<PAGE>   1

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                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549
                            ------------------------

                                   FORM 10-K
                            ------------------------

(MARK ONE)

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

                    FOR THE FISCAL YEAR ENDED APRIL 1, 2001

                                       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 NO. 0-23298

                               QLOGIC CORPORATION
             (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

<TABLE>
<S>                                            <C>
                  DELAWARE                                      33-0537669
          (STATE OF INCORPORATION)                 (I.R.S. EMPLOYER IDENTIFICATION NO.)

          26600 LAGUNA HILLS DRIVE
           ALISO VIEJO, CALIFORNIA                                 92656
  (ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)                      (ZIP CODE)
</TABLE>

                                 (949) 389-6000
              (REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE)
                            ------------------------

          SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:
                                      NONE

          SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:
                    COMMON STOCK, PAR VALUE $0.001 PER SHARE
   SERIES A JUNIOR PARTICIPATING PREFERRED STOCK, PAR VALUE $0.001 PER SHARE
                                (TITLE OF CLASS)
                            ------------------------

     Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.  Yes [X]  No [ ]

     Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K (Section 229.405 of this chapter) is not contained herein,
and will not be contained, to the best of registrant's knowledge, in definitive
proxy or information statements incorporated by reference in Part III of this
Form 10-K or any amendment to this Form 10-K.  [X]

     As of June 15, 2001 the aggregate market value of the voting stock held by
non-affiliates of the registrant was $3,488,394,936.

     As of June 15, 2001, the registrant had 92,457,289 shares of common stock
outstanding.

                      DOCUMENTS INCORPORATED BY REFERENCE:

     Portions of the following documents are incorporated herein by reference in
the Parts of this report indicated below:

     Part III, Items 10, 11, 12 and 13 -- Definitive proxy statement for the
2001 Annual Meeting of Stockholders which will be filed with the Securities and
Exchange Commission within 120 days after the close of the 2001 fiscal year.

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<PAGE>   2

                                     PART I

ITEM 1. BUSINESS

INTRODUCTION

     QLogic Corporation was organized as a Delaware corporation in 1992. Unless
the context indicates otherwise, the "Company" and "QLogic" each refer to the
Registrant and its subsidiaries.

     All references to years refer to the Company's fiscal years ended April 1,
2001, April 2, 2000 and March 28, 1999 as applicable, unless the calendar years
are specified.

OVERVIEW

     QLogic is a leading designer and supplier of Storage Area Networking (SAN)
infrastructure building blocks. Our SAN infrastructure building blocks,
comprised of semiconductor chips, host board adapters and switches, are
integrated into storage networking solutions of the world's leading system and
storage manufacturers. Companies such as Sun Microsystems, Inc., IBM, Dell
Computer Corporation, Compaq Computer Corporation, Fujitsu Microelectronics,
Inc. and Hitachi Ltd. all use some or all of our components in the storage and
systems solutions they sell to the world's largest information technology
environments. In addition to our original equipment manufacturer relationships
with these and other companies, in January 2000 we started delivering selected
Fibre Channel building blocks through leading distributors, systems integrators
and resellers, thereby expanding our reach and visibility to the information
technology community.

STORAGE INDUSTRY

     The University of California at Berkeley report entitled "How Much
Information?" published in late 2000, attempted to measure how much information
is generated in the world each year. The report concluded we currently generate
over 1.6 million terabytes (1 terabyte equals roughly 1 million books) of
magnetically recorded information a year. Even more surprising is that this
volume is doubling every year. The ability to access, share and, most
importantly, manage this amount of information represents a large market
opportunity.

     In the mid-1980s the need to distribute information quickly and efficiently
drove client access from a "mainframe direct connect" environment to a Local
Area Network (LAN) environment. More recently, the need to access growing
volumes of information by large numbers of homogeneous and heterogeneous
computing platforms has led to a rapid adoption of storage area networking
environments. As indicated in the UC Berkeley study, the explosive expansion of
the Internet and the growing use of digital information servers act as a
catalyst for ever increasing storage requirements and drives the need to network
storage for accessibility, maintainability and simplicity of management.

     Storage area networking was first introduced by IBM with the Enterprise
System Connection (ESCON) in the early 1990s. While this was an effective
solution for IBM mainframe environments, it did nothing for the rapidly
expanding open systems environment. Fibre Channel, which was introduced in 1994,
promised superior connectivity, distance and access benefits over ESCON in a
standard protocol.

     Initially deployed in a loop environment and used primarily for its
tremendous bandwidth advantages over existing Small Computer System Interface
(SCSI) solutions, Fibre Channel gradually moved into networked environments. At
first, deployments used hubs to connect networked servers and storage
subsystems. Subsequently, switches replaced hubs and now represent the vast
majority of deployments.

     As was the case in the adoption of LANs, software was a key ingredient to
the successful adoption of storage area networking. The ability to consolidate
multiple computing environments and share connectivity of previously dedicated
storage offered significant cost advantages. The only remaining issue was
managing such a sophisticated environment. SANs followed much the same adoption
path as LANs, with storage manufacturers, original equipment manufacturers and
third parties all developing and delivering SAN management solutions. Today
there are many SAN management solutions available, from relatively basic

                                        1
<PAGE>   3

solutions for small environments to extensive software packages capable of
managing thousands of SAN nodes.

     Storage Area Networks are still in the early adoption phase with Fibre
Channel the primary enabling technology for their implementation. According to
International Data Corporation (IDC) and Dataquest market reports, SANs will
dominate the storage market by 2004 and Fibre Channel will be the overwhelmingly
dominant technology used to deploy SANs through 2004 and beyond.

THE QLOGIC SOLUTION

     We have been designing and marketing storage connectivity and management
controller products for over 14 years. Initially we produced high-performance
controller chips for leading hard disk drive manufacturers. Then expanded into
high-performance host bus adapters in the early 1990s and in 2001 we added Fibre
Channel switches through our merger with Ancor Communications, Inc. to expand
our storage networking solution set.

     To ensure that our storage network products, and the products of our
largest customers, remain competitive in the industry, we continued to expand
our core competence in semiconductor design. In 1996 we introduced the
industry's first fully integrated single chip Peripheral Computing Interface, or
PCI, to Fibre Channel controller. This chip and the board products we designed
around it, quickly became a standard for performance, reliability and
interoperability in the storage industry. In addition, leading Redundant Array
of Independent Disks (RAID) storage and system manufacturers selected this chip
for their internal Fibre Channel SAN initiatives.

