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, 2005

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 [ X ]
      NO [     ]

As of May 2, 2005, there were 26,873,047 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, 2005



|PART I.   FINANCIAL INFORMATION                                                                                         | Page No.
|----------------------------------------------------------------------------------------------------------------------- | --------
|                                                                                                                        |         
|Item 1.     Financial Statements (Unaudited):                                                                           |         
|                                                                                                                        |         
|Condensed Consolidated Balance Sheets at
         March 31, 2005 and December 31, 2004                                  | 3       
|                                                                                                                        |         
|Condensed Consolidated Statements of Operations for the three
          
          months ended March 31, 2005 and 2004 | 4       
|                                                                                                                        |         
|Condensed Consolidated Statements of Cash Flows for the three
          
         months ended March 31, 2005 and 2004  | 5       
|                                                                                                                        |         
|Notes to Condensed Consolidated Financial Statements                                                                    | 6       
|                                                                                                                        |         
|Item 2.     Management's Discussion and Analysis of Financial
                      Condition and Results of Operations | 9       
|                                                                                                                        |         
|Item 3.     Quantitative and Qualitative Disclosures About Market Risk                                                  | 21      
|                                                                                                                        |         
|Item 4.     Controls and Procedures                                                                                     | 21      
|                                                                                                                        |         
|PART II.  OTHER INFORMATION                                                                                             |         
|                                                                                                                        |         
|Item 6.     Exhibits                                                                                                    | 22      
|                                                                                                                        |         
|Signature                                                                                                               | 23      

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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,
                                                         2005          2004 (1)
                                                     ------------  ------------
                                                      (unaudited)
ASSETS
Current assets:
  Cash and cash equivalents........................ $     12,174  $      9,556
  Short-term marketable securities.................       15,205        10,565
  Accounts receivable, net.........................        6,329         5,084
  Inventories......................................        3,158         4,159
  Other current assets.............................        1,672         2,058
                                                     ------------  ------------
Total current assets...............................       38,538        31,422
Property and equipment, net........................       30,533        30,860
Long-term marketable securities....................        2,943        10,155
Goodwill...........................................       30,965        30,965
Other purchased intangible assets..................        6,480         6,991
Other assets.......................................          454            80
                                                     ------------  ------------
Total assets....................................... $    109,913  $    110,473
                                                     ============  ============
LIABILITIES
Current liabilities:
  Accounts payable................................. $      3,364  $      3,627
  Accrued compensation and benefits................        1,778         1,813
  Deferred revenues................................        1,234         1,310
  Accrued commissions..............................          265           300
  Other accrued expenses...........................          964         1,264
                                                     ------------  ------------
Total current liabilities..........................        7,605         8,314
                                                     ------------  ------------
STOCKHOLDERS' EQUITY
  Common stock, par value..........................           27            27
  Additional paid-in capital.......................      112,356       111,739
  Deferred compensation............................         (306)         (406)
  Accumulated other comprehensive loss.............         (238)         (211)
  Accumulated deficit..............................       (9,531)       (8,990)
                                                     ------------  ------------
Total stockholders' equity.........................      102,308       102,159
                                                     ------------  ------------
Total liabilities and stockholders' equity......... $    109,913  $    110,473
                                                     ============  ============`

(1)  Derived from audited financial statements

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,
                                                        --------------------
                                                           2005       2004
                                                        ---------  --------- 
Net revenues.......................................... $  13,222  $  11,642
Cost of revenues......................................     4,857      3,229
                                                        ---------  ---------
Gross margin..........................................     8,365      8,413
                                                        ---------  ---------
Operating expenses:
  Research and development............................     4,112      4,057
  Selling, general and administrative.................     4,426      3,678
  Amortization of purchased intangible assets.........       512        297
                                                        ---------  ---------
Total operating expenses..............................     9,050      8,032
                                                        ---------  ---------
Income (loss) from operations.........................      (685)       381
Interest income and other, net........................       155         68
                                                        ---------  ---------
Income (loss) before provision for income taxes.......      (530)       449
Provision for income taxes............................        11        172
                                                        ---------  ---------
Net income (loss)..................................... $    (541) $     277
                                                        =========  =========

