<PAGE>   1
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                   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 September 29, 1997

                                       OR

[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE 
      SECURITIES EXCHANGE ACT OF 1934

                        Commission file number: 0-27016

                             ROSS TECHNOLOGY, INC.
             (Exact Name of Registrant as Specified in Its Charter)

            DELAWARE                                               74-2507960
(State or Other Jurisdiction of                              (I.R.S. Employer
 Incorporation or Organization)                              Identification No.)

                        5316 Highway 290 West, Suite 500
                            Austin, Texas 78735-8930
                                 (512) 436-2000
         (Address and Telephone Number of Principal Executive Offices)


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.

                                 [X] Yes [ ] No


Number of shares outstanding of each of the issuer's classes of common stock,
as of October 1, 1997: $.001 par value, 23,563,001 shares.


<PAGE>   2



                             ROSS TECHNOLOGY, INC.
                         QUARTERLY REPORT ON FORM 10-Q
                     THREE MONTHS ENDED SEPTEMBER 29, 1997

                                     INDEX
<TABLE>
<CAPTION>
                                                                                                         Page
                                                                                                         ----
<S>                                                                                                      <C>
Title Page .............................................................................................. 1

Index ................................................................................................... 2

PART I - FINANCIAL INFORMATION

   ITEM 1.  Financial Statements

            Condensed Consolidated Balance Sheets - September 29,
            1997 and March 31, 1997 ..................................................................... 3

            Condensed Consolidated Statements of Operations for the
            Three and Six Months Ended September 29, 1997 and September 30, 1996......................... 4

            Condensed Consolidated Statements of Cash Flows for the
            Six Months Ended September 29, 1997 and September 30, 1996................................... 5

            Notes to Condensed Consolidated Financial Statements ........................................ 6

   ITEM 2.  Management's Discussion and Analysis of Financial
            Condition and Results of Operations ......................................................... 7

PART II -   OTHER INFORMATION

   ITEM 1.       Legal Proceedings ..................................................................... 16

   ITEM 2.       Changes in Securities ................................................................. 16

   ITEM 3.       Defaults Upon Senior Securities  ...................................................... 16

   ITEM 4.       Submission of Matters to a Vote of Security-Holders ................................... 17

   ITEM 5.       Other Information ..................................................................... 18

   ITEM 6.       Exhibits and Reports on Form 8-K ...................................................... 18

SIGNATURES  ............................................................................................ 20
</TABLE>



                                      -2-
<PAGE>   3

PART I - FINANCIAL INFORMATION

ITEM 1.     FINANCIAL STATEMENTS

                             ROSS TECHNOLOGY, INC.
                                 AND SUBSIDIARY

                     CONDENSED CONSOLIDATED BALANCE SHEETS
                                 (IN THOUSANDS)
                                  (UNAUDITED)


<TABLE>
<CAPTION>
                                                                                     SEPTEMBER 29,    MARCH 31,
                                                                                         1997           1997
                                                                                     -------------    ---------
<S>                                                                                    <C>            <C>      
ASSETS
Current assets:
  Cash and cash equivalents ......................................................     $   3,936      $   2,811
  Trade accounts receivable, net allowance of $1,797 and $1,555, respectively ....         6,256         11,297
  Receivable from Fujitsu ........................................................         8,078          3,320
  Inventory ......................................................................        14,458         16,308
  Prepaid expenses and other assets ..............................................         4,190          3,331
                                                                                       ---------      ---------

          Total current assets ...................................................        36,918         37,067

Property and equipment, net ......................................................        14,951         17,752
                                                                                       ---------      ---------

Total assets .....................................................................     $  51,869      $  54,819
                                                                                       =========      =========

LIABILITIES AND STOCKHOLDERS' DEFICIT
Current liabilities:
  Trade accounts payable .........................................................     $  11,970      $  19,194
  Accrued liabilities ............................................................         3,190          8,307
  Payable to Fujitsu .............................................................         8,989          4,043
  Notes payable ..................................................................        56,000         43,500
                                                                                       ---------      ---------

          Total current liabilities ..............................................        80,149         75,044

Stockholders' deficit:
  Common stock ...................................................................            23             23
  Additional paid-in capital .....................................................        82,575         82,564
  Accumulated deficit ............................................................      (109,627)      (101,561)
                                                                                       ---------      ---------

                                                                                         (27,029)       (18,974)

  Less treasury stock ............................................................        (1,251)        (1,251)
                                                                                       ---------      ---------

          Total stockholders' deficit ............................................       (28,280)       (20,225)
                                                                                       ---------      ---------

Total liabilities and stockholders' deficit ......................................     $  51,869      $  54,819
                                                                                       =========      =========
</TABLE>

     See accompanying notes to condensed consolidated financial statements.



