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


                                    FORM 10-Q

(Mark One)

[X]    QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES
       EXCHANGE ACT OF 1934
       For the quarterly period ended June 30, 2000.

       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



                      P L X   T E C H N O L O G Y,   I N C.
             (Exact name of Registrant as specified in its charter)



                Delaware                                 94-3008334
     (State or Other Jurisdiction of        (I.R.S. Employer Identification No.)
     Incorporation or Organization)


                     390 Potrero Avenue, Sunnyvale, CA 94086
               (Address of Principal Executive Offices) (Zip Code)



       Registrant's Telephone Number, Including Area Code: (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 such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes [X] No [ ]






As of July 31, 2000 there were 23,291,532 shares of common stock, par value
$0.001 per share, outstanding.

 This Report on Form 10-Q includes 22 pages with the Index to Exhibits located
                                   on page 23

<PAGE>   2


                              PLX TECHNOLOGY, INC.
                                    INDEX TO
                               REPORT ON FORM 10-Q
                         FOR QUARTER ENDED JUNE 30, 2000


<TABLE>
<CAPTION>
                                                                                      Page
                                                                                      ----
<S>                                                                                   <C>
                          PART I. FINANCIAL INFORMATION

ITEM 1.        Financial Statements (Unaudited):

                 Condensed Consolidated Balance Sheets  at June 30, 2000 and
                    December 31, 1999 ...............................................   3

                 Condensed Consolidated Statements of Operations for the three
                    and six months ended June 30, 2000 and 1999 .....................   4

                 Condensed Consolidated Statements of Cash Flows for the six
                    months ended June 30, 2000 and 1999 .............................   5

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


ITEM 2.        Management's Discussion and Analysis of Financial Condition
                 and Results of Operations ..........................................   11


ITEM 3.        Quantitative and Qualitative Disclosures About Market Risk ...........   21


                           PART II. OTHER INFORMATION

ITEM 2.        Changes in Securities ................................................   22

ITEM 4.        Submission of Matters to a Vote of Security Holders ..................   22

ITEM 6.        Exhibits and Reports on Form 8-K .....................................   23

Signature      ......................................................................   24
</TABLE>


                                       2
<PAGE>   3

                          PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

                              PLX TECHNOLOGY, INC.

                      CONDENSED CONSOLIDATED BALANCE SHEETS
                                 (in thousands)

<TABLE>
<CAPTION>
                                                      JUNE 30,      DECEMBER 31,
                                                       2000            1999 (1)
                                                    -----------     ------------
                                                    (UNAUDITED)
<S>                                                 <C>             <C>
ASSETS

CURRENT ASSETS:
   Cash and cash equivalents                          $ 15,400       $  8,636
   Short-term investments                               22,195         20,075
   Accounts receivable, net                              7,045          5,439
   Inventories                                           1,708          2,504
   Deferred tax assets                                   1,379          1,379
   Other current assets                                  1,212            447
                                                      --------       --------
Total current assets                                    48,939         38,480

Property and equipment, net                              2,690          1,537
Goodwill                                                12,962             --
Other intangible assets                                  3,399             --
Long term investments                                    8,773         11,198
Other assets                                               273            840
                                                      --------       --------
Total assets                                          $ 77,036       $ 52,055
                                                      ========       ========

LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES:
   Accounts payable                                   $  3,399       $  1,825
   Accrued compensation and benefits                     1,881          1,052
   Accrued commissions                                     550            320
   Deferred revenues                                     1,276          1,001
   Other accrued expenses                                1,306            608
   Income tax payable                                      257            847
                                                      --------       --------
Total current liabilities                                8,669          5,653


STOCKHOLDERS' EQUITY:
   Common stock, par value                                  23             22
   Additional paid in capital                           80,138         36,828
   Deferred compensation                               (12,115)          (192)
   Notes receivable for employee stock purchases           (88)            --
   Accumulated other comprehensive loss                    (44)           (66)
   Retained earnings                                       453          9,810
                                                      --------       --------
Total stockholders' equity                              68,367         46,402
                                                      --------       --------
Total liabilities and stockholders' equity            $ 77,036       $ 52,055
                                                      ========       ========
</TABLE>


-----------------------
(1) The balance sheet at December 31, 1999 has been derived from the audited
financial statements as of that date.


See notes to condensed consolidated financial statements.


                                       3
<PAGE>   4

                              PLX TECHNOLOGY, INC.

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


<TABLE>
<CAPTION>
                                                        THREE MONTHS ENDED           SIX MONTHS ENDED
                                                             JUNE 30,                     JUNE 30,
                                                      -----------------------      -----------------------
                                                        2000           1999          2000           1999
                                                      --------       --------      --------       --------
<S>                                                   <C>            <C>           <C>            <C>
Net revenues                                          $ 16,090       $  9,413      $ 30,632       $ 18,321
Cost of revenues                                         4,552          3,222         8,972          6,474
                                                      --------       --------      --------       --------
Gross margin                                            11,538          6,191        21,660         11,847

Operating expenses:
  Research and development                               4,609          1,780         6,629          3,512
  Selling, general and administrative                    3,701          2,397         7,101          4,688
  Amortization of goodwill and purchased
     intangible assets                                     449             --           449             --
  In-process research and development                   14,342             --        14,342             --
                                                      --------       --------      --------       --------
Total operating expenses                                23,101          4,177        28,521          8,200
                                                      --------       --------      --------       --------

Income (loss) from operations                          (11,563)         2,014        (6,861)         3,647