Basic net income (loss) per share..................... $   (0.02) $    0.01
                                                        =========  =========
Shares used to compute basic per share amounts........    26,786     23,876
                                                        =========  =========`

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,
                                                                                    --------------------
                                                                                       2005       2004
                                                                                    ---------  ---------
Cash flows from operating activities
Net income (loss)................................................................. $    (541) $     277
  Adjustments to reconcile net income (loss) to net cash
    provided by operating activities:
  Depreciation....................................................................       539        565
  Amortization of deferred compensation...........................................        99         18
  Amortization of purchased intangible assets.....................................       512        297
  Other non-cash items............................................................        49         13
  Changes in operating assets and liabilities:
    Accounts receivable...........................................................    (1,245)    (1,044)
    Inventories...................................................................     1,001        476
    Other current assets..........................................................       382        (72)
    Other assets..................................................................      (373)        29
    Accounts payable..............................................................      (263)       909
    Accrued compensation and benefits.............................................       (67)        74
    Deferred revenues.............................................................       (76)       135
    Other accrued expenses........................................................      (298)       323
                                                                                    ---------  ---------
Net cash provided by (used in) operating activities...............................      (281)     2,000
                                                                                    ---------  ---------
Investing Activities
Purchases of marketable securities................................................      (800)    (7,143)
Sales and maturities of marketable securities.....................................     3,300      3,950
Purchases of property and equipment...............................................      (215)      (194)
                                                                                    ---------  ---------
Net cash provided by (used in) investing activities...............................     2,285     (3,387)
                                                                                    ---------  ---------
Financing Activities
Proceeds from the exercise of common stock options................................       592        248
Proceeds from the exercise of warrants assumed in the acquisition of HiNT Corp....        26         --
                                                                                    ---------  ---------
Net cash provided by financing activities.........................................       618        248
                                                                                    ---------  ---------
Effect of exchange rate fluctuations on cash and cash equivalents.................        (4)         1
                                                                                    ---------  ---------
Increase (decrease) in cash and cash equivalents..................................     2,618     (1,138)
Cash and cash equivalents at beginning of year....................................     9,556     10,955
                                                                                    ---------  ---------
Cash and cash equivalents at end of period........................................ $  12,174  $   9,817
                                                                                    =========  =========`

The accompanying notes are an integral part of these unaudited 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, 2005
and for the three month periods ended March 31, 2005 and 2004 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 the Company's 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, 2004.

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, 2005 and March 31, 2004 was as follows (in
thousands):

`Three Months Ended
                                                                 March 31,
                                                           --------------------
                                                              2005       2004
                                                           ---------  --------- 
Net income (loss)........................................      (541)       277
Unrealized gain (loss) on marketable securities, net.....       (28)        28
Cumulative translation adjustments.......................         1          3
                                                           ---------  ---------
Comprehensive net income (loss)..........................      (568)       308
                                                           =========  =========`

Recent Accounting Pronouncements

In December 2004, the FASB issued SFAS 123R
which requires the measurement of all employee share-based payments to
employees, including grants of employee stock options, using a fair-value-based
method and the recording of such expense in our consolidated statements of
operations. The accounting provisions of SFAS 123R was originally effective
for reporting periods beginning after June 15, 2005. On April 14, 2005
the U.S. Securities and Exchange Commission (the "SEC") announced a
deferral of the effective date of FAS 123(R) for calendar year companies until
the beginning of 2006.  The pro forma disclosures previously permitted under
SFAS 123 no longer will be an alternative to financial statement
recognition beginning in the first quarter of 2006. See "Stock-Based
Compensation" (Note 2 of the Consolidated Financial Statements) for the pro
forma net income (loss) and net income (loss) per share amounts, for the three
months ended March 31, 2005 and 2004, as if we had used a fair-value-based
method similar to the methods required under SFAS 123R to measure
compensation expense for employee stock incentive awards. Although we have not
yet determined whether the adoption of SFAS 123R will result in amounts
that are similar to the current pro forma disclosures under SFAS 123, we
are evaluating the requirements under SFAS 123R and expect the adoption to
have a material impact on our consolidated statements of operations and net
income (loss) per share.