                                      -3-
<PAGE>   4



                             ROSS TECHNOLOGY, INC.
                                 AND SUBSIDIARY

                CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                     (IN THOUSANDS, EXCEPT PER SHARE DATA)
                                  (UNAUDITED)



<TABLE>
<CAPTION>
                                           THREE         THREE          SIX           SIX
                                           MONTHS        MONTHS        MONTHS        MONTHS
                                           ENDED         ENDED         ENDED         ENDED
                                         SEPTEMBER 29, SEPTEMBER 30, SEPTEMBER 29, SEPTEMBER 30,
                                            1997          1996          1997          1996
                                          --------      --------      --------      --------
<S>                                       <C>           <C>           <C>           <C>     
Net sales ..............................  $ 11,472      $ 21,197      $ 23,285      $ 52,109
Cost of sales ..........................    10,063        14,096        21,238        30,826
                                          --------      --------      --------      --------

  Gross profit .........................     1,409         7,101         2,047        21,286
                                          --------      --------      --------      --------

Operating expenses:
  Research and development, net ........      (152)        9,090         1,394        13,489
  Selling, general and administrative ..     3,535         7,484         7,135        10,974
  Amortization of goodwill .............        --           272            --           544
                                          --------      --------      --------      --------

      Total operating expenses .........     3,383        16,846         8,529        25,007
                                          --------      --------      --------      --------

      (Loss) from operations ...........    (1,974)       (9,745)       (6,482)       (3,724)

Interest income (expense), net .........      (933)           --        (1,584)          107
                                          --------      --------      --------      --------

      (Loss) before income taxes .......    (2,907)       (9,745)       (8,066)       (3,617)
Income tax (benefit) ...................        --        (3,411)           --        (1,266)
                                          --------      --------      --------      --------


      Net (loss) .......................  $ (2,907)     $ (6,334)     $ (8,066)     $ (2,351)
                                          ========      ========      ========      ========


Net (loss) applicable to
      common shareholders ..............  $ (2,907)     $ (6,334)     $ (8,066)     $ (2,351)
                                          ========      ========      ========      ========

Net (loss) per share ...................  $  (0.12)     $  (0.27)     $  (0.34)     $  (0.10)
                                          ========      ========      ========      ========

Weighted average common and common
      equivalent shares outstanding ....    23,547        23,418        23,542        23,331
                                          ========      ========      ========      ========
</TABLE>


     See accompanying notes to condensed consolidated financial statements.



                                      -4-
<PAGE>   5



                             ROSS TECHNOLOGY, INC.
                                 AND SUBSIDIARY

                CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (IN THOUSANDS)
                                  (UNAUDITED)


<TABLE>
<CAPTION>
                                                               SIX MONTHS     SIX MONTHS
                                                                 ENDED          ENDED
                                                              SEPTEMBER 29,  SEPTEMBER 30,
                                                                 1997          1996
                                                               --------      --------
<S>                                                            <C>           <C>      
Cash flows from operating activities:
  Net (loss) ................................................  $ (8,066)     $ (2,351)
  Adjustments to reconcile net (loss) to
    cash used in operating activities:
    Depreciation and amortization ...........................     2,822         3,286
    Change in assets and liabilities:
      Trade accounts receivable .............................     5,041        (2,278)
      Receivable from Fujitsu ...............................    (4,758)          789
      Inventory .............................................     1,850       (18,460)
      Deferred tax asset ....................................        --        (1,266)
      Prepaid expenses ......................................       539        (3,391)
      Trade accounts payable ................................    (7,224)        9,697
      Payable to Fujitsu ....................................     4,946         1,114
      Accrued liabilities ...................................    (5,117)       (1,359)
                                                               --------      --------
        Net cash used in operating activities ...............    (9,967)      (14,219)
                                                               --------      --------

Cash flows from investing activities:
  Capital expenditures ......................................    (1,419)       (5,094)
                                                               --------      --------

Cash flows from financing activities:
  Proceeds from issuance of common stock ....................        11           136
  Proceeds from borrowings on notes payable .................    12,500         1,400
                                                               --------      --------

      Net cash provided by financing activities .............    12,511         1,536
                                                               --------      --------

      Net increase (decrease) in cash and cash equivalents ..     1,125       (17,777)

Cash and cash equivalents at beginning of period ............     2,811        17,941
                                                               --------      --------

Cash and cash equivalents at end of period ..................  $  3,936      $    164
                                                               ========      ========
</TABLE>



     See accompanying notes to condensed consolidated financial statements.



                                      -5-
<PAGE>   6



                             ROSS TECHNOLOGY, INC.
                                 AND SUBSIDIARY

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(1)  FINANCIAL STATEMENT PRESENTATION

     The financial statements of ROSS Technology, Inc. and subsidiary (the
"Company") included herein have been prepared without audit pursuant to the
rules and regulations of the Securities and Exchange Commission (the "SEC")
and, in the opinion of management, reflect all adjustments necessary, such
adjustments being of a normal recurring nature, to present fairly the financial
condition and the results of operations for such interim periods. 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; however,
management believes that the disclosures are adequate to make the information
presented not misleading. It is suggested that these financial statements be
read in conjunction with the audited financial statements and notes thereto
included in the Company's filing with the SEC on Form 10-K for the fiscal year
ended March 31, 1997. The results for interim periods are not necessarily
indicative of the results for the respective fiscal years.