Interest income and other, net                             548            419         1,037            462
                                                      --------       --------      --------       --------
Income (loss) before income taxes                      (11,015)         2,433        (5,824)         4,109

Provision for income taxes                               1,717            851         3,533          1,442
                                                      --------       --------      --------       --------
Net income (loss)                                     $(12,732)      $  1,582      $ (9,357)      $  2,667
                                                      ========       ========      ========       ========
Basic net income (loss) per share                     $  (0.57)      $   0.08      $  (0.42)      $   0.22
                                                      ========       ========      ========       ========
Shares used to compute basic share amounts              22,428         20,558        22,100         11,909
                                                      ========       ========      ========       ========
Diluted net income (loss) per share                   $  (0.57)      $   0.07      $  (0.42)      $   0.13
                                                      ========       ========      ========       ========
Shares used to compute diluted per share amounts        22,428         22,814        22,100         20,697
                                                      ========       ========      ========       ========
</TABLE>


See notes to condensed consolidated financial statements.


                                       4
<PAGE>   5

                              PLX TECHNOLOGY, INC.
                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (UNAUDITED)
                                 (in thousands)

<TABLE>
<CAPTION>
                                                                             SIX MONTHS ENDED
                                                                                 JUNE 30,
                                                                          -----------------------
                                                                            2000           1999
                                                                          --------       --------
<S>                                                                       <C>            <C>
CASH FLOWS FROM OPERATING ACTIVITIES

Net income (loss)                                                         $ (9,357)      $  2,667
Adjustments to reconcile net income (loss) to net cash provided
by operating activities:
   Depreciation                                                                532            450
   Compensation expense recognized                                           1,348            144
   Amortization of unearned compensation                                       387             46
   Amortization of goodwill and other purchased intangible assets              449             --
   In-process research and development                                      14,342             --
   Income taxes                                                               (198)            --
   Changes in operating assets and liabilities:
     Accounts receivable                                                    (1,606)        (1,859)
     Inventories                                                               796           (178)
     Other current assets                                                   (2,206)           123
     Other assets                                                             (612)           (43)
     Accounts payable                                                        1,210            165
     Accrued compensation and benefits                                         387            151
     Accrued commissions                                                       230             52
     Deferred revenues                                                         275            191
     Other accrued expenses                                                    446            156
     Income tax payable                                                       (392)          (442)
                                                                          --------       --------
Net cash provided by operating activities                                    6,031          1,623
                                                                          --------       --------

INVESTING ACTIVITIES

Purchases of short term investments                                        (16,350)            --
Sales of short term investments                                              3,745             --
Maturities of short term investments                                        17,500             --
Purchases of long term investments                                          (4,568)            --
Purchases of property and equipment                                           (638)          (503)
Cash acquired in Sebring acquisition                                            33             --
                                                                          --------       --------
Net cash used in investing activities                                         (278)          (503)

FINANCING ACTIVITIES
Proceeds from sale of common stock                                           1,011         30,894
Repayment of stockholder notes receivable                                       --             17
                                                                          --------       --------
Net cash provided by financing activities                                    1,011         30,911
                                                                          --------       --------

Increase in cash and cash equivalents                                        6,764         32,031
Cash and cash equivalents at beginning of the period                         8,636          5,638
                                                                          --------       --------
Cash and cash equivalents at end of the period                            $ 15,400       $ 37,669
                                                                          ========       ========
</TABLE>

See notes to condensed consolidated financial statements.


                                       5
<PAGE>   6

                              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 subsidiary ("PLX" or the
        "Company") as of June 30, 2000 and for the three-month and six-month
        periods ended June 30, 2000 and 1999 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 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.

        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, 1999.

        USE OF ESTIMATES

        The preparation of financial statements in conformity with generally
        accepted accounting principles 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.

        ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)


        The Company has adopted Statement of Financial Accounting Standards No.
        130, "Reporting Comprehensive Income" (FAS 130). FAS 130 requires that
        all items required to be recognized under accounting standards as
        components of comprehensive income be reported in a financial statement
        that is displayed with the same prominence as other financial
        statements. The Company's comprehensive net income (loss) for the three
        and six months ended June 30, 2000 and June 30, 1999 was as follows:

The following are the components of comprehensive income (loss):

<TABLE>
<CAPTION>
                                              THREE MONTHS ENDED             SIX MONTHS ENDED
                                                   JUNE 30,                      JUNE 30,
                                            -----------------------      -----------------------
                                              2000           1999          2000           1999
                                            --------       --------      --------       --------
                                                (in thousands)               (in thousands)
<S>                                         <C>            <C>           <C>            <C>
Net income (loss)                           $(12,732)      $  1,582      $ (9,357)      $  2,667

Accumulated other comprehensive income            19             --            22             --

                                            --------       --------      --------       --------
Comprehensive income (loss)                 $(12,713)      $  1,582      $ (9,335)      $  2,667
                                            --------       --------      --------       --------
</TABLE>


        Accumulated other comprehensive loss on the accompanying Consolidated
        Balance Sheets is comprised entirely of unrealized losses on
        investments.


                                       6
<PAGE>   7

        RECENT ACCOUNTING PRONOUNCEMENTS

        In December 1999, the Securities and Exchange Commission ("SEC") issued
        Staff Accounting Bulletin No. 101 "SAB 101", "Revenue Recognition",
        which provides guidance on the recognition, presentation and disclosure
        in the financial statements files with the SEC. SAB 101 outlines the
        basic criteria that must be met to recognize revenue and provides
        guidance for disclosures related to revenue recognition policies.
        Management believes that the Company's revenue recognition policy is in
        compliance with the provisions of SAB 101 and the impact of SAB 101 will
        have no material affect on its financial position or results of
        operations.

