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SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549

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FORM 10-Q

|x                                                                  | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
|------------------------------------------------------------------ | ---------------------------------------------------------------------------------------
|                                                                   |                                                                                        
|FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2003                     
|                                                                   |                                                                                        
|Commission File Number: 000-31851                                 
|                                                                  
|MULTILINK TECHNOLOGY CORPORATION                                  
|                                                                  
|(Exact Name of Registrant as Specified in its Charter)            
|                                                                  
|California                                                         |                                                                                        
|                                                                   |                                                                                        
|(State or other jurisdiction of Incorporation or organization)     |                                                                                        
|                                                                   |                                                                                        
|300 Atrium Drive, 2nd Floor, Somerset, New Jersey                  |                                                                                        
|                                                                   |                                                                                        
|(Address of principal executive offices)                           |                                                                                        
|                                                                   |                                                                                        
|Registrants telephone number, including area code: (732) 537-3700
|                                                                   |                                                                                        

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 o
|----- | ----

Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Act).

|Yes o | No x
|----- | ----

As of May  12 , 2003, the number of shares of the Registrants common stock, $0.0001 par value per share, issued and
outstanding, were: 5,090,609 shares of Class A Common Stock and 2,600,000 shares of Class B Common Stock.

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MULTILINK TECHNOLOGY CORPORATION

FORM 10-Q

INDEX

|         |                                                                                                    | PAGE
|-------- | -------------------------------------------------------------------------------------------------- | ----
|         |                                                                                                    |     
|PART I.  | FINANCIAL INFORMATION                                                                              |     
|         |                                                                                                    |     
|Item 1.  | Financial Statements (unaudited):                                                                  |     
|         |                                                                                                    |     
|         | Condensed Consolidated Balance Sheets as of March 31, 2003 and December 31, 2002                   | 1   
|         |                                                                                                    |     
|         | Condensed Consolidated Statements of Operations for the Three Months Ended March 31, 2003 and 2002 | 2   
|         |                                                                                                    |     
|         | Condensed Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2003 and 2002 | 3   
|         |                                                                                                    |     
|         | Notes to Unaudited Financial Statements                                                            | 4   
|         |                                                                                                    |     
|Item 2.  | Managements Discussion and Analysis of Financial Condition and Results of Operations              | 11  
|         |                                                                                                    |     
|Item 3.  | Quantitative and Qualitative Disclosures about Market Risk                                         | 33  
|         |                                                                                                    |     
|Item 4.  | Controls and Procedures                                                                            | 35  
|         |                                                                                                    |     
|PART II. | OTHER INFORMATION                                                                                  |     
|         |                                                                                                    |     
|Item 1.  | Legal Proceedings                                                                                  | 36  
|         |                                                                                                    |     
|Item 2.  | Changes in Securities and Use of Proceeds                                                          | 36  
|         |                                                                                                    |     
|Item 3.  | Defaults Upon Senior Securities                                                                    | 36  
|         |                                                                                                    |     
|Item 4.  | Submission of Matters to a Vote of Security Holders                                                | 36  
|         |                                                                                                    |     
|Item 5.  | Other Information                                                                                  | 36  
|         |                                                                                                    |     
|Item 6.  | Exhibits and Reports on Form 8-K                                                                   | 36  



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Part I. FINANCIAL INFORMATION

Item 1. Financial Statements

MULTILINK TECHNOLOGY CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS  (in thousands, except for per share amounts)(unaudited)

|                                                                                                                    |  | March 31, 2003 |          | December 31, 2002 |  
|------------------------------------------------------------------------------------------------------------------- |  | -------------- | -------- | ----------------- | -
|                                                                                                                    |  |                |          |                   |  
|ASSETS                                                                                                              |  |                |          |                   |  
|Current assets:                                                                                                     |  |                |          |                   |  
|Cash and cash equivalents                                                                                           |  | $              | 30,362   |                   | $
|Restricted cash                                                                                                     |  |                | 1,307    |                   |  
|Short term investments                                                                                              |  |                | 5,875    |                   |  
|Accounts receivable, net                                                                                            |  |                | 432      |                   |  
|Inventories                                                                                                         |  |                | 2,397    |                   |  
|Prepaid expenses and other current assets                                                                           |  |                | 1,370    |                   |  
|                                                                                                                    |  |                |          |                   |  
|Total current assets                                                                                                |  |                | 41,743   |                   |  
|                                                                                                                    |  |                |          |                   |  
|Property and equipment, net                                                                                         |  |                | 17,518   |                   |  
|Other assets (including restricted cash of $1,416 and $1,743 at March 31, 2003 and December 31, 2002, respectively) |  |                | 2,253    |                   |  
|                                                                                                                    |  |                |          |                   |  
|Total assets                                                                                                        |  | $              | 61,514   |                   | $
|                                                                                                                    |  |                |          |                   |  
|LIABILITIES AND SHAREHOLDERS EQUITY                                                                                |  |                |          |                   |  
|Current liabilities:                                                                                                |  |                |          |                   |  
|Accounts payable                                                                                                    |  | $              | 4,009    |                   | $
|Accrued expenses                                                                                                    |  |                | 12,320   |                   |  
|Accrued warranty costs                                                                                              |  |                | 91       |                   |  
|Software and equipment financingcurrent portion                                                                    |  |                | 3,601    |                   |  
|Lease obligationscurrent portion                                                                                   |  |                | 44       |                   |  
|Income taxes payable                                                                                                |  |                | 401      |                   |  
|                                                                                                                    |  |                |          |                   |  
|Total current liabilities                                                                                           |  |                | 20,466   |                   |  
|                                                                                                                    |  |                |          |                   |  
|Software and equipment financingnet of current portion                                                             |  |                | 3,513    |                   |  
|                                                                                                                    |  |                |          |                   |  
|Commitments and contingencies                                                                                       |  |                |          |                   |  
|Shareholders equity:                                                                                               |  |                |          |                   |  
|Common stock, $.0001 par value:                                                                                     |  |                |          |                   |  
|Class A                                                                                                             |  |                |         |                   |  
|Class B                                                                                                             |  |                |         |                   |  
|Additional paid-in-capital                                                                                          |  |                | 182,167  |                   |  
|Deferred stock compensation                                                                                         |  |                | (1,276   | )                 |  
|Accumulated deficit                                                                                                 |  |                | (143,293 | )                 |  
|Accumulated other comprehensive (loss) income                                                                       |  |                | 55       |                   |  
|Treasury stock, at cost                                                                                             |  |                | (118     | )                 |  
|                                                                                                                    |  |                |          |                   |  
|Total shareholders equity                                                                                          |  |                | 37,535   |                   |  
|                                                                                                                    |  |                |          |                   |  
|Total liabilities and shareholders equity                                                                          |  | $              | 61,514   |                   | $
|                                                                                                                    |  |                |          |                   |  



See accompanying notes to condensed consolidated financial statements.

-1-



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MULTILINK TECHNOLOGY CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS  (in thousands, except for per share amounts) (unaudited)

|                                                                                                                                             |  | Three Months Ended March 31, |        
|-------------------------------------------------------------------------------------------------------------------------------------------- |  | ---------------------------- | -------
|                                                                                                                                             |  |                              |        
|                                                                                                                                             |  | 2003                         |        
|                                                                                                                                             |  |                              |        
|Total revenues                                                                                                                               |  | $                            | 959    
|Cost of revenues                                                                                                                             |  |                              |        
|Product                                                                                                                                      |  |                              | 1,096  
|Deferred stock compensation                                                                                                                  |  |                              | 48     
|                                                                                                                                             |  |                              |        
|Total cost of revenues                                                                                                                       |  |                              | 1,144  
|                                                                                                                                             |  |                              |        
|Gross (loss) profit                                                                                                                          |  |                              | (185   
|                                                                                                                                             |  |                              |        
|Operating expenses:                                                                                                                          |  |                              |        
|Research and development, excluding deferred stock compensation                                                                              |  |                              | 7,339  
|Sales and marketing, excluding deferred stock compensation                                                                                   |  |                              | 1,839  
|General and administrative, excluding deferred stock compensation                                                                            |  |                              | 1,689  
|Deferred stock compensation                                                                                                                  |  |                              | 701    
|Investment impairments and related charges                                                                                                   |  |                              | 343    
|Corporate realignment                                                                                                                        |  |                              | 189    
|                                                                                                                                             |  |                              |        
|Total operating expenses                                                                                                                     |  |                              | 12,100 
|                                                                                                                                             |  |                              |        
|Operating loss                                                                                                                               |  |                              | (12,285
|Other income and expenses:                                                                                                                   |  |                              |        
|Interest expense                                                                                                                             |  |                              | (105   
|Other income, net (including zero and $57 of equity losses in affiliate during the three months ended March 31, 2003 and 2002,
respectively) |  |                              | 209    
|                                                                                                                                             |  |                              |        
|Loss before provision (benefit) for income taxes                                                                                             |  |                              | (12,181
|Provision (benefit) for income taxes                                                                                                         |  |                              | 14     
|                                                                                                                                             |  |                              |        
|Net loss                                                                                                                                     |  | $                            | (12,195
|                                                                                                                                             |  |                              |        
|Net loss per share, basic and diluted                                                                                                        |  | $                            | (1.62  
|                                                                                                                                             |  |                              |        
|Weighted average shares of common stock, basic and diluted                                                                                   |  |                              | 7,512  
|                                                                                                                                             |  |                              |        
|The composition of the amortization of deferred stock compensation is as follows:                                                            |  |                              |        
|Research and development                                                                                                                     |  | $                            | 488    
|Sales and marketing                                                                                                                          |  |                              |       
|General and administrative                                                                                                                   |  |                              | 213    
|                                                                                                                                             |  |                              |        
|Total                                                                                                                                        |  | $                            | 701    
|                                                                                                                                             |  |                              |        

See accompanying notes to condensed consolidated financial
statements.

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MULTILINK TECHNOLOGY CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS  (in thousands) (unaudited)

|                                                                                              |  | Three Months Ended  March  31, |        
|--------------------------------------------------------------------------------------------- |  | ------------------------------ | -------
|                                                                                              |  |                                |        
|                                                                                              |  | 2003                           |        
|                                                                                              |  |                                |        
|Cash flows from operating activities:                                                         |  |                                |        
|Net loss                                                                                      |  | $                              | (12,195
|Adjustments to reconcile net loss to net cash provided by (used in) operating activities:     |  |                                |        
|Depreciation and amortization.                                                                |  |                                | 2,149  
|Deferred stock compensation                                                                   |  |                                | 749    
|Investment impairments and related charges                                                    |  |                                | 343    
|Corporate realignment                                                                         |  |                                | 189    
|Deferred income taxes                                                                         |  |                                |       
|Equity losses in affiliate                                                                    |  |                                |       
|Loss on disposal of assets                                                                    |  |                                | 32     
|Changes in working capital items, net                                                         |  |                                | (1,579 
|Other                                                                                         |  |                                | 147    
|                                                                                              |  |                                |        
|Net cash provided by (used in) operating activities                                           |  |                                | (10,165
|                                                                                              |  |                                |        
|Cash flows from investing activities:                                                         |  |                                |        
|Purchases of property and equipment                                                           |  |                                | (88    
|Proceeds from sales of fixed assets                                                           |  |                                | 223    
|Proceeds from sales of marketable securities                                                  |  |                                | 9,060  
|Purchases of marketable securities                                                            |  |                                |       
|                                                                                              |  |                                |        
|Net cash provided by (used in) investing activities                                           |  |                                | 9,195  
|                                                                                              |  |                                |        
|Cash flows from financing activities:                                                         |  |                                |        
|Proceeds from stock option exercises                                                          |  |                                | 125    
|Payments on lease obligations and software and equipment financing                            |  |                                | (1,849 
|Decrease in restricted cash                                                                   |  |                                | 327    
|Shareholder loan                                                                              |  |                                |       
|                                                                                              |  |                                |        
|Net cash provided by (used in) financing activities                                           |  |                                | (1,397 
|                                                                                              |  |                                |        
|Effect of exchange rate changes on cash                                                       |  |                                | 60     
|                                                                                              |  |                                |        
|Net decrease in cash and cash equivalents                                                     |  |                                | (2,307 
|Cash and cash equivalents, beginning of period                                                |  |                                | 32,669 
|                                                                                              |  |                                |        
|Cash and cash equivalents, end of period                                                      |  | $                              | 30,362 
|                                                                                              |  |                                |        
|Supplemental disclosures of cash flow informationCash paid (received) during the period for: |  |                                |        
|Income taxes                                                                                  |  | $                              |       
|Interest                                                                                      |  | $                              | 105    

See accompanying notes to condensed consolidated financial
statements.

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###### MULTILINK TECHNOLOGY CORPORATION NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

1.      BASIS OF PRESENTATION

The unaudited condensed consolidated financial statements included herein have been prepared by the Company pursuant to the rules and
regulations of the Securities and Exchange Commission.  Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted
pursuant to such rules and regulations.  In the opinion of management, all adjustments consisting of normal recurring items considered necessary for the fair presentation have been included.  The results of operations for the three months
ended March 31, 2003 are not necessarily indicative of the results to be expected for the entire year.

The financial statements included herein have been prepared with the understanding that the users of the interim financial information
have read or have access to the audited financial statements for the preceding fiscal year.  Accordingly, these financial statements should be read in conjunction with the audited financial statements and the related notes thereto contained in
the Companys Annual Report on Form 10-K for the year ended December 31, 2002.

Managements Plans  The Company operates in the semiconductor industry, which is cyclical and subject to rapid
technological change and evolving industry standards. The semiconductor industry is currently experiencing a significant downturn. This downturn is characterized by diminished product demand, excess customer inventories and excess production
capacity. These factors have caused a substantial decrease in the Companys revenues and in its results of operations. For example, during the three months ended March 31, 2003 the Company reported a net loss of $12.2 million and, as compared
to December 31, 2002, reported a net reduction in cash, cash equivalents and short-term investments of $11.4 million and a reduction in shareholders equity of $11.4 million.  At March 31, 2003, the Company has cash, cash equivalents and
short-term investments of $36.2 million and working capital of $21.3 million.  For the year ended December 31, 2002, the Company reported a net loss of $106.2 million and at December 31, 2002, reported cash, cash equivalents and short-term
investments of $47.6 million and working capital of $30.2 million.  The current downturn and future downturns in the semiconductor industry may be severe and prolonged, and any failure of this industry to recover from the current downturn will
seriously impact the Companys revenue and harm its business, financial condition, results of operations and cash flows.  The Company will continue to experience losses and use its cash, cash equivalents and short-term investments if it
does not receive sufficient product orders and its costs are not controlled.  The Company will continue to: (i) focus on cash preservation and expense reductions, (ii) attempt to expand market share with existing and new products by focusing on
its strength in mixed signal and digital signal processing technology, (iii) rationalize research and development spending on projects that will be accretive to revenues in the near term and (iv) secure system design wins with Tier I and emerging
communication equipment and optical module manufacturers.

As a result of the continuing significant
economic slowdown and the related uncertainties in the technology sector and semiconductor industry, the Company initiated a corporate realignment plan during the third quarter of 2002.  The plan included workforce reductions of approximately
150 employees, the consolidation of facilities through closure of certain locations, a reduction in the level of activity at other locations and asset impairment charges.  The Company recorded a charge during 2002 of $11.0 million associated
with this realignment plan (see Note 2).   The realignment plan will significantly reduce expenses and cash usage while permitting its crucial personnel to focus on key business strategies such as expanding market share and securing design
wins.  Excluding the $4.9 million of cash necessary to execute the realignment plan, the Company estimates that such plan, combined with its other cost savings initiatives, will provide annual cash savings of approximately $35.0
million.