(2)  INVENTORIES

<TABLE>
<CAPTION>
                            September 29,         March 31,
                                1997                1997
                              -------             -------
<S>                           <C>                 <C>    
Die bank                      $ 3,375             $ 4,496
Work-in-process                 8,662               6,236
Finished goods                  2,421               5,576
                              -------             -------
                              $14,458             $16,308
                              =======             =======
</TABLE>

     Die bank inventory, consisting of silicon wafers and cut and tested die,
is comparable to raw material inventory in other manufacturing industries.
Work-in-process inventory includes work in process as well as the Company's
inventories of multi-die packages (MDPs) and components and sub-systems to be
incorporated into module, board and system products. Finished goods inventory
includes finished module, board and system products as well as MDPs and ASICs
offered for sale to OEM customers.




                                      -6-
<PAGE>   7

(3)  NOTES PAYABLE

     In November 1996, the Company established a new credit facility (the "DKB
Facility") with The Dai-Ichi Kangyo Bank, Limited ("DKB"). The DKB Facility was
subsequently modified to a maximum $60 million unsecured line of credit. The
Company's majority stockholder, Fujitsu Limited ("Fujitsu"), provided a
guaranty to DKB with respect to $50 million of the DKB Facility. The interest
rate payable on the DKB Facility is at DKB's stated rate, which at September
29, 1997, was 6.3125%. As of September 29, 1997, the Company's outstanding
unpaid principal balance under the DKB Facility was $56 million.

(4)  SUBSEQUENT EVENT

     On September 30, 1997, the Company concluded a recapitalization
transaction with Fujitsu, whereby the Company issued 500,000 shares of a new
series B Convertible Preferred Stock to Fujitsu and Fujitsu paid $50 million on
behalf of the Company to DKB in partial payment of the Company's outstanding
indebtedness to DKB in satisfaction of Fujitsu's obligation pursuant to certain
loan guarantees provided by Fujitsu to DKB. Also, the unsecured line of credit
is to be reduced from $60 million to a maximum of $20 million and continues to
be guaranteed by Fujitsu.


ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
           OF OPERATIONS

CAUTIONARY STATEMENT

     This Quarterly Report contains forward-looking statements, within the
meaning of the Private Securities Litigation Reform Act of 1995, with respect
to the financial condition, results of operations and business of ROSS
Technology, Inc. and its subsidiary (collectively, unless the context otherwise
requires, "ROSS", the "Company", or the "Registrant"). Such statements are
subject to certain risks and uncertainties that could cause actual results to
differ materially and adversely from those set forth in the forward-looking
statements, including without limitation the availability of financial
resources adequate to the Company's short-, medium- and long-term needs, the
Company's dependence on the timely development, pre-production qualification,
manufacture, introduction and customer acceptance of new higher speed,
higher-margin products, the ability of the Company to successfully implement
its strategy of diversifying into the system products business, the various
effects on revenue, margins, inventories and operating expenses of
repositioning the Company's product lines and overall business, the effects of
building and maintaining product inventories in the Company's hands and in its
distribution channels, product return and credit risks with distributors,
resellers and other customers, the Company's dependence on distributors and
resellers for certain product sales to end-users, the impact on 



                                      -7-
<PAGE>   8

revenue, margins and inventories of rapidly changing technology, competition,
downward pricing pressures and allocations of product among different
distribution channels, the effects of routine price degradation over time in
each of the Company's product lines, varying customer demand for the Company's
products, supply and manufacturing constraints and costs, the Company's
dependence on outside suppliers for wafer fabrication and raw materials,
components and certain manufacturing services, changes in plans, programs or
expenses for research, development, sales or marketing, the Company's ability
to build and maintain adequate staff infrastructures in the areas of
microprocessor design, product engineering and development, sales and
marketing, finance, accounting and administration, supplier disputes, customer
warranty claims, general economic conditions, and the other risks and
uncertainties described from time to time in the Company's public announcements
and SEC filings, including without limitation the Company's Current, Quarterly,
and Annual Reports on Forms 8-K, 10-Q, and 10-K, respectively. The Company
cautions that the foregoing list of important factors is not exclusive. The
Company does not undertake to update any written or oral forward-looking
statement that may be made from time to time by or on behalf of the Company.

     The information contained in this Quarterly Report is not a complete
description of the Company's business or the risks associated with an
investment in the Company. More complete discussions can be found in the
Company's Annual Report on Form 10-K for the fiscal year ended March 31, 1997,
as supplemented by the information contained in subsequent Quarterly Reports on
Forms 10-Q, the Current Report on Form 8-K dated September 30, 1997, and this
Quarterly Report.

RESULTS OF OPERATIONS

     Net Sales. Net sales in the three-month period ended September 29, 1997 of
the fiscal year ending March 30, 1998 ("fiscal 1998") decreased 45.9% to $11.5
million from $21.2 million in the corresponding period of the fiscal year ended
March 31, 1997 ("fiscal 1997"). This was due primarily to a significant decline
in sales to the Company's primary OEM microprocessor chip customers, including
Sun Microsystems, Inc. ("Sun"), historically the Company's largest customer,
reflecting movement by those customers to competitors' 64-bit products as
compared to the Company's 32-bit products. Similarly, upgrade and systems sales
also declined in the second quarter of fiscal 1998 as compared to the second
quarter of fiscal 1997. For similar reasons, net sales for the six months ended
September 29, 1997 decreased 55.3% to $23.3 million from $52.1 million in the
corresponding period of fiscal 1997. Upgrade sales during the first and second
quarters of fiscal 1997 were affected positively by the introduction of the
Company's 150 MHz upgrade product.