2.  Stock Based Compensation

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.  Using 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 (in thousands, except per share data):

`Three Months Ended
                                                                              March 31,
                                                                        --------------------
                                                                           2005       2004
                                                                        ---------  ---------      
Net income (loss) as reported......................................... $    (541) $     277
Add: Stock-based compensation included in reported
  net income (loss)...................................................        99         18
Deduct: Stock-based compensation cost under SFAS 123..................    (1,376)    (1,198)
                                                                        ---------  ---------
Pro forma net loss.................................................... $  (1,818) $    (903)
                                                                        =========  =========
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.................    26,786     23,876

Pro forma net loss per common share - basic and diluted............... $   (0.07) $   (0.04)
                                                                        =========  =========
Reported net income (loss) per common share - basic and diluted....... $   (0.02) $    0.01
                                                                        =========  =========`





3.  Inventories

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,
                                 2005          2004
                             ------------  ------------
Work in process............ $        703  $      1,083
Finished goods.............        2,455         3,076
                             ------------  ------------
Total...................... $      3,158  $      4,159
                             ============  ============`



4.  Business Combination

On May 24, 2004, the Company
purchased NetChip Technology, Inc., a fabless supplier of high-performance
semiconductors based on Universal Serial Bus (USB) and Peripheral Component
Interconnect (PCI) standards, for an aggregate purchase price, including
acquisition costs, of $22.2 million. The Company acquired NetChip Technology,
Inc. in order to expand its position of strength in the market for PCI, PCI-X
and PCI Express interconnect chips to include the USB product line, where
NetChip offered an industry-leading product line offering high-performance and
low-power products for the USB 2.0 market. NetChip also had PCI Express products
in development that complemented the Company's PCI Express chips. The combined
company provides a wide selection of interconnect chips based on these
standards. The transaction was accounted for using purchase accounting.
Additional consideration of the Company's common stock with a maximum aggregate
value of $10 million may be paid out to the former shareholders of NetChip
Technology, Inc. in the event USB products acquired as part of the NetChip
Technology, Inc. acquisition meet certain gross profit milestones one year
following the close of the transaction. Any additional consideration will become
additional goodwill.  As of March 31, 2005, former NetChip shareholders are
eligible to receive approximately $3.0 million of the Company's common
stock.  The Company expects the actual amount will exceed $3.0 million as the earn out closing date is May 23, 2005.

Unaudited Pro Forma Financial Results

The unaudited pro forma financial information combines
the historical statements of operations of the Company and NetChip Technology,
Inc. for the three months ended March 31, 2004 and gives effect to the
transactions, including the amortization of other intangible assets and the
recognition of deferred compensation, as if they occurred at the beginning of
fiscal 2004.  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
date 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.  The following table is in thousands, except per
share data:

`Three Months Ended
                                                     March 31, 2004
                                                     -------------            
Net revenues.......................................... $  18,133
Net income ........................................... $   1,012
Net income per share - basic ......................... $    0.04
Shared used to compute basic per share amounts........    25,911
Net income per share - diluted ....................... $    0.04
Shared used to compute diluted per share amounts......    27,216`



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,
                                                        --------------------
                                                           2005       2004
                                                        ---------  --------- 

Net income (loss)..................................... $    (541) $     277
                                                        ========== ==========

Weighted average shares of common stock
   outstanding........................................    26,786     23,876
                                                        ---------  ---------

Net income (loss) per share - basic................... $   (0.02) $    0.01
                                                        ========== ==========
Shares used in computing basic net income (loss)
   per share..........................................    26,786     23,876
Dilutive effect of stock options......................        --      1,305
                                                        ---------  ---------
Shares used in computing diluted net income
   (loss) per share...................................    26,786     25,181
                                                        ========== ==========
Net income (loss) per share - diluted................. $   (0.02) $    0.01
                                                        ========== ==========`



As the Company incurred a loss for the three months ended
March 31, 2005, the effect of dilutive securities totaling 4.6 million
equivalent shares has been excluded from the computation of diluted loss per
share as its impact would be anti-dilutive.



Employee stock options to purchase approximately 3.3
million shares for the three month periods 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.



