<PAGE>
 
                                                                   EXHIBIT 10.41


                          AMENDMENT AGREEMENT (NO. 1)


THIS AMENDMENT AGREEMENT (NO. 1) is made the __________ day of ______________
1997, by and between:-

(1)  [*]; and

(2)  LEVEL ONE COMMUNICATIONS INCORPORATED, a company incorporated in California
     and having its place of business at 9750 Goethe Road, Sacramento, CA 95827,
     United States of America ("Customer").

WHEREAS

(A)  [*] and Customer had entered into a Deposit Agreement dated 9 November 1995
     (the "Deposit Agreement") for the purpose of Customer depositing certain
     funds with [*] and to procure [*] to make available to Customer certain
     wafer manufacturing capacity.

(B)  [*] and Customer hereto are entering into this Amendment Agreement to vary
     the Deposit Agreement with effect from the date hereof.

NOW THEREFORE, in consideration of the foregoing and the mutual covenants
contained herein, the parties agree as follows:

1.   INTERPRETATION

     All terms and references used in the Deposit Agreement and which are
     defined or construed in the Deposit Agreement but are not defined or
     construed in this Amendment Agreement shall have the same meaning and
     construction in this Amendment Agreement.

2.   AMENDMENT TO THE DEPOSIT AGREEMENT

     The Parties agree that with effect from the date of this Amendment
     Agreement, the Deposit Agreement shall be amended as follows:-

     2.1  CLAUSE 1.3 (THE DEPOSIT)
          ------------------------

          The entire Clause 1.3 shall be deleted in its entirety and replaced
          with the following:-

          "1.3 Upon the expiry of the term of this Agreement or the earlier
          termination thereof in accordance with Clause 5 or Clause 6.2, [*]

[*]  Confidential treatment has been requested with respect to the information 
     contained within the "[*]" markings.  Such marked portions have been 
     omitted from this filing and have been filed separately with the Securities
     and Exchange Commission.

                                       1
<PAGE>
 
          will return to Customer the Deposit, without interest and subject to
          any deductions [*] pursuant to the terms of this Agreement."

2.2  CLAUSE 2 ([*] SUPPLY COMMITMENT)
     --------------------------------

     i)   The words "second calendar quarter of 1996" appearing in the fifth
          line of Clause 2.1 shall be deleted and the words "first calendar
          quarter of 1997" substituted therefor.

     ii)  The word "Clause 8.6" appearing at the third line of Clause 2.4 shall
          be deleted and the word "Clause 7.6" substituted therefor.

2.3  CLAUSE 3.3 (CUSTOMER LOADING COMMITMENT)
     ----------------------------------------

     Clause 3.3 shall be deleted in its entirety.

2.4  [*]

2.5  CLAUSE 5 (SET OFF AND MAINTENANCE OF DEPOSIT)
     ---------------------------------------------

     The provisions of Clause 5 shall be amended as follows:-

     i)   by renumbering the heading "5." as "4.".

     ii)  by deleting Clause 5.2 in its entirety and replacing it with the
          following new Clause 4.1:-

          "4.1 [*] shall be entitled to deduct from and set-off against the
               Deposit, any payment falling due and remaining unpaid by Customer
               under the Foundry Agreement."

     iii) by deleting Clause 5.1 in its entirety and replacing it with the
          following new Clause 4.2:-

          "4.2 At the end of each calendar quarter, [*] shall issue a written
               notice to Customer stating the amount of the

[*]  Confidential treatment has been requested with respect to the information 
     contained within the "[*]" markings.  Such marked portions have been 
     omitted from this filing and have been filed separately with the Securities
     and Exchange Commission.

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<PAGE>
 
               overdue payments and Customer shall pay the relevant sum to [*]
               within 30 days of the date of such notice, so as to maintain the
               Deposit at [*].
 
     (iv) by renumbering Clause 5.3 as Clause "4.3"; by deleting the word
          "Clause 5.2" appearing in the first line and substituting the word
          "Clause 4.2" therefor; and by deleting the words [*] appearing in the
          second line.

     (v)  by inserting the following new Clause 4.4:-

              (a)   
                                [*]

                    "A"  means such quantity of the aggregate Customer Actual
                         Loading for the calendar year which is less than or
                         equal to 50% of the aggregate Customer Loading
                         Commitment for the calendar year.

                    "C"  means the aggregate Customer Loading Commitment for the
                         calendar year.

[*]  Confidential treatment has been requested with respect to the information 
     contained within the "[*]" markings.  Such marked portions have been 
     omitted from this filing and have been filed separately with the Securities
     and Exchange Commission.

                                       3
<PAGE>
 
               (b)  [*]
                    "A"  means such quantity of the aggregate Customer Actual
                         Loading for the calendar year if Customer exceeds 50%
                         of the aggregate Customer Loading Commitment for the
                         calendar year.

                    "HC" means 50% of the aggregate Customer Loading Commitment
                         for the calendar year

                    "C"  means the aggregate Customer Loading Commitment for the
                         calendar year.

              [*]

     2.6  CLAUSE 6 (TERM AND TERMINATION)
          -------------------------------

          The provisions of Clause 6 shall be amended as follows:-

          i)   By renumbering the heading "6." as "5.".

          ii)  By renumbering Clause "6.1" as Clause "5.1".

          iii) By deleting sub-clause 6.1(a) in its entirety and replacing it
               with the following new sub-clause 6.1(a):-

               "(a) At the option of [*], in the event that the amount of the
                    Deposit falls below 50% of [*] and Customer fails to make
                    payment of the shortfall to [*] within the period set out in
                    Clause 4.1."

          iv)  By renumbering Clause "6.1" as Clause "5.2"; and by deleting the
               word "Clause 6.1" appearing in the first line and substituting
               the word "Clause 5.1" therefor.