     Gross Profit. Gross profit as a percentage of net sales for the quarter
ended September 29, 1997, decreased to 12.3% as compared with 33.5% of net
sales for the comparable period in fiscal 1997. This decrease is primarily
attributable to the Company's relatively high cost of production, which in turn
is primarily attributable to overhead distributed over fewer units in fiscal
1998 compared to the similar period in fiscal 1997, and the usual erosion in
price of the 




                                      -8-

<PAGE>   9

Company's products over their life cycles. In addition, gross profit was
adversely affected by the Company's lack of new, higher-margin microprocessor
and upgrade subsystem module products. Likewise, gross profit for the six
months ended September 29, 1997, decreased to 8.8% from 40.8% for the
corresponding period in fiscal 1997.

     Research and Development Expense. Net research and development ("R&D")
expenses were (1.3) % of net sales for the quarter ended September 29, 1997,
compared with 42.9% of net sales for the comparable period in fiscal 1997. This
decrease was primarily attributable to reimbursement by Fujitsu of $4.6 million
in expenses relating to the Company's 64-bit Viper microprocessor development
project, pursuant to a Development Agreement between Fujitsu and the Company
(the "Viper Development Agreement"), as well as application of $1 million of
payments from Fujitsu against R&D expenses pursuant to an additional
development agreement between Fujitsu and the Company. To a lesser degree, this
decrease also reflects the lack of expenses in fiscal 1998 related to the
Company's fiscal 1997 entrance into the systems business. This decrease was
partially offset by increases due to the addition of new personnel and related
overhead and outside contractor expenses in the areas of new product design and
new product development related to the Company's Colorado 4 and Colorado 5
hyperSPARC(TM) and next generation Viper microprocessor designs. Reflecting the
same trends, R&D expenses for the six months ended September 29, 1997 decreased
to 6.0% from 25.9% in the corresponding period in fiscal 1997.

     Selling, General and Administrative Expense. Selling, general and
administrative ("SG&A") expenses were 30.8% of net sales for the quarter ended
September 29, 1997, compared with 35.3% of net sales for the comparable period
in fiscal 1997. Absolute SG&A expenses decreased $3.9 million in the quarter
ended September 29, 1997, from the comparable period in the prior year. This
decrease in SG&A expense is primarily attributable to a $3.4 million increase
in the allowance for doubtful accounts recorded in the second quarter of fiscal
1997. Similarly, absolute SG&A expenses decreased $3.8 million for the six
months ended September 29, 1997 as compared to the corresponding period in
fiscal 1997. As a percentage of net sales, SG&A expenses for the six months
ended September 29, 1997, increased to 30.6% from 21.1%, reflecting an increase
in sales expense as the Company added a significant number of sales-related
personnel and related overhead, and the engagement of the Company's newly-hired
President and Chief Executive Officer.

     Net Interest Expense. The Company incurred net interest expense of $1.6
million for the six months ended September 29, 1997, versus interest income of
$.1 million for the six months ended September 30, 1996, reflecting the costs
of the Company's $60 million credit facility with The Dai-Ichi Kangyo Bank,
Limited ("DKB"). See "Liquidity and Capital Resources."

     Income Tax Benefit. The Company has established a 100% reserve against its
deferred income tax asset and will not record income tax expense or benefit
until such time as the Company achieves profitability.




                                      -9-
<PAGE>   10

     Future Operating Results. The Company's financial condition deteriorated
significantly during fiscal 1997, and at the end of the second quarter of
fiscal 1998, the Company was continuing to experience significant losses from
operations. Subsequent to the end of fiscal 1997, the Company made significant
changes to the senior management team to assess the Company's business and to
implement changes necessary to restore the Company to a sound financial
condition. The Company depends solely upon its majority stockholder, Fujitsu
Limited ("Fujitsu"), for additions to capital necessary to continue its
operations. On September 30, 1997, the Company concluded a recapitalization
transaction with Fujitsu whereby the Company issued 500,000 shares of a new
Series B Convertible Preferred Stock to Fujitsu and Fujitsu paid $50 million on
behalf of the Company to DKB in partial payment of the Company's outstanding
indebtedness to DKB in satisfaction of Fujitsu's obligation pursuant to certain
loan guarantees provided by Fujitsu to DKB. (Since the recapitalization
transaction occurred after the close of the fiscal quarter, it is not reflected
in the attached financial statements.) In connection with the recapitalization
transaction, Fujitsu agreed to provide, and has since provided, a guarantee for
a $20 million line of credit from DKB. $6 million of such line of credit has
been borrowed by the Company. As part of the recapitalization, the Company
agreed to the following provision, among others: "The Company acknowledges
that, based on the Business Plan through fiscal 1998, the funding provided
through the purchase of the Series B Preferred Stock and the availability of a
credit line of $20 million guaranteed by Buyer, should (assuming the Company's
timely receipt of $13.5 million in funding through payments contemplated to be
payable to the Company under the Viper Development Agreement between the
parties (dated June 25, 1997) [the "Viper Development Agreement"] or otherwise
provided to the Company by Buyer after the date hereof and prior to March 31,
1998) avoid any cash flow shortages through fiscal year 1998. Based on the
foregoing, Buyer and the Company agree that Buyer's obligations to the Company
under that certain Letter dated June 18, 1997 from Buyer to the Company shall
be fully satisfied and extinguished on and as of the Closing" (of the
recapitalization). (In the Letter dated June 18, 1997, Fujitsu stated that "In
accordance with our plan for ROSS Technology, we (Fujitsu) are ready to provide
the necessary funding through debt guarantees or other types of financing for
ROSS Technology not to incur cash flow shortages through April 1, 1998".) See
"Liquidity and Capital Resources."

