Exhibit 99.2

ZARLINK SEMICONDUCTOR INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS - CANADIAN SUPPLEMENT

             (in millions of U.S. dollars, except per share amounts,
                        and in accordance with CDN GAAP)

The following  Management's  Discussion and Analysis of Financial  Condition and
Results of Operations - Canadian  Supplement  ("Canadian  Supplement") should be
read in  conjunction  with  Zarlink's  Management's  Discussion  and Analysis of
Financial  Condition  and  Results  of  Operations  included  in  Item 2 of this
Quarterly  Report.  The Canadian  Supplement  should also be read in conjunction
with the unaudited  consolidated financial statements and notes thereto prepared
in accordance with U.S. GAAP (included in Item 1 of this Quarterly Report),  the
unaudited  consolidated  financial  statements  and notes  thereto  prepared  in
accordance with Canadian generally  accepted  accounting  principles  ("Canadian
GAAP")  (included  in  Exhibit  99.1)  and the  audited  consolidated  financial
statements and notes thereto included in the Company's  Annual  Information Form
for the fiscal year ended March 29, 2002.

Certain  statements  in  this  Canadian  Supplement  constitute  forward-looking
statements.  Such  forward-looking  statements  involve known and unknown risks,
uncertainties  and other factors that may cause the actual results,  performance
or achievements of Zarlink, or industry results, to be materially different from
any future  results,  performance or  achievements  expressed or implied by such
forward-looking  statements.  Such risks,  uncertainties and assumptions include
the following:  general economic and business  conditions;  demographic changes;
import  protection and  regulation;  rapid  technology  development and changes;
timing  of  product  introductions;  the  mix  of  products/services;   industry
competition,  industry  capacity and other industry  trends;  and the ability of
Zarlink to attract and retain key  employees.  The Canadian  Supplement has been
prepared  by  management  to provide an  analysis  of the  material  differences
between  Canadian  GAAP  and U.S.  GAAP  with  respect  to  Zarlink's  financial
condition and results of operations.

RESULTS OF OPERATIONS

<TABLE>
<CAPTION>
                                                         Three Months Ended              Nine Months Ended
                                                    ----------------------------    ---------------------------
(millions of U.S. dollars)                           Dec. 27,         Dec. 28,       Dec. 27,         Dec. 28,
                                                       2002             2001           2002             2001
                                                    ----------       -----------    -----------      ----------
<S>                                                   <C>             <C>            <C>              <C>
Loss from operations before
 income taxes - U.S. GAAP                             $(14.1)         $(16.8)        $(37.0)          $(107.1)
                                                      ======          ======         ======           =======
Loss from operations before
 income taxes - CDN GAAP
                                                      $(16.1)         $(24.4)        $(42.0)          $(122.6)
                                                      ======          ======         ======           =======

Net loss for the period - U.S. GAAP                   $(13.7)         $(18.3)        $(34.4)          $ (98.5)
                                                      ======          ======         ======           =======

Net loss for the period - CDN GAAP                    $(15.0)         $(25.5)        $(39.6)          $(120.1)
                                                      ======          ======         ======           =======

Net loss per common share - U.S. GAAP                 $(0.11)         $(0.15)        $(0.28)          $ (0.80)
                                                      ======          ======         ======           =======

Net loss per common share - CDN GAAP                  $(0.12)         $(0.21)        $(0.32)          $ (0.97)
                                                      ======          ======         ======           =======
</TABLE>

The  difference  in loss from  operations  between U.S.  and  Canadian  GAAP was
principally  due to differences in the treatment of stock  compensation  expense
and the fair  value  methods  used  when  recording  an  impairment  charge  for
long-lived and intangible assets.

In the third  quarter  of Fiscal  2003 there was no stock  compensation  expense
recorded in the Company's  earnings under Canadian or U.S. GAAP. Prior to Fiscal
2003,  stock  compensation  expense was not recorded in the  Company's  earnings
under  Canadian GAAP. As a result,  the loss from  operations and net loss under
Canadian  GAAP as compared to U.S.  GAAP was reduced by $3.8 in the three months
ended  December 28, 2001. In the first nine months of Fiscal 2003 there was $nil
stock  compensation  expense  recorded in the Company's  earnings under Canadian
GAAP, as compared to a stock  compensation  recovery of $1.4 recorded under U.S.
GAAP in the same  period.  As a result,  the loss from  operations  and net loss
under  Canadian  GAAP as compared  to U.S.  GAAP was higher by $1.4 for the nine
months ended December 27, 2002. Prior to Fiscal 2003, stock compensation expense
was not recorded in the Company's earnings under Canadian GAAP. As a result, the
loss from  operations  and net loss under Canadian GAAP as compared to U.S. GAAP
was reduced by $10.1 in the nine months ended December 28, 2001.


