UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

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FORM 10-Q

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[X]       QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
             SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2004

OR

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

For the transition period from ________to _________

Commission file number 0-25699



PLX Technology, Inc.



|Delaware                                                       | 94-3008334                             
|-------------------------------------------------------------- | ---------------------------------------
|(State or Other Jurisdiction of Incorporation or Organization) | (I.R.S. Employer Identification Number)

870 Maude Avenue
Sunnyvale, California     94085

(408) 774-9060







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 reports), and (2) has been subject to such filing
requirements for the past 90 days. YES [ X ]      NO [   ]

Indicate by check mark whether the Registrant is an accelerated filer (as defined in
Rule 121(b)2 of the Securities Exchange Act of 1934). YES [       ]
      NO [ X ]

As of April 27, 2004, there were 23,988,314 shares of common stock, par value $0.001 per share, outstanding.







PLX Technology, Inc.

                                     Index To

                                    Report on Form 10-Q

                             For Quarter Ended March 31, 2004



|PART I.   FINANCIAL INFORMATION                                                                                                 | Page No.
|------------------------------------------------------------------------------------------------------------------------------- | --------
|                                                                                                                                |         
|Item 1.   Financial Statements (Unaudited):                                                                                     |         
|                                                                                                                                |         
|Condensed Consolidated Balance Sheets at
         March 31, 2004 and December 31, 2003                                          | 3       
|                                                                                                                                |         
|Condensed Consolidated Statements of Operations for the three
          
         and nine months ended March 31, 2004 and 2003 | 4       
|                                                                                                                                |         
|Condensed Consolidated Statements of Cash Flows for the nine
          
         months ended March 31, 2004 and 2003           | 5       
|                                                                                                                                |         
|Notes to Condensed Consolidated Financial Statements                                                                            | 6       
|                                                                                                                                |         
|Item 2.   Management's Discussion and Analysis of Financial
                      Condition and Results of Operations           | 10      
|                                                                                                                                |         
|Item 3.   Quantitative and Qualitative Disclosures About Market Risk                                                            | 21      
|                                                                                                                                |         
|Item 4.   Controls and Procedures                                                                                               | 21      
|                                                                                                                                |         
|PART II.  OTHER INFORMATION                                                                                                     |         
|                                                                                                                                |         
|Item 6.   Exhibits and Reports on Form 8-K                                                                                      | 22      
|                                                                                                                                |         
|Signature                                                                                                                       | 27      

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PART I.   FINANCIAL INFORMATION

ITEM 1.    FINANCIAL STATEMENTS



PLX TECHNOLOGY,
INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands)







`March 31,   December 31,
                                                         2004          2003 (1)
                                                     ------------  ------------ 
                                                      (unaudited)   
ASSETS
Current assets:
  Cash and cash equivalents........................ $      9,817  $     10,955
  Short-term marketable securities.................        7,100        10,052
  Accounts receivable, net.........................        6,042         4,998
  Inventories......................................        1,417         1,893
  Income tax receivable............................           --            --
  Other current assets.............................        1,798         1,730
                                                     ------------  ------------
Total current assets...............................       26,174        29,628
Property and equipment, net........................       30,696        31,068
Long-term marketable securities....................        8,212         2,049
Goodwill...........................................       15,998        15,998
Other intangible assets............................        2,434         2,730
Other assets.......................................          305           330
                                                     ------------  ------------
Total assets.......................................       83,819  $     81,803
                                                     ============  ============
LIABILITIES
Current liabilities:
  Accounts payable................................. $      2,678  $      1,768
  Accrued compensation and benefits................        1,561         1,427
  Deferred revenues................................        1,126           991
  Accrued commissions..............................          308           368
  Other accrued expenses...........................        1,551         1,228
                                                     ------------  ------------
Total current liabilities..........................        7,224         5,782
                                                     ------------  ------------
STOCKHOLDERS' EQUITY
  Common stock, par value..........................           24            24
  Additional paid-in capital.......................       84,756        84,508
  Deferred compensation............................          (26)          (44)
  Notes receivable for employee stock purchases....          (70)          (70)
  Accumulated other comprehensive loss.............          (18)          (49)
  Accumulated deficit..............................       (8,071)       (8,348)
                                                     ------------  ------------
Total stockholders' equity.........................       76,595        76,021
                                                     ------------  ------------
Total liabilities and stockholders' equity......... $     83,819  $     81,803
                                                     ============  ============`



See accompanying notes to condensed consolidated financial statements.

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PLX TECHNOLOGY,
INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

(in thousands, except per share amounts)







`Three Months Ended
                                                           March 31,
                                                   --------------------
                                                       2004       2003
                                                   ---------  ---------  
Net revenues..................................... $  11,642  $   8,503
Cost of revenues.................................     3,229      2,515
                                                   ---------  ---------
Gross margin.....................................     8,413      5,988
                                                   ---------  ---------
Operating expenses:
  Research and development.......................     4,057      3,713
  Selling, general and administrative............     3,678      3,058
  In-process research and development............        --         --
  Amortization of purchased intangible assets....       297        133
                                                   ---------  ---------
Total operating expenses.........................     8,032      6,904
                                                   ---------  ---------
Income (loss) from operations....................       381       (916)
Interest income and other, net...................        68        108
                                                   ---------  ---------
Income (loss) before provision for income taxes..       449       (808)
Provision for income taxes.......................       172          8
                                                   ---------  ---------
Net income (loss)................................ $     277  $    (816)
                                                   =========  =========

Basic net income (loss) per share................ $    0.01  $   (0.04)
                                                   =========  =========
Shares used to compute basic per share amounts...    23,876     21,135
                                                   =========  =========
Diluted net income (loss) per share.............. $    0.01  $   (0.04)
                                                   =========  =========
Shares used to compute diluted per share amounts.    25,181     21,135
                                                   =========  =========`

See accompanying notes to condensed consolidated financial statements.

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PLX TECHNOLOGY, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

(in thousands)







`Three Months Ended
                                                                             March 31,
                                                                     --------------------
                                                                         2004       2003
                                                                     ---------  ---------
Cash flows from operating activities
Net income (loss).................................................. $     277  $    (816)
  Adjustments to reconcile net loss to net cash
    provided by operating activities:
  Depreciation.....................................................       565        564
  Amortization of deferred compensation............................        18        457
  Amortization of purchased intangible assets......................       297        133
  In process research and development..............................        --         --
  Other non-cash items.............................................        13         36
  Changes in operating assets and liabilities:
    Accounts receivable............................................    (1,044)      (751)
    Inventories....................................................       476        156
    Income tax receivable..........................................        --         --
    Other current assets...........................................       (72)      (404)
    Other assets...................................................        29         32
    Accounts payable...............................................       909        366
    Accrued compensation and benefits..............................        74        150
    Income Tax Payable.............................................        --         --
    Deferred tax liability.........................................        --         --
    Deferred revenues..............................................       135         76
    Other accrued expenses.........................................       323         15
                                                                     ---------  ---------
Net cash provided by operating activities..........................     2,000         14
                                                                     ---------  ---------
Investing Activities
Payment for the acquisition of HiNT, net of cash acquired..........        --         --
Purchases of  marketable securities................................    (7,143)    (2,000)
Sales and maturities of marketable securities......................     3,950      1,000
Purchases of property and equipment................................      (194)      (349)
                                                                     ---------  ---------
Net cash used in investing activities..............................    (3,387)    (1,349)
                                                                     ---------  ---------
Financing Activities
Proceeds from sales of common stock................................       248         24
Repurchases of common stock........................................        --         --
                                                                     ---------  ---------
Net cash used in financing activities..............................       248         24
                                                                     ---------  ---------
Effect of exchange rate fluctuations on cash and cash equivalents..         1         (5)
                                                                     ---------  ---------
Decrease in cash and cash equivalents..............................    (1,138)    (1,316)
Cash and cash equivalents at beginning of year.....................    10,955      5,482
                                                                     ---------  ---------
Cash and cash equivalents at end of period......................... $   9,817  $   4,166
                                                                     =========  =========`

See accompanying notes to condensed consolidated financial statements.