6.  Segments of an Enterprise and Related Information

The Company has one operating segment, the sale of
semiconductor devices. The Chief Executive Officer 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,
                                                        --------------------
                                                           2005       2004
                                                        ---------  --------- 
Revenues:
  United States....................................... $   3,656  $   4,174
  Europe .............................................     2,336      2,134
  Asia - excluding China, Singapore and Taiwan........     2,160      1,255
  China...............................................     2,062      1,060
  Singapore...........................................     1,478      1,191
  Taiwan..............................................       910      1,243
  Americas - excluding United States..................       620        585
                                                        ---------  ---------
Total................................................. $  13,222  $  11,642
                                                        =========  =========`

For the three months ended March 31, 2005, one distributor
accounted for 25% of net revenues.  For the same period in 2004, the same
distributor accounted for 12% of net revenues.  For both of these periods, no
other individual direct customer or distributor represented greater than 10% of
net revenues.

7.  Income Taxes

Income tax expense of $11,000 was
recorded for the three month period ended March 31, 2005, compared to income tax
expense of $172,000 for the same period in 2004.  Income tax expense for the
three months ended March 31, 2005 was primarily due to miscellaneous state
income taxes payable and foreign income taxes currently payable.  For the same
period in 2004, the provision for income taxes related to projected federal,
state and foreign taxes payable pertaining to that quarter.  The current expense
differs from the expected provision derived by applying the applicable U.S.
federal statutory rate to the income (loss) from operations primarily due to
nondeductible acquisition-related items and a change in the valuation allowance.



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.

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.  Such forward-
looking statements also include statements regarding our future gross margin,
our future research and development expenses, our future selling, general and
administrative expenses, our future deferred compensation expenses, 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 unexpected changes in the mix of our product sales,
unexpected pricing pressures, or unexpected capital requirements that may arise
due to the NetChip 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, 2004.



OVERVIEW

PLX was founded in 1986, and between 1994 and 2002 we
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.  In 2002, we shifted the majority of our development efforts to
PCI Express.  In September 2004, we began shipping products based on the PCI
Express standard for next-generation systems.  We generate less than 2% of our
revenues from sales of our software and development tools.

In May 2003, we acquired HiNT Corp. which markets and sells
PCI and PCI-X Bridge 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 May 2004, we acquired NetChip Technology, Inc. which
markets and sells USB Device Controllers used in a range of business and
consumer applications, including printers, wireless LAN adapters, personal video
recorders, and digital camcorders. Beginning with the quarter ended June 30,
2004, our operating results include results of NetChip Technology, Inc. and its
products.

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 and
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 their customers.
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."



RESULTS OF OPERATIONS

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

`Three Months Ended
                                                              March 31,
                                                        --------------------
                                                           2005       2004
                                                        ---------  ---------  
Net revenues..........................................     100.0 %    100.0 %
Cost of revenues......................................      36.7       27.7
                                                        ---------  ---------
Gross margin..........................................      63.3       72.3
                                                        ---------  ---------
Operating expenses:
  Research and development............................      31.1       34.8
  Selling, general and administrative.................      33.5       31.6
  Amortization of purchased intangible assets.........       3.9        2.6
                                                        ---------  ---------
Total operating expenses..............................      68.5       69.0
                                                        ---------  ---------
Income (loss) from operations.........................      (5.2)       3.3
Interest income and other, net........................       1.2        0.6
                                                        ---------  ---------
Income (loss) before provision for income taxes.......      (4.0)       3.9
Provision for income taxes............................       0.1        1.5
                                                        ---------  ---------
Net income (loss).....................................      (4.1)%      2.4 %
                                                        =========  =========`

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, 2005 were $13.2 million, an increase of 13.6% from $11.6
million for the three months ended March 31, 2004.  The increase was primarily
due to sales of our USB products acquired as part of the NetChip Technology,
Inc. acquisition which was completed in May 2004



For the three months ended March 31, 2005, one distributor
accounted for 25% of net revenues. For the same period in 2004, the same
distributor accounted for 12% of net revenues.  For both of these periods, no
other individual distributor or direct customer represented greater than 10% of
net revenues.