2. INVESTMENTS IN DEBT AND EQUITY SECURITIES

        The Company invests its excess cash in high quality, short-term and
        long-term debt and equity instruments. The following is a summary of the
        Company's investments by major security type at amortized cost which
        approximates fair value:



<TABLE>
<CAPTION>
                                                         JUNE 30,          DECEMBER 31,
                                                           2000               1999
                                                         -------           ------------
                                                                (in thousands)
<S>                                                      <C>                <C>
Operating cash                                           $   987            $   274
Money market                                                 635              1,070
Certificates of deposit                                    2,500              1,500
Commercial paper                                          11,740             14,759
Municipal bonds                                           27,017             18,814
Corporate debt securities                                  1,497              1,500
U.S government and agency securities                       1,992              1,992
                                                         -------            -------
                                                         $46,368            $39,909
                                                         =======            =======
Amounts included in cash and cash equivalents            $15,400            $ 8,636
Amounts included in short-term investments                22,195             20,075
Amounts included in long-term investments                  8,773             11,198
                                                         -------            -------
                                                         $46,368            $39,909
                                                         =======            =======
</TABLE>

        The Company classifies all securities as either cash and cash
equivalents or available for sale.

3. INVENTORIES

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


<TABLE>
<CAPTION>
                                      JUNE 30,         DECEMBER 31,
                                        2000              1999
                                      --------         ------------
                                            (in thousands)
<S>                                    <C>               <C>
            Work in Process.........   $  440            $  193
            Finished goods..........    1,268             2,311
                                       ------            ------
                 Total..............    1,708            $2,504
                                       ======            ======
</TABLE>




                                       7
<PAGE>   8

4. NET INCOME (LOSS) PER SHARE

The following table sets forth the computation of basic and diluted net income
(loss) per share:


<TABLE>
<CAPTION>
                                                              THREE MONTHS ENDED             SIX MONTHS ENDED
                                                                   JUNE 30,                       JUNE 30,
                                                           ------------------------       ------------------------
                                                              2000           1999           2000            1999
                                                           ---------       --------       --------        --------
                                                                 (in thousands)                 (in thousands)
<S>                                                        <C>            <C>            <C>             <C>
Net income (loss) (numerator)                              $(12,732)       $  1,582       $  9,357        $  2,667
Shares used in computing basic
   Net income (loss) per share -
   Weighted average number of common shares,
   net of unvested restricted stock                          22,428          20,558         22,100          11,909
                                                           ========        ========       ========        ========
Basic net income (loss) per share                          $  (0.57)       $   0.08       $  (0.42)       $   0.22
                                                           ========        ========       ========        ========

Outstanding weighted average number of common shares         22,428          20,558         22,100          11,909
Effect of dilutive securities:
Employee stock options                                           --             876             --             876
Unvested restricted stock                                        --             625             --             665
Redeemable convertible preferred stock                           --             755             --           7,247
                                                           --------        --------       --------        --------
Dilutive potential common shares                                 --           2,256             --           8,788
                                                           --------        --------       --------        --------

Denominator for diluted net income (loss) per share
--adjusted
Weighted-average shares and assumed conversions              22,428          22,814         22,100          20,697
                                                           ========        ========       ========        ========
Diluted net income (loss) per share                        $  (0.57)       $   0.07       $  (0.42)       $   0.13
                                                           ========        ========       ========        ========
</TABLE>


5. 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 were as follows:



<TABLE>
<CAPTION>
                               THREE MONTHS ENDED JUNE 30,                SIX MONTHS ENDED JUNE 30,
                                2000                 1999                 2000                 1999
                              -------              -------              -------              -------
                                      (in thousands)                            (in thousands)
<S>                           <C>                    <C>                <C>                  <C>
Revenues:
   North America              $ 9,966                6,248              $19,284              $12,627
   Europe                       4,211                1,990                7,362                3,871
   Asia                         1,913                1,175                3,986                1,823
                              -------              -------              -------              -------
Total                         $16,090              $ 9,413              $30,632              $18,321
                              =======              =======              =======              =======
</TABLE>


                                       8
<PAGE>   9


6. BUSINESS COMBINATION

        In May 2000, the Company purchased Sebring Systems Inc., a development
        stage company, that is developing the SebringRing(TM), a silicon switch
        fabric interconnect solution, for an aggregate purchase price, including
        assumed liabilities, of $32.3 million. The transaction was accounted for
        using purchase accounting. Additionally, PLX recorded $12.3 million in
        deferred compensation on options granted to employees below fair market
        value related to the acquisition of Sebring. The financial results for
        the six months ended June 30, 2000 reflect the acquisition from the date
        the transaction was closed.

        The estimated purchase price of the Sebring Systems acquisition is
        summarized below:

        (in thousands)

<TABLE>
<S>                                                             <C>
        Prior consideration .................                    $   681
        Stock consideration .................                     24,196
        Converted options ...................                      4,672
        Assumed liabilities .................                      2,242
        Acquisition costs ...................                        525
                                                                 -------
        Total consideration .................                    $32,316
                                                                 =======
</TABLE>

        The Company issued an aggregate of 960,931 shares of its common stock
        valued at $24.2 million. The stock options were valued using the
        Black-Scholes valuation model. Additionally, the Company incurred $0.5
        million in professional fees, including legal, valuation and accounting
        fees related to the acquisition, which were capitalized as part of the
        purchase price of the transaction.

        The allocation of the Company's purchase price to the tangible and
        identifiable intangible assets acquired and liabilities assumed is
        summarized below.