---





PLX TECHNOLOGY, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)



1.	Basis of Presentation

The accompanying unaudited condensed consolidated
financial statements of PLX Technology, Inc. and its wholly-owned subsidiaries
(collectively, "PLX" or the "Company") as of March 31, 2004
and for the three month periods ended March 31, 2004 and 2003 have been prepared
in accordance with generally accepted accounting principles for interim
financial information and with the instructions to Form 10-Q and Article 10 of
Regulation S-X.  In the opinion of management, the unaudited condensed
consolidated financial statements include all adjustments (consisting only of
normal recurring accruals) that management considers necessary for a fair
presentation of our financial position, operating results and cash flows for the
interim periods presented. Operating results and cash flows for interim periods
are not necessarily indicative of results for the entire year.

The unaudited condensed consolidated financial statements
include all of the accounts of the Company and those of its wholly owned
subsidiaries.  All intercompany accounts and transactions have been
eliminated.

This financial data should be read in conjunction with the
audited consolidated financial statements and notes thereto included in our
Annual Report on Form 10-K for the fiscal year ended December 31, 2003.

Use of Estimates

The preparation of financial statements in conformity
with accounting principles generally accepted in the United States requires
management to make estimates and assumptions that affect the amounts reported in
the financial statements and accompanying notes.  Actual results could differ
from those estimates and such differences may be material to the financial
statements.

Comprehensive Net Income (Loss)

The Company's comprehensive net income (loss) for the
three months ended March 31, 2004 and March 31, 2003 was as follows (in
thousands):

`Three Months Ended
                                                           March 31,
                                                   --------------------
                                                       2004       2003
                                                   ---------  ---------  
Net income (loss)................................       277       (816)
Unrealized gain (loss) on marketable securities,         28        (17)
Cumulative translation adjustments...............         3          4
                                                   ---------  ---------
Comprehensive net income (loss)..................       308       (829)
                                                   =========  =========`



Recent Accounting Pronouncements

In January 2003, the FASB issued FASB
Interpretation No. 46 (FIN 46), "Consolidation of Variable Interest
Entities, an Interpretation of ARB No. 51", which requires companies to
consolidate certain types of variable interest entities.  A variable interest
entity is an entity that has inadequate invested equity at risk to meet expected
future losses, or whose holders of the equity investments lack any of the
following three characteristics:  (i) the ability to make the Company's
decisions about the entity's activities; (ii) the obligation to absorb the
entity's losses if they occur; (iii) the right to receive the entity's future
returns if they occur.  FIN 46 is applicable immediately for variable interest
entities created after January 31, 2003.  For variable interest entities created
before February 1, 2003, the provisions of the interpretation are effective for
financial statements issued for the first period ending after December 15, 2003,
or March 15, 2004, depending on the nature of the variable interest entity.
Adoption of this statement did not  have a material impact on the Company's
financial position, results of operations or cash flows.



2.

The Company has elected to follow the intrinsic value
method under APB Opinion No. 25 and related interpretations in accounting for
its stock options and grants since the alternative fair market value accounting
provided for under Statement of Financial Accounting Standards (SFAS) No. 123
requires use of grant valuation models that were not developed for use in
valuing employee stock options and grants.  Under the intrinsic value method
under APB Opinion No. 25, if the exercise price of the Company's stock grants
and options equals the deemed fair value of the underlying stock on the date of
grant, no compensation expense is recognized.

If compensation expense for the Company's stock-based
compensation plans had been determined based on the fair value at the grant
dates for awards under those plans consistent with the method of SFAS No. 123,
then the Company's net income (loss) per share would have been adjusted to the
pro forma amounts indicated below:



`Three Months Ended
                                                                   March 31,
                                                           --------------------
                                                               2004       2003
                                                           ---------  --------- 
Net income (loss) as reported............................ $     277  $    (816)
Add: stock-based compensation included in reported
  net income (loss)......................................        18        457
Deduct: stock-based compensation cost under SFAS 123.....    (1,198)    (1,905)
                                                           ---------  ---------
Pro forma net loss....................................... $    (903) $  (2,264)
                                                           =========  =========
Pro forma basic and diluted net loss per common share:
Pro forma shares used in the calculation of pro
  forma net loss per common share - basic and diluted....    23,876     21,135

Pro forma net loss per common share - basic and diluted.. $   (0.04) $   (0.11)
                                                           =========  =========
Reported net income (loss) per common share - basic...... $    0.01  $   (0.04)
                                                           =========  =========
Reported net income (loss) per common share - diluted.... $    0.01  $   (0.04)
                                                           =========  =========`

3.

Inventories are valued at the lower
of cost (first-in, first-out method) or market (net realizable value).
Inventories were as follows (in thousands):



`March 31,   December 31,
                                 2004          2003
                             ------------  ------------
Work in process............ $        447  $        356
Finished goods.............          970         1,537
                             ------------  ------------
Total...................... $      1,417  $      1,893
                             ============  ============`

4.

On May 22, 2003, the Company
purchased HiNT Corp., a fabless semiconductor supplier of Peripheral Component
Interconnect (PCI) and PCI-X bridge chips, for an aggregate purchase price,
including assumed liabilities, of $15.6 million. The Company acquired HiNT Corp.
in order to provide electronic-equipment suppliers with a single source for a
wide selection of advanced interconnect chips and design support. The PCI, PCI-
X, and HyperTransportTM standards are the architectural foundation for a
broad range of communications, server, storage and embedded-control systems. The
transaction was accounted for using purchase accounting.  Additional
consideration of PLX's common stock and cash with a maximum aggregate value of
approximately $2.3 million may be paid out in the event HiNT product sales meet
certain performance milestones approximately one year following the close of the
transaction.  Any additional consideration will become additional goodwill.



Amortization of developed/core technology and customer base
was $91,000 and $72,000, respectively, for the three month period ended March
31, 2004.



Unaudited Pro Forma Financial Results

The unaudited pro forma financial information combines
the historical statements of operations of the Company and Hint Corp. for the
three months ended March 31, 2003 and gives effect to the transaction, including
the amortization of other intangible assets and the recognition of deferred
compensation, as if they occurred at January 1, 2003.  The amount
of the aggregate purchase price allocated to purchased in-process research and
development has been excluded from the pro forma information, as it is a non-
recurring item.



The unaudited pro forma information is presented for
illustrative purposes only and is not necessarily indicative of the operating
results that would have occurred if the transaction had been consummated at
January 1, 2003, nor is it necessarily indicative of future operating results of
the combined companies and should not be construed as representative of these
amounts for any future periods (in thousands, except per share data).