     One of our key strategies has been to provide our customers with solutions
that simplify their product design requirements. Complete storage networking
solutions that are pre-tested and easy to install significantly reduce the
implementation efforts in both manufacturing and enterprise information
technology environments. This strategy also led us to acquire Ancor
Communications, Inc., a leading SAN switching technology company, enabling us to
deliver our customers a complete end-to-end SAN infrastructure. Today our SAN
infrastructure components can be found in all aspects of the SAN infrastructure,
including SAN-connected disk drives, RAID controllers, SAN switches, system host
bus adapters and even systems motherboards.

QLOGIC PRODUCT OVERVIEW

     QLogic designs and supplies storage network infrastructure components and
software for the world's largest server and storage subsystem manufacturers and
ultimately for the medium to large information technology environment. Our
products are based on small computer systems interface (SCSI) and Fibre Channel
standards. We have the unique position as the only end-to-end supplier of Fibre
Channel network infrastructure components that aid in the transfer and
acquisition of data within the Storage Area Network. Our products include our
SANblade adapters and SANbox Fibre Channel Switches. In addition, we design and
supply controller chips used in hard drives and tape drives as well as enclosure
management and baseboard management chip solutions that monitor the health of
the physical environment within a server or storage enclosure.

  Storage Network Infrastructure Products

     SANblade(TM) Host Bus Adapters

     Currently, QLogic's SANblade family consists of board-level solutions based
on Fibre Channel. QLogic SANblade products are engineered around a standard,
common driver interface (CDI), so developers can migrate between topologies with
minimal investment and bring new technology products to market quickly. QLogic
produces a broad-line of host bus adapters and management software for both
direct connect and SAN connected environments.

          SANblade 2300, 2200 and 2100 Series. Host bus adapters support a wide
     range of operating system environments and provide reliable,
     high-performance connectivity for the world's leading server and storage
     subsystem platforms.

                                        2
<PAGE>   4

     PCI-SCSI Host Bus Adapters

     Designed for maximum performance in real world applications, QLogic's
PCI-SCSI host bus adapter family enables a powerful combination of speed and
host-CPU independence, making QLogic SCSI products among the most scalable
solutions on the market.

     SANbox(TM) Fibre Channel Switches

     We develop and market innovative Fibre Channel switches and switch
management software. Deployed in single or multi-stage "fabrics" of almost any
size, these products are essential to the creation of resilient, intelligent
SANs. Linking multiple host and storage resources, SANbox products create the
connectivity framework that allows users to share and efficiently access stored
data.

     The SANbox product line features 8-, 16-, 64-, and 128-port switches along
with a variety of software tools. By incorporating these reliable,
highly-scalable products in their own solutions, QLogic's original equipment
manufacturer and systems integrator partners along with enterprise network
storage customers maximize the benefits of today's state-of-the-art SAN
technologies.

          SANbox 8. The SANbox-8's small size makes it the ideal 8-port switch
     for either "edge switch" or "core switch" use, supporting applications
     ranging from server clustering to storage consolidation and enterprise
     backup.

          SANbox 16/16HA. The SANbox-16 is the ideal storage consolidation,
     server clustering, enterprise backup for any application requiring maximum
     reliability, availability and performance. The SANbox-16HA includes all the
     features of our standard 16-port switch, plus optional dual redundant power
     supplies.

          SANbox 64/128. The SANbox-64/128 Director, which is sold exclusively
     to our OEM customers, is a highly scalable Fibre Channel switch offering
     Reliability, Availability and Serviceability (RAS) features required in
     today's 24X7 data center environment. Providing robust, mainframe-class
     connectivity for mission-critical open systems storage applications, the
     SANbox Director creates an intelligent backbone infrastructure.

     SAN Management Software

     With the SAN as the prime focus for IT managers, and the ability to easily
configure and manage critical data resources as a primary requirement, we offer
two software tools that help manage network connectivity through host bus
adapters and network switches -- QLogic Management Suite (QMS) and
SANSurfer(TM).

     ISP Controller Chips

     QLogic's PCI-Fibre Channel and PCI-SCSI controllers are highly integrated,
cost effective solutions. Interoperability is a key feature of our single-chip
design and ultra-scalable chip architecture, making our Fibre Channel products
easy to implement and migrate to new technology.

     Peripheral Controllers

     QLogic's Peripheral Controllers are the industry standard for stand-alone
SCSI and Fibre Channel solutions, providing the flexibility and performance
required for applications in hard drives, tape drives, scanners, and other
peripheral products.

     Management Controllers

     QLogic's Management Controller products monitor and control the physical
environment within server or storage enclosure environment. These products
detect the presence or absence of functional disk drives, power supplies and
fans, as well as monitor the temperature within the enclosure, and pass the
information back to a system for display and/or programmed action.

                                        3
<PAGE>   5

SALES AND MARKETING

     We market and distribute our products through original equipment
manufacturer partners, system integrators, resellers and our direct sales
organization supported by sales and field engineering personnel. We also utilize
a network of independent manufacturers' representatives and regional and
international distributors.

     In North America, we maintain a direct sales force to serve our large
original equipment manufacturer customers and multiple outside representatives
that are focused on medium and emerging accounts. National distributors carrying
our products serve the Value Added Reseller (VAR) market.

     We also utilize a focused sales organization to assist, train, equip and
augment the sales organizations of our major original equipment manufacturer
customers and their respective reseller organizations and partners.

     We market and sell our products throughout the world. Internationally, we
utilize an extensive network of distributors and master distributors to focus on
the original equipment manufacturer and VAR markets. We maintain direct sales
and technical relationships with our major original equipment manufacturer
customers.

     We believe that it is important to work closely with our large peripheral
and computer system manufacturers during their design cycles. We support these
customers with extensive applications and system design support, as well as
training classes and seminars, conducted both in the field and from our offices
in Eden Prairie, Minnesota and Aliso Viejo, California. We also maintain a high
level of customer support through technical hotlines and Internet
communications.

     For our original equipment manufacturer customers, our sales efforts are
focused on establishing and developing long-term relationships. The sales cycle
typically begins with one of our product designs being selected as a component
into a potential customer's computer system or data storage peripheral. Once we
secure this design win with a given customer, the time to product shipment can
range between six and 18 months. After winning a design with a potential
customer, we work closely with the customer to integrate our product with the
customer's current and next generation products.

     We actively participate within industry organizations relating to the
development and acceptance of industry standards. We also collaborate with peer
companies in respective markets through co-marketing activities, joint training,
road tours and cooperative testing. To ensure multi-vendor inter-operation, we
maintain extensive interoperability and testing laboratories.

ENGINEERING AND DEVELOPMENT

     Our industry is subject to rapid and regular technological change. Our
ability to compete depends upon our ability to continually design, develop and
introduce new products that take advantage of market opportunities and address
emerging standards. Our strategy is to leverage our substantial base of
architectural and systems expertise to address a broad range of Input/Output, or
I/O, and SAN solutions.