Although the Company undertook cost reduction programs and initiated its corporate realignment
plan during 2002 to reduce expenses, the Company may still need additional capital. The market for the Companys products has declined substantially; accordingly, the Company has continued to utilize significant amounts of capital.  In the
event that the Company is required, or elects, to raise additional funds, it may not be able to do so on favorable terms, if at all.  The Companys inability to raise additional capital may result in the need to further restructure its
operations.  As another alternative to raising capital, the Company may need to explore the opportunity to merge with or be acquired by another company.  The Company cannot give any assurance that such a merger can occur or how favorable
the terms of such a merger would be for the Companys existing shareholders.

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MULTILINK TECHNOLOGY CORPORATION NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

The Companys decrease in revenues continues to reflect the limited demand for optical equipment in its end markets and the
additional reductions in carrier spending during 2002 and 2003.  The Companys business prospects depend substantially on the continued build-out of the communications infrastructure.  Almost all telecommunication service providers
have curtailed the level of their capital expenditures on their infrastructure build-out, which has significantly reduced the demand for the Companys products by communications equipment manufacturers.  This slowdown has caused the
Companys  revenues and backlog to decline substantially.  The Companys revenues declined in each quarter of 2002, compared to the comparable periods in 2001, and further declined in the first quarter of 2003 as compared with
the fourth quarter of 2002.  Because of general economic conditions and slowdowns in purchases of optical networking equipment, it has become increasingly difficult for the Company to predict the purchasing activities of its customers. 
The Companys success in emerging from this prolonged downturn requires that the Company significantly reduce its cost structure to preserve cash and enhance its ability to invest in opportunities that expand market share and grow revenues in
new markets.  The Company will continue to focus on its strength in mixed-signal and digital signal processing technology and will expand into new markets based upon this strength.  The Company has continued to secure design wins with Tier
I and emerging communication equipment and optical module manufacturers in North America, Europe and Asia Pacific regions.  The Companys exclusive focus is now on building discrete components for communication equipment and optical module
manufacturers.  By focusing on components, the Company ensures that its customers will have access to the best component technology and will avoid competing with its transceiver and transponder customers.

Exclusive of obtaining any new capital or material increases in revenues, the Company believes that if it executes on the items
discussed above, it has sufficient cash, cash equivalents and short-term investments for at least the next fifteen months.  The fifteen months assumes that the Company can execute on the items discussed above and that revenues meet the
Companys forecast.  If the Company cannot satisfactorily execute on the above items or if 2003 revenues are lower than the Company expects, the Company will be required to make further headcount and expense reductions which may limit
certain operational abilities including, but not limited to, making new product introductions in a timely manner, obtaining design wins, procuring required raw materials and meeting customer shipping schedules.  If the Company is able to obtain
new capital and/or revenues grow greater than expected, the Companys liquidity will exceed fifteen months.  Based upon the Companys cost reduction efforts, revenues of less than $10 million per quarter will be cash neutral to the
Company and any revenues in excess of this amount will generate positive cash flows from operations.

Derivative Financial Instruments  During the three months ended March 31, 2003, the Company did not utilize any
derivative financial instruments. During the three months ended March 31, 2002, the Company used foreign currency forward contracts designated as cash flow hedges to hedge the Companys exposure to market risk from changes in foreign currency
exchange rates associated with forecasted foreign currency-denominated expenses. The fair value changes of the forward contracts related to the effective portion of the hedges are initially recorded as a component of other comprehensive income. The
Company is exposed to market risk from changes in foreign currency exchange rates associated with forecasted foreign currency-denominated expenses. The Company utilized these foreign currency forward contracts to hedge its variability in U.S. dollar
cash flows associated with probable forecasted foreign inter-company Euro denominated expenses because the Company reimburses its German subsidiary for such expenses. Unrealized and realized gains and losses on cash flow hedges accumulate in other
comprehensive income and are reclassified into earnings in the periods in which earnings are impacted by the variability of the cash flows of the hedged item. Gains and losses on derivatives that are terminated prior to their maturity are also
reclassified into earnings when the underlying hedged items impact earnings, unless it is no longer probable that the hedged forecasted transaction will occur, whereby such gains and losses are recognized immediately in earnings.  For the three
months ended March 31, 2002, hedge ineffectiveness associated with instruments designated as cash flow hedges was not significant. For the three months ended March 31, 2002, net losses of less than $0.1 million were reclassified into earnings as an
adjustment to research and development expense. These net losses were offset by gains and losses on the transactions being hedged. At March 31, 2002, less than $0.1 million of net derivative gains/losses included in accumulated other comprehensive
income will be reclassified into earnings within twelve months from that date. The unrealized amounts in accumulated other comprehensive income will fluctuate based on changes in fair value of open contracts at each reporting period. At March 31,
2002, the Companys liability of less than $0.1 million relating to these forward contracts is included in accrued expenses in the accompanying condensed consolidated balance sheet.

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MULTILINK TECHNOLOGY CORPORATION NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Equity-Based Compensation  The Company has two stock-based employee compensation plans.  The Company accounts for stock-based employee
compensation arrangements in accordance with provisions of Accounting Principles Board (APB) Opinion No. 25, Accounting for Stock Issued to Employees, and complies with the disclosure provisions of Statement of Financial
Accounting Standards (SFAS) No. 123, Accounting for Stock-Based Compensation. Under APB Opinion No. 25, compensation expense is based on the difference, if any, on the date of grant, between the fair value of the
Companys stock and the exercise price.  The Company accounts for stock options issued to non-employees in accordance with the provisions of SFAS No. 123, and Emerging Issues Task Force Consensus on Issue No. 96-18, Accounting for
Equity Instruments That Are Issued to Other Than Employees for Acquiring, or in Conjunction with Selling, Goods or Services.  The Company is amortizing deferred stock compensation using the graded vesting method, in accordance with
Financial Accounting Standards Board Interpretation No. 28 Accounting for Stock Appreciation Rights and Other Variable Stock Option or Award Plans (An Interpretation of APB Opinions No. 15 and 25), over the vesting period of each
respective option, which is generally four years.

In December 2002, the FASB issued SFAS No. 148,
Accounting for Stock-Based Compensation  Transition and Disclosure  an Amendment of FASB Statement No. 123, to provide alternative methods of transition for a voluntary change to the fair value based method of accounting for
stock-based employee compensation.  In addition, SFAS No. 148 amends the disclosure requirements of SFAS No. 123 to require prominent disclosures in both annual and interim financial statements about the method of accounting for stock-based
employee compensation and the effect of the method used on reported results.

The following table
illustrates the effect on net loss and loss per share if the Company had applied the fair value recognition provisions of SFAS No. 123 to stock-based employee compensation:

|                                                                                                                                            |  | Three Months Ended March 31, |        
|------------------------------------------------------------------------------------------------------------------------------------------- |  | ---------------------------- | -------
|                                                                                                                                            |  |                              |        
|(Amounts in thousands)                                                                                                                      |  | 2003                         |        
|                                                                                                                                            |  |                              |        
|Net loss, as reported                                                                                                                       |  | $                            | (12,195
|Add: Stock-based employee compensation expense included in reported net loss, net of related tax effects                                    |  |                              | 749    
|Deduct: Total stock-based employee compensation expense determined under fair value based method for all awards,
net of related tax effects |  |                              | (1,405 
|                                                                                                                                            |  |                              |        
|Pro forma net loss                                                                                                                          |  | $                            | (12,851
|                                                                                                                                            |  |                              |        
|Net loss per share:                                                                                                                         |  |                              |        
|As reported:  Basic and diluted                                                                                                             |  | $                            | (1.62  
|                                                                                                                                            |  |                              |        
|Pro forma:  Basic and diluted                                                                                                               |  | $                            | (1.71  
|                                                                                                                                            |  |                              |        

Reverse Split - On September 6, 2002, the Companys board of directors approved a one-for-ten reverse stock
split.  The Companys consolidated financial statements have been retroactively adjusted to show the effect of this stock split for all periods presented.

Reclassifications - Certain prior year amounts have been reclassified in order to conform to the current year
presentation.

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MULTILINK TECHNOLOGY CORPORATION NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

2.      CORPORATE REALIGNMENT

During 2002, the
Company commenced a corporate realignment program (the Realignment Plan) to create a more efficient cost structure and realign its business to reflect the current telecommunication market environment which will permit the Company to
focus its personnel on its key business strategies.  The major initiatives of the Realignment Plan include a reduction of 40 to 45 percent in the Companys worldwide headcount and the consolidation of facilities through the closure of
certain locations and the reduction in the level of activity at other locations.

The components of
the realignment reserves and movements within these components during 2003 were as follows:

|(Amounts in thousands)        |  | Severance and Termination Benefits |      | Lease and  Contract Termination Costs |   | Other Costs |   | Total |    
|----------------------------- |  | ---------------------------------- | ---- | ------------------------------------- | - | ----------- | - | ----- | ---
|                              |  |                                    |      |                                       |   |             |   |       |    
|Balance at December 31, 2002  |  | $                                  | 883  |                                       | $ | 2,514       |   | $     | 140
|2003 payments                 |  |                                    | (488 | )                                     |   | (421        | ) |       | (16
|First quarter 2003 provision  |  |                                    | 111  |                                       |   | 41          |   |       |   
|                              |  |                                    |      |                                       |   |             |   |       |    
|Total realignment liabilities |  | $                                  | 506  |                                       | $ | 2,134       |   | $     | 124
|                              |  |                                    |      |                                       |   |             |   |       |    

Cash
payments are expected to be $1.6 million for the remainder of 2003, less than $0.6 million in 2004 and $0.7 million thereafter.

3.     INVESTMENT IMPAIRMENTS AND
RELATED CHARGES

The Company recorded a $0.3 million impairment charge against its investment in
Innovative Processing AG (IPAG).  The Company believes that the reduction in the value of the IPAG investment is other than temporary.  IPAG is an optical component start-up company and is subject to many of the same industry
risks as the Company.

In determining whether its investment in IPAG was impaired, the Company
considered several factors such as, but not limited to, the reduction in market valuations for optical component companies, the continued reduction in spending by communications equipment manufacturers, the historical and forecasted operating
results of IPAG and changes in technology.   Upon review of these and other qualitative and quantitative factors, the Company concluded that its investment in IPAG was impaired.

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MULTILINK TECHNOLOGY CORPORATION NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

4.     EARNINGS PER SHARE

Basic net income or loss
per share excludes dilution for potentially dilutive securities and is computed by dividing net income or loss attributable to common shareholders by the weighted average number of common shares outstanding during the period. Diluted net income or
loss per share reflects the potential dilution that could occur if securities or other instruments to issue common stock were exercised or converted into common stock. Potentially dilutive securities are excluded from the computation of diluted net
income or loss per share when their inclusion would be antidilutive. A reconciliation between basic and diluted weighted average shares outstanding is as follows:

|                                                             |  | Three Months Ended March 31, |      
|------------------------------------------------------------ |  | ---------------------------- | -----
|                                                             |  |                              |      
|(Amounts in thousands)                                       |  | 2003                         |      
|                                                             |  |                              |      
|Weighted average shares outstanding, basic                   |  |                              | 7,512
|Dilutive shares issuable in connection with stock plans      |  |                              | 458  
|Dilutive shares issuable in connection with warrants granted |  |                              | .   
|Conversion of preferred stock to common stock                |  |                              |     
|                                                             |  |                              |      
|Weighted average shares outstanding, diluted                 |  |                              | 7,970
|                                                             |  |                              |      

* Since there was a loss attributable to common shareholders in these periods, the basic
weighted average shares outstanding were used in calculating diluted loss per share, as inclusion of the incremental shares shown in this calculation would be antidilutive.  During the three months ended March 31, 2003 and 2002, stock options
and warrants totaling 1,651,202 and 1,288,581, respectively, were excluded from the computation of diluted shares outstanding due to their antidilutive effect.

5.     
INVENTORIES

Inventories consisted of the following:

|(Amounts in thousands) |  | March 31, 2003 |       | December 31, 2002 |  
|---------------------- |  | -------------- | ----- | ----------------- | -
|                       |  |                |       |                   |  
|Finished goods         |  | $              | 1,074 |                   | $
|Work-in-progress       |  |                | 213   |                   |  
|Raw materials          |  |                | 1,110 |                   |  
|                       |  |                |       |                   |  
|Total                  |  | $              | 2,397 |                   | $
|                       |  |                |       |                   |  

6.     SEGMENT INFORMATION AND CONCENTRATION OF
REVENUES

Revenues to geographic locations are as follows:

|                       |  | Three Months Ended March 31, |    
|---------------------- |  | ---------------------------- | ---
|                       |  |                              |    
|(Amounts in thousands) |  | 2003                         |    
|                       |  |                              |    
|North America          |  | $                            | 646
|Europe                 |  |                              | 206
|Asia                   |  |                              | 107
|                       |  |                              |    
|                       |  | $                            | 959
|                       |  |                              |    

Revenues to certain geographic locations within Europe and Asia are as follows:

|Germany |  |  | 15 | % |  |  | *
|------- |  |  | -- | - |  |  | -
|        |  |  |    |   |  |  |  

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MULTILINK TECHNOLOGY CORPORATION NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

The following is a summary of the percentage of revenues from major customers:

|        |  | Three Months Ended March 31, |   
|------- |  | ---------------------------- | --
|        |  |                              |   
|        |  | 2003                         |   
|        |  |                              |   
|Alcatel |  |                              |   
|TyCom   |  |                              |   
|Lucent  |  |                              | 36

* Customers or countrys revenues represents less than 10% of total
revenue in the respective period.

7.     COMPREHENSIVE LOSS

The components of comprehensive loss, net of tax, are as follows:

|(Amounts in thousands)                                          |  | Three Months Ended March 31, |        
|--------------------------------------------------------------- |  | ---------------------------- | -------
|                                                                |  |                              |        
|                                                                |  | 2003                         |        
|                                                                |  |                              |        
|Net loss                                                        |  | $                            | (12,195
|Change in net unrealized loss on available-for-sale investments |  |                              | (37    
|Cash flow hedge reclassification adjustments                    |  |                              |       
|Foreign currency translation adjustment                         |  |                              | (30    
|                                                                |  |                              |        
|Comprehensive loss                                              |  | $                            | (12,262
|                                                                |  |                              |        

8.     COMMITMENTS AND CONTINGENCIES

The Company, in the ordinary course of its business, is the subject of, or party to, various pending or threatened legal
actions. The Company believes that an ultimate liability arising from these actions will not have a material adverse effect on its financial position, results of operations or cash flows.

In February 2003, the Company, its chief executive officer and its former chief financial officer were named as one of the issuer
defendants in a class action stockholder complaint filed in the United States District Court for the Southern District of Florida, captioned Liu v. Credit Suisse First Boston Corporation (CSFB), et al., Case No. 03-20459. In the
complaint, the plaintiffs allege that CSFB knowingly conspired with dozens of issuers, including the Company, to conduct initial public offerings based on misinformation about the issuers future prospects and the proper pricing of their
shares, in violation of the anti-fraud provisions of section 10(b) of the Securities Exchange Act of 1934. The plaintiffs seek unspecified monetary damages and other relief. Neither the Company nor the named individuals have yet been served with the
complaint. The Company believes that this lawsuit is without merit and intends to defend against it vigorously.