`Three Months Ended
                                                 March 31,
                                         --------------------
                                             2004       2003
                                         ---------  ---------  
Net revenues........................... $  11,642  $   9,921
Net income (loss)...................... $     277  $    (707)

Net income (loss) per share - basic.... $    0.01  $   (0.03)
                                         ========== ==========
Shares used to compute basic per share     23,876     24,132
                                         ========== ==========

Net income (loss) per share - diluted.. $    0.01  $   (0.03)
                                         ========== ==========
Shares used to compute diluted per shar    25,181     24,132
                                         ========== ==========`

5.	Net Income (Loss) Per Share

The following table sets forth the computation of basic
and diluted net income (loss) per share (in thousands, except per share data):

`Three Months Ended
                                                 March 31,
                                         --------------------
                                             2004       2003
                                         ---------  ---------  

Net income (loss)...................... $     277  $    (816)
                                         ========== ==========

Weighted average shares of common stock
   outstanding.........................    23,876     21,135
                                         ========== ==========

Net income (loss) per share - basic.... $    0.01  $   (0.04)
                                         ========== ==========

Shares used in computing basic net income (loss)
   per share...........................    23,876     21,135
Dilutive effect of stock options.......     1,305         --
                                         ---------- ----------
Shares used in computing diluted net income
   (loss)per share.....................    25,181     21,135
                                         ========== ==========

Net income (loss) per share - diluted.. $    0.01  $   (0.04)
                                         ========== ==========`



Employee stock options to purchase approximately 3.3
million shares for the three months period ended March 31, 2004 were
outstanding, but were not included in the computation of diluted earnings per
share because the exercise price of the stock options was greater than the
average share price of the common shares and, therefore, the effect would have
been anti-dilutive.  As the Company incurred a loss for the three months period
ended March 31, 2003, the effect of dilutive securities, totaling 4.0 million
equivalent shares, have been excluded from the computation of diluted loss per
share, as their impact would be anti-dilutive.

6.	Segments of an Enterprise and Related Information

The Company has one operating segment, the sale of
semiconductor devices. The President has been identified as the Chief Operating
Decision Maker (CODM) because he has final authority over resource allocation
decisions and performance assessment. The CODM does not receive discrete
financial information about individual components of the Company's business.



Revenues by geographic region based on customer location were as
follows (in thousands):



`Three Months Ended
                                                 March 31,
                                         --------------------
                                             2004       2003
                                         ---------  ---------  
                                         (unaudited)
Revenues:
  United States......................... $   4,174  $   3,140
  Asia - excluding Taiwan and Singapore.     2,315      1,299
  Europe - excluding France.............     1,721      1,147
  Taiwan................................     1,243        723
  Singapore.............................     1,191        797
  Americas - excluding United States....       585        467
  France................................       413        930
                                         ---------  ---------
Total................................... $  11,642  $   8,503
                                         =========  =========`

For the three months ended March 31, 2004, approximately 12%
of net revenue was derived from sales to one distributor.  For the three months
ended March 31, 2003, approximately 11% of net revenues was derived from sales
to a different distributor.  No other distributor or direct customer represented
greater than 10% of net revenues.



7.	Income Taxes

Income tax expense of $172,000 was recorded for the three
months ended March 31, 2004 compared to income tax expense of $8,000 for the
three months ended March 31, 2003.  Income tax expense for the three months
ended March 31, 2004 is primarily due to federal alternative minimum tax,
miscellaneous state income taxes and foreign income taxes.  The current expense
differs from the expected provision derived by applying the applicable U.S.
federal statutory rate to the income from operations primarily due to
nondeductible acquisition-related items.



Deferred tax assets are recognized when there is sufficient
evidence that it is more likely than not that such deferred tax assets will be
realized.  The company has determined that such evidence does not currently
exist.  Therefore, a full valuation allowance has been established to reserve
the Company's net deferred tax assets.





8.	Agreement to Acquire NetChip Technology, Inc.



In March 2004, the Company announced a definitive
agreement to acquire NetChip Technology, Inc., a privately held, fabless
semiconductor supplier. NetChip is a leading supplier of chips based on
Universal Serial Bus 2.0 (USB 2.0), a high-speed, mixed-signal interconnect
standard, as well as the Peripheral Component Interconnect (PCI) standard. Under
the terms of the agreement, the Company will issue common stock and options to
purchase common stock with an aggregate value of approximately $20 million,
valued at approximately $9.78 per share, which is subject to adjustment at the
closing, in exchange for all outstanding securities of NetChip and options to
purchase securities of NetChip. Additional consideration of common stock with a
maximum aggregate value of approximately $10 million may be paid out under
certain provisions approximately one year following the close of the
transaction.  The Company expects to close the NetChip acquisition late in the
second quarter, pending the necessary vote of PLX stockholders and other
customary closing conditions.



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

This Report on Form 10-Q contains forward-looking
statements within the "safe harbor" provisions of the Private Securities
Litigation Reform Act of 1995, including statements regarding our expectations,
hopes, intentions, beliefs or strategies regarding the future.  These statements
also include statements regarding the anticipated closing date of the NetChip
acquisition, our ability to meet our capital requirements for the next twelve
months, and our future capital requirements.  Actual results could differ
materially from those projected in such forward-looking statements.  Factors
that could cause actual results to differ include that there may be unexpected
delays in closing the NetChip acquisition and that unexpected capital
requirements may arise due to that acquisition or other possible acquisitions.
Actual results could also differ for the reasons noted under the sub-heading
"Factors That May Affect Future Operating Results" and in other
sections of this report on Form 10-Q.  All forward-looking statements included
in this Form 10-Q are based on information available to us on the date of
this Report on Form 10-Q, and we assume no obligation to update the
forward-looking statements, or to update the reasons why actual results could
differ from those projected in the forward-looking statements.



The following discussion should be read in conjunction with
the audited consolidated financial statements and the notes thereto included in
our Annual Report on Form 10-K for the fiscal year ended December 31, 2003.



OVERVIEW



PLX was founded in 1986, and since 1994 we have focused on
development of I/O interface semiconductors and related software and development
tools that are used in systems incorporating the PCI standard.  In 1994 and
1995, a significant portion of our revenues were derived from the sale of
semiconductor devices that perform similar functions as our current products,
except they were based on a variety of industry standards.  Our revenues since
1996 have been derived predominantly from the sale of semiconductor devices
based on the PCI standard to a large number of customers in a variety of
applications including networking and telecommunications, enterprise storage,
imaging, industrial and other embedded applications as well as in related
adapter cards.  We generate less than 1% of our revenues from sales of our
software and development tools.

In May of 2003, we acquired HiNT Corp. which markets and
sells PCI Bridges and PCI-X products into a variety of applications including
networking and telecommunications, personal computer, peripheral, imaging,
industrial and other embedded applications.  Beginning with the quarter ended
June 30, 2003, our operating results include results of HiNT Corp. and its
products.

In March of 2004, we signed a definitive agreement to acquire
NetChip Technology, a leading supplier of chips based on Universal Serial Bus
2.0 (USB 2.0), a high-speed, mixed-signal interconnect standard, as well as the
Peripheral Component Interconnect (PCI) standard. We expect to close the NetChip
acquisition late in the second quarter, pending the necessary vote of PLX
stockholders and other customary closing conditions.

We utilize a "fabless" semiconductor business model
whereby we purchase wafers and packaged and tested semiconductor devices from
independent manufacturing foundries.  This approach allows us to focus on
defining, developing, and marketing our products and eliminates the need for us
to invest large amounts of capital in manufacturing facilities and work-in-
process inventory.