     We are engaged in the design and development of integrated circuits for
Fibre Channel switches, switch components, SCSI I/O controllers and Fibre
Channel host bus adapters. We also design and develop SCSI and Fibre Channel
hard disk controllers and management controller semiconductors used in storage
peripherals and server enclosures and circuit boards.

     We continue to invest heavily in research and development and have expanded
our capabilities with the merger with Ancor Communications, Inc. and the
acquisition of Little Mountain Group, Inc. Recognizing the rapid technological
evolution in the industry, we maintain research and development activities in
the areas of emerging technologies including Infiniband and iSCSI.

     On April 1, 2001, we employed approximately 330 engineers, including
technicians and support personnel engaged in the development of new products and
the improvement of existing products. There can be no assurance that we will
continue to be successful in attracting and retaining key personnel with the
skills and expertise necessary to develop new products in the future.

                                        4
<PAGE>   6

BACKLOG

     Our backlog of orders was approximately $86.2 million on April 1, 2001,
compared to approximately $83.9 million on April 2, 2000. These backlog figures
include only orders scheduled for shipment within six months. Most orders are
subject to rescheduling and/or cancellation with little or no penalty. Purchase
order release lead times depend upon the scheduling practices of the individual
customer, and the rate of booking new orders fluctuates from month to month. Our
customers have in the past encountered uncertain and changing demand for their
products. Orders are typically placed based on customer forecasts. If demand
falls below customers' forecasts, or if customers do not control their
inventories effectively, they may cancel or reschedule shipments previously
ordered from us. In the past, we have experienced and we may at any time and
with minimal notice in the future experience cancellations and postponements of
orders. Therefore, the level of backlog at any particular date is not
necessarily indicative of sales for any future period.

COMPETITION

     The markets for storage area network infrastructure components are highly
competitive and are characterized by short product life cycles, price erosion,
rapidly changing technology, frequent product performance improvements and
evolving industry standards.

     Due to the broad array of components required in the storage area network
infrastructure, we compete with several companies. In the host bus adapter (HBA)
market our primary competitors are Emulex Corporation, Adaptec Inc. and JNI
Corporation. Our switch products compete with Brocade Communications Systems,
Inc., however, there are also many other smaller companies in these markets.

     There are two markets in the Fibre Channel semiconductor controller
business. The first market is associated with host applications and controller
interfaces. In this market our primary competitors are Agilent Technologies and
LSI Logic Corporation. The other market is the hard drive controller business.
Although there are no direct competitors currently, potential competitors are
LSI Logic Corporation and vertically integrated hard disk drive manufacturers.

     Finally, our enclosure and baseboard management semiconductor controllers
compete primarily with Vitesse Semiconductor Corporation.

MANUFACTURING

     We subcontract the manufacturing of our semiconductor chips and host bus
adapter boards and switches to independent foundries and subcontractors, which
allows us to avoid the high costs of owning, operating and constantly upgrading
a wafer fabrication facility and assembly factory. As a result, we focus our
resources on product design and development, quality assurance, sales and
marketing and customer support. We design our semiconductor switches, and host
adapter board products, and perform final tests on products, including tests
required under our ISO9001/TickIT Certification. We also provide fabrication
process reliability tests, conduct failure analysis and audit the finished goods
inventory to confirm the integrity of our quality assurance procedures.

     Our semiconductors are currently manufactured by a number of domestic and
offshore foundries. Our major semiconductor suppliers are Toshiba, NEC
Electronics, LSI Logic Corporation and Samsung Semiconductor, Inc. Most of our
products are manufactured using 0.35 or 0.25 micron process technology.

     We depend on our foundries to allocate a portion of their foundry capacity
sufficient to meet our needs and to produce products of acceptable quality and
with satisfactory manufacturing yields in a timely manner. These foundries
fabricate products for other companies and manufacture products of their own
design. We do not have long-term agreements with any of our foundries; we
purchase both wafers and finished chips on a purchase order basis. Therefore,
the foundries generally are not obligated to supply products to us for any
specific period, in any specific quantity or at any specific price, except as
may be provided in a particular purchase order. We work with our existing
foundries, and intend to qualify new foundries, as needed, to obtain additional
manufacturing capacity. However, there can be no assurance that we will be able
to maintain our current foundry relationships or obtain additional capacity.
                                        5
<PAGE>   7

     We currently purchase our semiconductor products from our foundries either
in finished form or wafer form. We use subcontractors to die assemble our
semiconductor products purchased in wafer form, and to assemble our switches and
host adapter board products. In the assembly process for our semiconductor
products, the silicon wafers are separated into individual die, which are then
assembled into packages and tested. Following assembly, we further test and
inspect the packaged devices prior to shipment to our customers. For our host
adapter board products, we purchase components in kit form. We provide these
items to contract manufacturing companies that work together with our component
suppliers to assemble the boards to our specifications. For our switch products,
we subcontract the material, management, test and assembly to a subcontractor.

     Most component parts used in our host bus adapter boards are standard
off-the-shelf items, which are, or can be, dual-sourced. We select suppliers on
the basis of technology, manufacturing capacity, quality and cost. Whenever
possible and practicable, we strive to have at least two manufacturing locations
for each host adapter board and chip product. Nevertheless, our reliance on
third-party manufacturers involves risks, including possible limitations on
availability of products due to market abnormalities, unavailability of, or
delays in obtaining access to certain product technologies and the absence of
complete control over delivery schedules, manufacturing yields, and total
production costs. The inability of our suppliers to deliver products of
acceptable quality and in a timely manner or the inability by us to procure
adequate supplies of our products could have a material adverse effect on our
business, financial condition and results of operations.

INTELLECTUAL PROPERTY

     Although we have thirteen patents issued and fifteen additional patent
applications pending in the United States, we rely primarily on our trade
secrets, trademarks and copyrights to protect our intellectual property. We
attempt to protect our proprietary information through confidentiality
agreements and contractual provisions with our customers, suppliers, employees
and consultants, and through other security measures. Although we intend to
protect our rights vigorously, there can be no assurance that these measures
will be successful. In addition, the laws of certain countries in which our
products are or may be developed, manufactured or sold, including various
countries in Asia, may not protect our products and intellectual property rights
to the same extent as the laws of the United States.

     While our ability to compete may be affected by our ability to protect our
intellectual property, we believe our technical expertise and ability to
introduce new products on a timely basis will be more important in maintaining
our competitive position than protection of our intellectual property.

     We have received notices of claimed infringement of trademark rights in the
past. There can be no assurance that third parties will not assert claims of
infringement of trademarks or any other intellectual property rights against us
with respect to existing and future products. In the event of a patent or other
intellectual property dispute, we may be required to expend significant
resources to develop non-infringing technology or to obtain licenses to the
technology which is the subject of the claim. There can be no assurance that we
would be successful in such development or that any such license would be
available on commercially reasonable terms, if at all. In the event of
litigation to determine the validity of any third party's claims, such
litigation could result in significant expense to us, and divert the efforts of
our technical and management personnel, whether or not such litigation is
determined our favor.