Customer demand for semiconductors can change quickly and
unexpectedly.  Our revenue levels have been highly dependent on the amount
of new orders that are received for products to be delivered to the customer
within the same quarter, also called "turns fill" orders. 
Because of the long cycle time to build our products, our lack of visibility
into demand when turns fill is high makes it difficult to predict what product
to build to match future demand.  We believe the current high turns fill
requirements will continue until lead times substantially increase and order
backlog grows.  However, the sustainability of improved customer
demand is uncertain and highly dependent on economic conditions.  The high
turns fill requirement together with the uncertainty of product mix and pricing,
makes it difficult to predict future levels of sales and profitability and may
require us to carry higher levels of inventory.



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, 2005 was
63.3%, a decrease of 9.0% from 72.3% for the same period in 2004.  Excluding
benefits from selling previously written-down inventory of approximately $0.1
million for the three months ended March 31, 2004, gross margin for the period
was 71.5%.  The decrease in gross margin for the three months ended March 31,
2005 when compared to the same period in 2004 was primarily due to higher unit
shipments of our USB products that have lower margins compared to our PCI
products.  The USB product line was acquired pursuant to our acquisition of
NetChip, which was completed in May 2004.



Future gross profit and gross margin are highly dependent on
the product and customer mix of net revenues.  Accordingly, we are not able to
predict future gross profit levels or gross margins with certainty.



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 engineering tooling costs at our independent
foundries and deferred compensation are included in research and development
expenses.



R&D as a percentage of net revenues decreased to 31.1%
for the three months ended March 31, 2005, as compared to 34.8% for the same
period in 2004.  The percentage decrease is due primarily to revenues increasing
at a higher rate than costs.  In absolute dollars, R&D expenses remained
relatively flat at $4.1 million for the three months ended March 31, 2005 as
compared to the same period in 2004.  Excluding deferred compensation
amortization of $0.1 million and $9,000 for the three months ended March 31,
2005 and 2004, respectively, R&D remained relatively flat at $4.0 million
for the three months ended March 31, 2005 and 2004.  While total R&D
expenses remained flat, compensation and benefit expenses for the three months
ended March 31, 2005 increased by $0.4 million as compared with the same period
in 2004 as a result of the NetChip acquisition.  Such increases were fully
offset by decreases in engineering tools expense of $0.2 million and outside
engineering consulting services of $0.2 million.



We expect research and development expenses in absolute
dollars to likely increase in future periods.



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 percentage of net revenues increased to 33.5%
for the three months ended March 31, 2005, as compared to 31.6% for the same
period in 2004.  In absolute dollars, SG&A expenses increased by $0.7
million or 20.3% to $4.4 million for the three months ended March 31, 2005 from
$3.7 million for the same period in 2004.  The increase in SG&A was due
primarily to higher compensation and benefit expenses of $0.5 million resulting
partly from higher headcount in connection with the NetChip acquisition and
higher consulting and professional fees of $0.1 million resulting mainly from
our 2004 year-end Sarbanes Oxley compliance effort.



We expect selling, general and administrative expense in
absolute dollars to likely increase in future periods.



Amortization of Purchased Intangible Assets

Amortization of purchased intangible assets for the three
months ended March 31, 2005 was $0.5 million, an increase of $0.2 million from
$0.3 million for the three months ended March 31, 2004.  The increase was due
primarily to additional amortization expense from developed/core technology and
customer base acquired as a result of the NetChip Technology, Inc. acquisition
in May 2004 (see Note 4 to the condensed consolidated financial statements).



Deferred Compensation



We recorded deferred compensation of $0.9 million related
to unvested stock options assumed in connection with the acquisition of NetChip
Technology, Inc. in May 2004.  The amount of deferred compensation is presented
as a reduction of stockholders' equity and is amortized ratably over the vesting
period of the applicable stock grants, generally three years.



Amortization of deferred compensation increased by $81,000 to
$0.1 million for the three months ended March 31, 2005 from $18,000 from the
same period in 2004.  The increase was primarily the result of additional
deferred compensation recorded from the NetChip Technology, Inc. acquisition in
2004.  Substantially all of these amounts are recorded in research and
development expenses.



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 increased by $0.1 million to $0.2 million for the
three months ended March 31, 2005 from $0.1 million from the same period in
2004.  The increase was primarily due to higher interest received on short and
long term marketable securities.