     2.7  CLAUSE 7 (FORCE MAJEURE)
          ------------------------

          i)   The heading "7." and Clause "7.1" shall be renumbered as "6." and
               Clause "6.1" respectively.

          ii)  Clause "7.2" shall be renumbered as Clause "6.2"; and the word
               "Clause 7" appearing in the first line shall be deleted and the
               word "Clause 6" substituted therefor.

     2.8  CLAUSE 8 (WARRANTY AND INDEMNITY)
          ---------------------------------

[*]  Confidential treatment has been requested with respect to the information 
     contained within the "[*]" markings.  Such marked portions have been 
     omitted from this filing and have been filed separately with the Securities
     and Exchange Commission.

                                       4
<PAGE>
 
          i)   The heading "8." shall be renumbered as "7.".

          ii)  Clauses "8.1", "8.2", "8.3", "8.4", "8.5" and "8.6" shall be
               renumbered as Clauses "7.1", "7.2", "7.3", "7.4", "7.5" and "7.6"
               respectively.

     2.9  CLAUSE 9 (CONFIDENTIALITY)
          --------------------------

          The heading "9." and Clauses "9.1", "9.2" and "9.3" shall be
          renumbered as "8.", and Clauses "8.1", "8.2" and "8.3" respectively.

     2.10 CLAUSE 10 (NOTICES)
          -------------------

          By amending Clause 10 as follows:-

          i)   By renumbering the heading "10." as "9.".

          ii)  By renumbering Clause "10.1" as Clause "9.1" and by deleting the
               address and facsimile number for [*] in its entirety and
               replacing it with the following:-


               [*]
               ---
          iii) By renumbering Clause "10.2" as Clause "9.2".

     2.11 CLAUSE 11 (WAIVER AND REMEDIES)
          -------------------------------

          The heading "11." and Clauses "11.1", and "11.2" shall be renumbered
          as "10.", Clauses "10.1" and "10.2" respectively.

     2.12 CLAUSE 12 (SEVERANCE)
          ---------------------

          The heading "12." shall be renumbered as "11.".

     2.13 CLAUSE 13 (ENTIRE AGREEMENT)
          ----------------------------

          The heading "13." shall be renumbered as "12.".

     2.14 CLAUSE 14 (GOVERNING LAW)
          -------------------------

          The heading "14." shall be renumbered as "13.".

     2.15 ANNEX A (PAYMENT SCHEDULE)
          --------------------------

[*]  Confidential treatment has been requested with respect to the information 
     contained within the "[*]" markings.  Such marked portions have been 
     omitted from this filing and have been filed separately with the Securities
     and Exchange Commission.

                                       5
<PAGE>
 
     Item 3.   Of Annex A shall be deleted in its entirety and replaced with the
               following:-

               "3.  Upon signing of the
                    Amendment Agreement
                    (No. 1) to Deposit Agreement      [*]

     2.16 ANNEX B ([*]
          ------------

          The entire Annex B shall be deleted in its entirety and replaced with
          the following:-

                                   "ANNEX B

                                      [*]
                                      ---

          Number of 8-inch silicon wafers (based on 15 mask level)

 
(A)            [*]
<TABLE>
<CAPTION>
                                                                       Quarterly
================================================================================
 2Q96         3Q96           4Q96         1Q97          2Q97      3Q97    4Q97
                                                                         through
                                                                          4Q2000
--------------------------------------------------------------------------------
<S>           <C>            <C>          <C>          <C>        <C>     <C> 

--------------------------------------------------------------------------------
   [ *                                                                      ]
================================================================================
</TABLE> 
 
(B)       THRESHOLD
<TABLE>
<CAPTION> 
================================================================================
1997                    1998                     1999                     2000
--------------------------------------------------------------------------------
<S>                     <C>                      <C>                      <C> 

--------------------------------------------------------------------------------
  [ *                                                                      ]
================================================================================
</TABLE>

3.   SAVING AND INCORPORATION

3.1  Save as expressly amended by this Amendment Agreement, the terms and
     conditions of the Deposit Agreement shall continue to be in full force and
     effect in all other respects.

3.2  The Deposit Agreement and this Amendment Agreement shall be construed as
     one document and this Amendment Agreement shall be deemed to be part of the
     Deposit Agreement.  Where the context so permits, references in the Deposit
     Agreement and in this Amendment Agreement to "the Deposit Agreement" or

[*]  Confidential treatment has been requested with respect to the information 
     contained within the "[*]" markings.  Such marked portions have been 
     omitted from this filing and have been filed separately with the Securities
     and Exchange Commission.

                                       6
<PAGE>
 
     "this Agreement" shall be read and construed as references to the Deposit
     Agreement as amended and supplemented by this Amendment Agreement.


4.   GOVERNING LAW

     This Amendment Agreement shall be governed by and construed in accordance
     with the laws of [*].  The parties hereto irrevocably submit to the non-
     exclusive jurisdiction of the courts of [*].



IN WITNESS WHEREOF the Parties have hereunto entered into this Agreement the
date first above written.

[*]



Signed by John Kehoe, V.P. and CFO          )
LEVEL ONE COMMUNICATIONS                    )
INCORPORATED                                )
in the presence of:-                        )     /s/ John Kehoe
                                             ------------------------------



       /s/ Bruce Dravis
----------------------------------
Name:  Bruce Dravis
       General Counsel

[*] Confidential treatment has been requested with respect to the information
    contained within the "[*]" markings. Such marked portions have been omitted
    from this filing and have been filed separately with the Securities and
    Exchange Commission.

                                       7