EMPLOYEES

     We had 624 employees as of April 1, 2001, including 330 engineers. We
believe our future prospects will depend, in part, on our ability to continue to
attract, train, motivate, retain and manage skilled engineering, sales,
marketing and executive personnel. None of our employees are represented by a
labor union. We believe that our relations with our employees are good.

ITEM 2. PROPERTIES

     Our principal product development, operations, sales and corporate offices
are currently located in three buildings comprising approximately 165,000 square
feet in Aliso Viejo, California. We purchased the Aliso
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<PAGE>   8

Viejo facility on March 23, 2000 and the facility is held without encumbrance.
Additionally, we have leased design centers in Austin, Texas, Roseville,
California and Eden Prairie, Minnesota comprising 5,973 square feet, 15,000
square feet and 50,182 square feet, respectively.

ITEM 3. LEGAL PROCEEDINGS

     Periodically, we are a party to ordinary disputes arising in the normal
course of business. We do not believe that the outcome of any current legal
proceedings will have a material adverse effect on our business, financial
condition or results of operations.

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

     No matter was submitted during the fourth quarter of fiscal 2001 to a vote
of security holders.

                                        7
<PAGE>   9

                                    PART II

ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

PRINCIPAL MARKET AND PRICES

     Shares of our common stock are traded and quoted in The NASDAQ National
Market under the symbol QLGC. The following table sets forth the range of high
and low sales prices per share of our common stock for each quarterly period of
the two most recent years as reported on The NASDAQ National Market. The share
prices have been retroactively restated to reflect the two-for-one stock split
of our common stock which was effected in February 2000.

<TABLE>
<CAPTION>
                                                              SALES PRICES
                                                            -----------------
                                                             HIGH       LOW
                       FISCAL 2001                          -------    ------
<S>                                                         <C>        <C>
First Quarter.............................................  $131.75    $39.69
Second Quarter............................................   119.25     60.25
Third Quarter.............................................   130.25     60.44
Fourth Quarter............................................    99.13     21.75
</TABLE>

<TABLE>
<CAPTION>
                                                             HIGH       LOW
                       FISCAL 2000                          -------    ------
<S>                                                         <C>        <C>
First Quarter.............................................  $ 34.22    $14.38
Second Quarter............................................    49.75     31.25
Third Quarter.............................................    83.75     22.50
Fourth Quarter............................................   203.25     68.06
</TABLE>

NUMBER OF COMMON STOCKHOLDERS

     The approximate number of record holders of our common stock was 650 as of
April 1, 2001.

DIVIDENDS

     We have never paid cash dividends on our common stock and currently have no
intention to do so. We currently anticipate that we will retain all of our
future earnings for use in the development and expansion of our business and for
general corporate purposes. Any determination to pay dividends in the future
will be at the discretion of our board of directors and will depend upon our
operating results, financial condition and other factors as the board of
directors, in its discretion, deems relevant.

                                        8
<PAGE>   10

ITEM 6. SELECTED FINANCIAL DATA(1)

     The following table of certain selected data regarding QLogic should be
read in conjunction with the consolidated financial statements and notes
thereto.

<TABLE>
<CAPTION>
                                                                FISCAL YEAR ENDED
                                           ------------------------------------------------------------
                                           APRIL 1,    APRIL 2,    MARCH 28,    MARCH 29,    MARCH 30,
                                             2001        2000         1999         1998         1997
                                           --------   ----------   ----------   ----------   ----------
                                                      (IN THOUSANDS, EXCEPT PER SHARE DATA)
                                                      (RESTATED)   (RESTATED)   (RESTATED)   (RESTATED)
<S>                                        <C>        <C>          <C>          <C>          <C>
SELECTED STATEMENTS OF OPERATIONS DATA
Net revenues.............................  $357,542    $216,093     $121,575     $ 89,317     $75,185
Cost of revenues.........................   128,739      70,982       49,034       40,040      41,717
                                           --------    --------     --------     --------     -------
     Gross profit........................   228,803     145,111       72,541       49,277      33,468
                                           --------    --------     --------     --------     -------
Operating expenses:
  Engineering and development............    56,315      47,451       29,809       19,872      13,620
  Selling and marketing..................    36,482      22,623       15,248       12,540       9,047
  General and administrative.............    14,828      11,202        8,803        8,402       6,897
  Merger and related expenses............    22,947          --           --           --          --
                                           --------    --------     --------     --------     -------
          Total operating expenses.......   130,572      81,276       53,860       40,814      29,564
                                           --------    --------     --------     --------     -------
          Operating income...............    98,231      63,835       18,681        8,463       3,904
Interest and other income................    18,706       9,181        5,759        3,543         637
                                           --------    --------     --------     --------     -------
  Income before income taxes.............   116,937      73,016       24,440       12,006       4,541
Income tax provision.....................    48,168      24,701        8,310        4,983       2,132
                                           --------    --------     --------     --------     -------
Net income...............................    68,769      48,315       16,130        7,023       2,409
Accretion on convertible preferred
  stock..................................        --          12          762          345         331
Net income attributable to common
  stockholders...........................  $ 68,769    $ 48,303     $ 15,368     $  6,678     $ 2,078
                                           ========    ========     ========     ========     =======
Basic net income per share(2)............  $   0.76    $   0.56     $   0.20     $   0.10     $  0.04
                                           --------    --------     --------     --------     -------
Diluted net income per share(2)..........  $   0.72    $   0.52     $   0.18     $   0.09     $  0.04
                                           --------    --------     --------     --------     -------
SELECTED BALANCE SHEET DATA
Working capital..........................  $442,702    $257,127     $118,790     $ 96,066     $26,312
Total assets.............................  $571,497    $394,969     $203,479     $159,295     $58,676
Long-term capitalized lease obligations,
  excluding current installments.........  $     --    $     --     $     --     $    141     $   352
Other non-current liabilities............  $     --    $     --     $     --     $     --     $   924
Total stockholders' equity...............  $523,702    $359,325     $175,710     $139,255     $43,711
</TABLE>

---------------
(1) The condensed consolidated selected financial data as of April 2, 2000, and
    all financial data prior to that, have been restated to give effect to the
    August 1, 2000 merger accounted for using the pooling-of-interest method.

(2) All per share data has been retroactively restated to reflect the stock
    splits in February 1999, August 1999 and February 2000.