     During the quarter ended September 29, 1997, the Company failed to meet
certain of the milestones set forth in the Viper Development Agreement. Fujitsu
and the Company amended such Agreement to provide for later achievement dates
for these milestones. Given the overall risks inherent in complex developments
such as that undertaken by the Company pursuant to the Viper Development
Agreement, there can be no assurance that the Company will achieve future
milestones in a timely manner or that, if such milestones are not achieved,
Fujitsu will agree to waive or postpone them.

         The Company's operating results have in the past and may in the future
vary due to a number of factors, including availability and market acceptance
of new or enhanced versions of the Company's products, the Company's success in
entering new markets, the timing and extent of product development costs,
changes in the mix of products sold and in the mix of sales by 



                                     -10-

<PAGE>   11
distribution channel, competitive pricing pressures, anticipated decreases in
unit average selling prices of the Company's products, availability and cost of
products (particularly silicon wafers) from the Company's suppliers,
fluctuations in manufacturing yields, the gain or loss of significant
customers, new product introductions by the Company or the Company's
competitors, the competitiveness of the SPARC architecture and the timing of
significant orders, order cancellations or rescheduling, all as more fully
described in the Company's SEC reports, including without limitation the Annual
Report on Form 10-K for Fiscal 1997. Any unfavorable change in the foregoing or
other factors could have a material adverse effect on the Company's business,
operating results and financial condition.

     The Company operates in an industry characterized by increasing
competition, rapidly changing technology, and increasingly aggressive pricing.
As a result, the Company's future operating results will depend to a
considerable extent on its ability to rapidly and continuously develop and
introduce new microprocessor technologies that offer its customers enhanced
performance at competitive prices. The development of new high-performance
computer products is a complex and uncertain process requiring high levels of
innovation from the Company's designers and suppliers, as well as accurate
anticipation of customers' requirements and technological trends. The Company
is also increasingly dependent on the ability of its suppliers to design,
manufacture, and deliver advanced components required for the timely
introduction of new products. The failure of any of these suppliers to deliver
components on time or in sufficient quantities, or the failure of any of the
Company's designers to develop advanced innovative products on a timely basis,
could result in significant adverse impact on the Company's operating results.

     Once a hardware product is developed, the Company must rapidly bring it to
volume manufacturing, a process that requires accurate forecasting of both
volumes and configurations, among other things, in order to achieve competitive
yields and costs. Upon introduction of new products, the Company must also
manage the transition from older, displaced products to minimize disruptions in
customer ordering patterns, reduce levels of existing product inventory, and
ensure that adequate supplies of new products can be delivered to meet customer
demand.

     Historically, average selling prices for microprocessors in general, and
for the Company's products in the time period during which they have been
commercially available, have decreased over the life of each specific product.
Although the Company has recently announced price increases for several of its
products, it expects that the average selling prices of its products will
continue to be subject to significant downward pressure in the future. If the
Company is unable to introduce and gain market acceptance of new products with
higher average selling prices or reduce its costs sufficiently to offset
decreases in prices of existing products, the Company's gross profits and
operating results would be adversely affected. In addition, because the Company
is continuing to increase its operating expenses for new product development in
anticipation of increasing sales levels, the Company's business and operating
results would be adversely affected if such sales levels were not achieved.




                                     -11-
<PAGE>   12

     The Company intends to continue to emphasize its upgrade business, in
which the Company's modules and motherboards are used to provide enhanced
performance for existing systems. In addition the Company will focus on sales
to OEM customers, which incorporate the Company's products into their products.
The Company intends to continue to explore the systems business in selling
workstation and server components together with SPARCplug(TM) systems which
provide customers with a unique form factor solution to their systems
requirements.

     The Company believes that continued development of its systems business
may provide additional engines for future revenues and profits. There can be no
assurance, however, that this business segment will be successful. The Company
anticipates that the gross profit margins of these systems product lines will
be lower than those it has historically experienced in the OEM microprocessor
chip and upgrade subsystem module businesses. Also, for sales of certain
products through distributors, the Company is able to recognize revenue from
such sales only upon resale to end-users.

     As noted above, the Company has recently experienced lower than expected
demand for a number of its products, especially its lower speed microprocessor
chips and associated semiconductors and MBus modules, as well as routine price
degradation on older products. These trends are continuing and are expected to
continue for the foreseeable future.

     In addition, operating results could be adversely affected by general
economic and other conditions affecting the timing of customer orders and
capital spending or a downturn in the markets for microprocessors or
high-performance computer workstations.