Provision for Income Taxes



Income tax expense of $11,000 was recorded for the three
month period ended March 31, 2005, compared to income tax expense of $172,000
for the same period in 2004.  Income tax expense for the three months ended
March 31, 2005 was primarily due to miscellaneous state income taxes payable and
foreign income taxes currently payable.  For the same period in 2004, the
provision for income taxes related to projected federal, state and foreign taxes
payable pertaining to that quarter.  The current expense differs from the
expected provision derived by applying the applicable U.S. federal statutory
rate to the income (loss) from operations primarily due to nondeductible
acquisition-related items and a change in the valuation allowance.



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 remained relatively flat at $30.3 million at March 31, 2005 as
compared to December 31, 2004.  The March 31, 2005 balance remained flat
primarily as a result of: (1) net losses of $0.5 million adjusted for non-cash
expenses of $1.2 million, (2) decreases in inventory of $1.0 million, and (3)
cash received of $0.6 million from the exercise of stock options.  These cash
inflows were offset by (1) increases in accounts receivable of $1.2 million, (2)
decreases in accounts payable and accrued expenses of $0.3 million and $0.3
million, respectively, and (3) capital expenditures of $0.2 million.



Additional consideration of our common stock with a maximum
aggregate value of $10 million may be paid out to the former shareholders of
NetChip Technology, Inc. in the event USB products acquired as part of the
NetChip Technology, Inc. acquisition meet certain gross profit milestones one
year following the May 2004 closing of the transaction.   As of March 31, 2005,
former NetChip shareholders are eligible to receive approximately $3.0 million
of the Company's common stock.  We expect the actual amount will exceed $3.0 million
as the earn out  closing date is May 23, 2005.



In September 2002, our Board of Directors authorized the
repurchase of up to 2,000,000 shares of common stock.  At the
discretion of the management, we can repurchase the shares from time to time in
the open market or in privately negotiated transactions.  We did not
repurchase any shares during the three month period ended March 31, 2005.



As of March 31, 2005, non-cancelable inventory purchase
commitments were $2.9 million as compared with $3.0 million at December 31,
2004.  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 need for potential
write-downs for inventory by considering a combination of factors. Based on the
life of the product, sales history, obsolescence, and sales forecast, we may
record write-downs  to our inventory 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. 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 creditworthiness 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.  We perform goodwill impairment tests on
an annual basis and between annual tests if indicators of potential impairment
exist. Although at March 31, 2005, no impairment of goodwill has been
recognized, it is reasonably possible that assumptions upon which the
recoverability of goodwill were based could differ in the future.  In that
event, impairment charges could be required.

Taxes.  We account for income taxes using the
liability method.  Deferred taxes are determined based on the differences
between the financial statement and tax bases of assets and liabilities, using
enacted tax rates in effect for the year in which the differences are expected
to reverse.  Valuation allowances are established when necessary to reduce
deferred tax assets to the amounts expected to be realized. As of March 31,
2005, we carried a valuation allowance for the entire deferred tax asset as a
result of uncertainties regarding the realization of the asset balance. Future
taxable income and/or tax planning strategies may eliminate all or a portion of
the need for the valuation allowance. In the event we determine we are able to
realize our deferred tax asset, an adjustment to the valuation allowance may
increase income in the period such determination is made.

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,
- integration of our product functionality into our customers' products,
- our ability to develop, introduce and market new products and technologies
on a timely basis,
- introduction of products and technologies by our competitors,
- unexpected issues that may arise with devices in production
- 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 of production capacity at the fabrication facilities that
manufacture 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.



We May Fail To Adequately Integrate Acquired Businesses

In May 2004, we acquired NetChip Technology, Inc., a supplier
of high-performance semiconductors based on Universal Serial Bus (USB) and
Peripheral Component Interconnect (PCI) standards, in a transaction accounted
for as a purchase transaction.  We are continuing to integrate NetChip
Technology, Inc. and its products into our business.  This integration is
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, and 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 NetChip.