                                       1
<PAGE>

The Canadian GAAP loss from  operations was higher than the  corresponding  U.S.
GAAP amounts due to differences  in the net book values of certain  tangible and
intangible assets resulting from different methods used to determine fair values
resulting from their  impairment.  The different net book values of tangible and
intangible  assets resulted in a higher  depreciation and  amortization  expense
under  Canadian GAAP by $1.1 for the three months ended December 27, 2002 (three
months ended  December 28, 2001 - higher by $2.2).  For the first nine months of
the year,  the  different  net book values of  tangible  and  intangible  assets
resulted in a higher  depreciation and amortization  expense under Canadian GAAP
by $3.2 (nine months ended December 28, 2001 - higher by $6.6).

Differences also arose between U.S. and Canadian GAAP earnings in the first nine
months of Fiscal 2002 due to foreign exchange  translation  differences  between
U.S.  and  Canadian  GAAP.  As a result of the  Company's  change  in  reporting
currency to U.S.  dollars in Fiscal 2002,  historical  results were  restated in
accordance with U.S. and Canadian GAAP.  Under U.S. GAAP, the restatement of the
Company's  results was  calculated  using the average rates for each  respective
period.  Under Canadian GAAP, a translation of convenience is permitted  whereby
all  historical  results  are  converted  using the rate at the time of the last
published  financial  statements  prior to adopting the new reporting  currency.
Accordingly,  the exchange  rates used by the Company  were as at September  28,
2001.  As a result  of the  different  methods  of  translation,  Canadian  GAAP
earnings  were higher by $1.9 for the nine months ended  December 28, 2001,  but
were not impacted by the change for the three months ended December 28, 2001.

Under Canadian GAAP, unrealized gains and losses on forward contracts identified
as hedges may be  deferred  as long as there is  reasonable  assurance  that the
hedge will be  effective.  Under U.S.  GAAP,  deferral is allowed for  contracts
meeting  the  requirements  for cash flow  hedging  under FAS 133.  Prior to the
adoption of FAS 133,  deferral was allowed  only on contracts  intended to hedge
identifiable firm commitments.  The difference in accounting  resulted in higher
Canadian  GAAP net loss by $0.2 for the three  months  ended  December  27, 2002
(three  months  ended  December  28,  2001 - lower by $0.1).  For the first nine
months of Fiscal 2003, the difference in accounting  resulted in higher Canadian
GAAP net loss by $0.6 (nine months ended December 28, 2001 - higher by $5.5).

Differences  may also arise  between  Canadian  and U.S.  GAAP where  income tax
expense is calculated using  substantively  enacted income tax rates. Under U.S.
GAAP,  income tax expense is  calculated  using only enacted tax rates.  For the
three  months  ended  December  27, 2002 and  December  28,  2001,  there was no
difference  in income tax expense  between  Canadian and U.S.  GAAP.  During the
first nine months of Fiscal 2003,  there was no difference in income tax expense
between  Canadian and U.S.  GAAP,  but for the first nine months of Fiscal 2002,
the Canadian income tax recovery was lower by $1.1.

Under  Canadian  GAAP,  capital taxes and investment tax credits are included in
operating income.  Under U.S. GAAP, capital taxes and investment tax credits are
included in income tax expense. As a result of these differences in presentation
under Canadian GAAP, Zarlink's operating loss was higher, and income tax expense
was lower by $0.9 in the three months ended  December 27, 2002 and for the three
months ended December 28, 2001, the Canadian GAAP operating loss was higher, and
income tax expense was lower by $0.3.  For the first nine months of Fiscal 2003,
Zarlink's  Canadian GAAP operating  loss was higher,  and income tax expense was
lower by $0.5 and for the first nine months of Fiscal 2002,  the  Canadian  GAAP
operating loss was lower, and income tax recovery was lower by $0.5.


                                       2