                                        9
<PAGE>   11

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS

     This Discussion and Analysis of Financial Condition and Results of
Operations contains descriptions of our expectations regarding future trends
affecting our business. These forward-looking statements and other
forward-looking statements made elsewhere in this document are made in reliance
upon safe harbor provisions of the Private Securities Litigation Reform Act of
1995. Our actual results could differ materially from those anticipated in these
forward-looking statements as a result of several factors, including, but not
limited to those factors set forth under "Factors That May Affect Future
Results" and elsewhere in this document, which include without limitation the
fact that our operating results fluctuate significantly, that our business is
dependent on the storage area network market that is new and unpredictable, and
that our financial condition will be materially harmed if we do not maintain and
gain market or industry acceptance of our products. Readers of this Annual
Report on Form 10-K are urged to read those sections in their entirety. In light
of the significant uncertainties inherent in the forward-looking information
included in this document, the inclusion of information should not be regarded
as a representation by us or any other person that our objectives or plans will
be achieved. QLogic undertakes no obligation to update or revise these
forward-looking statements, whether as a result of new information, future
events or otherwise.

                             RESULTS OF OPERATIONS

     The following table sets forth the results of operations and percentage of
total revenues in our consolidated statements of income:

<TABLE>
<CAPTION>
                                                         FISCAL YEAR ENDED
                                    -----------------------------------------------------------
                                      APRIL 1, 2001        APRIL 2, 2000       MARCH 28, 1999
                                    -----------------    -----------------    -----------------
                                                          (IN THOUSANDS)
<S>                                 <C>         <C>      <C>         <C>      <C>         <C>
Net revenues......................  $357,542    100.0%   $216,093    100.0%   $121,575    100.0%
Cost of revenues..................   128,739     36.0      70,982     32.8      49,034     40.3
                                    --------    -----    --------    -----    --------    -----
     Gross profit.................   228,803     64.0     145,111     67.2      72,541     59.7
                                    --------    -----    --------    -----    --------    -----
Operating expenses:
  Engineering and development.....    56,315     15.8      47,451     22.0      29,809     24.5
  Selling and marketing...........    36,482     10.2      22,623     10.5      15,248     12.6
  General and administrative......    14,828      4.1      11,202      5.2       8,803      7.2
  Merger and related expenses.....    22,947      6.4          --       --          --       --
                                    --------    -----    --------    -----    --------    -----
          Total operating
            expenses..............   130,572     36.5      81,276     37.7      53,860     44.3
                                    --------    -----    --------    -----    --------    -----
          Operating income........  $ 98,231     27.5%   $ 63,835     29.5%   $ 18,681     15.4%
                                    ========    =====    ========    =====    ========    =====
</TABLE>

NET REVENUES

     Our net revenues are derived primarily from the sale of SCSI and Fibre
Channel based I/O products and enclosure management products. We also license
certain designs and receive royalty revenues and non-recurring engineering fees.
Net revenues in fiscal 2001 increased $141.4 million or 65% from fiscal 2000 to
$357.5 million. The increase was the result of a $35.8 million increase in sales
of SCSI products, and a $112.1 million increase in sales of Fibre Channel
products, partially offset by a $6.4 million decrease in IDE-based royalties.

     Net revenues in fiscal 2000 increased $94.5 million or 78% from fiscal 1999
to $216.1 million. The increase was the result of a $34.9 million increase in
sales of SCSI products, a $48.8 million increase in sales of Fibre Channel
products, and a $10.8 million increase in IDE-based royalties.

     Export revenues (primarily to Pacific Rim Countries) in fiscal year 2001
increased $84.0 million or 73% from fiscal 2000 to approximately $198.9 million.
Export revenues in fiscal 2000 increased $51.6 million or 82% from fiscal 1999,
to approximately $114.9 million. As a percentage of net revenues, export
revenues accounted for 56% in fiscal year 2001, 53% in fiscal year 2000, and 52%
in fiscal year 1999. The increase in export net revenues as a percentage of
total revenues is due to an increase in net revenues in Pacific Rim

                                        10
<PAGE>   12

countries. The increases in export revenue dollars are primarily due to
increased sales to customers in Japan and to a lesser extent, Europe. Export
revenues are denominated in U.S. Dollars. We do not expect the uncertainty in
selected Pacific Rim foreign currency markets to have a material adverse effect
on the results of our operations.

     A small number of our customers account for a substantial portion of our
net revenues, and we expect that a limited number of customers will continue to
represent a substantial portion of our net revenues for the foreseeable future.
Our four largest customers accounted for approximately 64% of net revenues in
fiscal year 2001, 55% in fiscal year 2000, and 55% in fiscal year 1999. In
fiscal 2001, Fujitsu Limited accounted for 29% of net revenues, and Sun
Microsystems accounted for 18% of the Company's net revenues. In fiscal 2000,
Fujitsu Limited accounted for 27% of net revenues, and Sun Microsystems
accounted for 13% of the Company's net revenues. In fiscal 1999, Fujitsu Limited
accounted for 24% of net revenues and Sun Microsystems accounted for 18% of net
revenues.

     We believe that our major customers continually evaluate whether or not to
purchase products from alternate or additional sources. Additionally, customers'
economic and market conditions frequently change. Accordingly, there can also be
no assurance that a major customer will not reduce, delay or eliminate its
purchases from us. Any such reduction, delay or loss of purchases could have a
material adverse effect on the Company's business, financial condition and
results of operations.

GROSS PROFIT

     Cost of revenues consist primarily of raw materials (including wafers and
completed chips from third-party manufacturers), assembly and test labor,
overhead and warranty costs. The gross profit percentage in fiscal 2001 was 64%,
a decrease from 67% in fiscal 2000. The percentage decline was due to a
reduction in the contribution of license fees combined with an increase in sales
of switch products with lower margins.

     The gross profit percentage in fiscal 2000 was 67%, an increase from 60% in
fiscal 1999. The percentage increase was due to the increasing contribution of
license fees combined with the continuing introduction of new, higher margin
products and volume related cost reductions on mature products.

     Our ability to maintain our current gross profit percentage can be
significantly affected by factors such as supply costs and, in particular, the
cost of silicon wafers, the worldwide semiconductor foundry capacity, the mix of
products shipped, competitive price pressures, the timeliness of volume
shipments of new products and our ability to achieve manufacturing cost
reductions. We anticipate that it will be increasingly more difficult to reduce
manufacturing costs. As a result, we do not anticipate gross profit percentages
to remain consistent with historic trends.

OPERATING EXPENSES

     Engineering and Development. Engineering and development expenses consist
primarily of salaries and other personnel related expenses, development related
material, occupancy costs, and computer support. We believe continued
investments in engineering and development activities are critical to achieving
our strategic objectives. As a result, we expect that engineering and
development expenses will increase in absolute dollars in fiscal 2002.