        The allocation was based on an independent appraisal and estimate of
        fair value.

        (in thousands)

<TABLE>
<S>                                                              <C>
        Net tangible assets ......................               $ 1,165
        In-process technology ....................                14,342
        Goodwill and other intangible assets:
          Goodwill ...............................                13,339
          Acquired employees .....................                   983
          Tradename ..............................                   355
          Patents ................................                 2,132
                                                                 -------
                                                                  16,809
                                                                 -------
          Net assets acquired ....................               $32,316
                                                                 =======
</TABLE>

        The net tangible assets acquired were comprised primarily of property
        and equipment and accrued liabilities. The acquired in-process
        technology was written-off in the second quarter of fiscal 2000. The
        estimated weighted average useful life of the intangible assets for
        patents, tradenames, and the residual goodwill, created as a result of
        the acquisition of Sebring Systems is approximately four years. Deferred
        compensation is being amortized over the vesting period of three years.



                                       9
<PAGE>   10

        The $14.3 million allocation of the purchase price to the acquired
        in-process technology was determined by identifying research projects in
        areas for which technological feasibility had not been established and
        no alternative future uses existed. PLX acquired technology consisting
        of silicon switch fabric interconnect solutions. The value was
        determined by estimating the expected cash flows from the project once
        commercially viable, discounting the net cash flows to their present
        value, and then applying a percentage of completion to the calculated
        value as defined below.

        NET CASH FLOWS. The net cash flows from the identified project was based
        on estimates of revenues, cost of sales, research and development costs,
        selling, general and administrative costs, royalty costs and income
        taxes from the project. These estimates were based on the assumptions
        mentioned below. The research and development costs excluded costs to
        bring the acquired in-process project to technological feasibility. The
        estimated revenues were based on management projections of the acquired
        in-process project. The business projections were compared with and
        found to be in line with industry analysts' forecasts of growth in
        substantially all of the relevant markets. Estimated total revenues from
        the acquired in-process technology product are expected to peak in
        fiscal 2003 and decline in fiscal 2004 as other new products are
        expected to become available. These projections were based on estimates
        of market size and growth, expected trends in technology, and the nature
        and expected timing of new product introductions by the Company and its
        competitors.

        DISCOUNT RATE. Discounting the net cash flows back to their present
        value was based on the cost of capital for well managed venture capital
        funds which typically have similar risks and returns on investments. The
        cost of capital used in discounting the net cash flows from acquired
        in-process technology was 25%.

        PERCENTAGE OF COMPLETION. The percentage of completion was determined
        using costs incurred by Sebring prior to the acquisition date compared
        to the remaining research and development to be completed to bring the
        project to technological feasibility. The Company estimated, as of the
        acquisition date, the project was 85% complete.

        The Company expects to complete the project within six months from the
        acquisition date. However, development of this project remains a
        significant risk to the Company due to the remaining effort to achieve
        technical feasibility, integration of Sebring and the Company, employee
        retention, rapidly changing customer markets and significant competitive
        threats from numerous companies. Failure to bring these products to
        market in a timely manner could adversely impact sales and profitability
        of the Company in the future. Additionally, the value of the intangible
        assets acquired may become impaired.

        UNAUDITED PRO FORMA FINANCIAL RESULTS

        The unaudited pro forma financial information combines the historical
        statements of operations of PLX Technology, Inc. and Sebring Systems,
        Inc. for the six months ended June 30, 2000 and 1999 and give effect to
        the transactions, including the amortization of goodwill and other
        intangible assets and the recognition of deferred compensation, as if
        they occurred at the beginning of each period presented. 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 transactions had been consummated at the
        dates indicated, 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.

<TABLE>
<CAPTION>
                                                         SIX MONTHS ENDED JUNE 30,
                                                           2000            1999
                                                                (UNAUDITED)
                                                               (in thousands)
<S>                                                      <C>             <C>
Net revenues                                             $ 30,632        $ 18,321
Net loss                                                 $   (344)       $ (2,903)
Net loss per share -- basic and diluted                  $  (0.01)       $  (0.23)
Number of shares used in per share
   calculations -- basic and diluted                       23,389          12,870
</TABLE>


                                       10
<PAGE>   11

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


This Report on Form 10-Q contains forward-looking statements, including
statements regarding our expectations, hopes, intentions, beliefs or strategies
regarding the future. Such forward-looking statements include, but are not
limited to, our anticipated expense levels for research and development,
selling, general and administrative operations, and deferred compensation; the
amount of and specific uses of anticipated capital expenditures; expectations
regarding inventory balances, and adequacy of cash resources under the
sub-headings "Results of Operations" and "Liquidity and Capital Resources."
Actual results could differ materially from those projected in any
forward-looking statements for the reasons detailed below 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. See "Factors That May Affect Future Operating
Results" below, as well as such other risks and uncertainties as are detailed in
our SEC reports and filings for a discussion of the factors that could cause
actual results to differ materially from 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, 1999.

OVERVIEW

PLX, established in May 1986, develops and supplies semiconductor devices and
software that accelerate and manage the transfer of data in networking and
telecommunications, enterprise storage, imaging and industrial equipment. This
equipment is typically controlled by internal computers, commonly referred to as
embedded systems. We offer a complete solution consisting of three related types
of products: semiconductor devices, software development kits and hardware
design kits. Our semiconductor devices simplify the development of data transfer
circuits in high-performance embedded systems and are compatible with
microprocessors such as IBM's PowerPC, Motorola's PowerPC, Intel's i960, IDT's
MIPs and Hitachi's SH. Our software development kits and hardware design kits
promote sales of our semiconductor devices by lowering customers' development
costs and by accelerating their ability to bring new products to market.