9.     RELATED PARTY TRANSACTIONS

During the three months ended March 31, 2003, the Company paid $0.2 million to ASIP under an existing development
agreement.  The Company did not make any purchases from TRW, but made $0.2 million of purchases from IBM. During the three months ended March 31, 2002, the Company paid $0.2 million and $0.4 million to IPAG and ASIP, respectively, under
existing development agreements with these entities and made $0.3 million and $0.5 million of purchases from TRW and IBM, respectively.

During May 2003, the Company and ASIP mutually terminated their development and license agreement.  Pursuant to the termination, in
exchange for loaning ASIP $0.2 million pursuant to an unsecured convertible subordinated note and reducing the value for which equipment consigned to ASIP may be exchanged for equity in a future ASIP financing round, the parties agreed to
terminate all remaining obligations under the development agreement, including all further obligations to pay development expenses and engage in development activities.  The note is automatically convertible into equity and the equipment may be
converted into equity in a future ASIP equity financing round of at least $5.0 million.  Additionally, the equipment is now being leased to ASIP on a month-to-month basis.

10.     SUPPLEMENTAL SCHEDULE OF NONCASH TRANSACTIONS

During the three months ended March 31, 2002, the Company financed the acquisition of equipment or software in the amount of $7.5
million.

During the three months ended March 31, 2002, the Company issued 114,000 shares of
restricted Class A common stock, and recorded $2.5 million of deferred stock compensation, to its employees with vesting periods from 18 months to immediate vesting upon the attainment of certain performance criteria in 2002.  Also during
the

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MULTILINK TECHNOLOGY CORPORATION NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

three months ended March 31,
2002, a shareholder converted 100,000 shares of the Companys Class B common stock into the same number of shares of Class A common stock.

Stock Option Exchange Offer  In June 2002, the Company initiated a voluntary stock option exchange program to its
employees, officers and board members located in the United States and Europe. The program commenced on June 24, 2002, and as amended in July 2002, participants were able to tender for cancellation stock options to purchase the Companys Class
A common stock that had an exercise price equal to or greater than $13.50 per share for replacement options to purchase Class A common stock to be granted on a date which is at least six months plus one day from the date of cancellation of the
tendered options.   The cancellation date was August 30, 2002.  Pursuant to the offer, the Company accepted for exchange and cancelled options to purchase an aggregate of 1,144,127 shares of the Companys Class A common stock
from 206 eligible participants representing 63% of the options subject to the offer.  On March 3, 2003, 718,530 replacement options were granted with an exercise price of $1.98, which was equal to the market price of the Companys Class A
common stock on such date. The remaining terms and conditions of the replacement options, including the vesting schedules, are substantially the same as the terms and conditions of the options cancelled.

11.      RECENTLY ISSUED OR ADOPTED ACCOUNTING PRONOUNCEMENTS

In June 2001, the Financial Accounting Standards Board, or FASB, issued Statement of Financial Accounting Standards (SFAS)
No. 143, Accounting for Asset Retirement Obligations.  SFAS No. 143, which is effective for the Company on January 1, 2003, requires that the fair value of a liability for an asset retirement obligation be recognized in the period
in which it is incurred if a reasonable estimate of fair value can be made.  The associated asset retirement costs are capitalized as part of the carrying amount of the long-lived asset.  The adoption of this standard did not have a
material impact on the Companys financial position, results of operations or cash flows.

In July
2002, the FASB issued SFAS No. 146, Accounting for Costs Associated with Exit or Disposal Activities.  This statement requires that a liability for costs associated with an exit or disposal activity be recognized when the liability
is incurred.  This differs from prior guidance, which required the liability to be recognized when a commitment plan was put into place.   SFAS No. 146 also establishes that fair value is the objective for initial measurement of the
liability.  This statement is effective for exit or disposal activities that are initiated after December 31, 2002.  The Company does not expect that the adoption of this standard will have a material impact on its financial position,
results of operations or cash flows.

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Item 2.  Managements Discussion and Analysis of Financial Condition and Results of Operations

The following discussion should be read in conjunction with our condensed consolidated financial statements included elsewhere in
this Form 10-Q. This discussion contains forward-looking statements that involve risks and uncertainties. Our actual results could differ materially from those anticipated in these forward-looking statements as a result of various factors including
those set forth under Risk Factors herein.

OVERVIEW

We design, develop and market advanced integrated circuits, modules and higher-level assemblies that enable next generation
optical networking systems. We are expanding into the Access and Enterprise markets by leveraging our intellectual property portfolio of mixed-signal, analog and digital signal processing technologies. During the past two years, we have made
significant research and development investments in developing mixed-signal products that utilize 0.13um CMOS technology. We recently announced products related to a new family of SerDes devices targeted at local area and storage area networks that
can utilize our mixed-signal expertise.  We outsource substantially all of our semiconductor fabrication and focus our efforts on the design, development and marketing of our products.

To date, we have generated a substantial portion of our revenues from a limited number of customers. Our top three customers for
the three months ended March 31, 2003 were Lucent, ADVA and Cisco, representing 36%, 9% and 8% of our revenues, respectively. Our top three customers for the three months ended March 31, 2002 were TyCom, Alcatel and Lucent, representing 44%, 21% and
16% of our revenues, respectively.    During the year ended December 31, 2002, our top three customers were TyCom, Alcatel and Lucent, representing 25%, 19% and 10% of our revenues, and three other customers each accounted for
greater than 5% of our revenues.

A number of telecommunication service providers have curtailed the
level of their capital expenditures on their infrastructure build-out, which has significantly reduced the demand for our products by communications equipment manufacturers, including these principal customers. Our revenues continued to decline in
the first quarter of 2003 compared with the fourth quarter of 2002.  Due to general economic conditions and slowdowns in purchases of optical networking equipment, it has become increasingly difficult for us to predict the purchasing activities
of our customers and we expect that our operating results will fluctuate substantially in the future.

During August 2002, we commenced a significant corporate realignment plan that included workforce reductions, the consolidation
of facilities through closure of certain locations, a reduction in the level of activity at other locations and asset impairment charges.  Upon completion of the plan, attrition in the normal course of business and expected headcount reductions
as a result of our continuing efforts to reduce expenses across all functions, we anticipate that our worldwide headcount will decrease to less than 100 people by June 30, 2003.  The headcount reduction portion of the plan was substantially
completed by December 2002 and is expected to be fully completed by April 2003.  The headcount reductions have occurred at all of our locations in Europe, Israel and the United States.

We focus our sales and marketing efforts on North American, European and Asian communications equipment manufacturers. During the
three months ended March 31, 2003, we derived 67% of our total revenues from communications equipment manufacturers in North America compared with 86% during the comparable period in 2002.  We currently sell through our direct sales force in
North America and Europe and through selected independent sales representatives in the United States, Germany, Italy, France, Israel, China, Korea and Japan.  International revenues are denominated in U.S. dollars, which reduces our exposure to
foreign currency risks. We expect international revenues to continue to account for a significant percentage of total revenues.

Revenues.We recognize product revenues at the time of shipment. Our customers are not obligated by long-term contracts to
purchase our products and can generally cancel or reschedule orders on short notice.  Our revenues substantially declined in 2002, compared to 2001.  In the ordinary course of business, we receive order cancellations and rescheduled
shipments.  To the extent possible, we pursue order cancellation fees from our customers.  Depending upon the facts and circumstances surrounding these cancellation fees, the receipt of such fees may have an immediate impact on revenues in
the period that such fees are collected or the fees may need to be deferred and then recognized as revenue over some future period.  We cannot ensure that we will be able to collect an order cancellation fee for each order cancelled and we
cannot project how such fees will affect revenue.

-11-



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Cost of Revenues.Cost of revenues consists of component and materials
cost, direct labor, deferred stock compensation relating to manufacturing labor, manufacturing, overhead costs and estimated warranty costs. Cost of revenues also includes adjustments to write down inventory to its net realizable value resulting
from such items as customer order cancellations and excess and obsolete inventory.  We outsource substantially all of the fabrication and assembly, and a portion of the testing, of our products. Accordingly, a significant portion of our cost of
revenues consists of payments to our third-party manufacturers. If revenues increase, we believe favorable trends should occur in manufacturing costs due to our ability to absorb overhead costs over higher volumes. Nevertheless, there is a
substantial fixed component to cost of revenues, and the decline in our revenues in 2003, compared to 2002, has materially adversely affected our gross margins.

Research and Development.Research and development expenses consist primarily of salaries and related personnel costs,
material, third-party costs and fees related to the development and prototyping of our products and depreciation associated with engineering and design software costs. We expense our research and development costs as they are incurred, except for
the purchase of engineering and design software licenses, which are capitalized and depreciated over their estimated useful life. Research and development is key to our future success and we will continue to strategically invest in research and
development in order to maximize our product offerings.  We expect that research and development expenses will decrease during 2003 in absolute dollar amounts due to the effects of our previously announced corporate realignment plan.

Sales and Marketing.Sales and marketing expenses consist primarily of salaries, commissions and related
expenses for personnel engaged in sales, marketing, customer service and application engineering support functions. As a result of our corporate realignment plan, we expect that sales and marketing expenses will decrease in 2003 in absolute dollar
amounts as we execute on our corporate realignment plan.

General and Administrative.General
and administrative expenses consist primarily of salaries and related expenses for executive, finance, accounting, facilities, information services, human resources, recruiting, professional fees and other corporate expenses. We expect that general
and administrative expenses will decrease in 2003 in absolute dollar amounts due to the effects of our corporate realignment plan and various cost reduction programs that were initiated in 2001 with the purpose of maximizing the leverage within
general and administrative functions.

Deferred Stock Compensation.In connection with stock
option and restricted stock grants to our employees, officers and directors, we recorded deferred stock compensation. Deferred stock compensation represents the difference between the grant price and the fair value of the common stock underlying
options and restricted stock granted during these periods. Deferred stock compensation is presented as a reduction of shareholders equity. We are amortizing our deferred stock compensation using the graded vesting method, in accordance with
FASB Interpretation No. 28, over the vesting period of each respective option, generally three to four years.  Based on our balance of deferred stock compensation as of March 31, 2003, we estimate our amortization of deferred stock
compensation for each of the periods below to be as follows:

|Year Ending December 31,            |  | Amount         |      
|----------------------------------- |  | -------------- | -----
|                                    |  |                |      
|                                    |  | (in thousands) |      
|2003 (subsequent to March 31, 2003) |  | $              | 879  
|2004                                |  |                | 397  
|                                    |  |                |      
|Total                               |  | $              | 1,276
|                                    |  |                |      

Approximately $0.2 million of the remaining amortization of deferred stock compensation will be charged to cost of revenues. 
Subsequent to our initial public offering, we did not issue any stock options that required the recognition of any deferred stock compensation.

Net Income (Loss).   In addition to the items discussed above, net income (loss) also includes interest expense, other
income, income or loss associated with our equity investments and a provision or benefit for income taxes. Interest expense relates to interest associated with capital leases and equipment and software financings. Other income represents investment
earnings on our cash and cash equivalents and short-term investments.

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RESULTS OF OPERATIONS

Revenues.   Revenues decreased to $1.0 million for the three months ended March 31, 2003, compared with $10.1 million
for the three months ended March 31, 2002.  The decrease was due to a continuing dramatic decline in demand for products in our sector generally, resulting in reduced component purchases by communications equipment manufacturers.

Gross Profit.Cost of revenues, including less than $0.1 million of deferred stock compensation,
decreased to $1.1 million for the three months ended March 31, 2003, compared with $6.0 million for the three months ended March 31, 2002. Gross profit as a percentage of revenues, or gross margin, decreased to a negative 19% for the three months
ended March 31, 2003, compared with a positive 40% for the three months ended March 31, 2002. During the three months ended March 31, 2003, we accrued $0.2 million for the portion of a minimum purchase contract that we believe is in excess of our
requirements.  Our lower sales volume and the accrual for this purchase contract were the most significant factors contributing to the gross margin reduction.  Gross margin for the three months ended March 31, 2002 is favorably impacted by
the sale of inventory, with a cost of $0.5 million, that was previously written down to its net realizable value during the first quarter of 2001.  Gross margins were increased to 40% from 37% from the sale of this previously written down
inventory.  The inventory was written down during the first quarter of 2001 based upon information from the sole customer of the product that they were moving from GaAs to SiGe technology.  The customers transition from GaAs to SiGe
was delayed.    We do not expect any material orders for this product during 2003; however, we will continue to disclose the effect of such sales on gross margin.

Research and Development.Research and development expenses, excluding deferred stock compensation, decreased to $7.3
million for the three months ended March 31, 2003, compared with $12.8 million for the three months ended March 31, 2002. As a percentage of revenues, research and development expenses increased to 765% for the three months ended March 31, 2003,
compared with 127% for the three months March 31, 2002.  The increase as a percent of revenues was due to the reduction in revenues discussed above.  The decrease in absolute dollars is the result of our focused spending on projects that
we believe will be accretive to revenues in the near term, our Company-wide expense reduction programs and our corporate realignment program.  Despite the reduction in communications equipment manufacturer spending, we will continue to
strategically invest in research and development and seek to build relationships with a global customer base of communications equipment manufacturers.   We are targeting investments in research and development on expanding our addressable
markets to include Metro/Access and Enterprise applications.  Our research and development spending will be reduced if forecasted 2003 revenues do not meet our expectations.

During the three months ended March 31, 2003, stock based compensation expense associated with research and development decreased to
$0.5 million as compared with $1.4 million during the three months ended March 31, 2002.  The decrease is due to headcount reductions as a result of our corporate realignment plan and the acceleration of stock based compensation expense during
the three months ended September 30, 2002 in connection with our stock option exchange program.  As a result of our stock option exchange program, there is less deferred stock compensation that remains to be amortized into the consolidated
statement of operations.

Sales and Marketing.   Sales and marketing expenses, excluding
deferred stock compensation, decreased to $1.8 million for the three months ended March 31, 2003, compared with $3.9 million for the three months ended March 31, 2002. As a percentage of revenues, sales and marketing expenses increased to 192% for
the three months ended March 31, 2003, compared with 39% for the three months ended March 31, 2002.  The increase as a percentage of revenues is due primarily to the reduced revenues discussed above.  The decrease in absolute dollars is
the result of our Company-wide expense reduction programs and our corporate realignment program.  The decrease in stock-based compensation expense associated with sales and marketing expenses during 2003 compared with 2002 is due to the same
reasons discussed above under research and development.

General and Administrative.  
General and administrative expenses, excluding deferred stock compensation, decreased to $1.7 million for the three months ended March 31, 2003, compared with $2.4 million for the three months ended March 31, 2002. As a percentage of revenues,
general and administrative expenses were 176% for the three months ended March 31, 2003, compared with 24% for the three months ended March 31, 2002.  The decrease in absolute dollars was due primarily to our focused efforts to leverage our
general and administrative expenses by reducing spending and the execution of our corporate realignment plan.  The decrease in stock-based compensation expense associated with general and administrative expenses during 2003 compared with 2002
is due to the same reasons discussed above under research and development.