     Engineering and development expenses were $56.3 million in fiscal year
2001, $47.5 million in fiscal year 2000, and $29.8 million in fiscal year 1999.
As a percentage of net revenues this amounted to 16% in fiscal 2001, 22% in
fiscal 2000, and 25% in fiscal 1999. The increase in spending each fiscal year
was largely due to increased levels of spending for Fibre Channel, IDE, and SCSI
design and engineering support. The decline as a percentage of net revenues is
attributed to economies of scale benefits realized from an increase in net
revenues.

     In fiscal year 2000 we incurred a $7.5 million charge for acquired
in-process technology relating to the acquisition of AdaptiveRAID(R) technology
from Borg Adaptive Technologies, Inc., a wholly-owned subsidiary of nStor
Corporation. The Company recorded the purchase price as a one-time charge for
in-process research

                                        11
<PAGE>   13

and development of $7.5 million to engineering and development expense in the
fourth fiscal quarter ended April 2, 2000.

     In fiscal year 1999 we incurred a $2.1 million charge for acquired
in-process technology relating to the acquisition of Silicon Design Resources,
Inc.

     Selling and Marketing. Selling and marketing expenses consist primarily of
sales and marketing salaries, sales commissions and related expenses,
promotional activities and travel for sales and marketing personnel. We believe
continued investments of these types of expenses are critical to the success of
our strategy of expanding relationships with our customers. As a result, we
expect sales and marketing expenditures will continue to increase in the future.

     Sales and marketing expenses were $36.5 million in fiscal 2001, $22.6
million in fiscal 2000, and $15.2 million in fiscal 1999. As a percentage of net
revenues this amounted to 10% in fiscal 2001, 11% in fiscal 2000, and 13% in
fiscal 1999. The increases in dollars reflected an increased level of sales
commissions paid as a result of the increase in revenues. The decrease in sales
and marketing expenses as a percentage of net revenues from fiscal 1999 to
fiscal 2000 and from fiscal 2000 to fiscal 2001 relates to economies of scale
benefits realized from the growth in net revenues.

     General and Administrative. General and administrative expenses consist
primarily of salaries and related expenses for executive, finance, accounting,
human resources and information technology personnel. Non-personnel related
expenses consist of recruiting fees, professional services, and corporate
expenses. We expect general and administrative expenses to increase in absolute
dollars as we add personnel and incur additional costs relating to the growth of
the business and our operation as a public company.

     General and administrative expenses were $14.8 million in fiscal 2001,
$11.2 million in fiscal 2000, and $8.8 million in fiscal 1999. As a percentage
of net revenues this amounted to 4% in fiscal 2001, 5% in fiscal 2000, and 7% in
fiscal 1999. In fiscal 2001 salaries and fringe benefits increased by $3.6
million due to an increase in personnel, combined with increases in bad debt
reserve related to accounts receivable growth. The decrease in general and
administrative expenses as a percentage of net revenues is due to our benefits
realized from economies of scale related to the increases in net revenue.

     General and administrative expenses increased in fiscal year 2000 from
fiscal year 1999 due to an increase in outside services related to the
acquisition of Silicon Design Resources, Inc. and an increase in general and
administrative personnel.

     Merger and Related Expenses. Merger and related expenses consist primarily
of direct and incremental transaction costs, such as fees for investment
bankers, attorneys, accountants, and other related fees and expenses. Merger and
related costs of approximately $22.9 million were incurred in fiscal year 2001
in connection with the merger with Ancor accounted for as a
pooling-of-interests.

NON-OPERATING INCOME

     Interest and other income, was $18.7 million in fiscal 2001, $9.2 million
in 2000, and $5.9 million in fiscal 1999. The increases in interest and other
income in fiscal 2001, 2000 and 1999 are largely due to increases in cash
equivalents and investment balances due to $64.9 million in net proceeds
received from a secondary stock offering in the second quarter of 2000, $14.8
million in net proceeds received from Intel pursuant to a stock purchase
agreement in the third quarter of fiscal 2000, and $77.5 million in net proceeds
received from a secondary stock offering in the second quarter of fiscal 1998.
Additionally, cash equivalent and investment balances have increased due to cash
flow from operations in each of the last three fiscal years.

INCOME TAX PROVISION

     Our effective tax rates were approximately 41% in fiscal 2001, 34% in
fiscal 2000, and 34% in fiscal 1999. The increase in tax rates in fiscal 2001 is
due to nondeductible costs incurred in conjunction with the merger

                                        12
<PAGE>   14

with Ancor Communications, Inc. For more information on the merger, please see
Note (2) in Notes to Consolidated Financial Statements.

NEW ACCOUNTING STANDARDS

     In June 1998, the Financial Accounting Standards Board ("FASB") issued
Statement of Financial Accounting Standards No. ("SFAS") 133, "Accounting for
Derivative Instruments and Hedging Activities." SFAS 133 establishes accounting
and reporting standards for derivative instruments, hedging activities, and
exposure definition. SFAS 133 requires an entity to recognize all derivatives as
either assets or liabilities in the statement of financial position and measure
those instruments at fair value. Derivatives that are not hedges must be
adjusted to fair value through income. If a derivative is a hedge, depending on
the nature of the hedge, changes in fair value will either be offset against the
change in fair value of the hedged assets, liabilities, or firm commitments
through earnings, or recognized in other comprehensive income until the hedged
item is recognized in earnings. In June 1999, the FASB issued SFAS 137,
"Accounting for Derivative Instruments and Hedging Activities -- Deferral of the
Effective Date of FASB Statement No. 133," which defers the effective date of
SFAS 133 to all fiscal quarters for fiscal years beginning after June 15, 2000.
In June 2000, the FASB issued SFAS 138 "Accounting for Certain Derivative
Instruments and Certain Hedging Activities," an amendment of FASB Statement No.
133 ("SFAS 138"). Although we continue to review the effect of the
implementation of SFAS 133 and SFAS 138, we do not currently believe their
adoption will have a material impact on our financial position or overall trends
in results of operations and do not believe adoption will result in significant
changes to our financial risk management practices.

LIQUIDITY AND CAPITAL RESOURCES

     Our combined balances of cash and cash equivalents, short-term and
long-term investments have increased to $355.5 million at April 1, 2001 compared
to $244.4 million at April 2, 2000. The increase was attributable to positive
cash flow from operations, primarily net income growth, during the twelve months
ended April 1, 2001.

     Our primary source of liquidity is derived from working capital and cash
from operations. We also have an unused $5.0 million unsecured line of credit
with Silicon Valley Bank. Working capital increased $185.6 million to $442.7
million from April 2, 2000 to April 1, 2001. The increase in working capital in
the fiscal year ended April 1, 2001 was largely attributable to positive cash
flow from operations. The $5.0 million line of credit facility with Silicon
Valley Bank allows us to borrow at the bank's prime rate. The credit facility
expires on July 6, 2001, and, although there can be no assurance, we currently
expect to renew this line of credit. There were no borrowings under this credit
facility on April 1, 2001.