Demand for networking, telecommunications and other equipment that transmits,
stores and processes information rapidly has dramatically increased due to:

-  growth of the Internet,

-  deployment of high-speed networking, and

-  proliferation of multimedia.

Suppliers of this equipment are changing the way they design their products to
reduce product development time and to use their scarce engineering resources
more efficiently. Until recently, these suppliers typically developed their own
system components and the connections between the components. Now, however, they
are increasingly building their equipment based on industry standard connection
methods, and they are purchasing components supplied by other companies that
comply with these standards. By doing so, they reduce the time and resources
required for product development. Consequently, there is a growing demand for
standards-based components that connect systems together, such as our
semiconductor devices. The majority of our products are based on Peripheral
Component Interconnect, or PCI, a standard that is widely used in our markets.

Our objective is to expand our advantages in data transfer technology by:



                                       11
<PAGE>   12

- focusing on high-growth markets,

- delivering comprehensive solutions, including semiconductor devices,

- software development kits and hardware design kits,

- extending our technology advantages by incorporating new functions and
  technologies,

- driving industry standards, and

- strengthening and expanding our industry relationships.

We utilize a "fabless" semiconductor business model whereby we purchase
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.

Our gross margins have fluctuated in the past and are expected to fluctuate in
the future due to changes in product mix, the position of our products in their
respective life cycles, and specific product manufacturing costs.


RESULTS OF OPERATIONS

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


<TABLE>
<CAPTION>
                                              THREE MONTHS ENDED            SIX MONTHS ENDED
                                                    JUNE 30,                    JUNE 30,
                                             --------------------         --------------------
                                              2000           1999         2000           1999
                                             -----          -----         -----          -----
<S>                                          <C>            <C>           <C>            <C>
Net revenues                                 100.0%         100.0%        100.0%         100.0%
Cost of revenues                              28.3           34.2          29.3           35.3
                                             -----          -----         -----          -----
Gross margin                                  71.7           65.8          70.7           64.7
Operating expenses:
  Research and development                    28.6           18.9          21.6           19.2
  Selling, general and administrative         23.0           25.5          23.2           25.6
  Amortization of goodwill and
     purchased intangible assets               2.8             --           1.5             --
  In-process research and development         89.1             --          46.8             --
                                             -----          -----         -----          -----
Total operating expenses                     143.5           44.4          93.1           44.8
                                             -----          -----         -----          -----
Income (loss) from operations                (71.8)          21.4         (22.4)          19.9
Interest income and other, net                 3.4            4.4           3.4            2.5
                                             -----          -----         -----          -----
Income (loss) before income taxes            (68.4)          25.8         (19.0)          22.4
Provision for income taxes                    10.7            9.0          11.5            7.8
                                             -----          -----         -----          -----
Net income (loss)                            (79.1)%         16.8%        (30.5)%         14.6%
                                             =====          =====         =====          =====
</TABLE>

NET REVENUES

Net revenues for the three months ended June 30, 2000 were $16.1 million, an
increase of 71% from $9.4 million for the three months ended June 30, 1999. For
the six months ended June 30, 2000, net revenues were $30.6 million, a 67%
increase over the $18.3 million recorded in the six months ended June 30, 1999.
The increase was primarily due to higher unit shipments resulting from increased
market acceptance of our products. For the six months ended June 30, 2000, net
revenues derived from customers in the United States were 63%, with 27% of net
revenues from sales to


                                       12
<PAGE>   13

Unique Technologies, our U.S. distributor. For that period Cisco Systems
accounted for 15% of net revenues through purchases from our distributors as
well as direct sales. No other individual customer represented greater than 10%
of net revenues.

GROSS PROFIT

Gross profit represents net revenues less the cost of revenues. Cost of revenues
includes the cost of purchasing packaged semiconductor devices from our
independent foundries, our operating costs associated with the procurement,
storage, and shipment of products, as well as royalty expenses paid on some of
our products. Gross profit for the three months ended June 30, 2000 was $11.5
million, an increase of 86% from $6.2 million for the three months ended June
30, 1999. For the six months ended June 30, 2000, gross profit was $21.7
million, an increase of 83% from $11.8 million for the six months ended June 30,
1999. The improvement in the Company's gross profit is primarily due to higher
unit shipments.

RESEARCH AND DEVELOPMENT EXPENSES

Research and development 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 are included in research and
development expenses. Research and development expenses for the three months
ended June 30, 2000 were $4.6 million, an increase of 159% from $1.8 million for
the three months ended June 30, 1999. For the six months ended June 30, 2000,
research and development expenses were $6.6 million compared to $3.5 million in
the six months ended June 30, 1999. The increases were primarily due to
amortization of deferred compensation associated with the acquisition of Sebring
Systems, a one-time compensation charge related to a severance arrangement,
increased headcount and higher costs to support the Company's continuing efforts
to develop new products. Research and development expenses as a percentage of
net revenues were 28.6% for the three months ended June 30, 2000, as compared to
18.9% for the three months ended June 30, 1999. For the six months ended June
30, 2000, research and development expenses were 21.6% as a percentage of net
revenues compared to 19.2% for the six months ended June 30, 1999. This
percentage increase was primarily due to compensation charges associated with
the acquisition of Sebring Systems. We expect that research and development
expenses in absolute dollars will continue to increase in future periods.