Our Potential Future Acquisitions May Not Be Successful
Because Of Our Limited Experience With Acquisitions In The Past

As part of our business strategy, we expect to review
acquisition prospects that would complement our existing product offerings,
improve market coverage or enhance our technological capabilities.  Future
acquisitions could result in any of all of the following:

- potentially dilutive issuances of equity securities,
- large acquisition-related 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.

A Downturn In The Global Economy May Adversely Affect Our
Revenues, Results Of Operations And Financial Condition

Demand for semiconductor components is increasingly
dependent upon the rate of growth in the global economy.  If the rate of global
economic growth slows, or contracts, customer demand for products could be
adversely affected, which in turn could adversely affect revenues, results of
operations and financial condition.  Many factors could adversely affect
regional or global economic growth.  Some of the factors that could slow global
economic growth include:  rising interest rates in the United States, a slowdown
in the rate of growth of the Chinese economy, a significant act of terrorism
which disrupts global trade or consumer confidence, geopolitical tensions
including war and civil unrest.  Reduced levels of economic activity, or
disruptions of international transportation, could adversely affect sales on
either a global basis or in specific geographic regions.

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.  For the three months ended March 31, 2005, one distributor accounted
for 25% of net revenues. For the same period in 2004, the same distributor
accounted for 12% of net revenues. No other individual direct customer or
distributor represented greater than 10% of net revenues.



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 other
products, adoption of relevant interconnect standards, perceived advantages over
competing products and the level of customer service available to support such
products.  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 understand 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 principally located
in Japan, Taiwan and Malaysia, 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.



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, 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, 2004.



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 microprocessor-based systems
markets including networking and telecommunications, enterprise storage, imaging
and industrial applications.  The size and rate of growth of these
microprocessor-based 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 microprocessor-based 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, 2005 and 2004, net revenues
through distributors accounted for approximately 60% and 53%, 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

A majority of our revenues are derived from sales of
products, which rely on the PCI, PCI-X, USB and limited sales of PCI Express
standards.  If markets move away from these standards 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, these standards are continuously evolving, and we may not be able to
modify our products to address new 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 microprocessor-based 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 there under 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 past, 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 approximately
68% of our revenues for the three months ended March 31, 2005.  In 2004, 2003,
and 2002, sales outside of North America accounted for approximately 68%, 63%,
and 58% 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 $28.6 million at March
31, 2005.  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.

Based on their evaluation as of March 31, 2005, our Chief
Executive Officer and Chief Financial Officer, have concluded that our
disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-
15(e) under the Securities Exchange Act of 1934, as amended) were sufficiently
effective to ensure that the information required to be disclosed by us in this
Quarterly Report on Form 10-Q was recorded, processed, summarized and
reported within the time periods specified in the SEC's rules and instructions
for 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

The Company was not required to report the information
pursuant to Items 1 through 6 of Part II of Form 10-Q except as follows.

ITEM 6.  EXHIBITS







|Exhibit
Number | Description                                                                                                                                                                                   
|-------------- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|               |                                                                                                                                                                                               
|10.1*          | PLX Technology, Inc. 2005 Bonus and Deferred
Compensation Plan, attached as Exhibit 10.1 to our Form 8-K, filed April 13,
2005 and incorporated herein by reference.                          
|31.1           | Certification of Chief Executive Officer
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 Chief Executive Officer
Pursuant to 18 U.S.C. 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 18 U.S.C. Section 1350, Chapter 63 of Title 18, United
States Code, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act
of 2002.
|               |                                                                                                                                                                                               
|*              | Management contract or compensatory plan or
arrangement.                                                                                                                                      

---





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:

By 	/s/	    Rafael Torres



---

EXHIBIT INDEX







|Exhibit
Number | Description                                                                                                                                                                                   
|-------------- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|               |                                                                                                                                                                                               
|10.1*          | PLX Technology, Inc. 2005 Bonus and Deferred
Compensation Plan, attached as Exhibit 10.1 to our Form 8-K, filed April 13,
2005 and incorporated herein by reference.                          
|31.1           | Certification of Chief Executive Officer
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 Chief Executive Officer
Pursuant to 18 U.S.C. 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 18 U.S.C. Section 1350, Chapter 63 of Title 18, United
States Code, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act
of 2002.
|               |                                                                                                                                                                                               
|*              | Management contract or compensatory plan or
arrangement.