     Our cash flow provided by operations was $98.1 million in fiscal 2001, and
$66.5 million in fiscal 2000. The growth in cash provided by operations compared
to the prior year was primarily due to increases in profitability. Additionally,
in fiscal 2001, cash flow from operations was improved by increases in income
taxes payable, accounts payable, and accrued compensation balances, and was
offset by increases in accounts and notes receivable and inventories. Our
inventory turns decreased to 3.2 in fiscal 2001 from 3.5 in the comparable prior
year period largely due to the increase in inventory at fiscal year end to
assure product availability for HBA customers.

     Our cash flow used in investing activities was $86.7 million in fiscal 2001
compared to $110.9 million in fiscal 2000. The decrease in net cash used in
investing activities in fiscal 2001 was primarily due to decreases in additions
to property and equipment partially offset by increases in purchases of
investments, net of maturities. Additions to property and equipment were $16.7
million in fiscal 2001, compared to $42.4 in fiscal 2000. The fiscal year 2000
additions to property and equipment included $32.2 million for the new corporate
headquarters in Aliso Viejo, California.

     Our cash flow provided by financing activities was $30.0 million in fiscal
2001 compared to $96.0 million in the prior year. The fiscal year 2001 decrease
in cash provided by financing activities was primarily due to a reduction in
proceeds from sale of common and preferred stock offset by increases in proceeds
from issuance of stock under employee stock plans.
                                        13
<PAGE>   15

     We believe that existing cash and cash equivalent balances, short term
investments, debt facilities and cash flows from operating activities will
provide the Company with sufficient funds to finance its operations for at least
the next 12 months.

                     FACTORS THAT MAY AFFECT FUTURE RESULTS

     Except for the historical information contained herein, the information in
this report constitutes forward-looking statements. When used in this report the
words "shall," "should," "forecast," "all of," "projected," "believes,"
"anticipates," "expects," and similar expressions are intended to identify
forward-looking statements. In addition, we may from time to time make oral
forward-looking statements. We wish to caution readers that a number of
important factors could cause actual results to differ materially from those in
the forward-looking statements. Factors that could cause or contribute to such
differences include those discussed below, as well as those discussed above in
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" or elsewhere in this report.

OUR STOCK PRICE MAY BE VOLATILE WHICH COULD AFFECT THE VALUE OF YOUR INVESTMENT.

     The market price of our common stock has fluctuated substantially, and
there can be no assurance that such volatility will not continue. From January
1, 2000 through April 1, 2001, the market price has ranged from a low of $21.75
per share to a high of $203.25 per share. Several factors could impact our stock
price including, but not limited to:

     - announcements concerning QLogic, our competitors or customers;

     - quarterly fluctuations in our operating results;

     - introduction of new products or changes in product pricing policies by us
       or our competitors;

     - conditions in the semiconductor industry;

     - changes in earnings estimates by industry analysts; or

     - market conditions for high technology equities in general.

     In addition, stock markets have experienced extreme price and volume
volatility in recent years and stock prices of technology companies have been
especially volatile. This volatility has had a substantial effect on the market
prices of securities of many smaller public companies for reasons frequently
unrelated to the operating performance of the specific companies. These broad
market fluctuations could adversely affect the market price of our common stock.

OUR OPERATING RESULTS FLUCTUATE SIGNIFICANTLY, WHICH COULD CAUSE OUR STOCK PRICE
TO DECLINE IF OUR RESULTS FAIL TO MEET INVESTORS' AND ANALYSTS' EXPECTATIONS.

     We have experienced, and expect to continue to experience, fluctuations in
sales and operating results from quarter to quarter. As a result, we believe
that period-to-period comparisons of our operating results are not necessarily
meaningful, and that such comparisons cannot be relied upon as indicators of
future performance. In addition, there can be no assurance that we will maintain
our current profitability in the future. A significant portion of our net
revenues in each fiscal quarter result from orders booked in that quarter.
Orders placed by major customers are typically based on their forecasted sales
and inventory levels for our products. Fluctuations in our quarterly operating
results may be the result of:

     - changes in purchasing patterns by one or more of our major customers,
       order changes or rescheduling;

     - gain or loss of significant customers;

     - customer policies pertaining to desired inventory levels of our products;

     - negotiations of rebates and extended payment terms;

     - changes in our ability to anticipate in advance the mix of customer
       orders;
                                        14
<PAGE>   16

     - level of inventory our customers require us to maintain in our field
       warehouses;

     - the time, availability and sale of new products;

     - changes in the mix of products having differing gross margins;

     - variations in manufacturing capacities, efficiencies and costs;

     - the availability and cost of components, including silicon wafers;

     - warranty expenses;

     - variations in product development and other operating expenses;

     - revenue adjustments related to product returns;

     - adoption of new accounting pronouncements and/or changes in our policies;
       or

     - general economic and other conditions effecting the timing of customer
       orders and capital spending.

     Our quarterly results of operations are also influenced by competitive
factors, including the pricing and availability of our products and our
competitors' products. Although we do not maintain our own wafer manufacturing
facility, large portions of our expenses are fixed and difficult to reduce in a
short period of time. If net revenues do not meet our expectations, our fixed
expenses would magnify the effect on net income of such shortfall in net
revenues. Furthermore, announcements regarding new products and technologies
could cause our customers to defer or cancel purchases of our products. Order
deferrals by our customers, delays in our introduction of new products, and
longer than anticipated design-in cycles for our products have in the past
adversely effected our quarterly results of operations. Due to these factors, as
well as other unanticipated factors, it is likely that in some future quarter or
quarters our operating results will be below the expectations of public market
analysts or investors, and as a result, the price of our common stock could
significantly decrease.

OUR BUSINESS IS DEPENDENT ON THE STORAGE AREA NETWORK (SAN) MARKET THAT IS NEW
AND UNPREDICTABLE, AND IF THIS MARKET DOES NOT DEVELOP AND EXPAND AS WE
ANTICIPATE, OUR BUSINESS WILL SUFFER.