We rely on a combination of direct sales personnel,
distributors, and manufacturers' representatives throughout the world to sell a
significant portion of our products.  We pay manufacturers' representatives a
commission on sales while we sell products to distributors at a discount from
the selling price.  We generally recognize revenue at the time of title passage.
Recognition of sales to distributors, including international distributors, is
deferred until the product is resold by the distributors to end users.  See
"Certain Factors That May Affect Future Operating Results -- A Large
Portion of Our Revenues Is Derived From Sales to Third-Party Distributors Who
May Terminate Their Relationships with Us at Any Time."

Our gross margins have fluctuated in the past and are
expected to fluctuate in the future due to changes in product and customer mix,
write-downs and recoveries of excess or obsolete inventory, the position of our
products in their respective life cycles, and specific product manufacturing
costs.

The time period between initial customer evaluation and
design completion can range from six to twelve months or more.  Furthermore,
there is typically an additional six to twelve month or greater period after
design completion before a customer requests volume production of our products.
Due to the variability and length of these design cycles and variable demand
from customers, we may experience significant fluctuations in new orders from
month to month.  In addition, we typically make inventory purchases prior to
receiving customer orders.  Consequently, if anticipated sales and shipments in
any quarter do not occur when expected, expenses and inventory levels could be
disproportionately high, and our results for that quarter and potentially future
quarters would be materially and adversely affected.

Our long-term success will depend on our ability to introduce
new products.  While new products typically generate little or no revenues
during the first twelve months following their introduction, our revenues in
subsequent periods depend upon these new products.  Due to the lengthy sales
cycle and additional time before our customers request volume production,
significant revenues from our new products typically occur twelve to twenty-four
months after product introduction.  As a result, revenues from newly introduced
products have, in the past, produced a small percentage of our total revenues in
the year the product was introduced.  See "Certain Factors That May Affect
Future Operating Results -- Our Lengthy Sales Cycle Can Result in Uncertainty
and Delays with Regard to Our Expected Revenues."



The following table summarizes historical results of
operations as a percentage of net revenues for the periods shown.



`Three Months Ended
                                                           March 31,
                                                   --------------------
                                                       2004       2003
                                                   ---------  --------- 
Net revenues.....................................     100.0 %    100.0 %%
Cost of revenues.................................      27.7       29.6
                                                   ---------  ---------
Gross margin.....................................      72.3       70.4
                                                   ---------  ---------
Operating expenses:
  Research and development.......................      34.8       43.7
  Selling, general and administrative............      31.6       36.0
  In-process research and development............        --         --
  Amortization of purchased intangible assets....       2.6        1.6
                                                   ---------  ---------
Total operating expenses.........................      69.0       81.3
                                                   ---------  ---------
Income (loss) from operations....................       3.3      (10.9)
Interest income and other, net...................       0.6        1.3
                                                   ---------  ---------
Income (loss) before provision for income taxes..       3.9       (9.6)
Provision for income taxes.......................       1.5        0.1
                                                   ---------  ---------
Net income (loss)................................       2.4 %     (9.7)%%
                                                   =========  =========`

Net Revenues

Net revenues consist of product revenues generated
principally by sales of our semiconductor devices.  Net revenues for the three
months ended March 31, 2004 were $11.6 million, an increase of 36.9% from $8.5
million for the three months ended March 31, 2003.  The increase was primarily
due to higher unit shipments as well as revenues generated from the PCI bridge
product acquired as part of the HiNT Corp. acquisition.  The HiNT Corp.
acquisition was in May 2003 and revenues for the quarter ended March 31, 2003 do
not include any revenues generated from the PCI bridge products.  For the three
months ended March 31, 2004, approximately 12% of net revenue was derived from
sales to one distributor.  For the three months ended March 31, 2003,
approximately 11% of net revenues was derived from sales to a different
distributor.  No other distributor or direct customer represented greater than
10% of net revenues.



Gross Margin

Gross margin represents net revenues less the cost of
revenues.  Cost of revenues includes the cost of (1) purchasing semiconductor
devices from our independent foundries, (2) package, assembly and test services
from our independent foundries and assembly and test contractors and (3) our
operating costs associated with the procurement, storage, and shipment of
products.



Gross margin for the three months ended March 31, 2004 was
72.3%, an increase of 1.9% from 70.4% for the same period in 2003.  Excluding
benefits from selling previously written-down inventory of approximately $0.1
million and $0.2 million for the three months ended March 31, 2004 and 2003,
respectively, gross margin increased to 71.5% for the three months ended March
31, 2004, from 68.0% for the same period in 2003.  The increase in gross margin
was primarily due to shifts in our product and customer mix.



Research and Development Expenses

Research and development (R&D) expenses consist
primarily of salaries and related costs of employees engaged in research,
design, and development activities.  In addition, expenses for outside
engineering consultants and non-recurring engineering at our independent
foundries and deferred compensation are included in research and development
expenses.



R&D as a percent of net revenues decreased to 34.8% for
the three months ended March 31, 2004, as compared to 43.7% for the same period
in 2003.  The percentage decrease is due primarily to an increase in revenues.
In absolute dollars, R&D expenses increased to $4.1 million for the three
months ended March 31, 2004 from $3.7 million for the same period in 2003.
Excluding deferred compensation amortization of $18,000 and $0.5 million for the
three months ended March 31, 2004 and 2003, respectively, R&D increased by
$0.9 million to $4.1 million for the three months ended March 31, 2004 from $3.2
million for the same period in 2003.   The increase in R&D was primarily due
to (1) an increase of approximately $0.5 million in compensation and benefit
expenses due mainly to the HiNT Corp. acquisition in May 2003, (2) an increase
of approximately $0.1 million in consulting expenses and (3) an increase of
approximately $0.1 million in engineering tools expense associated with the
development of new products and enhancement of existing products.



Selling, General and Administrative Expenses

Selling, general and administrative (SG&A) expenses
consist primarily of employee-related expenses, professional fees, trade show
and other promotional expenses, and sales commissions to manufacturers'
representatives.



SG&A as a percent of net revenues decreased to 31.6% for
the three months ended March 31, 2004, as compared to 36.0% for the same period
in 2003.  The decrease is due primarily to an increase in revenues.  In absolute
dollars, SG&A expenses increased by $0.6 million to $3.7 million for the
three months ended March 31, 2004 from $3.1 million for the same period in 2003.
The increase was primarily due to an increase of approximately $0.3 million in
compensation and benefit expenses due mainly to the HiNT Corp. acquisition in
May 2003 and an increase of approximately $0.1 million in sales commissions to
manufacturer's representatives as a result of higher revenues.



Amortization of Purchased Intangible Assets

Amortization of purchased intangible assets for the three
months ended March 31, 2004 was $0.3 million, an increase of $0.2 million from
$0.1 million for the three months ended March 31, 2003.  The increase for the
three months ended March 31, 2004 compared to March 31, 2003 is due to
additional amortization expense from developed/core technology and customer base
acquired as a result of the HiNT Corp. acquisition in May 2003 (see Note 4 to
the condensed consolidated financial statements).



Interest Income and Other, Net

Interest income reflects interest
earned on cash, cash equivalents and short-term and long-term marketable
securities balances. Interest income and other remained relatively flat at $0.1
million for the three months ended March 31, 2004 and 2003.

Provision for Income Taxes

Income tax expense of $172,000 was recorded for the three
months ended March 31, 2004 compared to income tax expense of $8,000 for the
three months ended March 31, 2003.  Income tax expense for the three months
ended March 31, 2004 is primarily due to federal alternative minimum tax,
miscellaneous state income taxes, and foreign income taxes.  The current expense
differs from the expected provision derived by applying the applicable U.S.
federal statutory rate to the income from operations primarily due to
nondeductible acquisition-related items.



