Exhibit 99.1

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), the unaudited  consolidated
financial  statements  and notes thereto  prepared in  accordance  with Canadian
generally accepted accounting  principles ("Canadian GAAP") (included in exhibit
99) and the audited consolidated financial statements and notes thereto included
in the  Company's  Annual  Information  Form for the fiscal year ended March 30,
2001.

During the quarter  ended  December  28,  2001,  the Company  adopted the United
States dollar as its reporting  currency for  presentation  of its  consolidated
financial statements. Historical consolidated financial statements were restated
using the translation of convenience method.

The Company made this change to enhance its communication with its shareholders,
customers and suppliers  using the currency and  accounting  rules that are more
familiar to these groups.  This  presentation  is also more  consistent with the
presentation  of  the  financial  results  of  its  industry   counterparts  and
competitors.

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.

RESULTS OF CONTINUING OPERATIONS
--------------------------------

<TABLE>
<CAPTION>
                                                          Three Months Ended          Nine Months Ended
                                                         Dec. 28,    Dec. 29,        Dec. 28,    Dec. 29,
(millions of U.S. dollars)                                 2001        2000            2001         2000
                                                         --------    --------        ---------    --------
<S>                                                      <C>         <C>             <C>          <C>
Income (loss) from continuing operations before
income taxes - US GAAP                                   $  (18.2)   $  (13.2)       $  (101.5)   $   20.3
                                                         ========    ========        =========    ========
Income (loss) from continuing operations before
income taxes - CDN GAAP                                  $  (25.4)   $  (13.1)       $  (121.9)   $   20.6
                                                         ========    ========        =========    ========

Net loss for the period - US GAAP                        $  (18.3)   $  (21.9)       $   (98.5)   $   (4.9)
                                                         ========    ========        =========    ========

Net loss for the period - CDN GAAP                       $  (25.5)   $  (21.5)       $  (120.1)   $   (3.6)
                                                         ========    ========        =========    ========

Net loss per common share - US GAAP                      $  (0.15)   $  (0.18)       $   (0.80)   $  (0.05)
                                                         ========    ========        =========    ========

Net loss per common share - CDN GAAP                     $  (0.21)   $  (0.18)       $   (0.97)   $  (0.04)
                                                         ========    ========        =========    ========
</TABLE>


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<PAGE>

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

Also impacting the previously  reported  income (loss) for the nine months ended
December 28, 2001, and  comparative  results for the three and nine months ended
December 29, 2000, was a foreign exchange  difference  between U.S. and Canadian
GAAP. As a result of the Company's change in reporting currency to U.S. dollars,
historical results have been 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 or September 28,
2001. For the nine months ended  December 28, 2001,  the difference  resulted in
the U.S.  GAAP net loss being  greater by $1.9 (nine months  ended  December 29,
2000 - $0.5).

Stock  compensation  expense is not  recorded in the  Company's  earnings  under
Canadian GAAP and as a result  reduced the loss from  continuing  operations and
net loss under Canadian GAAP as compared to U.S. GAAP.

The timing of when  restructuring  charges  are  recognized  may differ  between
Canadian and U.S.  GAAP with certain  charges only expensed when paid under U.S.
GAAP.  There were no  differences  between U.S. and Canadian  GAAP for the three
months ended December 28, 2001, and December 29, 2000. For the nine months ended
December  28,  2001,  the  difference  resulted in the  Canadian  GAAP loss from
continuing operations being lower by $0.7 (nine months ended December 29, 2000 -
$nil).

The  Canadian  GAAP  loss  from  continuing   operations  was  higher  than  the
corresponding  US 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 resulted in a higher depreciation expense under Canadian GAAP by $2.2 and
$6.6 for the respective three and nine months ended December 28, 2001. In Fiscal
2001,  depreciation  expense under Canadian GAAP was higher by $0.1 and $0.9 for
the three and nine months ended December 29, 2000.

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 and nine months  ended  December  28,  2001,  the  difference  resulted in
Canadian  GAAP income tax recovery  being lower by $nil and $1.2,  respectively.
For the three and nine months ended December 29, 2000,  the difference  resulted
in the  Canadian  GAAP  income  tax  expense  being  lower  by  $0.1  and  $1.1,
respectively.


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