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES

Selling, general and administrative expenses consist primarily of employee
related expenses, professional fees, trade show and other promotional expenses,
and sales commissions to manufacturers' representatives. Selling, general and
administrative expenses for the three months ended June 30, 2000 were $3.7
million, an increase of 54% from $2.4 million for the three months ended June
30, 1999. For the six months ended June 30, 2000, selling, general and
administrative expenses were $7.1 million, an increase of 51% from $4.7 million
for the six months ended June 30, 1999. Selling, general and administrative
expenses as a percentage of net revenues were 23.0% for the three months ended
June 30, 2000, as compared to 25.5% for the three months ended June 30, 1999.
For the six months ended June 30, 2000, selling, general and administrative
expenses as a percentage of net revenues decreased to 23.2% compared to 25.6%
for the six months ended June 30, 1999. This percentage decrease was primarily
due to higher net revenues. The first six months of 1999 amounts include
approximately $144,000 for compensation expense recognized related to stock
options granted to non-employees. We expect that selling, general and
administrative expenses in absolute dollars will continue to increase in future
periods.

AMORTIZATION OF GOODWILL AND PURCHASED INTANGIBLE ASSETS

Amortization of goodwill and purchased intangible assets increased by $449,000
for the three and six months ended June 30, 2000. Amortization of goodwill and
purchased intangible assets includes the amortization of goodwill and other
purchased intangible assets relating to the acquisition of Sebring Systems.

IN-PROCESS RESEARCH AND DEVELOPMENT

The amounts expensed to in-process research and development in the three and six
months ended June 30, 2000 related to the acquisition of Sebring Systems.

DEFERRED COMPENSATION

We recorded deferred compensation in connection with the grant of stock options
and restricted stock to our employees during 1997 and 1998. We also recorded
deferred compensation related to stock options granted below fair market value
to employees in relation to the acquisition of Sebring Systems in May 2000. For
the three months ended June



                                       13
<PAGE>   14


30, 2000 and 1999, we recorded amortization of deferred compensation of $23,000.
For the six months ended June 30, 2000 and 1999, we recorded amortization of
deferred compensation of $365,000 and $45,000, respectively. The amount of
deferred compensation is amortized ratably over the vesting period of the
applicable stock grants. We expect to record expenses related to deferred
compensation of approximately $1.1 million per quarter through September 30,
2003.

INTEREST INCOME AND OTHER, NET

Interest income and other income, net reflects interest earned on average cash,
cash equivalents, short-term and long-term investment balances. Interest income
and other, net increased to $548,000 for the three months ended June 30, 2000
from $419,000 for the three months ended June 30, 1999. For the six months ended
June 30, 2000, interest income increased to $1,037,000 from $462,000 in the six
months ended June 30, 1999. The increase was primarily due to interest earned on
higher levels of short-term investments and cash balances.

PROVISION FOR INCOME TAXES

We recorded a provision for income taxes of $3.5 million at an effective tax
rate of (60.6)% and $1.4 million at an effective tax rate of 35% for the six
months ended June 30, 2000 and 1999, respectively. Our 2000 effective tax rate
differs from the expected benefit by applying the applicable statutory rate to
the loss from operations primarily due to certain non-deductible acquisition
related charges partially offset by the benefit of research and development tax
credits. Our 1999 effective tax rate differs from the applicable statutory rate
primarily due to the benefit of research and development tax credits.

LIQUIDITY AND CAPITAL RESOURCES

At June 30, 1999, we had $40.3 million in working capital and $15.4 million in
cash and cash equivalents. Our operating activities generated cash of $6.0
million for the six months ended June 30, 2000, and provided cash of $1.6
million for the six months ended June 30, 1999. The $6.0 million cash provided
by operations was primarily attributable to a net loss of $9.4 million and a
decrease of $2.8 million in other current assets and other assets, offset by
non-cash charges of $16.3 million.

Our investing activities used cash of $278,000 and $503,000 for the six months
ended June 30, 2000 and the six months ended June 30, 1999, respectively. The
$278,000 in cash used by investing activities was primarily attributable to the
acquisition of equipment of $638,000 partially offset by the net decrease in
investments of $327,000. Cash provided by financing activities was $1.0 million
and $30.9 million for the six months ended June 30, 2000 and the six months
ended June 30, 1999, respectively. Cash provided by financing activities for the
six months ended June 30,2000 is related to exercise of employee stock options.

On April 9, 1999 we completed our initial public offering of common stock which
generated approximately $31 million in net proceeds. We intend to use the net
proceeds primarily for general corporate purposes, including working capital.
Pending use of the net proceeds for such purposes, we invested the funds in
interest-bearing, investment-grade securities. We believe that the proceeds from
the public offering together with the 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.


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.

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 in our control. Our operating expenses, which
include product development costs and selling, general and administrative
expenses, are relatively fixed in the short-



                                       14
<PAGE>   15

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:

-       our ability to develop, introduce and market new products and
        technologies on a timely basis,

-       the timing of significant orders, order cancellations and reschedulings,

-       changes in our pricing policies or those of our competitors or
        suppliers, including decreases in unit average selling prices of our
        products,

-       introduction of products and technologies by our competitors,

-       shifts in our product mix toward lower margin products,

-       the availability of production capacity at the fabrication facilities
        that manufacture our products, and

-       the availability and cost of materials to our suppliers.

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.

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 the 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 The semiconductor
industry is characterized by rapidly changing technology and industry standards,
along with frequent new product introductions. Consequently, our future success
depends on our ability to identify trends in our target markets and to offer new
semiconductor devices, as well as other products and services, that address the
changing needs of our target customers.