Deferred tax assets are recognized when there is sufficient
evidence that it is more likely than not that such deferred tax assets will be
realized.  The Company has determined that such evidence does not currently
exist.  Therefore, a full valuation allowance has been established to reserve
the Company's net deferred tax asset.



Liquidity and Capital Resources

Cash and cash equivalents and short and long-term
marketable securities were $25.1 million at March 31, 2004, an increase of
$2.0 million from $23.1 million at December 31, 2003.  The increase was
primarily due to $2.0 million of cash provided by operating activities, which
included (1) net income of $0.3 million adjusted for non-cash expenses of $0.9
million, (2) increases in accounts payable and accrued expenses of $0.9 million
and $0.3 million, respectively, and (3) a decrease in inventories of $0.5
million.  This was partially offset by an increase in accounts receivable of
$1.0 million.



In September 2002, our Board of Directors authorized the
repurchase of up to 2,000,000 shares of common stock.  The Company, at
the discretion of the management, can repurchase the shares from time to time in
the open market or in privately negotiated transactions.  As of March 31,
2004, approximately 774,000 shares had been repurchased at approximately
$1,867,000.  The Company did not repurchase any shares for the three month
period ended  March 31, 2004.



Additional consideration of the Company's common stock and
cash with a maximum aggregate value of approximately $2.3 million is expected to
be paid out in the event PCI bridge product sales acquired as part of the HiNT
Corp. acquisition meet certain performance milestones by June 30, 2004.



As of March 31, 2004, inventory purchase commitments were
$4.5 million.  There were no other significant changes in contractual obligations or commercial commitments
outstanding.



We believe that our existing resources, together with cash
generated from our operations will be sufficient to meet our capital
requirements for at least the next twelve months.  Our future capital
requirements will depend on many factors, including the inventory levels we
maintain, the level of investment we make in new technologies and improvements
to existing technologies and the levels of monthly expenses required to launch
new products.  From time to time, we may also evaluate potential acquisitions
and equity investments complementary to our technologies and market strategies.
To the extent that existing resources and future earnings are insufficient to
fund our future activities, we may need to raise additional funds through public
or private financings.  Additional funds may not be available or, if available,
we may not be able to obtain them on terms favorable to us and our
stockholders.



Critical Accounting Policies

The preparation of financial
statements in conformity with accounting principles generally accepted in the
United States requires management to make estimates and assumptions that affect
the reported amounts of assets and liabilities, revenues and expenses and
related disclosures of contingent assets and liabilities in the consolidated
financial statements and accompanying notes. The SEC has defined a company's
critical accounting policies as the ones that are most important to the
portrayal of the company's financial condition and results of operations, and
which require the company to make its most difficult and subjective judgments,
often as a result of the need to make estimates of matters that are inherently
uncertain.  Based on this definition, we have identified the critical accounting
policies and judgments addressed below.  We also have other key accounting
policies which involve the use of estimates, judgments and assumptions that are
significant to understanding our results.  Although we believe that our
estimates, assumptions and judgments are reasonable, they are based upon
information presently available.  Actual results may differ significantly from
these estimates under different assumptions, judgments or conditions.



Inventory Write-downs. We evaluate the write-downs for
inventory based on a combination of factors. Based on the life of the product,
sales history, obsolescence, and sales forecast, we record write-downs ranging
from 0% to 100%. Any adverse changes to our future product demand may result in
increased write-downs, resulting in decreased gross margin. In addition, future
sales on any of our previously written down inventory may result in increased
gross margin in the period of sale.



Allowance for Doubtful Accounts. We evaluate the
collectibility of our accounts receivable based on length of time the
receivables are past due and our historical bad debt experience. We record
reserves for bad debts against amounts due to reduce the net recognized
receivable to the amount we reasonably believe will be collected.  We have
certain customers with individually large amounts due at any given balance sheet
date.  Any unanticipated change in one of those customer's credit worthiness or
other matters affecting the collectibility of amounts due from such customers
could have a material affect on our results of operations in the period in which
such changes or events occur.



Goodwill.

Taxes.

CERTAIN FACTORS THAT MAY AFFECT FUTURE OPERATING
RESULTS

This quarterly report on Form 10-Q contains forward-
looking statements which involve risks and uncertainties.  Our actual results
could differ materially from those anticipated by such forward-looking
statements as a result of certain factors, including those set forth below.



Our Operating Results May Fluctuate Significantly Due To
Factors Which Are Not Within Our Control

``

Our quarterly operating results have fluctuated significantly
in the past and are expected to fluctuate significantly in the future based on a
number of factors, many of which are not under our control.  Our operating
expenses, which include product development costs and selling, general and
administrative expenses, are relatively fixed in the short-term.  If our
revenues are lower than we expect because we sell fewer semiconductor devices,
delay the release of new products or the announcement of new features, or for
other reasons, we may not be able to quickly reduce our spending in
response.



Other circumstances that can affect our operating results
include:

- the timing of significant orders, order cancellations and
reschedulings,
- the loss of a significant customer(s),
- our significant customers could lose market share that
may affect our business,
- the availability of production capacity at the
fabrication facilities that manufacture our products,
- our ability to develop, introduce and market new products
and technologies on a timely basis,
- introduction of products and technologies by our
competitors,
- shifts in our product mix toward lower margin
products,
- changes in our pricing policies or those of our
competitors or suppliers, including decreases in unit average selling prices of
our products,
- the availability and cost of materials to our
suppliers,
- general economic conditions, and
- political climate.

These factors are difficult to forecast, and these or other
factors could adversely affect our business.  Any shortfall in our revenues
would have a direct impact on our business.  In addition, fluctuations in our
quarterly results could adversely affect the market price of our common stock in
a manner unrelated to our long-term operating performance.

Our Pending NetChip Acquisition And Other Potential Future
Acquisitions May Not Be Successful Because Of Our Limited Experience With
Acquisitions In The Past

In March 2004, we signed a definitive agreement to
acquire NetChip Technology Inc., a leading supplier of chips based on Universal
Serial Bus 2.0 (USB 2.0), a high-speed, mixed-signal interconnect standard, as
well as the Peripheral Component Interconnect (PCI) standard.  We expect to
close the NetChip acquisition late in the second quarter, pending the necessary
vote of our stockholders and other customary closing conditions.  In addition,
we expect to review other acquisition prospects that would complement our
existing product offerings, improve market coverage or enhance our technological
capabilities.  The NetChip acquisition, as well as other future acquisitions,
could result in any or all of the following:

- potentially dilutive issuances of equity
securities,
- large one-time write-offs,
- the incurrence of debt and contingent liabilities or
amortization expenses related to other intangible assets,
- difficulties in the assimilation of operations,
personnel, technologies, products and the information systems of the acquired
companies,
- diversion of management's attention from other business
concerns,
- risks of entering geographic and business markets in
which we have no or limited prior experience, and
- potential loss of key employees of acquired
organizations.

We have had limited experience with acquisitions in the past
and may not be able to successfully integrate any businesses, products,
technologies or personnel that may be acquired in the future.  Our failure to do
so could have a material adverse effect on our business.

Because A Substantial Portion Of Our
Net Sales Is Generated By A Small Number Of Large Customers, If Any Of These
Customers Delays Or Reduces Its Orders, Our Net Revenues And Earnings Will Be
Harmed

Historically, a relatively small number
of customers have accounted for a significant portion of our net revenues in any
particular period.