     Sales to Sun, historically the Company's largest OEM customer, have varied
substantially on a year-to-year and quarter-to-quarter basis over the periods
since fiscal 1991 and have decreased substantially in recent fiscal quarters,
as Sun has transitioned its business predominantly to 64-bit microprocessor
products. As previously advised, the Company anticipates that sales to Sun will
continue to fluctuate significantly in the future. The Company continues to
pursue sales to Sun of its current and future microprocessor products, but
there can be no assurance that the Company will achieve any future design wins
with Sun.

     Although the Company is taking specific actions to improve gross profit
margins, it is anticipated that gross profit will continue to remain under
pressure for the foreseeable future due to a variety of factors, including
continued industry-wide pricing pressures, relatively low unit volumes
processed by the Company's test and assembly facilities, and the inability to
purchase raw materials in sufficient volume to obtain favorable pricing from
vendors.

     R&D expenses are expected to increase, reflecting pre-production
qualification of the Colorado 5 hyperSPARC microprocessor and new product
design and development related to the Viper generation of microprocessors that
the Company expects to introduce in 1999. The Company expects that the level of
SG&A expenses will vary depending upon the overall sales 



                                     -12-
<PAGE>   13

effort undertaken and the Company's distribution strategies. Although R&D and
SG&A expenses can be reduced over time if the Company's revenues are less than
anticipated, the Company believes that it is building an infrastructure that is
critical to the Company's future success and represents a long-term investment
in the Company's future. Therefore, as in the recent past, the Company may
decide to undertake such expenses even if the result would be an increase in
such categories of expense as a percentage of net sales in a given fiscal
quarter or for a fiscal year as a whole.

     The Company expects interest expense to be substantially lower on a
quarterly basis for the foreseeable future (as compared to recent prior
quarters) as a result of the Company's recapitalization. See "Liquidity and
Capital Resources."

     The Company has lost a number of executives, engineers and other employees
due to voluntary resignations. The loss of executives and other key employees
has negatively affected the overall quality and depth of the Company's staff
infrastructure and its management and accounting controls. The Company is
seeking to remedy these shortcomings as a priority matter through new hiring
and the use of consultants and outside contractors. However, the impaired
infrastructure and controls may have a material adverse effect on the Company's
business, results of operations and financial condition. The Company has
recently filled key management positions, including a Chief Executive Officer
and President, a Chief Financial Officer, a Vice President of Sales and other
key positions in sales, product engineering, finance and accounting. However,
given the Company's recent performance and financial condition, and the
availability of other attractive employment opportunities in the Austin area,
hiring staff remains difficult.

     Although no decisions have been made, the Company anticipates that it may
need to implement additional incentive compensation programs in order to
attract and retain key employees and to motivate employees.

LIQUIDITY AND CAPITAL RESOURCES

     The Company experienced negative cash flows during the six months ended
September 29, 1997 and had negative working capital and stockholders' equity at
the end of that period. The Company is dependent on its parent company,
Fujitsu, for its capital requirements. In November 1996 the Company established
a "New Credit Facility" with DKB for a maximum principal amount of $25 million;
in February 1997 such New Credit Facility was increased to a maximum of $50
million. The New Credit Facility expires on March 31, 1998, and is guaranteed
by Fujitsu. In September 1997, a separate $10 million "Additional Credit
Facility" was established with DKB. This Additional Credit Facility expired on
September 30, 1997. At September 29, 1997, the principal amount outstanding
under both credit facilities was $56.0 million, with $50 million due on
December 31, 1997 and $6 million due on September 30, 1997. On September 30,
1997, the Company concluded a recapitalization transaction with Fujitsu,
whereby the Company issued 500,000 shares of a new Series B Convertible
Preferred Stock to Fujitsu and Fujitsu paid $50 million on behalf of the
Company to DKB in partial 





                                     -13-

<PAGE>   14

payment of the Company's outstanding indebtedness to DKB in satisfaction of
Fujitsu's obligation pursuant to certain loan guarantees provided by Fujitsu to
DKB. (Since the recapitalization transaction occurred after the close of the
fiscal quarter, it is not reflected in the attached financial statements.) In
connection with the recapitalization transaction, Fujitsu agreed to provide,
and has since provided, a guarantee for a new credit facility with DKB for a
maximum principal amount of $20 million. $6 million of such line of credit has
been borrowed by the Company. Accordingly, the Company believes that it will
have adequate capital for its business through April 1, 1998, but remains
dependent upon meeting the milestones requisite to receiving the periodic R&D
reimbursements contained in the Viper Development Agreement. Nevertheless,
there can be no assurance that the Company will not experience negative cash
flow from operations and the Company may in the future be required to seek
additional external sources of financing for its operating needs. There can be
no assurance that additional capital, including capital from bank borrowings,
will be available on terms favorable to the Company, if at all, or that Fujitsu
would be willing to provide additional loan guarantees, equity infusions or
other financial assistance to the Company in the future. To the extent that
additional capital is raised through the sale of additional equity or
convertible debt securities, the issuance of such securities would likely
result in substantial dilution to the Company's then existing stockholders. In
view of its position as the Company's controlling stockholder, Fujitsu's
concurrence is necessary for the issuance of any additional debt or equity
financing by the Company. The Company's failure to obtain sufficient additional
financing could make it impossible for it to continue operations, force the
Company to seek protection under Federal bankruptcy law and/or affect the
Company's listing on the Nasdaq National Market (see "Item 5, Other
Information").