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.
Prospective investors should note that our efforts to introduce new
semiconductor devices or other products or services may not



                                       15
<PAGE>   16

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 to 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, may delay our shipments or may
increase our costs.

OUR RELIANCE ON SINGLE SOURCE MANUFACTURERS OF OUR SEMICONDUCTOR DEVICES COULD
DELAY SHIPMENTS AND INCREASE OUR COSTS

None of our semiconductor devices is 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, with our processor products, we 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 we. 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.

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


                                       16
<PAGE>   17

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 often 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 can make it more
difficult to retain our existing customers and to attract new customers.
Moreover, product errors, defects or bugs can 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.

FAILURE TO HIRE ADDITIONAL PERSONNEL AND TO IMPROVE OUR OPERATIONS WILL LIMIT
OUR GROWTH

We have experienced rapid growth which places a significant strain on our
limited personnel and other resources. To manage our expanded operations
effectively, we will need to further improve our operational, financial and
management systems. We will also need to successfully hire, train, motivate and
manage our employees. We may not be able to manage our growth effectively, which
could have a material adverse effect on our business. Also, we are seeking to
hire additional skilled development engineers, who are currently in short
supply. Our business could be adversely affected if we encounter delays in
hiring additional engineers.

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



                                       17
<PAGE>   18

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. In the
six months ended June 30, 2000 and in 1999, net revenues through distributors
accounted for approximately 64% and 58%, 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.

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 generally 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 other third
parties. While there is currently no intellectual property litigation pending
against us, litigation could result in significant expenses to us, 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.



                                       18
<PAGE>   19

THE CYCLICAL NATURE OF THE SEMICONDUCTOR INDUSTRY MAY LEAD TO SIGNIFICANT
VARIANCES IN THE DEMAND FOR OUR PRODUCTS

In the last two 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, including economic conditions in
Asia. 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 37% of our revenues for the six
months ended June 30, 2000. In 1999, 1998, and 1997 sales outside of North
America accounted for 35%, 34%, and 22% of our revenues, respectively. We
anticipate that these sales may increase in future periods and may account for
an increasing 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, leading to a
reduction in sales and profitability in that country.

WE MAY FAIL TO ADEQUATELY INTEGRATE ACQUIRED BUSINESSES

In May 2000, we acquired Sebring Systems, a development stage company that is
developing the SebringRing(TM), a silicon switch fabric interconnect solution,
in a transaction accounted for as a purchase transaction. There can be no
assurance that this acquisition will be effectively assimilated into our
business. The integration of Sebring Systems will place a burden on our
management and infrastructure. Such integrations are subject to risks commonly
encountered in making such acquisitions, including, among others, loss of key
personnel of the acquired company, loss of key customers and business
relationships of the acquired company, the difficulty associated with
assimilating and integrating the personnel, operations and technologies of the
acquired company, the potential disruption of our ongoing business, the
maintenance of uniform standards, controls, procedures, employees and clients.
There can be no assurance that we will be successful in overcoming these risks
or any other problems encountered in connections with our acquisition of Sebring
Systems.



                                       19
<PAGE>   20

[From time to time, in the ordinary course of business, we may evaluate
potential acquisitions of other businesses, products or technologies. In
addition, future acquisitions could result in the issuance of dilutive equity
securities, the incurrence of debt or contingent liabilities. Furthermore, there
can be no assurance that any strategic acquisition of investment will succeed.
Any future acquisition or investment could have a material adverse effect on our
business, financial condition and results of operations.

Recently, the Financial Accounting Standards Board ("FASB") voted to eliminate
pooling of interests accounting for acquisitions and the ability to write-off
in-process research and development has been limited by recent pronouncements.
The effect of these changes would be to increase the portion of the purchase
price for any future acquisitions that must be charged to our cost of revenues
and operating expenses in the periods following any such acquisitions. As a
consequence, our results of operations in periods following any such
acquisitions. As a consequence, our results of operations in periods following
any such acquisitions could be materially adversely affected. Although these
changes would not directly affect the purchase price for any of these
acquisitions. To that extent, these changes may make it more difficult for us to
acquire other companies, product lines or technologies.]

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 approximately 40% 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. Under
Delaware law, our Board of Directors may adopt additional anti-takeover measures
in the future.

One anti-takeover provision that we have is the ability of our Board of
Directors 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.



                                       20
<PAGE>   21

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

We have an investment portfolio of fixed income securities, including those
classified as cash equivalents of approximately $45.7 million at June 30, 2000.
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 less
than $0.5 million decrease (less than 2%) in the fair value of our
available-for-sale securities.





                                       21
<PAGE>   22

                           PART II. OTHER INFORMATION


ITEM 2. CHANGES IN SECURITIES.

The Company has invested the proceeds generated from the initial public offering
of its common stock in the amount of $31 million in high quality, short-term and
long-term debt and equity securities. The Company intends to use such proceeds
for general corporate purposes, including working capital.