We have no long-term volume purchase commitments from any of
our significant customers. We cannot be certain that our current customers will
continue to place orders with us, that orders by existing customers will
continue at the levels of previous periods or that we will be able to obtain
orders from new customers. In addition, some of our customers supply products to
end-market purchasers and any of these end-market purchasers could choose to
reduce or eliminate orders for our customers' products. This would in turn lower
our customers' orders for our products.



We anticipate that sales of our products
to a relatively small number of customers will continue to account for a
significant portion of our net sales.  Due to these factors, the following have
in the past and may in the future reduce our net sales or earnings:

- the reduction, delay or cancellation of orders from one
or more of our significant customers;
- the selection of competing products or in-house design by
one or more of our current customers;
- the loss of one or more of our current customers;
or
- a failure of one or more of our current customers to pay
our invoices.

Our Lengthy Sales Cycle Can Result In Uncertainty And
Delays With Regard To Our Expected Revenues

Our customers typically perform numerous tests and
extensively evaluate our products before incorporating them into their systems.
The time required for test, evaluation and design of our products into a
customer's equipment can range from six to twelve months or more.  It can take
an additional six to twelve months or more before a customer commences volume
shipments of equipment that incorporates our products.  Because of this lengthy
sales cycle, we may experience a delay between the time when we increase
expenses for research and development and sales and marketing efforts and the
time when we generate higher revenues, if any, from these expenditures.

In addition, the delays inherent in our lengthy sales cycle
raise additional risks of customer decisions to cancel or change product plans.
When we achieve a design win, there can be no assurance that the customer will
ultimately ship products incorporating our products.  Our business could be
materially adversely affected if a significant customer curtails, reduces or
delays orders during our sales cycle or chooses not to release products
incorporating our products.

Rapid Technological Change Could Make
Our Products Obsolete

We operate in an industry that is subject
to evolving industry standards, rapid technological changes, rapid changes in
customer demands and the rapid introduction of new, higher performance products
with shorter product life cycles.  As a result, we expect to continue to make
significant investments in research and development.  However, we may not have
adequate funds from operations or otherwise to devote to research and
development, forcing us to reduce our research and development efforts.  Also,
we must manage product transitions successfully, since announcements or
introductions of new products by us or our competitors could adversely affect
sales of our existing products because these existing products can become
obsolete or unmarketable for specific purposes.  There can be no assurance that
we will be able to develop and introduce new products or enhancements to our
existing products on a timely basis or in a manner which satisfies customer
needs or achieves widespread market acceptance.  Any significant delay in
releasing new products could adversely affect our reputation, give a competitor
a first-to-market advantage or allow a competitor to achieve greater market
share.  The failure to adjust to rapid technological change could harm our
business, financial condition, results of operations and cash flows.

Failure Of Our Products To Gain Market Acceptance Would Adversely Affect
Our Financial Condition

We believe that our growth prospects depend upon our ability
to gain customer acceptance of our products and technology.  Market acceptance
of products depends upon numerous factors, including compatibility with existing
manufacturing processes and products, perceived advantages over competing
products and the level of customer service available to support such products.
Moreover, manufacturers often rely on a limited number of equipment vendors to
meet their manufacturing equipment needs.  As a result, market acceptance of our
products may be adversely affected to the extent potential customers utilize a
competitor's manufacturing equipment.  There can be no assurance that growth in
sales of new products will continue or that we will be successful in obtaining
broad market acceptance of our products and technology.



We expect to spend a significant amount of time and resources
to develop new products and refine existing products.  In light of the long
product development cycles inherent in our industry, these expenditures will be
made well in advance of the prospect of deriving revenues from the sale of any
new products.  Our ability to commercially introduce and successfully market any
new products is subject to a wide variety of challenges during this development
cycle, including start-up bugs, design defects and other matters that could
delay introduction of these products to the marketplace.  In addition, since our
customers are not obligated by long-term contracts to purchase our products, our
anticipated product orders may not materialize, or orders that do materialize
may be cancelled.  As a result, if we do not achieve market acceptance of new
products, we may not be able to realize sufficient sales of our products in
order to recoup research and development expenditures.  The failure of any of
our new products to achieve market acceptance would harm our business, financial
condition, results of operation and cash flows.

We Must Make Significant Research And
Development Expenditures Prior To Generating Revenues From Products

To establish market acceptance of a new semiconductor device,
we must dedicate significant resources to research and development, production
and sales and marketing.  We incur substantial costs in developing,
manufacturing and selling a new product, which often significantly precede
meaningful revenues from the sale of this product.  Consequently, new products
can require significant time and investment to achieve profitability.  Investors
should note that our efforts to introduce new semiconductor devices or other
products or services may not be successful or profitable.  In addition, products
or technologies developed by others may render our products or technologies
obsolete or noncompetitive.



We record as expenses the costs related to the development of
new semiconductor devices and other products as these expenses are incurred.  As
a result, our profitability from quarter to quarter and from year to year may be
adversely affected by the number and timing of our new product launches in any
period and the level of acceptance gained by these products.

Our Independent Manufacturers May Not
Be Able To Meet Our Manufacturing Requirements

We do not manufacture any of our semiconductor devices.
Therefore, we are referred to in the semiconductor industry as a
"fabless" producer of semiconductors.  Consequently, we depend upon
third party manufacturers to produce semiconductors that meet our
specifications.  We currently have third party manufacturers that can produce
semiconductors which meet our needs.  However, as the semiconductor industry
continues to progress towards smaller manufacturing and design geometries, the
complexities of producing semiconductors will increase.  Decreasing geometries
may introduce new problems and delays that may affect product development and
deliveries.  Due to the nature of the semiconductor industry and our status as a
"fabless" semiconductor company, we could encounter fabrication-
related problems that may affect the availability of our semiconductor devices,
delay our shipments or may increase our costs.



The cyclical nature of the semiconductor industry drives wide
fluctuations in available capacity at third party manufacturers.  We
believe that the industry is now in a period of high demand which is creating an
environment of capacity shortages.   We may be unable to obtain
adequate manufacturing or assembly capacity from our third-party manufacturers
and assembly subcontractors to meet our customers' delivery requirements even if
we adequately forecast customer demand.

None of our semiconductor devices are currently manufactured
by more than one supplier.  We place our orders on a purchase order basis and do
not have a long term purchase agreement with any of our existing suppliers.  In
the event that the supplier of a semiconductor device was unable or unwilling to
continue to manufacture this product in the required volume, we would have to
identify and qualify a substitute supplier.  Introducing new products or
transferring existing products to a new third party manufacturer or process may
result in unforeseen device specification and operating problems.  These
problems may affect product shipments and may be costly to correct.  Silicon
fabrication capacity may also change, or the costs per silicon wafer may
increase.  Manufacturing-related problems may have a material adverse effect on
our business.

Intense Competition In The Markets In Which We Operate May
Reduce The Demand For Or Prices Of Our Products

Competition in the semiconductor industry is intense.  If our
main target market, the embedded systems market, continues to grow, the number
of competitors may increase significantly.  In addition, new semiconductor
technology may lead to new products that can perform similar functions as our
products.  Some of our competitors and other semiconductor companies may develop
and introduce products that integrate into a single semiconductor device the
functions performed by our semiconductor devices.  This would eliminate the need
for our products in some applications.