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Deferred Stock Compensation.Operating expenses included
amortization of deferred stock compensation of $0.7 million for the three months ended March 31, 2003, compared with $2.2 million for the three months ended March 31, 2002.   The decrease is due to (i) a greater proportion of deferred
stock compensation expense being recognized earlier in the vesting period, (ii) the cancellation of options due to employee terminations in connection with our realignment plan and (iii) the reduction in deferred stock compensation as a result of
accelerating the amortization of expense during the three months ended September 30, 2002 relating to options that were tendered in connection with our stock option exchange program.  Since our initial public offering in June 2001, we have not
issued any stock options with an exercise price below fair value that would require the recognition of any deferred stock compensation.  We have issued restricted stock to certain of our employees.  The deferred stock compensation
associated with these restricted stock grants is being amortized over the vesting period, which generally ranges from six months to three years.  The deferred stock compensation associated with the restricted stock grants will increase deferred
stock compensation expense in future quarters.

In June 2002 we initiated a voluntary stock option exchange
program to our employees, officers and board members located in the United States and Europe. The program commenced on June 24, 2002, and as amended in July 2002, participants were able to tender for cancellation stock options to purchase our Class
A common stock that have an exercise price equal to or greater than $13.50 per share for replacement options to purchase Class A common stock to be granted on a date which is at least six months plus one day from the date of cancellation of the
tendered options.   The cancellation date was August 30, 2002.  On March 3, 2003, 718,530 replacement options were granted with an exercise price of $1.98, which was equal to the market price of our Class A common stock on such date.
The remaining terms and conditions of the replacement options, including the vesting schedules, are substantially the same as the terms and conditions of the options cancelled.

Investment Impairments and Related Charges.  During the three months ended March 31, 2003, we recorded an impairment charge
of $0.3 million associated with our investment in Innovative Processing AG (IPAG).  We believe that the reduction in the value of our investment in IPAG is other than temporary.  IPAG is an optical component start-up company
and is subject to many of the same industry risks as us.

In determining whether our investment in
IPAG was impaired, we considered several factors such as, but not limited to, the reduction in market valuations for optical component companies, the continued reduction in spending by communications equipment manufacturers, the historical and
forecasted operating results of IPAG and changes in technology.   Upon review of these and other qualitative and quantitative factors, we concluded that our investment in IPAG was impaired.

Corporate Realignment.  During the three months ended March 31, 2003, we decided to accelerate the closure of one of our
facilities.  When we originally recorded the realignment charge for this closure during the three months ended December 31, 2002, we had planned on closing this facility sometime during the middle of 2003.  As a result of our decision to
accelerate the closure date to March 30, 2003, we recorded severance and lease expenses of $0.2 million in excess of our original estimates.

Based upon headcount reductions associated with our realignment plan, attrition in the normal course of business and expected headcount
reductions as a result of our continuing efforts to reduce expenses across all functions, we anticipate that our worldwide headcount will decrease to less than 100 people by June 30, 2003.  The headcount reductions will occur at all of our
locations in Europe, Israel and the United States.  Generally, as attrition occurs, we are allocating current resources to fill the vacancies.  We have estimated that the total cash cost of the realignment plan is approximately $4.9
million and that the plan, combined with our other cost saving initiatives, will contribute approximately $35.0 million of annual cash savings.  The estimated remaining cash outflows related to the plan are expected to be $1.6 million for the
remainder of 2003, less than $0.6 million in 2004 and $0.7 million thereafter. The estimated cash outflow and annual cash savings related to the plan will, however, be negatively impacted if it takes us longer than anticipated to sublease some of
our closed facilities or if our planned terminations are delayed.

Other Income and Expenses,
Net.   Other income decreased to $0.1 million for the three months ended March 31, 2003, compared with $0.4 million for the three months ended March 31, 2002.  The decrease is due primarily to higher interest expense resulting
from software and equipment financings during 2001 and the first half of 2002 and lower interest income as a result of having a lower average cash and short-term investment balance.  We expect that other income will continue to decrease as our
cash and short-term investments decrease during 2003, offset by a decrease in interest expense related to software and equipment financing.

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Net Income (Loss).  Net loss increased to $12.2 million for the three
months ended March 31, 2003, compared with $10.5 million for the three months ended March 31, 2002.  The increase in net loss is predominantly due to the items discussed above including the reduction in revenue and the corresponding decrease in
gross profit, discontinuing the recognition of a deferred tax benefit offset by our reduced spending in all areas.  During the three months ended March 31, 2002, we recognized a tax benefit of $6.4 million.  During the three months ended
June 30, 2002, we concluded that significant uncertainty existed surrounding the recoverability of our deferred tax assets.

On a quarterly basis, we assess the recoverability of our deferred tax assets by reviewing a number of factors, including operating
trends, the scheduled reversal of deferred tax liabilities and future projections of taxable income, to determine whether a valuation allowance is required to reduce such deferred tax assets to an amount that is more likely than not to be
realized.  We considered the following factors in assessing the recoverability of our deferred tax assets: (i) further announced reductions in 2002 capital spending by the major telecommunication service providers and industry analysts
forecasting a further reduction in capital spending in 2003, (ii) significant workforce reductions within the telecommunications and related industries, (iii) continued poor visibility of customer orders, (iv) a depressed capital market which makes
obtaining new capital difficult and (v) a lower than expected demand for 10 gigabit products.

Based
on the projections for future taxable income over the periods in which the deferred tax assets are realizable, we believe that significant uncertainty exists surrounding the recoverability of the deferred tax assets.  Accordingly, we continue
to record a valuation allowance equal to our deferred tax assets.

LIQUIDITY AND CAPITAL RESOURCES

A summary of our contractual obligations and commercial commitments as of March 31, 2003 are as follows:

|(Amounts in thousands)             |  |                  |        |                       | Amounts Due In |      
|---------------------------------- |  | ---------------- | ------ | --------------------- | -------------- | -----
|                                   |  |                  |        |                       |                |      
|Obligation                         |  | Total Obligation |        | 2003 (after March 31) |                | 2004 
|                                   |  |                  |        |                       |                |      
|Software and equipment financing   |  | $                | 7,114  |                       | $              | 2,843
|Capital lease obligations          |  |                  | 44     |                       |                | 44   
|Operating leases                   |  |                  | 9,274  |                       |                | 2,646
|Guarantees (1)                     |  |                  | 895    |                       |                |     
|Unconditional purchase obligations |  |                  | 1,013  |                       |                | 1,013
|                                   |  |                  |        |                       |                |      
|Total obligations                  |  | $                | 18,340 |                       | $              | 6,546
|                                   |  |                  |        |                       |                |      

---

(1) During April 2001, we guaranteed
a facility lease for ASIP.  The guarantee is through December 31, 2005 provided that ASIP continues to meet all terms and conditions of the lease.  The total remaining lease payments to be made by ASIP during the guarantee period are $0.9
million.  Because the likelihood that we will have to satisfy this guarantee is not probable, no liability has been recorded for the guarantee and we cannot project when or if we will have to satisfy such guarantee.

As of March 31, 2003, we had cash and cash equivalents and short-term investments of $36.2 million.

Cash used in operating activities was $10.2 million during the three months ended March 31, 2003 compared with cash provided by
operations of $0.2 million during the three months ended March 31, 2002.  Net loss of $12.2 million includes non-cash charges of $2.1 million for depreciation and amortization, $0.7 million for

-15-



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amortization of deferred stock compensation, $0.3 million of investment impairments and $0.2 million for the additional corporate realignment charge discussed above.  The
increase in cash used in operating activities is due to the significant reduction in revenues discussed above.

Cash provided by investing activities was $9.2 million for the three months ended March 31, 2003 compared with $11.9 million of cash
used in investing activities for the three months ended March 31, 2002.  The increase in cash provided by investing activities is due to the net sale of $9.0 million of marketable securities during the first quarter of 2003 as compared with a
net purchase of $10.8 million of marketable securities during the first quarter of 2002, coupled with a decrease in fixed asset purchases and proceeds from the sale of fixed assets.  The proceeds from the sale of marketable securities were used
predominantly for operating purposes and to pay certain financing obligations that were due.

Cash used in
financing activities was $1.4 million for the three months ended March 31, 2003 compared with $0.5 million during the three months ended March 31, 2002. The increase in cash used by financing activities is due to a decrease in stock option exercises
during the first quarter of 2003, an increase in our debt payments due to software and equipment financings that were entered into during the first half of 2002, and a decrease in the restricted cash balance required as a result of the terms of our
credit facility discussed below.  In addition, we made a $0.5 million loan to our former Co-chairman and Executive Vice President in the first quarter of 2002.  During December 2002, the former officer fully paid all outstanding principal
and interest due under the promissory note and we paid severance and adjusted the officers options according to the separation agreement.

During April 2002, we entered into an unsecured $6.0 million credit facility which was amended in December 2002.  The agreement
provided for two separate draw downs, referred to as Tranche A and Tranche B, and required that we maintain (i) a liabilities to tangible net worth ratio of .50 to 1, (ii) a minimum cash balance of $50 million and (iii) at least $12 million invested
at the financial institution. During December 2002, we amended this facility to eliminate these covenants, remove the draw down ability for Tranche B and to cash secure the outstanding balance under Tranche A.  The cash collateral is equal to
110% of the amount outstanding under the facility.  No further amounts will be borrowed under this facility.

As of March 31, 2003, cash equivalents of $2.7 million were considered restricted and are held as collateral pursuant to the amended
credit facility and $2.5 million was outstanding under Tranche A described above, of which $1.2 million, plus interest, is due within the next 12 months.  Interest under this facility is fixed at 4.0 percent per annum.

As discussed below under Risk Factors, we operate in the semiconductor industry, which is cyclical and subject to
rapid technological change and evolving industry standards. The semiconductor industry is currently experiencing a significant downturn. This downturn is characterized by diminished product demand, excess customer inventories and excess production
capacity. These factors have caused a substantial decrease in our revenues and in our results of operations. For example, during the first quarter of 2003 we reported a net loss of $12.2 million and, as compared to the year ended 2002, reported a
net reduction in cash, cash equivalents and short-term investments of $11.4 million and a reduction in shareholders equity of $11.4 million.  The substantial decrease in cash, cash equivalents and short-term investments is predominantly
due to cash used in operations and for debt service requirements.  At March 31, 2003, we had cash, cash equivalents and short-term investments of $36.2 million and working capital of $21.3 million.  Cash and cash equivalents and short-term
investments are expected to decrease throughout 2003.  We expect that our net cash usage will range from $36 to $38 million during 2003.  Given the short maturity of our short-term investments and their high liquidity, a material change in
interest rates will not materially affect our liquidity.

The current downturn and future downturns
in the semiconductor industry may be severe and prolonged, and any failure of this industry to recover from the current downturn will seriously impact our revenue and harm our business, financial condition and results of operations.  We will
continue to experience losses and use our cash, cash equivalents and short-term investments if we do not receive sufficient product orders and our costs are not controlled.  We will continue to (i) focus on cash preservation and expense
reductions, (ii) expand market share with existing and new products by focusing on our strength in mixed signal and digital signal processing technology, (iii) rationalize research and development spending on projects that will be accretive to
revenues in the near term and (iv) secure system design wins with Tier I and emerging communication equipment and optical module manufacturers.

As a result of the continuing significant economic slowdown and the related uncertainties in the technology sector and semiconductor
industry, we initiated our corporate realignment plan as discussed above.  The plan

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included workforce reductions of approximately 150 employees, the consolidation of facilities through closure of certain locations, a reduction in the level of activity at
other locations and asset impairment charges.  We recorded a charge during 2002 of $11.0 million associated with this realignment.   The realignment plan will significantly reduce expenses and cash usage while permitting our crucial
personnel to focus on key business strategies such as expanding market share and securing design wins.  Excluding the $4.9 million of cash necessary to execute the realignment plan, we estimate that such plan, combined with the our other cost
saving initiatives, will provide annual cash savings of approximately $35.0 million.

Although we undertook
cost reduction programs and initiated our corporate realignment plan during 2002 to reduce expenses, we may still need additional capital. The market for our products has declined substantially; accordingly, we will continue to utilize significant
amounts of capital.  In the event that we are required, or elect, to raise additional funds, we may not be able to do so on favorable terms, if at all.  Our inability to raise additional capital may result in the need to further
restructure our operations.  As another alternative to raising capital, we may need to explore the opportunity to merge with or be acquired by another company.  We cannot give any assurance that such a merger can occur or how favorable the
terms of such a merger would be for our existing shareholders.

Our decrease in revenues continues to
reflect the limited demand for optical equipment in our end markets and the additional reductions in carrier spending during 2002 and 2003.  Our business prospects depend substantially on the continued build-out of the communications
infrastructure.  Almost all telecommunication service providers have curtailed the level of their capital expenditures on their infrastructure build-out, which has significantly reduced the demand for our products by communications equipment
manufacturers.  This slowdown has caused our  revenues and backlog to decline substantially.  Our revenues declined in each quarter of 2002, compared to the comparable periods in 2001.  Because of general economic conditions and
slowdowns in purchases of optical networking equipment, it has become increasingly difficult for us to predict the purchasing activities of our customers.  Our success in emerging from this prolonged downturn requires that we significantly
reduce our cost structure to preserve cash and enhance our ability to invest in opportunities that expand market share and grow revenues in new markets.  We will continue to focus on our strength in mixed-signal and digital signal processing
technology and will expand into new markets based upon this strength.  We have continued to secure design wins with Tier I and emerging communication equipment and optical module manufacturers in North America, Europe and Asia Pacific
regions.  Our exclusive focus is now on building discrete components for communication equipment and optical module manufacturers.  By focusing on components, we ensure that our customers will have access to the best component technology
and we avoid competing with our transceiver and transponder customers.

Exclusive of obtaining any
new capital or material increases in revenues, we believe that if we execute on the items discussed above, we will have sufficient cash, cash equivalents and short-term investments for at least the next fifteen months.  The fifteen months
assumes that we can execute on the items discussed above and that revenues meet our forecast.  If we cannot satisfactorily execute on the above items or if 2003 revenues are lower than we expect, we will be required to make further headcount
and expense reductions which may limit certain operational abilities including, but not limited to, making new product introductions in a timely manner, obtaining design wins, procuring required raw materials and meeting customer shipping
schedules.  If we are able to obtain new capital and/or revenues grow greater than expected, our liquidity will exceed fifteen months.  Based upon our cost reduction efforts, revenues of less than $10 million per quarter will be cash
neutral to us and any revenues in excess of this amount will generate positive cash flows from operations.

RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

In June and August 2001, the Financial Accounting Standards Board, or FASB, issued SFAS No. 143, Accounting for Asset Retirement
Obligations and SFAS No. 144, Accounting for the Impairment or Disposal of Long-Lived Assets, respectively.  SFAS No. 143, which is effective for us on January 1, 2003, requires that the fair value of a liability for an asset
retirement obligation be recognized in the period in which it is incurred if a reasonable estimate of fair value can be made.  The associated asset retirement costs are capitalized as part of the carrying amount of the long-lived asset. 
SFAS No. 144, which was effective for us on January 1, 2002, establishes a single accounting model for the accounting of a discontinued segment of a business as well as addresses significant implementation issues related to SFAS No. 121. The
adoption of SFAS No. 143 did not have a material impact on our financial position, results of operations or cash flows.  We implemented the provisions of SFAS No. 144 to record the asset impairment charges discussed above.