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

At the Company's Annual Meeting of Stockholders held on May 24, 2000, the
following individuals were elected to the Board of Directors:

<TABLE>
<CAPTION>
Name                               Votes For          Votes Against         Votes Withheld
----                               ---------          -------------         --------------
<S>                                <C>                <C>                   <C>
Michael J. Salameh                 20,472,342             5,240             1,557,414
D. James Guzy                      18,413,751         2,063,831             1,557,414
Eugene Flath                       20,472,242             5,340             1,557,414
Timothy Draper                     20,472,342             5,240             1,557,414
Young K. Sohn                      20,472,192             5,390             1,557,414
John H. Hart                       20,472,342             5,240             1,557,414
</TABLE>

The following proposals were approved at the Company's Annual Meeting:

<TABLE>
<CAPTION>
                                           Affirmative Votes       Negative Votes
                                           -----------------       --------------
<S>                                        <C>                     <C>
1.   Amendments to the Company's
     1999 Stock Incentive Plan             10,141,106              3,452,704
2.   Ratification of the appointment
     of Ernst & Young LLP as
     independent auditors for the
     fiscal year ending December 31,
     2000                                  20,469,275                  3,750
</TABLE>





                                       22
<PAGE>   23

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

        (a)     Exhibits



<TABLE>
<CAPTION>
                EXHIBIT
                 NUMBER                           DESCRIPTION
                -------      -------------------------------------------------
<S>                         <C>
                  2.1#       Agreement and Plan of Merger dated April 19, 2000
                             by and among PLX Technology, Inc., OKW Technology
                             Acquisition Corporation and Sebring Systems, Inc.

                  3.1*       Amended and Restated Certificate of Incorporation
                             of the Registrant.

                  3.2*       Registrant's Amended and Restated Bylaws.

                  4.1        Reference is made to Exhibit 3.1.

                  10.1*      Form of Indemnification Agreement between PLX and
                             each of its Officers and Directors.

                  10.2*+     1998 Stock Incentive Plan.

                  10.3*+     1999 Stock Incentive Plan.

                  10.4*      Lease Agreement dated December 20, 1995 by and
                             between Aetna Life Insurance Company as Landlord
                             and PLX as Tenant.

                  10.5*      Lease Agreement dated October 17, 1997 between The
                             Arrillaga Foundation and The Perry Foundation as
                             Landlords and PLX as Tenant, as amended.

                  10.6*+     Form of Restricted Stock Purchase Agreement used in
                             connection with the 1986 Restricted Stock Purchase
                             Program.

                  10.7*+     Form of Pledge Agreement used in connection with
                             the 1986 Restricted Stock Purchase Program.

                  10.8*+     Form of Promissory Note used in connection with the
                             1986 Restricted Stock Purchase Program.

                  10.9*      PLX Technology, Inc. Stock Restriction, Information
                             Rights and Registration Rights Agreement dated
                             April 19, 1989.

                  10.10*     PLX Technology, Inc. Stock Restriction, Information
                             Rights and Registration Rights Agreement dated July
                             3, 1991.

                  27.1       Financial Data Schedule.
</TABLE>


----------------------

*       Incorporated by reference to the same numbered exhibit previously filed
        with the Company's Registration Statement on Form S-1 (Registration No.
        333-71795).

#       Incorporated by reference to Exhibit 2.1 to Form 8-K as filed May 30,
        2000.

+       Management contract or compensatory plan or arrangement.

(b)     Reports on Form 8-K. Reports on Form 8-K and 8-K/A were filed by the
        Company during the quarter ended June 30, 2000 for the acquisition of
        Sebring Systems, Inc.


                                       23
<PAGE>   24

                                    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.
                                                  (Registrant)



Date: August 14, 2000                         By   /s/   Scott M. Gibson
                                                  -----------------------------
                                                         Scott M. Gibson
                                                   Vice President, Finance and
                                                     Chief Financial Officer
                                                     (Authorized Officer and
                                                  Principal Financial Officer)





                                       24


<PAGE>   25

                                  EXHIBIT LIST



<TABLE>
<CAPTION>
                EXHIBIT
                 NUMBER                           DESCRIPTION
                -------      -------------------------------------------------
<S>                         <C>
                  2.1#       Agreement and Plan of Merger dated April 19, 2000
                             by and among PLX Technology, Inc., OKW Technology
                             Acquisition Corporation and Sebring Systems, Inc.

                  3.1*       Amended and Restated Certificate of Incorporation
                             of the Registrant.

                  3.2*       Registrant's Amended and Restated Bylaws.

                  4.1        Reference is made to Exhibit 3.1.

                  10.1*      Form of Indemnification Agreement between PLX and
                             each of its Officers and Directors.

                  10.2*+     1998 Stock Incentive Plan.

                  10.3*+     1999 Stock Incentive Plan.

                  10.4*      Lease Agreement dated December 20, 1995 by and
                             between Aetna Life Insurance Company as Landlord
                             and PLX as Tenant.

                  10.5*      Lease Agreement dated October 17, 1997 between The
                             Arrillaga Foundation and The Perry Foundation as
                             Landlords and PLX as Tenant, as amended.

                  10.6*+     Form of Restricted Stock Purchase Agreement used in
                             connection with the 1986 Restricted Stock Purchase
                             Program.

                  10.7*+     Form of Pledge Agreement used in connection with
                             the 1986 Restricted Stock Purchase Program.

                  10.8*+     Form of Promissory Note used in connection with the
                             1986 Restricted Stock Purchase Program.

                  10.9*      PLX Technology, Inc. Stock Restriction, Information
                             Rights and Registration Rights Agreement dated
                             April 19, 1989.

                  10.10*     PLX Technology, Inc. Stock Restriction, Information
                             Rights and Registration Rights Agreement dated July
                             3, 1991.

                  27.1       Financial Data Schedule.
</TABLE>


----------------------

*       Incorporated by reference to the same numbered exhibit previously filed
        with the Company's Registration Statement on Form S-1 (Registration No.
        333-71795).

#       Incorporated by reference to Exhibit 2.1 to Form 8-K as filed May 30,
        2000.

+       Management contract or compensatory plan or arrangement.

(b)     Reports on Form 8-K. The Company did not file any Reports on Form 8-K
        during the quarter ended June 30, 1999.