     The Company's principal source of liquidity as of September 29, 1997,
consisted of $3.9 million of cash and cash equivalents and $4 million of
borrowing availability under its DKB credit facility. As of September 29, 1997,
the Company had negative working capital of $43.2 million, an accumulated
deficit of $109.6 million, and a stockholders' deficit of $28.3 million.

     During fiscal 1997 and during the first six months of fiscal 1998, the
Company extended payment terms with many suppliers in order to increase the
availability of on-hand cash. As a result, the Company experienced difficulty
in procuring inventory and subcontract manufacturing services from some
suppliers. Although relations with some suppliers have improved, there can be
no assurance that the Company's various suppliers will continue to ship
supplies to the Company or that if they will ship supplies to the Company, that
the associated purchase terms will be favorable to the Company.

     During the first six months of fiscal 1998, operating activities used cash
of $9.9 million, compared with using $14.2 million of cash during the
corresponding period in fiscal 1997. This improvement is due primarily to a
decrease in inventory of $.5 million as compared to an $18.5 million inventory
growth during the same period in fiscal 1997.

     Cash generated by financing activities increased by $11 million in the
first quarter of fiscal 1998 due to borrowings under the New Credit Facility
from DKB.




                                     -14-
<PAGE>   15

     The Company's payment terms with Fujitsu for purchases of silicon wafers
and MDPs are longer than those generally available from other suppliers.
Although the Company believes that such payment terms will not change in the
near future, there can be no assurance that Fujitsu will continue to extend
such favorable payment terms to the Company. Shorter payment terms would
increase the Company's cash requirements.

     The Company intends to incur additional capital expenditures of
approximately $6 million during the next 12 months, principally for computer
hardware and software, lab equipment and general office equipment and
furnishings.

     Because the Company must order raw materials, silicon wafers and
components and build finished goods inventory substantially in advance of
product shipments, there is continued risk that the Company will forecast
quantity and product mix incorrectly and, therefore, produce excess or
insufficient inventories. Because the markets for the Company's microprocessor,
module and system products are subject to rapid technological and price
changes, inventory may be subject to rapid obsolescence. The inventory risk is
heightened because the Company's customers usually place orders with short lead
times. If the Company forecasts incorrectly and produces insufficient inventory
of particular products, the Company may face order cancellations from or loss
of customers, who may seek to satisfy their needs from other suppliers. In
general, the Company's customers may change delivery schedules or cancel orders
without penalty. To the extent that the Company produces excess or insufficient
inventories of particular products, or inventory becomes obsolete, the
Company's results of operations and financial condition could be materially and
adversely affected.

     Based on the Company's current operating plan, including continued
payments from Fujitsu pursuant to the Viper Development Agreement that are
contingent upon the Company attaining the development milestones defined in
such agreement, the Company believes that its cash requirements will be met
through April 1, 1998. Beyond that time, the Company may require additional
equity or debt financing. There can be no assurance that additional capital,
including capital from bank borrowings, will be available on terms favorable to
the Company, if at all. Moreover, the Company's cash requirements may vary
materially from those now planned because of changes in the Company's business
or capital expenditure plans, product plans or technology roadmap, changes in
the Company's level of product and manufacturing integration, results of
research and development, relationships with suppliers and customers, changes
in the focus and direction of the Company's research and development programs,
competitive and technological advances, the level of working capital required
to sustain planned growth, operating results (including the extent and duration
of operating losses), facilities, employment matters, and other factors.





                                     -15-

<PAGE>   16

PART II - OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS

     There are no material new developments with respect to previously-reported
litigation. In addition, the Company is involved in routine litigation arising
in the ordinary course of business, and, while the results of the proceedings
cannot be predicted with certainty, the Company believes that the final outcome
of such proceedings will not be material. .

ITEM 2.  CHANGES IN SECURITIES

     On September 30, 1997, the Company issued 500,000 shares of a new Series B
Convertible Preferred Stock to Fujitsu. The aggregate liquidation preference of
these shares is $50,000,000. The Series B Convertible Preferred Stock ranks
senior to the Company's common stock as to liquidation preference and pari
passu as to dividends. Other terms and conditions of the Series B Convertible
Preferred Stock are set forth in a Current Report on Form 8-K dated September
30, 1997 and the exhibits incorporated therein.