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In July 2002, the FASB issued SFAS No. 146, Accounting for Costs Associated
with Exit or Disposal Activities.  This statement requires that a liability for costs associated with an exit or disposal activity be recognized when the liability is incurred.  This differs from prior guidance, which required the
liability to be recognized when a commitment plan was put into place.   SFAS No. 146 also establishes that fair value is the objective for initial measurement of the liability.  This Statement is effective for exit or disposal
activities that are initiated after December 31, 2002.  We do not expect that the adoption of this standard will have a material impact on our financial position, results of operations or cash flows.

In December 2002, the FASB issued SFAS No. 148, Accounting for Stock-Based Compensation  Transition and Disclosure  an
Amendment of SFAS No. 123, to provide alternative methods of transition for a voluntary change to the fair value based method of accounting for stock-based employee compensation.  In addition, SFAS No. 148 amends the disclosure
requirements of SFAS No. 123 to require prominent disclosures in both annual and interim financial statements about the method of accounting for stock-based employee compensation and the effect of the method used on reported results.  We have
adopted the disclosure requirements of SFAS No. 148 as of December 31, 2002.  We account for stock-based employee compensation arrangements in accordance with provisions of Accounting Principles Board (APB) Opinion No. 25,
Accounting for Stock Issued to Employees, and comply with the disclosure provisions of SFAS No. 123, as amended.  Under APB Opinion No. 25, compensation expense is based on the difference, if any, on the date of grant, between the
fair value of our stock and the exercise price.

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FORWARD-LOOKING INFORMATION

This Report contains forward-looking statements which include, but are not limited to, statements concerning projected revenues,
expenses, gross profit and income, market acceptance of our products, the competitive nature of and anticipated changes in our markets, our ability to achieve further product integration, the status of evolving technologies and their growth
potential, the timing of new product introductions, the adoption of future industry standards, our production capacity, our ability to migrate to smaller process geometries, new technologies, and the need for additional capital. These
forward-looking statements are based on our current expectations, estimates and projections about our industry, managements beliefs, and certain assumptions made by us. Words such as anticipates, expects,
intends, plans, believes, seeks, estimates, may, will and variations of these words or similar expressions are intended to identify forward-looking statements. In
addition, any statements that refer to expectations, projections or other characterizations of future events or circumstances, including any underlying assumptions, are forward-looking statements. These statements are not guarantees of future
performance and are subject to risks, uncertainties and assumptions that are difficult to predict. Therefore, our actual results could differ materially and adversely from those expressed in any forward-looking statements as a result of various
factors, some of which are listed herein. We undertake no obligation to revise or update publicly any forward-looking statements for any reason.

As used in this Form 10-Q, company, we, us, our, Multilink and
Multilink Technology refer to Multilink Technology Corporation and its subsidiary companies.

RISK FACTORS

Set forth below and elsewhere in this Quarterly Report and in the other documents we file with the Securities and Exchange Commission
are risks and uncertainties that could cause our actual results to differ materially from the results contemplated by the forward-looking statements contained in this Quarterly Report.

The
continuing worldwide economic slowdown and related uncertainties may continue to adversely impact our revenues and operating results.

Slower economic activity, concerns about inflation, decreased consumer confidence, reduced corporate profits and capital spending,
adverse business conditions and liquidity concerns in the telecommunications and related industries, and recent international conflicts and terrorist and military activity have resulted in a continuing downturn in worldwide economic conditions. As a
result of these unfavorable economic conditions, beginning in the first half of 2002, we experienced a significant slowdown in customer orders, an increase in the number of cancellations and rescheduling of backlog, and higher overhead costs as a
percentage of our reduced net revenue, from which we have not recovered. We cannot predict the timing, strength and duration of any economic recovery in the semiconductor industry. In addition, the events of September 11, 2001 and subsequent
international conflicts and terrorist acts can be expected to place further pressure on economic conditions in the United States and worldwide. These conditions make it extremely difficult for our customers, our vendors and us to accurately forecast
and plan future business activities. If such conditions continue or worsen, our business, financial condition and results of operations will likely be materially and adversely affected.

We are
using our available cash to fund our operating activities.

During the first quarter of 2003, we used
$11.4 million of our available cash, cash equivalents and short term investments to fund our operating, investing and financing activities.  We anticipate that we will use approximately $36 to $38 million in cash, cash equivalents and
investments during fiscal year 2003 to fund our operations, investments and financing activities.  We believe that we will continue to use our available cash, cash equivalents and investments in the future although we believe that we have
sufficient cash for our needs for at least the next fifteen months.  We will continue to experience losses and use our cash, cash equivalents and investments if we do not receive sufficient product orders and our costs are not
controlled.

Although we undertook cost reduction programs and initiated our corporate realignment plan
during 2002 to reduce expenses, we may still need additional capital. The market for our products has declined substantially; accordingly, we have continued to utilize significant amounts of capital.  In the event we are required, or elect, to

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raise additional funds, we may not be able to do so on favorable terms, if at all.  Our inability to raise additional capital could result in the need to further
restructure our operations.

Our corporate realignment plan may not be successful and could result in the erosion of employee morale, legal actions against us and management
distractions.

As a result of the continuing significant economic slowdown and the related
uncertainties in the technology sector and semiconductor industry, we initiated a corporate realignment plan during the third quarter of 2002.  The plan included workforce reductions, the consolidation of facilities through closure of certain
locations, a reduction in the level of activity at other locations and expected asset impairment charges.  We recorded a charge during 2002 of $11.0 million associated with our realignment plan.  Although we are making every effort to
reduce our expenses, we still expect to incur significant net losses in the foreseeable future due predominantly to the significant and continuing decrease in our revenues.  In establishing the realignment plan, we may have incorrectly
anticipated the demand for our products and our ability to execute on the plan.  We may be forced to restructure further and our plan may not be successful.

These workforce reductions could result in an erosion of morale, and a lack of focus and reduced productivity by our remaining
employees, including those directly responsible for revenue generation, which in turn may affect our revenue in the future. In addition, employees directly affected by the reductions may seek future employment with our business partners, customers,
or competitors. Although all employees are required to sign a confidentiality agreement with us at the time of hire, there can be no assurances that the confidential nature of our proprietary information will be maintained in the course of such
future employment. Additionally, we may face wrongful termination or other claims relating to compensation asserted by employees directly affected by the reduction. We could incur substantial costs in defending ourselves or our employees against
such claims, regardless of the merits of such actions. Furthermore, such matters could divert the attention of our management away from our operations, harm our reputation and increase our expenses, and we may fail to achieve our targeted
goals.

Our operating results may fluctuate significantly due to the cyclicality of the semiconductor industry. Any such variations could adversely affect the market price of our
Class A common stock.

We operate in the semiconductor industry, which is cyclical and subject to
rapid technological change and evolving industry standards. From time to time, the semiconductor industry has experienced significant downturns such as the current one. These downturns are characterized by diminished product demand, excess customer
inventories, accelerated erosion of prices and excess production capacity. These factors could cause substantial fluctuations in our revenues and in our results of operations. The current downturn and future downturns in the semiconductor industry
may be severe and prolonged, and any failure of this industry to fully recover from the current downturn would seriously impact our revenue and harm our business, financial condition and results of operations. The semiconductor industry also
periodically experiences increased demand and production capacity constraints, which may affect our ability to ship products in future periods. Our quarterly results may vary significantly as a result of the general conditions in the semiconductor
industry, which could cause our stock price to decline.  During the current downturn, our revenues have decreased for the last six quarters. We can give no assurances that this trend will not continue.

We have incurred net losses in the past and expect to incur net losses in the future.

We had net losses of $12.2 million for the first quarter ended March 31, 2003, $106.2 million in 2002 and $12.4 million in 2001. 
Despite our corporate realignment plan, our ability to achieve profitability will be materially and adversely affected if we fail to significantly increase our revenues.  We anticipate incurring net losses for the foreseeable future.

Our quarterly revenues and operating results have declined substantially and could continue to decline because of a number of factors, any one of which could adversely affect our stock
price.

Our revenues have declined substantially during the past several quarters.  Because of
general economic conditions and slowdowns in purchases of optical networking equipment, it has become increasingly difficult for us to predict the purchasing activities of our customers.  We expect that our operating results will fluctuate
substantially in the future and could continue to decline.  Our revenues were significantly lower and loss per share was significantly greater in fiscal 2002 than in fiscal 2001.  Future declines in revenues and increased losses may be

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caused by a number of factors, many of which are outside our control.  Factors that could negatively affect our future operating results include the following:

| | a continuing downturn in the telecommunications industry;                                       
|- | ------------------------------------------------------------------------------------------------
|  |                                                                                                 
| | lower demand for our products and our customers products;                                      
|  |                                                                                                 
| | the failure of our corporate realignment plan;                                                  
|  |                                                                                                 
| | the reduction, rescheduling or cancellation of orders by our customers or prospective customers;
|  |                                                                                                 
| | general communications and semiconductor industry conditions;                                   
|  |                                                                                                 
| | the amounts and timing of investments in research and development;                              
|  |                                                                                                 
| | competitive pressures on selling prices and the loss of customers;                              
|  |                                                                                                 
| | our ability to introduce new products and technologies on a timely basis;                       
|  |                                                                                                 
| | the amounts and timing of costs associated with warranties and product returns;                 
|  |                                                                                                 
| | the ability of our customers to obtain components from their other suppliers; and               
|  |                                                                                                 
| | general economic conditions.                                                                    

Any of the above-mentioned factors could have a material adverse effect on
our business and on our financial results.

In the past, we have recorded significant new product and
process development costs because our policy is to expense these costs at the time that they are incurred.  We may incur these types of expenses in the future.  These additional expenses will have a material and adverse effect on our
results in future periods.

The market price for our Class A common stock has declined substantially and could continue to decline.

Our stock price has declined significantly in the context of announcements made by us and other semiconductor suppliers of reduced
revenues, declining operating performance, reduced expectations and a significant slowdown in the technology sector, particularly the optical networking equipment sector.  Given these general economic conditions and the reduced demand for our
products that we have experienced, we expect that our stock price will continue to be volatile and could decline further.  In addition, the value of our company could decline due to the impact of any of the following factors, among others, upon
the market price of our Class A common stock:

| | additional declines in our revenues and continued increased losses;                                      
|- | ---------------------------------------------------------------------------------------------------------
|  |                                                                                                          
| | additional changes in financial analysts estimates of our revenues and earnings (losses);               
|  |                                                                                                          
| | our failure to meet financial analysts performance expectations; and                                    
|  |                                                                                                          
| | changes in market valuations of other companies in the semiconductor or fiber optic equipment industries.

In addition, many of the risks described elsewhere in this section could materially and adversely affect our stock price, as discussed
in those risk factors.  The stock markets have recently experienced substantial price and volume volatility.  Fluctuations such as these have affected and are likely to continue to affect the market price of our common stock.

In the past, securities class action litigation has often been instituted against companies following periods of
volatility and decline in the market price of such companies securities.  If instituted against us, regardless of the outcome, such litigation could result in substantial costs and diversion of our managements attention and
resources and have a material adverse effect on our business, financial condition and results of operations.  We could be required to pay substantial damages, including punitive damages, if we were to lose such a lawsuit.

Our reverse stock split may adversely affect the market price of our stock.

On September 5, 2002, our board of directors authorized, and our shareholders approved, an amendment to our articles of
incorporation to effect a reverse stock split for the purpose of increasing the market price of our Class A common stock above the Nasdaq minimum of $1.00 and avoiding delisting of our Class A common stock from

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the NASDAQ National Market.  Under the amendment, each outstanding ten shares of our Class A common stock and Class B common stock was converted into one share of Class A
common stock or Class B common stock, as applicable.  The effective date of the reverse split was September 6, 2002.

The long-term effect of the reverse stock split upon the market prices for our Class A common stock cannot be accurately
predicted.  In particular, there is no assurance that prices for shares of the Class A common stock after the reverse stock split will return to or maintain levels higher than the prices for shares of the Class A common stock immediately prior
to the reverse stock split.  Moreover, because some investors may view the reverse stock split negatively, there can be no assurance that the reverse stock split has not and will not continue to adversely impact the market price of our Class A
common stock.

Our Class A common stock may still be delisted from the Nasdaq National Market.

Despite the completion of our reverse stock split, if the closing bid price for the Class A common stock is less than $1.00 per share
during thirty consecutive trading days, we may not qualify for continued inclusion of the Class A common stock on the NASDAQ National Market, and our Class A common stock could be delisted.  Additionally, there are other requirements for
continued listing, in particular the requirement that we maintain a public float of at least $5 million, that could also cause our Class A common stock to be delisted.  If a delisting were to occur, our Class A common stock may
trade on the NASDAQ SmallCap Market, on the OTC Bulletin Board, or in the pink sheets maintained by the National Quotation Bureau, likely adversely affecting its liquidity.  In addition, some institutional investors have internal
policies preventing the purchase of stocks trading on the NASDAQ SmallCap Market, the OTC Bulletin Board, or the pink sheets, which could also negatively affect the marketability of the Class A common stock.  Accordingly, if our
Class A common stock were no longer to trade on the NASDAQ National Market, its market price could be adversely impacted.

Declining activity in the build-out of the communications infrastructure
and uncertainties in network service providers purchasing programs, as well as consolidation in the network service provider industry, may adversely affect our future business and operating results.

Our business prospects depend substantially on the continued build-out of the communications infrastructure.  Almost all
telecommunication service providers have curtailed the level of their capital expenditures on their infrastructure build-out, which has significantly reduced the demand for our products by communications equipment manufacturers.  This slowdown
has caused our revenues and backlog to decline substantially.  Our revenues declined in each quarter of 2002, compared to the comparable periods in 2001and further declined in the first quarter of 2003 as compared to the fourth quarter of
2002.  In addition, network service providers typically purchase network equipment pursuant to multi-year purchasing programs that may increase or decrease on a monthly basis as the providers adjust their capital equipment budgets and
purchasing priorities.  Network service providers further curtailment or termination of purchasing programs or decreases in capital budgets could materially and adversely affect our revenue and business prospects.  This is
particularly true if significant and unanticipated by our communications equipment manufacturer customers and us.  Additionally, consolidation among network service providers may cause delays in the purchase of our products and a reexamination
of strategic and purchasing decisions by these network service providers and our current and potential communications equipment manufacturer customers, including delaying the expansion of 10 Gb/s systems and the migration to 40 Gb/s systems, which
could harm our business and financial condition.

We may not immediately benefit from a recovery in the communications equipment industry.

Our industry is currently experiencing a significant and prolonged downturn due to a corresponding downturn in the communications
equipment industry.  As noted above, this downturn could continue for some time. We expect to be positively affected when the communications equipment industry recovers.  Many of our customers, however, may have significant inventory on
hand and a recovery in the communications equipment industry, when it occurs, may not benefit us in the short or intermediate term.  Our customers will first utilize their current inventory levels before placing orders with us.  If our
customers or potential customers are maintaining a substantial amount of inventory, it may take a significant period of time before we benefit from an improvement in the communications equipment industry.  We attempt to estimate inventory
levels at our customers, but we cannot ensure that such estimates are materially accurate.

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We must incur substantial research and development expenses.  If we do not have sufficient resources to invest in research and development, our business would be
seriously harmed.