In addition, competition in our markets comes from companies
of various sizes, many of which are significantly larger and have greater
financial and other resources than we do and thus can better withstand adverse
economic or market conditions.  Also, as we start to sell our processor
products, we will compete with established embedded microprocessor companies and
others.  Many of these indirect competitors and microprocessor companies have
significantly greater financial, technical, marketing and other resources than
PLX.  Therefore, we cannot assure you that we will be able to compete
successfully in the future against existing or new competitors, and increased
competition may adversely affect our business.  See "Business --
Competition," and " -- Products" in Part I of Item I of our Form
10-K for the year ended December 31, 2003.



Failure To Have Our Products Designed Into The Products Of
Electronic Equipment Manufacturers Will Result In Reduced Sales

Our future success depends on electronic equipment
manufacturers that design our semiconductor devices into their systems.  We must
anticipate market trends and the price, performance and functionality
requirements of current and potential future electronic equipment manufacturers
and must successfully develop and manufacture products that meet these
requirements.  In addition, we must meet the timing requirements of these
electronic equipment manufacturers and must make products available to them in
sufficient quantities.  These electronic equipment manufacturers could develop
products that provide the same or similar functionality as one or more of our
products and render these products obsolete in their applications.



We do not have purchase agreements with our customers that
contain minimum purchase requirements.  Instead, electronic equipment
manufacturers purchase our products pursuant to short-term purchase orders that
may be canceled without charge.  We believe that in order to obtain broad
penetration in the markets for our products, we must maintain and cultivate
relationships, directly or through our distributors, with electronic equipment
manufacturers that are leaders in the embedded systems markets.  Accordingly, we
will incur significant expenditures in order to build relationships with
electronic equipment manufacturers prior to volume sales of new products.  If we
fail to develop relationships with additional electronic equipment manufacturers
to have our products designed into new embedded systems or to develop sufficient
new products to replace products that have become obsolete, our business would
be materially adversely affected.



Lower Demand For Our Customers' Products Will Result In Lower
Demand For Our Products

Demand for our products depends in large part on the
development and expansion of the high-performance embedded systems markets
including networking and telecommunications, enterprise storage, imaging and
industrial applications.  The size and rate of growth of these embedded systems
markets may in the future fluctuate significantly based on numerous factors.
These factors include the adoption of alternative technologies, capital spending
levels and general economic conditions.  Demand for products that incorporate
high-performance embedded systems may not grow.



Defects In Our Products Could Increase Our Costs And Delay
Our Product Shipments



Our products are complex.  While we test our products, these
products may still have errors, defects or bugs that we find only after
commercial production has begun.  We have experienced errors, defects and bugs
in the past in connection with new products.



Our customers may not purchase our products if the products
have reliability, quality or compatibility problems.  This delay in acceptance
could make it more difficult to retain our existing customers and to attract new
customers.  Moreover, product errors, defects or bugs could result in additional
development costs, diversion of technical and other resources from our other
development efforts, claims by our customers or others against us, or the loss
of credibility with our current and prospective customers.  In the past, the
additional time required to correct defects has caused delays in product
shipments and resulted in lower revenues.  We may have to spend significant
amounts of capital and resources to address and fix problems in new
products.

We must continuously develop our products using new process
technology with smaller geometries to remain competitive on a cost and
performance basis.  Migrating to new technologies is a challenging task
requiring new design skills, methods and tools and is difficult to achieve.



We Could Lose Key Personnel Due To Competitive Market
Conditions And Attrition

Our success depends to a significant extent upon our senior
management and key technical and sales personnel.  The loss of one or more of
these employees could have a material adverse effect on our business.  We do not
have employment contracts with any of our executive officers.



Our success also depends on our ability to attract and retain
qualified technical, sales and marketing, customer support, financial and
accounting, and managerial personnel.  Competition for such personnel in the
semiconductor industry is intense, and we may not be able to retain our key
personnel or to attract, assimilate or retain other highly qualified personnel
in the future.  In addition, we may lose key personnel due to attrition,
including health, family and other reasons.  We have experienced, and may
continue to experience, difficulty in hiring and retaining candidates with
appropriate qualifications.  If we do not succeed in hiring and retaining
candidates with appropriate qualifications, our business could be materially
adversely affected.



A Large Portion Of Our Revenues Is Derived From Sales To
Third-Party Distributors Who May Terminate Their Relationships With Us At Any
Time

We depend on distributors to sell a significant portion of
our products.  For the three months ended March 31, 2004 and 2003, net revenues
through distributors accounted for approximately 53% and 52%, respectively, of
our net revenues.  Some of our distributors also market and sell competing
products.  Distributors may terminate their relationships with us at any time.
Our future performance will depend in part on our ability to attract additional
distributors that will be able to market and support our products effectively,
especially in markets in which we have not previously distributed our products.
We may lose one or more of our current distributors or may not be able to
recruit additional or replacement distributors.  The loss of one or more of our
major distributors could have a material adverse effect on our business, as we
may not be successful in servicing our customers directly or through
manufacturers' representatives.



The Demand For Our Products Depends Upon Our Ability To
Support Evolving Industry Standards

Substantially all of our revenues are derived from sales of
products, which rely on the PCI standard.  If the embedded systems markets move
away from this standard and begin using new standards, we may not be able to
successfully design and manufacture new products that use these new standards.
There is also the risk that new products we develop in response to new standards
may not be accepted in the market.  In addition, the PCI standard is
continuously evolving, and we may not be able to modify our products to address
new PCI specifications.  Any of these events would have a material adverse
effect on our business.



The Successful Marketing And Sales Of Our Products Depend
Upon Our Third Party Relationships, Which Are Not Supported By Written
Agreements

When marketing and selling our semiconductor devices, we
believe we enjoy a competitive advantage based on the availability of
development tools offered by third parties.  These development tools are used
principally for the design of other parts of the embedded system but also work
with our products.  We will lose this advantage if these third party tool
vendors cease to provide these tools for existing products or do not offer them
for our future products.  This event could have a material adverse effect on our
business.  We have no written agreements with these third parties, and these
parties could choose to stop providing these tools at any time.

Our Limited Ability To Protect Our Intellectual Property
And Proprietary Rights Could Adversely Affect Our Competitive Position

Our future success and competitive position depend upon our
ability to obtain and maintain proprietary technology used in our principal
products.  Currently, we have limited protection of our intellectual property in
the form of patents and rely instead on trade secret protection.  Our existing
or future patents may be invalidated, circumvented, challenged or licensed to
others.  The rights granted thereunder may not provide competitive advantages to
us.  In addition, our future patent applications may not be issued with the
scope of the claims sought by us, if at all.  Furthermore, others may develop
technologies that are similar or superior to our technology, duplicate our
technology or design around the patents owned or licensed by us.  In addition,
effective patent, trademark, copyright and trade secret protection may be
unavailable or limited in foreign countries where we may need protection.  We
cannot be sure that steps taken by us to protect our technology will prevent
misappropriation of the technology.

We may from time to time receive notifications of claims that
we may be infringing patents or other intellectual property rights owned by
third parties.  While there is currently no intellectual property litigation
pending against us, litigation could result in significant expenses to us and
adversely affect sales of the challenged product or technology.  This litigation
could also divert the efforts of our technical and management personnel, whether
or not the litigation is determined in our favor.  In addition, we may not be
able to develop or acquire non-infringing technology or procure licenses to the
infringing technology under reasonable terms.  This could require expenditures
by us of substantial time and other resources.  Any of these developments would
have a material adverse effect on our business.