ITEM 3.  DEFAULTS UPON SENIOR SECURITIES

         None





                                     -16-
<PAGE>   17




ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY-HOLDERS

         The following matterS were submitted to a vote of the Company's
stockholders during the Company's Annual Meeting of Stockholders held on August
11, 1997 and approved by the votes shown:

<TABLE>
<CAPTION>
1.       Election of Directors                       Votes Cast For                Authority Withheld

<S>                                                    <C>                              <C>  
         Fred T. May                                   20,548,301                       7,860
         Ryusuke Hoshikawa                             20,548,611                       7,860
         William J. Raduchel                           20,548,611                       7,860
         Masahiro Saida                                20,548,611                       7,860
         Jack W. Simpson, Sr.                          20,548,611                       7,860
         Yasushi Tajiri                                20,548,611                       7,860
         Edward F. Thompson                            20,548,611                       7,860
         Seiichi Yoshikawa                             20,548,611                       7,860

2.       Approval of Amendment and                                      Votes Cast
         Restatement of the Company's               
         Stock Option and Restricted Stock                For                         Against  Abstentions
         Purchase Plan 2.0:                            16,414,990                      391,185   3,801,737



</TABLE>




                                     -17-
<PAGE>   18

ITEM 5.  OTHER INFORMATION

         As previously reported in a Current Report on Form 8-K dated September
30, 1997, on that date the Company concluded a recapitalization transaction
with Fujitsu whereby the Company issued 500,000 shares of a new Series B
Convertible Preferred Stock to Fujitsu and Fujitsu paid $50 million on behalf
of the Company to DKB in partial payment of the Company's outstanding
indebtedness to DKB in satisfaction of Fujitsu's obligation pursuant to certain
loan guarantees provided by Fujitsu to DKB. The Company also paid approximately
$.9 million of accrued interest outstanding on the $50 million of indebtedness.

         In connection with the recapitalization transaction, Fujitsu agreed to
facilitate (through a guarantee, which has since been provided) a line of
credit for the Company from DKB up to a maximum of $20 million. As of October
28, 1997, the Company had borrowed $6 million against such line of credit.

         Reference is hereby made to the Current Report on Form 8-K dated
September 30, 1997 for details of the foregoing transactions.

         As disclosed on the Form 10-Q dated August 12, 1997, on July 14,
1997, the Company received notification from the Nasdaq Stock Market, Inc.
("Nasdaq") that the Company did not comply with the net tangible asset
requirement for continued listing on the Nasdaq National Market. Consequently,
Nasdaq requested that the Company provide it with plans for complying with the
net tangible asset requirement ($4 million in the Company's case). In the event
that the Company could not meet the net tangible asset requirement, the
Company's common stock was subject to delisting from the Nasdaq National
Market. Upon concluding the recapitalization on September 30, 1997, as of that
date, the Company met the net tangible asset requirement. Accordingly, per the
letter dated October 8, 1997, Nasdaq formally notified the Company that it was
found to be in compliance with all requirements necessary for continued listing
on the Nasdaq National Market.


ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

    (a)  Exhibits

         Exhibit
           No.                              Description
         -------                            -----------

          3.2              Restated Bylaws of the Company

          3.3              Certificate of Designation of Series B Convertible 
                           Preferred Stock of the Company*




                                     -18-
<PAGE>   19

         10.1              Stock Purchase Agreement between Fujitsu Limited and 
                           the Company dated as of September 30, 1997*

         10.2              Agreement for Reimbursement of Wafer Payments 
                           between the Company and Fujitsu Limited dated as of
                           September 30, 1997*

         10.3              Agreement between Fujitsu Limited and the Company
                           dated as of September 29, 1997 relating to the Viper
                           Development Agreement dated June 25, 1997**

         10.4              Letter of Guaranty dated October 29, 1997 from 
                           Fujitsu Limited to The Dai-Ichi Kangyo Bank, Ltd.,
                           New York Branch.

         27                Financial Data Schedule
-----------------
         *                 Incorporated by reference to the Company's Current 
                           Report on Form 8-K dated September 30, 1997

         **                Certain portions of this Exhibit have been omitted 
                           and filed separately under an application for
                           confidential treatment



    (b)  Reports on Form 8-K

    A Current Report on Form 8-K was filed by the Company on September 22, 1997
reporting the Company's mailing to its stockholders relating to the letter of
intent entered into by the Company and Fujitsu with regard to the proposed
recapitalization of the Company.






                                     -19-
<PAGE>   20



                                   SIGNATURES

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

                             ROSS TECHNOLOGY, INC.,
                             a Delaware corporation



Date:  November 3, 1997     /s/ F. S. (KIT) WEBSTER III
                            ---------------------------
                            F. S. (KIT) WEBSTER III
                            Chief Financial Officer




                                      -20-
<PAGE>   21
                               INDEX TO EXHIBITS


<TABLE>
<CAPTION>
         Exhibit
           No.                              Description
         -------                            -----------
         <S>               <C>
          3.2              Restated Bylaws of the Company

          3.3              Certificate of Designation of Series B Convertible 
                           Preferred Stock of the Company*

         10.1              Stock Purchase Agreement between Fujitsu Limited and 
                           the Company dated as of September 30, 1997*

         10.2              Agreement for Reimbursement of Wafer Payments 
                           between the Company and Fujitsu Limited dated as of
                           September 30, 1997*

         10.3              Agreement between Fujitsu Limited and the Company
                           dated as of September 29, 1997 relating to the Viper
                           Development Agreement dated June 25, 1997**

         10.4              Letter of Guaranty dated October 29, 1997 from 
                           Fujitsu Limited to The Dai-Ichi Kangyo Bank, Ltd.,
                           New York Branch.

         27                Financial Data Schedule
</TABLE>

-----------------
         *                 Incorporated by reference to the Company's Current 
                           Report on Form 8-K dated September 30, 1997

         **                Certain portions of this Exhibit have been omitted 
                           and filed separately under an application for
                           confidential treatment