In order to remain competitive, we must continue to make substantial investments in
research and development to develop new and enhanced products.  We cannot assure you that we will have sufficient resources to invest in the development of new and enhanced technologies and competitive products.  Our failure to continue to
make sufficient investments in research and development programs could further significantly reduce our revenue and harm our business.  Additionally, our products have a short life cycle; therefore, we have limited time to capitalize upon our
research and development investments and generate revenues.  We cannot assure you that our research and development investments will result in revenues in excess of our expenses, if at all, or will result in any commercially accepted
products.

A few customers account for a majority of our sales, and the loss of one or more key customers could significantly reduce our cash flows, revenues and operating
results.

A relatively small number of customers have historically accounted for a majority of our
revenues.  Our three largest customers accounted for approximately 54% of our revenues for fiscal year 2002, 71% of our revenues in 2001, and 53% of our revenues for the three months ended March 31, 2003.  Our top three customers for the
quarter ended March 31, 2003 were Lucent, ADVA and Cisco, representing approximately 36%, 9% and 8%, respectively.  Our top three customers for the year ended December 31, 2002 were TyCom, Alcatel and Lucent, representing approximately
25%, 19% and 10% of our revenues, respectively.  Our top three customers in 2001 were TyCom, Alcatel and Marconi, representing approximately 34%, 29% and 8% of our revenues, respectively.  We anticipate that relatively few customers will
continue to account for a significant portion of our revenues.  A reduction, delay or cancellation of orders from one or more significant customers or the loss of one or more key customers in any period could significantly reduce our already
declining revenues.

Our industry is subject to consolidation.

There has been a trend toward consolidation among companies in our industry for several years.  We expect this trend toward
industry consolidation to continue as communications integrated circuit companies attempt to strengthen or hold their positions in evolving markets.  Consolidation may result in stronger competitors, which in turn could have a material adverse
effect on our business, operating results, and financial condition.  There has also been consolidation among communication equipment manufacturers, which could reduce the quantity of systems into which we could sell, which in turn could have a
material adverse effect on our business.

We sell substantially all of our products based on individual purchase orders, and we cannot predict the size or timing of our orders.  Our failure
to effectively plan production levels and inventory could materially harm our business and operating results.

We sell substantially all of our products based on individual purchase orders, rather than long-term contracts.  As a result, our
customers generally can cancel or reschedule orders on short notice and are not obligated to purchase a specified quantity of any product.  For example, we had significant order cancellations during 2001.  We cannot assure you that our
existing customers will continue to place orders with us, that orders by existing customers will be repeated at current levels or that we will be able to obtain orders from new customers.  We cannot predict the size, timing or terms of incoming
purchase orders; therefore, decreases in the number or size of orders or the development of customer orders with new terms may adversely affect our business and operating results.

Because we do not have substantial non-cancelable backlog, we typically plan our production and inventory levels based on internal
forecasts of customer demand that are highly unpredictable and can fluctuate substantially.  In anticipation of long lead times to obtain certain inventory and materials, we order materials in advance of anticipated customer sales.  This
advance ordering might result in excess inventory levels or unanticipated inventory write-downs if our customers cancel orders or change the specifications for their orders.  If we are unable to plan inventory and production levels effectively,
our business and operating results could be materially harmed.

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We compete in highly competitive markets, against competitors with longer operating histories, greater name recognition, greater resources or larger market
capitalization.  Our failure to compete effectively would harm our business.

The markets in which
we compete are highly competitive.  Our ability to compete successfully in our markets depends on a number of factors, including:

| | product time-to-market;                                                                                 
|- | --------------------------------------------------------------------------------------------------------
|  |                                                                                                         
| | product performance;                                                                                    
|  |                                                                                                         
| | product price;                                                                                          
|  |                                                                                                         
| | product quality; product reliability;                                                                   
|  |                                                                                                         
| | success in designing and subcontracting the manufacture of new products that implement new technologies;
|  |                                                                                                         
| | market acceptance of our competitors products;                                                         
|  |                                                                                                         
| | efficiency of production;                                                                               
|  |                                                                                                         
| | expansion of production of our products for particular systems manufacturers; and                       
|  |                                                                                                         
| | customer support and reputation.                                                                        

We compete primarily against Agere, Applied Micro Circuits, Broadcom, Infineon, JDS Uniphase, Maxim, Mindspeed (a Conexant company),
NEL, Nortel (microelectronics division), NTT Electronics, Philips, PMC-Sierra, Transwitch, Vitesse and various start-ups.  Many of our competitors operate their own fabrication facilities and have longer operating histories and a greater
presence in key markets, greater name recognition, access to larger customer bases and significantly greater financial, sales and marketing, distribution, technical and other resources.  As a result, our competitors may be able to adapt more
quickly to new or emerging technologies, changes in customer requirements or devote greater resources to the promotion and sale of their products.  In addition, our competitors may develop technologies that more effectively address the
transmission of digital information through existing analog infrastructures at a lower cost, thereby rendering our products obsolete.  Our competitors that have large market capitalization or cash reserves are also better positioned than we are
to acquire other companies, thereby obtaining new technologies or products.  Any of these acquisitions could give our competitors a strategic advantage that could adversely affect our business, financial condition and results of
operations.  Additionally, these competitors resources place them in a stronger position to weather a continued downturn in our industry.

Current and potential competitors have established or may establish financial or strategic relationships among themselves or with
existing or potential customers, resellers or other third parties.  Accordingly, it is possible that new competitors or alliances forged by competitors could emerge and rapidly acquire significant market share.

We incur research and development expenses in advance of obtaining access to emerging process technology, and as a result, these investments may not result in the production of any marketable products.

We often incur substantial research and development expenses for the development of products incorporating emerging
process technologies.  We make these substantial investments in the product design stage and prior to gaining access to these process technologies.  Failure to gain access to these process technologies could prevent our products
development and commercialization and materially harm our business.

Our future success depends in part on strategic relationships with certain of our customers. If we cannot maintain these
relationships or if these customers develop their own solutions or adopt a competitors solutions instead of buying our products, our operating results would be adversely affected.

In the past, we have relied on our strategic relationships with certain customers who are technology leaders in our target markets. We
intend to pursue and continue to form these strategic relationships in the future but we cannot assure you that we will be able to do so. These relationships often require us to develop new products that typically involve significant technological
challenges. Our partners frequently place considerable pressure on us to meet their tight development schedules. Accordingly, we may have to devote a substantial amount of our limited resources to our strategic relationships, which could detract
from or delay our completion of other important development projects. Delays in development could impair our relationships with our strategic partners and negatively impact sales of the products under development. Moreover, it is possible that our
customers may develop

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their own solutions or adopt a competitors solution for products that they currently buy from us. If that happens, our business, financial condition and results of
operations could be materially and adversely affected.

We will lose customer sales and may not be successful if customers and prospective customers do not qualify our products to be designed
into their systems.

Because our products must function as part of a larger system or network, our
customers often undertake extensive qualification processes prior to placing large product orders.  Once communications equipment manufacturers decide to use a particular suppliers products or components, they incorporate those products
or components into their system design, which are known as design-wins.  Suppliers who fail to achieve design-wins are unlikely to make sales to those customers for particular projects until at least the adoption of future redesigned
systems.  Even then, many companies may be reluctant to incorporate entirely new products into their new system designs, as this could involve significant additional redesign efforts.  If we fail to achieve design-wins we will lose the
opportunity for sales to those customers for a lengthy period of time.  Although a design-win increases the likelihood that our products will be incorporated into the systems of our customers or prospective customers, it does not obligate that
customer or prospective customer to purchase specified quantities of our products.

Our success is dependent upon our ability to develop new products and reduce costs in a timely
manner.

Our operating results will depend largely on our ability to continue to introduce new and
enhanced products on a timely basis. Successful product development and introduction depends on numerous factors, including, among others:

| | our ability to anticipate customer and market requirements and changes in technology and industry standards;  
|- | --------------------------------------------------------------------------------------------------------------
|  |                                                                                                               
| | our ability to accurately define new products;                                                                
|  |                                                                                                               
| | our ability to timely complete development of new products and bring our products to market on a timely basis;
|  |                                                                                                               
| | our ability to differentiate our products from offerings of our competitors;                                  
|  |                                                                                                               
| | our ability to understand overall system and network architecture; and                                        
|  |                                                                                                               
| | overall market acceptance of our products.                                                                    

Furthermore, we are required to continually evaluate expenditures for planned product development and to choose among alternative
technologies based on our expectations of future market growth. We cannot assure you that we will be able to develop and introduce new or enhanced products in a timely and cost-effective manner, that our products will satisfy customer requirements
or achieve market acceptance, or that we will be able to anticipate new industry standards and technological changes.  We also cannot assure you that we will be able to respond successfully to new product announcements and introductions by
competitors.

In addition, prices of established products may decline, sometimes significantly, over time.
We believe that in order to remain competitive we must continue to reduce the cost of producing and delivering existing products at the same time that we develop and introduce new or enhanced products. We cannot assure you that we will be able to
continue to reduce the cost of our products to remain competitive.

The markets we serve are subject to rapid technological change, and if we are unable to develop and introduce new products,
our revenues could decline further.

The markets we serve frequently undergo transitions in which
products rapidly incorporate new features and performance standards on an industry-wide basis.  Products for communications applications, as well as for high-speed computing applications, are based on continually evolving industry
standards.  A significant portion of our revenues in recent periods has been, and is expected to continue to be, derived from sales of products based on existing transmission standards.  Our ability to compete in the future will, however,
depend on our ability to identify and ensure compliance with evolving industry standards.

The emergence of
new industry standards could render our products incompatible with products developed by major communications equipment manufacturers.  If our products are unable to support the new features, the enhanced integration of functions or the
performance levels required by communications equipment manufacturers in these markets, we would likely lose business from an existing or potential customer.  Moreover, we would not

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have the opportunity to compete for new business until the next product transition occurs.  As a result, we could be required to invest significant time and effort and to
incur significant expense to redesign our products to ensure compliance with relevant standards.  If our products are not in compliance with prevailing industry standards for a significant period of time, we could miss opportunities to achieve
crucial design-wins.

Moreover, to improve the cost-effectiveness and performance of our products, we may
be required to transition one or more of our products to process technologies with smaller components, other materials or higher speeds.  We may not be able to improve our process technologies and develop or otherwise gain access to new process
technologies in a timely or cost-effective manner.  We could record expenses or charges associated with such a transition. For example, we wrote off $4.3 million of our inventory in the first quarter of 2001, which resulted from a transition
from certain GaAs products to SiGe products and an order cancellation, reducing our gross profit.  Customers may be inclined to purchase 0.13um CMOS technologies rather than products that incorporate SiGe, GaAs or InP processes because of lower
power requirements and lower cost.

These risks may lead to increased costs or delay product delivery,
which would harm our revenues and customer relationships.  Consequently, our revenues could be reduced for a substantial period if we fail to develop products with required features or performance standards, if we experience a delay as short as
a few months in bringing a new product to market, or if our customers fail to achieve market acceptance of their products.

Necessary licenses of third-party technology may not be available to
us or may be prohibitively expensive, which could adversely affect our ability to produce and sell our products.

From time to time we may be required to license technology from third parties to develop new products or product enhancements.  We
cannot assure you that third-party licenses will be available to us on commercially reasonable terms, if at all.  Our inability to obtain any third-party license required to develop new products and product enhancements could require us to
obtain substitute technology of lower quality or performance standards or at greater cost, if at all, any of which could seriously harm our ability to sell our products.

Our future success
depends on the continued service of our engineering, technical and key management personnel, and our failure to retain such personnel would be harmful to our ongoing operations and business prospects.

We may not be able to continue to retain engineers or other qualified personnel necessary for the development of our products and
business or to replace engineers or other qualified personnel who may leave us in the future.  Loss of the services of engineers or other technical and key management personnel could be significantly detrimental to our product and process
development programs and adversely affect our business and operating results.

Our future success depends in part on the continued service of our key executives, and the loss of any of these key
executives could adversely affect our business and operating results.

Our success depends in part upon
the continued service of our executive officers, particularly Dr. Richard Nottenburg, our President, Chief Executive Officer and Chairman of the Board.  Dr. Nottenburg does not have an employment or non-competition agreement with
us.  The loss of Dr. Nottenburg would be detrimental to our ongoing operations and prospects.  In August 2002, Eric Pillmore, our Senior Vice President of Finance and Chief Financial Officer, resigned to pursue other opportunities. 
In November 2002, Joseph Cole, our Vice President of Worldwide Sales, and Ronald Krisanda, our Senior Vice President of Operations, resigned to pursue other opportunities.  Dr. Jens Albers, our Executive Vice President and Co-Chairman
of the Board, retired from his full-time duties as an officer and director in August 2002 and left our company to pursue other opportunities in December 2002.  While we have replaced Mr. Pillmore and reassigned
Dr. Albers, Mr. Coles and Mr. Krisandas responsibilities to other members of management, our future success will depend in part on how effectively we can carry out our business plan in their absence.

Several of our key personnel are relatively new to their positions and must be integrated into our organization.  Our failure to integrate these individuals could adversely affect our
business.

Several of our key personnel have recently been promoted to their current positions,
including John U. Soenksen, who was promoted to his current position of Chief Financial Officer in August 2002, and Richard

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Mannherz, who was promoted to Vice President of Sales in November 2002.  Therefore, in combination with the executive departures described above, there has been little or
no opportunity to evaluate the effectiveness of our current executive management team as a combined unit.  Our future performance will depend in part on our ability to successfully integrate our newly appointed officers and key personnel into
our management team, and our ability to develop an effective working relationship among management.

Our failure to protect our intellectual property adequately could adversely affect our
business, and patents obtained by our competitors may preclude us from certain product development.

Our intellectual property is critical to our ability to successfully design products for the optical networking systems market.  We
cannot assure you that our pending patent applications or any future applications will be approved.  Further, we cannot assure you that any issued patents will provide us with competitive advantages or will not be challenged by third parties,
or that if challenged, will be found to be valid or enforceable.  Additionally, we cannot assure you that the patents of others will not have an adverse effect on our ability to do business.  Furthermore, others may independently develop
similar products or processes, duplicate our products or processes or design around any patents that may be issued to us.

We rely on the combination of maskwork protection under the Semiconductor Chip Protection Act of 1984, trademarks, copyrights, trade
secrets, employee and third-party nondisclosure agreements and licensing arrangements to protect our intellectual property.  Despite these efforts, we cannot be certain that others will not independently develop substantially equivalent
intellectual property or otherwise gain access to our intellectual property, or disclose such intellectual property, or that we can meaningfully protect our intellectual property.

We could be
harmed by litigation involving patents and proprietary rights.

The semiconductor industry is
characterized by substantial litigation regarding patent and other intellectual property rights.  We may be accused of infringing upon the intellectual property rights of third parties.  Additionally, we have indemnification obligations to
our customers with respect to intellectual property infringement claims by third parties.  Such intellectual property infringement claims by third parties or indemnification claims by our customers could harm our business.

Any litigation relating to the intellectual property rights of third parties, whether or not determined in our favor or settled
by us, could be costly and could divert the efforts and attention of our management and technical personnel.  In the event of any adverse ruling in any litigation, we could be required to:

| | pay substantial damages;                                                                                                 
|- | -------------------------------------------------------------------------------------------------------------------------
|  |                                                                                                                          
| | cease the manufacturing, use and sale of certain products;                                                               
|  |                                                                                                                          
| | discontinue the use of certain process technologies; and                                                                 
|  |                                                                                                                          
| | obtain a license from the third-party claiming infringement, which might not be available on reasonable terms, if at all.