The Cyclical Nature Of The Semiconductor Industry May Lead To Significant
Variances In The Demand For Our Products

In the last few years, the semiconductor industry has been
characterized by significant downturns and wide fluctuations in supply and
demand.  Also, during this time, the industry has experienced significant
fluctuations in anticipation of changes in general economic conditions.  This
cyclicality has led to significant variances in product demand and production
capacity.  It has also accelerated erosion of average selling prices per unit.
We may experience periodic fluctuations in our future financial results because
of industry-wide conditions.



Because We Sell Our Products To Customers Outside Of North
America And Because Our Products Are Incorporated With Products Of Others That
Are Sold Outside Of North America We Face Foreign Business, Political And
Economic Risks

Sales outside of North America accounted for 59.1% of our
revenues for the three months ended March 31, 2004.  In 2003, 2002, and 2001,
sales outside of North America accounted for 62.9%, 58.4%, and 43.7% of our
revenues, respectively.  Sales outside of North America may fluctuate in future
periods and may continue to account for a large portion of our revenues.  In
addition, equipment manufacturers who incorporate our products into their
products sell their products outside of North America, thereby exposing us
indirectly to foreign risks.  Further, most of our semiconductor products are
manufactured outside of North America.  Accordingly, we are subject to
international risks, including:

- difficulties in managing distributors,
- difficulties in staffing and managing foreign subsidiary
and branch operations,
- political and economic instability,
- foreign currency exchange fluctuations,
- difficulties in accounts receivable collections,
- potentially adverse tax consequences,
- timing and availability of export licenses,
- changes in regulatory requirements, tariffs and other
barriers,
- difficulties in obtaining governmental approvals for
telecommunications and other products, and
- the burden of complying with complex foreign laws and
treaties.



Because sales of our products have been denominated to date
exclusively in United States dollars, increases in the value of the United
States dollar will increase the price of our products so that they become
relatively more expensive to customers in the local currency of a particular
country, which could lead to a reduction in sales and profitability in that
country.

Our Principal Stockholders Have Significant Voting Power
And May Take Actions That May Not Be In The Best Interests Of Our Other
Stockholders

Our executive officers, directors and other principal
stockholders, in the aggregate, beneficially own a substantial amount of our
outstanding common stock.  Although these stockholders do not have majority
control, they currently have, and likely will continue to have, significant
influence with respect to the election of our directors and approval or
disapproval of our significant corporate actions.  This influence over our
affairs might be adverse to the interests of other stockholders.  In addition,
the voting power of these stockholders could have the effect of delaying or
preventing a change in control of PLX.



The Anti-Takeover Provisions In Our Certificate of
Incorporation Could Adversely Affect The Rights Of The Holders Of Our Common
Stock

Anti-takeover provisions of Delaware law and our Certificate
of Incorporation may make a change in control of PLX more difficult, even if a
change in control would be beneficial to the stockholders.  These provisions may
allow the Board of Directors to prevent changes in the management and control of
PLX.

As part of our anti-takeover devices, our Board of Directors
has the ability to determine the terms of preferred stock and issue preferred
stock without the approval of the holders of the common stock.  Our Certificate
of Incorporation allows the issuance of up to 5,000,000 shares of preferred
stock.  There are no shares of preferred stock outstanding.  However, because
the rights and preferences of any series of preferred stock may be set by the
Board of Directors in its sole discretion without approval of the holders of the
common stock, the rights and preferences of this preferred stock may be superior
to those of the common stock.  Accordingly, the rights of the holders of common
stock may be adversely affected.  Consistent with Delaware law, our Board of
Directors may adopt additional anti-takeover measures in the future.

ITEM 3.  QUANTITATIVE AND QUALITATIVE
DISCLOSURES ABOUT MARKET RISK

We have an investment portfolio comprised of fixed income
securities, including amounts classified as cash equivalents, short-term
and long-term investments.  Our investment portfolio totaled $23.0
million at March 31, 2004.  These securities are subject to interest rate
fluctuations and will decrease in market value if interest rates increase.



The primary objective of our investment activities is to
preserve principal while at the same time maximizing yields without
significantly increasing risk.  We invest primarily in high quality, short-term
 and long-term debt instruments.  A hypothetical 100 basis point
increase in interest rates would result in approximately a $0.1 million decrease
(less than 1%) in the fair value of our available-for-sale securities.

ITEM 4.  CONTROLS AND PROCEDURES

(a) Evaluation of disclosure controls and procedures.

As of the end of the period covered by this report, we
carried out an evaluation, under the supervision and with the participation of
our President and Chief Financial Officer, of the effectiveness of the design
and operation of our disclosure controls and procedures.  Based on this
evaluation, our President and Chief Financial Officer concluded that our
disclosure controls and procedures are effective in timely alerting them to
material information required to be included in this report on Form 10-Q.

(b) Changes in internal controls.

There has been no significant change in our internal
control over financial reporting that occurred during our most recent fiscal
quarter that has materially affected or is reasonably likely to materially
affect our internal control over financial reporting.



PART II.  OTHER INFORMATION

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K





(a)	Exhibits





|Exhibit
Number | Description                                                                                                                                                                         
|-------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|2.1            | Agreement and Plan of Reorganization by and
among PLX Technology, Inc., NC Acquisition Sub, Inc., NetChip Technology, Inc.
and Wei-Ti Liu as Shareholders' Agent (1)                
|31.1           | Certification of President Pursuant to Section
302 of the Sarbanes-Oxley Act of 2002.                                                                                               
|31.2           | Certification of Chief Financial Officer
Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.                                                                                 
|32.1           | Certification of President Pursuant to
Section 1350, Chapter 63 of Title 18, United States Code, as Adopted
Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.              
|32.2           | Certification of Chief Financial Officer
Pursuant to Section 1350, Chapter 63 of Title 18, United States Code,
as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of
2002.
|               |                                                                                                                                                                                     
|               | (1) Incorporated by reference to Exhibit 2.1 to
Form 8-K filed on March 9, 2004.                                                                                                    



(b)	Reports on Form 8-K



1. A report on Form 8-K was filed by the Company on March 9,
2004 relating to the acquisition of Net Chip Technology, Inc.
2. A report on Form 8-K was furnished by the Company on
January 21, 2004 relating to a press release announcing the Company's
preliminary earnings release for the year ended December 31, 2003.





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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.



|PLX TECHNOLOGY, INC.
|--------------------

Date: April 29, 2004



|By: /s/ Rafael Torres                                                                                                                                                                     
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Rafael Torres                                                                                                                                                                             
|Vice President, Finance and
                            Chief Financial Officer
                           (Authorized Officer and
                           Principal Financial Officer)



EXHIBIT INDEX







|Exhibit
Number | Description                                                                                                                                                                         
|-------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|2.1            | Agreement and Plan of Reorganization by and
among PLX Technology, Inc., NC Acquisition Sub, Inc., NetChip Technology, Inc.
and Wei-Ti Liu as Shareholders' Agent (1)                
|31.1           | Certification of President Pursuant to Section
302 of the Sarbanes-Oxley Act of 2002.                                                                                               
|31.2           | Certification of Chief Financial Officer
Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.                                                                                 
|32.1           | Certification of President Pursuant to
Section 1350, Chapter 63 of Title 18, United States Code, as Adopted
Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.              
|32.2           | Certification of Chief Financial Officer
Pursuant to Section 1350, Chapter 63 of Title 18, United States Code,
as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of
2002.
|               |                                                                                                                                                                                     
|               | (1) Incorporated by reference to Exhibit 2.1 to
Form 8-K filed on March 9, 2004.                                                                                                    

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