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                  Six Months Ended
                                                                     ----------------------------        ---------------------------
(millions of U.S. dollars)                                            Sept. 27,        Sept. 28,          Sept. 27,        Sept. 28,
                                                                        2002             2001                2002             2001
                                                                     ----------       -----------        -----------       ---------
<S>                                                                    <C>               <C>               <C>               <C>
Loss from operations before
income taxes - U.S. GAAP                                               $(11.3)           $(19.2)           $(19.7)           $(82.9)
                                                                       ======            ======            ======            ======
Loss from operations before
income taxes - CDN GAAP
                                                                       $(12.1)           $(21.4)           $(23.3)           $(96.5)
                                                                       ======            ======            ======            ======
Net loss for the period - U.S. GAAP                                    $(11.9)           $(19.7)           $(20.6)           $(80.2)
                                                                       ======            ======            ======            ======
Net loss for the period - CDN GAAP                                     $(13.2)           $(21.0)           $(24.6)           $(94.6)
                                                                       ======            ======            ======            ======
Net loss per common share - U.S. GAAP                                  $(0.10)           $(0.16)           $(0.17)           $(0.65)
                                                                       ======            ======            ======            ======
Net loss per common share - CDN GAAP                                   $(0.11)           $(0.17)           $(0.20)           $(0.76)
                                                                       ======            ======            ======            ======
</TABLE>

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

In the second quarter of Fiscal 2003 there was $nil stock  compensation  expense
recorded in the Company's  earnings  under Canadian GAAP, as compared to a stock
compensation  expense of $0.2  recorded  under U.S.  GAAP in the  quarter.  As a
result, the loss from operations and net loss under Canadian GAAP as compared to
U.S. GAAP was lower by $0.2 in the three months ended September 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 $2.4 in the three
months ended  September  28, 2001.  In the first six 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 in the
six months ended September 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 $6.3 in the six months ended September 28, 2001.


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<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 September 27, 2002 (three
months ended  September 28, 2001 - higher by $4.9).  For the first six 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 $2.1 (six months ended September 28, 2001 - higher by $15.9).

Differences  also arose between U.S. and Canadian GAAP earnings in the first six
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 $0.5 for the three months ended  September 28, 2001, and
higher by $1.9 for the six months ended September 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 lower
Canadian GAAP operating  income by $0.4 for the three months ended September 27,
2002 (three months ended September 28, 2001 - higher by $0.7). For the first six
months of Fiscal 2003, the  difference in accounting  resulted in lower Canadian
GAAP  operating  income by $0.5 (six months ended  September 28, 2001 - lower by
$5.6).

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  September  27, 2002 and  September  28, 2001,  there was no
difference  in income tax expense  between  Canadian and U.S.  GAAP.  During the
first six months of Fiscal 2003,  there was no  difference in income tax expense
between Canadian and U.S. GAAP, and for the first six 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 lower, and income tax expense
was higher by $0.5 in the three  months  ended  September  27,  2002 and for the
three months ended  September  28, 2001,  the Canadian GAAP  operating  loss was
higher, and income tax recovery was higher by $0.9. For the first half of Fiscal
2003,  Zarlink's  Canadian GAAP operating loss was lower, and income tax expense
was  higher by $0.4 and for the first half of Fiscal  2002,  the  Canadian  GAAP
operating loss was higher, and income tax recovery was higher by $0.3.


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