Our operating results are subject to fluctuations because of sales to foreign customers.

International sales accounted for approximately 33% of our revenues for the first quarter ended March 31, 2003, 17% of our revenues for
the year ended December 31, 2002 and 24% of our revenues in 2001.  International sales will continue to account for a significant portion of our revenues, and as a result, we will be subject to certain risks associated with international
sales, including:

| | changes in regulatory requirements;                                            
|- | -------------------------------------------------------------------------------
|  |                                                                                
| | increases in tariffs and other trade barriers;                                 
|  |                                                                                
| | timing and availability of export licenses;                                    
|  |                                                                                
| | political and economic instability, including war and acts of terrorism;       
|  |                                                                                
| | difficulties in accounts receivable collections;                               
|  |                                                                                
| | difficulties in staffing and managing foreign subsidiary and branch operations;

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| | difficulties in managing distributors;                                                 
|- | ---------------------------------------------------------------------------------------
|  |                                                                                        
| | difficulties in obtaining governmental approvals for communications and other products;
|  |                                                                                        
| | foreign currency exchange fluctuations;                                                
|  |                                                                                        
| | the burden of complying with a wide variety of complex foreign laws and treaties; and  
|  |                                                                                        
| | potentially adverse tax consequences.                                                  

We are subject to the risks associated with the imposition of legislation and regulations relating to the import or export of high
technology products.  We cannot predict whether quotas, duties, taxes or other charges or restrictions upon the importation or exportation of our products will be implemented by the United States or other countries.  Some of our customer
purchase orders and agreements are governed by foreign laws, which may differ significantly from U.S. laws.  Therefore, we may be limited in our ability to enforce our rights under these agreements and to collect damages, if awarded.

Because sales of our products are denominated in U.S. dollars, increases in the value of the U.S. dollar could
increase the price of our products so that they become more expensive to customers in the local currency of a particular country, leading to a reduction in sales and profitability in that country.  Future international activity may result in
increased foreign currency denominated sales.  Gains and losses on the conversion to U.S. dollars of accounts receivable, accounts payable and other monetary assets and liabilities arising from international operations may contribute to
fluctuations in our results of operations.

If we become subject to unfair hiring claims we could incur substantial costs in defending ourselves, or our managements attention could be
diverted away from our operations.

Companies in our industry often hire individuals formerly employed
by their competitors.  In such cases, these competitors frequently claim that the hiring company has engaged in unfair hiring practices.  We have received claims of this kind in the past from our competitors, and we cannot assure you that
we will not receive claims of this kind in the future or that those claims will not result in material litigation.  We could incur substantial costs in defending ourselves or our employees against such claims, regardless of the merits of the
claims.  In addition, defending ourselves from such claims could divert the attention of our management away from our operations.

Our dependence on third-party manufacturing and supply
relationships could negatively impact the production of our products and significantly harm our business.

We do not own or operate manufacturing facilities necessary for the production of most of our products.  We rely on several outside
foundries and other outsource partners for the manufacture and assembly of most of our products, and we expect this to continue for the foreseeable future.  Finding alternative sources for these products will result in substantial delays in
production and additional costs.

Our dependence upon third parties that manufacture, assemble, package or
supply components for our products may result in:

| | lack of assured semiconductor wafer supply and reduced control over delivery schedules and quality;
|- | ---------------------------------------------------------------------------------------------------
|  |                                                                                                    
| | the unavailability of, or delays in obtaining access to, key process technologies;                 
|  |                                                                                                    
| | limited control over manufacturing yields and quality assurance;                                   
|  |                                                                                                    
| | inadequate capacity during periods of excess demand;                                               
|  |                                                                                                    
| | inadequate allocation of production capacity to meet our needs;                                    
|  |                                                                                                    
| | increased costs of materials or manufacturing services;                                            
|  |                                                                                                    
| | difficulties selecting and integrating new subcontractors;                                         
|  |                                                                                                    
| | limited warranties on wafers or products supplied to us;                                           
|  |                                                                                                    
| | inability to take advantage of price reductions; and                                               
|  |                                                                                                    
| | misappropriation of our intellectual property.                                                     

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Any one of these factors could adversely affect our business.

While we believe we have good relations with our outside foundries and suppliers, we cannot be certain that we will be able to maintain
these favorable relations.  Additionally, because there are a limited number of foundries and suppliers that can produce our products, establishing relationships and increasing production with new outside foundries takes a considerable amount
of time.  Thus, there is no readily available alternative source of supply for our production needs.  A manufacturing disruption, such as a raw material shortage, experienced by any of our outside foundries and suppliers could impact the
production of some of our products for a substantial period of time.  Our outside foundries and suppliers inability to increase their production capacity or to continue to allocate capacity to manufacture our components could also
limit our ability to grow our business.

In addition, our internal manufacturing operations, though limited,
are complex and subject to disruption due to causes beyond our control. The fabrication of integrated circuits is an extremely complex and precise process consisting of hundreds of separate steps. It requires production in a highly controlled, clean
environment. Minute impurities, errors in any step of the fabrication process, defects in the masks used to print circuits on a wafer or a number of other factors can cause a substantial percentage of wafers to be rejected or numerous die on each
wafer not to function.

We may face production delays if the subcontractors we use to manufacture our wafers or products discontinue the manufacturing processes needed to meet our demands or
fail to advance the process technologies needed to manufacture our products.

Our wafer and product
requirements represent a small portion of the total production of the third-party foundries that manufacture our products.  As a result, we are subject to the risk that our external foundries may not continue to devote resources to the
continued development and improvement of the process technologies on which the manufacturing of our products are based.  This could increase our costs and harm our ability to deliver our products on time.

Our operating results substantially depend on manufacturing output and yields, which may not meet expectations.

Manufacturing semiconductors requires manufacturing tools that are unique to each product produced.  If one of these unique
manufacturing tools of our outside foundries were damaged or destroyed, then the ability of these foundries to manufacture the related product would be impaired and our business would suffer.  In addition, our manufacturing yields decline
whenever a substantial percentage of wafers must be rejected or significant portions of each wafer are nonfunctional.  Such declines can be caused by many factors, including minute levels of contaminants in the manufacturing environment, design
imperfections, defects in masks used to print circuits on a wafer and difficulties in the fabrication process.  Many of these problems are difficult to diagnose, are time consuming and expensive to remedy and can result in shipment
delays.

Difficulties associated with adapting our technology and product design to the proprietary process
technology and design rules of our outside foundries can lead to reduced yields.  Since low yields may result from either design or process technology failures, yield problems may not be effectively determined or resolved until an actual
product exists that can be analyzed and tested.  As a result, yield problems may not be identified until well into the production process, and resolution of yield problems may require cooperation between our manufacturers and us.  In some
cases this risk could be compounded by the offshore location of some of our manufacturers, increasing the effort and time required to identify, communicate and resolve manufacturing yield problems.  Manufacturing defects that we do not discover
during the manufacturing or testing process may lead to costly product recalls.  Difficulties in diagnosing and solving the complicated problems of assembling these types of semiconductors could also reduce our yields.

If we are unable to commit to deliver sufficient quantities of our products to satisfy our customers needs, it may be difficult for us to attract new orders and customers or we may lose current orders and
customers.

Our customers typically require that we commit to provide specified quantities of products
over a given period of time.  We may be unable to deliver sufficient quantities of our products for any of the following reasons:

| | our reliance on third-party manufacturers;
|- | ------------------------------------------

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| | our limited infrastructure, including personnel and systems;
|- | ------------------------------------------------------------
|  |                                                             
| | the limited availability of raw materials;                  
|  |                                                             
| | competing customer demands; and                             
|  |                                                             
| | transportation.                                             

If we are unable to commit to deliver sufficient quantities of our products to satisfy a customers anticipated needs, we may lose
the order and the opportunity for significant sales to that customer and may be unable to attract new orders and customers.

Our products are incorporated into sophisticated systems, and defects
may be discovered only after full deployment, which could seriously harm our business.

Our products
are complex and are designed to be deployed in large quantities across sophisticated networks.  Because of the nature of our products, they can only be fully tested when completely deployed in large networks with high amounts of traffic. 
Our customers may discover errors or defects in our products, or our products may not operate as expected, after they have been fully deployed.  If our products have defects or do not operate as expected, we could experience:

| | loss of, or delay in, revenues and loss of market share;                       
|- | -------------------------------------------------------------------------------
|  |                                                                                
| | loss of existing customers;                                                    
|  |                                                                                
| | failure to attract new customers or achieve market acceptance for our products;
|  |                                                                                
| | diversion of development resources;                                            
|  |                                                                                
| | increased service and warranty costs;                                          
|  |                                                                                
| | legal actions by our customers;                                                
|  |                                                                                
| | increased insurance costs; and                                                 
|  |                                                                                
| | damage to our reputation and customer relationships.                           

The occurrence of any of these problems could seriously harm our business and result in decreased revenues and increased operating
expenses.  Defects, integration issues or other performance problems in our products could result in financial or other damages to our customers or could negatively affect market acceptance for our products.

Our business depends on the continued availability of raw materials and advanced process technologies at reasonable prices.  If adequate amounts of raw materials or advanced process technologies are unavailable, our
operating results would be adversely affected.

Highly specialized raw materials and advanced process
technologies are needed for the production of our products.  In some cases, there are only two or three suppliers of such materials and technologies in the world.  We depend on the continued availability of these materials and technologies
at reasonable prices.  We may not be able to fulfill customer purchase requests if there is a substantial increase in the price for these materials or if our outside suppliers cannot provide adequate quantities of raw materials for the
production of our products.  This may result in decreased revenues and adversely affect our operating results.

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We have made, and may make, investments in development stage companies which may not produce any returns for us in the future.

We have made investments in early stage venture-backed, start-up companies that develop technologies that are complementary to our
product roadmap.  The following table summarizes these investments as of March 31, 2003:

|Investee Company              |  |  | Initial Investment Date |  |  | Technology                                                                                             | 
|----------------------------- |  |  | ----------------------- |  |  | ------------------------------------------------------------------------------------------------------ | 
|                              |  |  |                         |  |  |                                                                                                        | 
|ASIP, Inc.                    |  |  | July 2000               |  |  | Integrated photonics components for advanced fiber optics communications networks                      | 
|Internet Machines Corporation |  |  | October 2000            |  |  | Integrated photonics components for advanced fiber optic communications networks                       | 
|Innovative Processing AG      |  |  | August 2001             |  |  | Components and services for high-speed and high-bandwidth networks for the telecom and datacom markets | 

Our total investment in these companies was approximately $3.7 million at December 31, 2001.  During fiscal 2002, we did
not make any additional investments in these companies and recognized equity losses totaling $0.7 million and asset impairments totaling $2.5 million bringing our total investment balance in these companies to $0.5 million at
December 31, 2002.  During the three months ended March 31, 2003, we did not make any additional investments in these companies and recognized an asset impairment on our investment in Innovative Processing AG for $0.3 million, bringing our
total investment balance in these companies to $0.2 million.  These investments involve all the risks normally associated with investments in development stage companies.  As such, there can be no assurance that we will receive a favorable
return on these or any future venture-backed investments that we may make.  Additionally, our original and any future investments may continue to become impaired if these companies do not succeed in the execution of their business plans. 
Any further impairment or equity losses in these investments could negatively impact our future operating results.

The communications industry is subject to U.S. and foreign government
regulations that could harm our business.  Our failure to timely comply with regulatory requirements, or obtain and maintain regulatory approvals, could materially harm our business.

The Federal Communications Commission, or FCC, has jurisdiction over the entire communications industry in the United States and, as a
result, our products and our customers products are subject to FCC rules and regulations.  Current and future FCC rules and regulations affecting communications services, our products or our customers businesses or products could
negatively affect our business.  In addition, international regulatory standards could impair our ability to develop products in the future.  Delays caused by our compliance with regulatory requirements could result in postponements or
cancellations of product orders, which would harm our business, results of operations and financial condition.  Further, we cannot be certain that we will be successful in obtaining or maintaining any regulatory approvals that may, in the
future, be required to operate our business.

Our business is subject to environmental regulations.

We are subject to various governmental regulations related to toxic, volatile and other hazardous chemicals used in our manufacturing
process.  If we fail to comply with these regulations, this failure could result in the imposition of fines or in the suspension or cessation of our operations.  Additionally, we may be restricted in our ability to expand operations at our
present locations, or we may be required to incur significant expenses to comply with these regulations.

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Certain of our directors, executive officers and their affiliates can control the outcome of matters that require the approval of our shareholders, and accordingly we will
not be able to engage in certain transactions without their approval.

We currently have approximately
5,100,000 shares of Class A common stock outstanding, with each share entitling the holder to one vote.  We currently have 2,600,000 shares of Class B common stock outstanding, each of which entitles the holder to ten votes.  All
of the Class B common stock is held by officers, directors or other persons or entities owning 5% or more of the total voting control held by our shareholders.

Our executive officers, directors and their affiliates beneficially own approximately 50% of our outstanding common stock and over 50%
of the total voting control held by our shareholders.  In particular, Dr. Richard Nottenburg, as a result of his stock ownership and a voting trust agreement with Dr. Jens Albers, alone controls approximately 50% of the outstanding
voting power of our capital stock.  In addition, persons and entities owning more than 5% of our outstanding shares of common stock, in the aggregate, control over 90% of the outstanding voting power of our capital stock.  As a result, our
directors and 5% shareholders acting together have the ability to control all matters submitted to our shareholders for approval, including the election and removal of directors and the approval of any merger, consolidation or sale of all or
substantially all of our assets.  These shareholders may make decisions that are adverse to the interests of our other shareholders.

If a significant number of shares become available for
sale and are sold in a short period of time, the market price of our stock could further decline.

We
had, as of December 31, 2002, 1.9 million shares subject to vested but unexercised options and warrants which may currently be exercised and sold in the public market.  If our shareholders now sell substantial amounts of our common stock
in the public markets, the market price of our Class A common stock could be materially adversely affected.

In addition, under certain investors rights agreements, some of our current shareholders have demand and/or
piggyback registration rights in connection with future offerings of our common stock.  Demand rights enable shareholders to demand that their shares be registered and may require us to file a registration statement
under the Securities Act at our expense.  Piggyback rights require us to notify the shareholders of our stock if we propose to register any of our securities under the Securities Act, and grant such shareholders the right to include
their shares in the registration statement.  Registration of these additional shares would make them generally available to be sold in the public market.

Our board of directors may issue,
without shareholder approval, shares of preferred stock that have rights and preferences superior to those of our shares of common stock and that may prevent or delay a change of control.

Our articles of incorporation provide that our board of directors may issue new shares of preferred stock without shareholder
approval.  Some of the rights and preferences of these shares of preferred stock would be superior to the rights and preferences of shares of our common stock.  Accordingly, the issuance of new shares of preferred stock may adversely
affect the rights of the holders of shares of our common stock.  In addition, the issuance of new shares of preferred stock may prevent or delay a change of control of our company.

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Item 3. 
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Foreign Currency Risk

We develop and market our products in North America, Europe and Asia. As a result, our financial results could be affected by factors
such as changes in foreign currency exchange rates or weak economic conditions in foreign markets. As our sales are currently made or denominated in U.S. dollars, a strengthening of the dollar could make our products less competitive in foreign
markets. Although we recognize our revenues in U.S. dollars, we incur expenses in currencies other than U.S. dollars.

