.  The  Company's  ability to use its net
operating  loss   carryforwards   against  taxable  income  may  be  subject  to
restrictions  and limitations  under Section 382 of the Internal Revenue Code of
1986,  as  amended,  in the event of a change in  ownership  of the  Company  as
defined therein.

Variability of Operating Results. The Company's quarterly operating results have
in the  past,  and will in the  future,  vary  significantly  due to a number of
factors,  including  the  timing,  cancellation,  or  rescheduling  of  customer
shipments;  the timing and level of NRE revenues;  variations  in  manufacturing
efficiencies  and costs; low yields of wafers and transistors from the Company's
wafer and device fabrication  facilities;  changes in the mix of products having
differing gross margins;  declining average sales prices;  competitive  factors;
the long sales cycles associated with the Company's  customer-specific products;
development risks associated with the introduction of new products that comprise
much of the Company's future sales; the high manufacturing costs associated with
starting  production of new products;  and variations in product  development or
other operating expenses.  In the near term,  operating results may be adversely
affected by continuing  delays in the availability for sale of the Company's new
products or by any failure to meet acceptable wafer production levels during the


                                       10
<PAGE>

 

Company's  transition from its current 3-inch wafer fabrication  facility to the
new 4-inch wafer fabrication facility currently nearing completion.


Liquidity and Capital Resources

        Cash provided by  operations  was $5.8 million for the nine months ended
December 30, 1995  compared to cash used for  operations of $4.9 million for the
nine months ended December 28, 1996. The decrease in cash provided by operations
in the nine months ended December 28, 1996 primarily  related to the decrease in
profitability over the comparable period of the prior year, as well as increases
in inventory.

       As of  December  28,  1996,  the  Company  had  working  capital of $18.7
million, including $6.2 million in cash and cash equivalents.  The Company has a
revolving  line  of  credit  with a bank,  secured  primarily  by the  Company's
accounts  receivable  and  inventory.  Under the terms of the  agreement,  which
expires  July 31,  1997,  the Company is required  to maintain  certain  minimum
working capital, net worth,  profitability,  and other specific financial ratios
and prohibits the payment of cash dividends without the prior written consent of
the lender.  As of December 28, 1996, the Company was in conformance  with these
convenants and $5.0 million was available under the line of credit.

       During the three month period ending  December 28, 1996, the Company sold
and leased back its principle  facilities located at 350 West Java Drive and 160
Gibraltar Court in Sunnyvale, California. Proceeds from the sale of the facility
were approximately $16.4 million net of fees, commissions and closing costs. The
Company agreed to leaseback the facility for a term of 15 years, with options to
extend the lease for two  additional  five year periods.  Prior to the sale, the
Company  had a term  loan of $5.9  million  outstanding,  secured  by this  real
estate,  as well as borrowings under a revolving line of credit of $6.0 million.
Both of these obligations were paid in full with the proceeds of the real estate
sale transaction.

          In January  1997,  the Company  borrowed  $6.0 million  against a Term
Loan, secured by substantially all of the Company's capital equipment. Under the
terms of the agreement,  which expires  January 2002, the Company is required to
make monthly  payments  against the loan,  plus  interest at a rate equal to the
Treasury  Rate plus  2.75%.  Under the terms of the  agreement,  the  Company is
required to maintain  certain  minimum  net worth and other  specific  financial
ratios.  As of January  27,  1997,  the Company  was in  conformance  with these
covenants.

       Additions to property and equipment in the nine months ended December 30,
1995 were $20.1 million, including $8.6 million for the purchase of the facility
in  Sunnyvale,  California  and $5.4 million for  improvements  to the facility.
Additions to property and equipment  were $10.4 million in the nine months ended
December  28,  1996,  including  $3.4  million for  equipment  and  construction
associated the Company's new 4-inch wafer fabrication facility.

       The Company expects capital additions for the remainder of fiscal 1997 to
be  approximately  $4 million,  primarily for test equipment for  manufacturing.
Based on the  Company's  current  working  capital,  expected cash flows and the
Company's  debt  capacity,  the Company  believes that  sufficient  cash will be
available to meet the Company's needs through at least the next twelve months.

      In connection with the operation of American  Microwave  Technology,  Inc.
("AMT"), the Company's wholly-owned subsidiary located in Brea, California,  the
Company occupies  approximately  14,400 square feet of a facility  pursuant to a
lease which expired in July 1996 and was  subsequently  renewed until  September
30, 1997.

    Certain statements in this Management's Discussion and Analysis of Financial
Condition  and Results of Operations  are  forward-looking  statements  based on
current  expectations,  and entail  various risks and  uncertainties  that could
cause actual results to differ  materially  from those expressed in such forward
looking  statements.  Such  risks  and  uncertainties  are set  forth  above  in
"Overview"  and  "Variability  of  Operating   Results"  and  include,   without
limitation,  statements  relating  to the  cancellation  or deferral of customer
orders;   the  timely   development  and  market  acceptance  of  new  products,
particularly the second  generation  multicarrier  product;  continued growth in
wireless communications,  including new PCS networks; the ability to manufacture
new  or  existing  products  in  sufficient  quantity  or  quality;  the  market
acceptance of the Company's  new or existing  products in Korea;  the ability of
the Company to  successfully  sell its  products  directly  to cellular  service
providers; or other general economic conditions.  Further information on factors
which could affect the Company's financial results are included in the Company's
1996 Annual Report on Form 10-K.

                                       11
<PAGE>

ITEM 6: Exhibits and Reports on Form 8-K

        (a)Exhibits

           11.1   Statement regarding computation of net income (loss) per share
           27.1   Financial Data Schedule

        (b)Reports on Form 8-K

           The  Company  filed a Current  Report on Form 8-K on December 3, 1996
with respect to a  sale/leaseback  transaction for the Company's main facilities
in  Sunnyvale,   California.  Proceeds  from  the  sale  of  the  facility  were
approximately  $16.4 million net of fees,  commissions  and closing  costs.  The
Company agreed to leaseback the facility for a term of 15 years, with options to
extend the lease for two additional five year periods.



                                       12


<PAGE>




SIGNATURES




Pursuant  to the  requirements  of the  Securities  Exchange  Act of  1934,  the
registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned thereunto duly authorized.


Dated: January 28, 1996

                      SPECTRIAN CORPORATION
                      (Registrant)



                      /S/ EDWARD A. SUPPLEE, JR.
                      -----------------------------------
                      Edward A. Supplee, Jr.
                      Executive Vice President, Finance and Administration,
                         Chief Financial Officer and Secretary
                      (Principal Financial and Accounting Officer)


                                       13

<PAGE>



INDEX TO EXHIBITS



EXHIBITS


11.1    Statement regarding computation of net income (loss) per share

27.1    Financial Data Schedule



                                       14