We are exposed to fluctuations in the Euro, Lita and the Israeli shekel.  During 2001, we opened sales offices in Canada, Italy and
the United Kingdom and during 2002 we closed our Canadian office.  We are now exposed to fluctuations in the British pound. The expenses of our foreign sales offices are not material.  During the three months ended March 31, 2003,
total expenses denominated in these currencies were $1.7 million or 13% of total expenses before income taxes. Expenses denominated in the Euro and shekel represented approximately $0.9 million and $0.7 million, respectively, of foreign expenses. We
expect that our foreign expenses will decrease as we continue to execute on our corporate realignment plan.

During the three months ended March 31, 2003, we did not enter into any foreign forward contracts and we currently have no foreign
forward contracts outstanding.  We do not enter into derivative financial instruments for trading or speculative purposes.

The economic impact of currency exchange rate movements on our operating results is complex because such changes are often linked to
variability in real growth, inflation, interest rates, governmental actions and other factors. These changes, if material, may cause us to adjust our financing and operating strategies. Consequently, isolating the effect of changes in currency does
not incorporate these other important economic factors.

Interest Rate Risk

Software and Equipment Financings

All of our software and equipment financings have a fixed interest rate and are not subject to interest rate fluctuations.  An
immediate 100 basis point fluctuation in these rates would not have a material impact on our financial condition, results of operations or cash flows.

Short-term Investments

At March 31, 2003, our investment portfolio included fixed and floating rate securities of $5.9 million.  The maximum maturity
of these investments is 12 months with an overall dollar-weighted maturity of the portfolio of less than six months.  Fixed rate securities are subject to interest rate risk and will decline in value if interest rates increase whereas floating
rate securities may produce less income than expected if interest rates decrease.  Accordingly, our future investment income may not meet expectations as a result of interest rate fluctuations or a loss of principal may occur if we were to sell
securities that have declined in market value as a result of interest rate fluctuations.  As a result of the relatively short average maturity of the portfolio, an immediate 100 basis point increase in interest rates would not have a material
impact on our financial condition, results of operations or cash flows.

We do not attempt to reduce our
exposure to interest rate risk through the use of derivative financial instruments due to the short-term nature of our portfolio.

Other Investments

Our other investments include several strategic investments in privately held companies.  These investments have an inherent level
of risk associated with them, as they are comprised of investments in start-up or development stage companies.  We consider these investments long-term strategic investments.  The market for these technologies or products that they have
under development is typically in the early stages, and may never materialize.  Accordingly, we could lose our entire investment in these companies.  In fact, during the three months

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ended March 31, 2003, we recorded an impairment charge of $0.3 million on our investment in IPAG and during 2002, we recorded an impairment charge of $1.1 million and $1.4
million on our investment in ASIP and IMC, respectively, because we believe that the reduction in these investments value is other than temporary.  We also recorded an impairment charge of $2.4 million on equipment that we consigned to
ASIP.  We have also provided a guarantee for a lease of ASIP, which is an equity basis investment.  The guarantee is through December 31, 2005, provided that ASIP continues to meet all terms and conditions of the lease.  The total
remaining lease payments to be made by ASIP during the guarantee period are $0.9 million.

Critical Accounting Policies

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America
requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses
during the reporting period.  Actual results could differ from those estimates.  We believe the most critical accounting policies that are significantly affected by these estimates include allowance for doubtful accounts receivable,
inventory reserves, valuation allowance for deferred tax assets, warranty accruals, related party transactions and equity-based compensation.

Revenues.We recognize product revenues at the time of shipment. Our customers are not obligated by long-term contracts to
purchase our products and can generally cancel or reschedule orders on short notice. The recent slowdown in the build-out of the communications infrastructure has caused our revenues to grow less rapidly than they otherwise would have.  In the
ordinary course of business, we receive order cancellations and rescheduled shipments.  To the extent possible, we pursue order cancellation fees from our customers.  Depending upon the facts and circumstances surrounding these
cancellation fees, the receipt of such fees may have an immediate impact on revenues in the period that such fees are collected or the fees may need to be deferred and then recognized as revenue over some future period.  We cannot ensure that
we will be able to collect an order cancellation fee for each order cancelled and we cannot project how such fees will affect revenue.

Allowance for doubtful accounts receivable.  Accounts receivable are reduced by a valuation allowance to estimate the amount
that will actually be collected from our customers.  Many of our customers have been adversely affected by reduced carrier spending and have been paying us slower than in the past and are attempting to negotiate longer payment terms.  Our
customers are aggressively managing their cash flows while other customers have virtually no cash flows and have filed for bankruptcy protection.  If the financial condition of our customers were to materially deteriorate, resulting in an
impairment of their ability to make payments, additional allowances would be required.

Inventory
reserves.  Inventories are stated at the lower of cost or market with cost being determined on the first-in, first-out method.  Reserves for slow moving and obsolete inventories are provided based on historical experience and current
product demand.  If our estimate of future demand is not correct or if our customers place significant order cancellations, actual inventory reserves could materially differ from our estimate. We may also receive orders for inventory that has
been fully or partially reserved.  To the extent that the sale of reserved inventory has a material impact on our financial results, we will appropriately disclose such effects.  Our inventory carrying costs are not material; thus we may
not physically dispose of reserved inventory immediately.

Valuation allowance for net deferred tax
assets.  We record a valuation allowance to reduce our deferred tax assets to an amount that is more likely than not to be realized.  During 2002, we concluded that significant uncertainty existed surrounding the recoverability of our
deferred tax assets.  On a quarterly basis, we assesses the recoverability of our deferred tax assets by reviewing a number of factors, including operating trends, the scheduled reversal of deferred tax liabilities and future projections of
taxable income, to determine whether a valuation allowance is required to reduce such deferred tax assets to an amount that is more likely than not to be realized. Based on the projections for future taxable income over the periods in which the
deferred tax assets are realizable, we believe that significant uncertainty exists surrounding the recoverability of the deferred tax assets.  Accordingly, during 2002, we recorded a valuation allowance equal to our net deferred tax
assets.

Warranty accruals.  Our warranty costs are predominantly driven by product
failure rates.  Should actual failure rates differ from our estimates and vary significantly from historical trends, revisions in the estimated warranty liability would be required. We have also recently introduced many new products with no
historical failure data.  A material failure in a new product would materially affect the required warranty accrual.

-34-



---

Related party transactions.  We enter into transactions with some of our
equity holders for various products used in both the manufacturing and research and development functions. We enter into these transactions, as these parties are predominant, well-established suppliers in our industry for these products.

Equity-based compensation.  As part of our compensation and retention structure, we grant employees,
officers and directors stock options and restricted stock.  Prior to our initial public offering during June 2001, most of our stock options were issued at an exercise price lower than our estimated fair market value.  The difference
between the exercise price and the estimated fair market value of the options is recorded as a separate component of shareholders equity as deferred stock compensation and amortized into expense over the vesting period of the options. 
Subsequent to our initial public offering, we did not issue any options with an exercise price lower than the fair market value of our stock on the option grant date.  When we issue restricted stock, we also record deferred stock compensation
for the difference between the exercise price, which is zero, and the fair market value of our stock on the grant date of the restricted stock.  This amount is also amortized into expense over the vesting period of the restricted stock. 
We account for stock-based employee compensation arrangements in accordance with provisions of Accounting Principles Board (APB) Opinion No. 25, Accounting for Stock Issued to Employees, and complies with the disclosure
provisions of Statement of Financial Accounting Standards (SFAS) No. 123, Accounting for Stock-Based Compensation. Under APB Opinion No. 25, compensation expense is based on the difference, if any, on the date of grant,
between the fair value of our stock and the exercise price.  We account for stock options issued to non-employees in accordance with the provisions of SFAS No. 123, and Emerging Issues Task Force Consensus on Issue No. 96-18, Accounting
for Equity Instruments That Are Issued to Other Than Employees for Acquiring, or in Conjunction with Selling, Goods or Services.  We are amortizing deferred stock compensation using the graded vesting method, in accordance with Financial
Accounting Standards Board Interpretation No. 28, over the vesting period of each respective option or restricted stock award, which ranges from six months to four years.

Corporate Realignment.  We recorded a corporate realignment charge that includes estimated costs for severance and costs to
exit leased facilities.  If actual severance costs are higher than our estimate or if we cannot sublease our vacant facilities as quickly as we anticipate and/or if the actual sublease income is less than our estimate, we may be required to
record additional charges for these items in future periods.

Long-Lived Asset Impairments.We evaluate long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying value of an asset may no longer be recoverable.  If the estimated future cash flows (undiscounted and without interest
charges) from the use of an asset were less than the carrying value, a write-down is recorded to reduce the related asset to its estimated fair value.  For purposes of estimating future cash flows from possibly impaired assets, we group assets
at the lowest level for which there are identifiable cash flows that are largely independent of the cash flows of other groups of assets.  For purposes of establishing fair value, we generally use information supplied by independent third
parties or information we obtained through sales of similar assets to independent third parties. Accordingly, we utilize significant estimates in the calculation of potential long-lived asset impairments.  A material change in any of these
estimates would materially effect our conclusions.

Item 4. 
CONTROLS AND PROCEDURES

Within the 90 days prior to the date of this report, we
carried out an evaluation, under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and
procedures pursuant to Exchange Act Rule 13a-14. Based upon that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures are effective in timely alerting them to material information
relating to us (including our consolidated subsidiaries) required to be included in our periodic SEC filings.

There were no significant changes in our internal controls or in other factors that could significantly affect these controls subsequent
to the date of the evaluation referred to above. There were no significant deficiencies or material weaknesses, and therefore there were no corrective actions taken.

-35-



---

PART II. 
OTHER INFORMATION

Item 1. 
Legal Proceedings

In February 2003, the Company, its chief executive officer
and its former chief financial officer were named as one of the issuer defendants in a class action stockholder complaint filed in the United States District Court for the Southern District of Florida, captioned Liu v. Credit Suisse First Boston
Corporation (CSFB), et al., Case No. 03-20459. In the complaint, the plaintiffs allege that CSFB knowingly conspired with dozens of issuers, including the Company, to conduct initial public offerings based on misinformation about the
issuers future prospects and the proper pricing of their shares, in violation of the anti-fraud provisions of section 10(b) of the Securities Exchange Act of 1934. The plaintiffs seek unspecified monetary damages and other relief. Neither the
Company nor the named individuals have yet been served with the complaint. We believe that this lawsuit is without merit and intend to defend against it vigorously.

Item 2. 
Changes in Securities and Use of Proceeds

(a)          None

(b)          None

(c)          None

(d)          None

Item 3. 
Defaults Upon Senior Securities

None

Item 4.
 Submission of Matters to a Vote of Security Holders

None

Item 5.
 Other Information

None

Item 6. 
Exhibits and Reports on Form 8-K

The following exhibits are filed herewith:

|Exhibit Number |  | Description                                                                                                                                                   
|-------------- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------
|               |  |                                                                                                                                                               
|99.1           |  | Certifications of the Chief Executive Officer provided pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|               |  |                                                                                                                                                               
|99.2           |  | Certifications of the Chief Financial Officer provided pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

We filed the following current reports on Form 8-K during the three months ended March 31,
2003:

On February 27, 2003, we filed a Current
Report on Form 8-K to announce the issuance of our press release that addressed fourth quarter 2002 results.

-36-



---

SIGNATURE

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.

|                    | MULTILINK TECHNOLOGY CORPORATION                                                                                  
|------------------- | ------------------------------------------------------------------------------------------------------------------
|                    |                                                                                                                   
|                    |                                                                                                                   
|Date:  May 14, 2003 | /s/ JOHN U. SOENKSEN                                                                                              
|                    |                                                                                                                   
|                    | John U. Soenksen  Chief Financial Officer (Principal Financial and Accounting Officer and Duly Authorized Officer)

-37-



---

CERTIFICATION

I,
Richard N. Nottenburg, certify that:

1.          I have reviewed this quarterly report on Form 10-Q of Multilink Technology
Corporation;

2.          Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a
material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report;

3.          Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the
financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report;

4.          The registrants other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange
Act Rules 13a-14 and 15d-14) for the registrant and we have:

| | (a)          designed such disclosure controls and procedures to ensure that material information relating to the registrant,
including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared;
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |                                                                                                                                                                                                                                                                                                             
| | (b)          evaluated the effectiveness of the registrants disclosure controls and procedures as of a date within 90 days
prior to the filing date of this quarterly report (the Evaluation Date); and                                                                                                  
| |                                                                                                                                                                                                                                                                                                             
| | (c)          presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and
procedures based on our evaluation as of the Evaluation Date;                                                                                                                        

5.          The registrants other certifying officers and
I have disclosed, based on our most recent evaluation, to the registrants auditors and the audit committee of registrants board of directors (or persons performing the equivalent function):

| | (a)          all significant deficiencies in the design or operation of internal controls which could adversely affect the
registrants ability to record, process, summarize and report financial data and have identified for the registrants auditors any material weaknesses in internal controls; and
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |                                                                                                                                                                                                                                                                                                            
| | (b)          any fraud, whether or not material, that involves management or other employees who have a significant role in the
registrants internal controls; and                                                                                                                                        

6.          The registrants other certifying officers and I have indicated in
this quarterly report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions
with regard to significant deficiencies and material weaknesses.

Date: May 14, 2003

| | /s/ RICHARD N. NOTTENBURG                                               
| | ------------------------------------------------------------------------
| |                                                                         
| | Richard N. Nottenburg  Chairman of the Board and Chief Executive Officer



---

CERTIFICATION

I, John
U. Soenksen, certify that:

1.          I have reviewed this quarterly report on Form 10-Q of Multilink Technology Corporation;

2.          Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to
make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report;

3.          Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the
financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report;

4.          The registrants other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange
Act Rules 13a-14 and 15d-14) for the registrant and we have:

| | (a)          designed such disclosure controls and procedures to ensure that material information relating to the registrant,
including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared;
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |                                                                                                                                                                                                                                                                                                             
| | (b)          evaluated the effectiveness of the registrants disclosure controls and procedures as of a date within 90
days prior to the filing date of this quarterly report (the Evaluation Date); and                                                                                                  
| |                                                                                                                                                                                                                                                                                                             
| | (c)          presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and
procedures based on our evaluation as of the Evaluation Date;                                                                                                                        

5.          The registrants other certifying officers and
I have disclosed, based on our most recent evaluation, to the registrants auditors and the audit committee of registrants board of directors (or persons performing the equivalent function):

| | (a)          all significant deficiencies in the design or operation of internal controls which could adversely affect the
registrants ability to record, process, summarize and report financial data and have identified for the registrants auditors any material weaknesses in internal controls; and
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |                                                                                                                                                                                                                                                                                                            
| | (b)          any fraud, whether or not material, that involves management or other employees who have a significant role in the
registrants internal controls; and                                                                                                                                        

6.          The registrants other certifying officers and I have indicated in
this quarterly report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions
with regard to significant deficiencies and material weaknesses.

Date: May 14, 2003

| | /s/ JOHN U. SOENKSEN                    
| | ----------------------------------------
| |                                         
| | John U. Soenksen Chief Financial Officer



---

Exhibit Index

|Exhibit Number |  | Description                                                                                                                                                   
|-------------- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------
|               |  |                                                                                                                                                               
|99.1           |  | Certifications of the Chief Executive Officer provided pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|               |  |                                                                                                                                                               
|99.2           |  | Certifications of the Chief Financial Officer provided pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002