     Fibre Channel-based storage area networks, or SANs, were first deployed in
1997. As a result, the market for SANs and related storage router products has
only recently begun to develop and is rapidly evolving. Because this market is
new, it is difficult to predict its potential size or future growth rate. A
significant number of our products are used exclusively in SANs and, therefore,
our business is dependent on the SAN market. Accordingly, the widespread
adoption of SANs for use in organizations' computing systems is critical to our
future success. Most of the organizations that potentially may purchase our
products from our customers have invested substantial resources in their
existing computing and data storage systems and, as a result, may be reluctant
or slow to adopt a new approach like SANs. SANs are often implemented in
connection with the deployment of new storage systems and servers. Therefore,
our future success is also substantially dependent on the market for new storage
systems and servers. Furthermore, the ability of the different components used
in a SAN to function effectively, or interoperate, with each other when placed
in a computing system has not yet been achieved on a widespread basis. Until
greater interoperability is achieved, customers may be reluctant to deploy SANs.
Our success in generating revenue in the emerging SAN market will depend on,
among other things, our ability to:

     - educate potential OEM customers, distributors, resellers, system
       integrators, storage service providers and end-user organizations about
       the benefits of SANs;

     - maintain and enhance our relationships with OEM customers, distributors,
       resellers, system integrators, storage system providers;

     - predict and base our products on standards which ultimately become
       industry standards; and

     - achieve interoperability between our products and other SAN components
       from diverse vendors.

                                        15
<PAGE>   17

OUR FINANCIAL CONDITION WILL BE MATERIALLY HARMED IF WE DO NOT MAINTAIN AND GAIN
MARKET OR INDUSTRY ACCEPTANCE OF OUR PRODUCTS.

     The markets in which our competitors and we compete involve rapidly
changing technology, evolving industry standards and continuing improvements in
products and services. Our future success depends on our ability to do the
following:

     - enhance our current products and to develop and introduce in a timely
       manner new products that keep pace with technological developments and
       industry standards;

     - compete effectively on the basis of price and performance; or

     - adequately address original equipment manufacturer customer and end-user
       customer requirements and achieve market acceptance.

     We believe that to remain competitive in the future we will need to
continue to develop new products, which will require a significant investment in
new product development. A significant portion of our revenues is generated from
Fibre Channel technology. We, along with our competitors are developing
alternative technologies that may compete with the market acceptance of our
Fibre Channel products, including, but not limited to, iSCSI and Infiniband. If
this kind of alternative standard is adopted by the industry, we may not be able
to develop products for the new standard in a timely manner. Further, even if
these alternative technologies do augment Fibre Channel revenues, our products
may not be fully developed in time to be accepted by our customers. If they are
developed on time, we may not be able to manufacture them at competitive prices
in sufficient volumes.

WE DEPEND ON A LIMITED NUMBER OF CUSTOMERS AND ANY DECREASE IN REVENUE FROM ANY
ONE OF OUR CUSTOMERS COULD CAUSE OUR STOCK PRICE TO DECLINE.

     A small number of customers account for a substantial portion of our net
revenues, and we expect that a limited number of customers will continue to
represent a substantial portion of our net revenues for the foreseeable future.
The loss of any of our major customers would have a material adverse effect on
our business, financial condition and results of operations. Some of these
customers are based in the Pacific Rim, which is subject to economic and
political uncertainties. In addition, a majority of our customers order products
through written purchase orders as opposed to long-term supply contracts and,
therefore, such customers are generally not obligated to purchase products from
us for any extended period. Major customers also have significant leverage over
us and may attempt to change the terms, including pricing, which could
materially adversely effect our business, financial condition and results of
operations. This risk is increased due to the potential for some of these
customers merging or acquiring another of our customers. As our original
equipment manufacturer customers are pressured to reduce prices as a result of
competitive factors, we may be required to contractually commit to price
reductions for our products before we know how, or if, cost reductions can be
obtained. If we are unable to achieve such cost reductions, our gross margins
could decline and such decline could have a material adverse effect on our
business, financial condition and results of operations. In addition, we provide
some customers with price protection in the event that we reduce the price of
our products. While we maintain reserves for this price protection, the impact
of any future price reductions could exceed our reserves in any specific fiscal
period. Any price protection in excess of recorded reserves could have a
negative impact on our business, financial condition and results of operations.

COMPETITION WITHIN OUR PRODUCT MARKETS IS INTENSE AND INCLUDES NUMEROUS
ESTABLISHED COMPETITORS.

     The markets for our products are highly competitive and are characterized
by short product life cycles, price erosion, rapidly changing technology,
frequent product performance improvements and evolving industry standards. We
currently compete primarily with Adaptec Inc. and LSI Logic Corporation in the
SCSI sector of the I/O market. In the Fibre Channel host bus adapter sector of
the I/O market, we compete primarily with Agilent Technologies, LSI Logic
Corporation, Emulex Corporation, JNI Corporation and Adaptec Inc. In the switch
products sector, we compete with Brocade Communications and several smaller
companies. In the enclosure management sector, we compete primarily with Vitesse
Semiconductor Corporation. We may

                                        16
<PAGE>   18

compete with some of our larger disk drive and computer systems customers, some
of which have the capability to develop I/O controller integrated circuits for
use in their own products. At least one large original equipment manufacturer
customer in the past has decided to vertically integrate and has therefore
stopped purchasing from us.

     We will need to continue to develop products appropriate to our markets to
remain competitive as our competitors continue to introduce products with
improved performance characteristics. While we continue to devote significant
resources to research and development, these efforts may not be successful, or
may not be developed and introduced in a timely manner. Further, several of our
competitors have greater resources devoted to securing semiconductor foundry
capacity because of long-term agreements regarding supply flow, equity or
financing agreements or direct ownership of a foundry. In addition, while
relatively few competitors offer a full range of storage area networking
products, additional domestic and foreign manufacturers may increase their
presence in these markets. We may not be able to compete successfully against
these or other competitors. If we are unable to design, develop and introduce
competitive new products on a timely basis, our future operating results will be
materially and adversely affected.

OUR DISTRIBUTORS MAY NOT ADEQUATELY DISTRIBUTE OUR PRODUCTS WHICH COULD
NEGATIVELY AFFECT OUR OPERATIONS.

     Our distributors generally offer a diverse array of products from several
different manufacturers. Accordingly, we are at a risk that these distributors
may give higher priority to selling products from other suppliers, thus reducing
their efforts to sell our products. A reduction in sales efforts by our current
distributors could materially adversely impact our business or operating
results. Our distributors may on occasion build inventories in anticipation of
substantial growth in sales, and if such growth does not occur rapidly as we
anticipate, distributors may decrease the amount of product ordered from us in
subsequent quarters. In addition, if we decrease our distributor-incentive
programs, our distributors may temporarily decrease the amounts of product
purchased from us. This could result in a change of business habits, and
distributors may decide to decrease the amount of product held and reduce their
inventory levels. This could reduce our revenues in any given quarter and could
negatively impact our operating results. In addition, we may from time to time
take actions to reduce levels of our products at distributors. These actions
could reduce our revenues in any given quarter and could negatively impact our
operating results or revenues.

WE DEPEND ON OUR RELATIONSHIPS WITH WAFER SUPPLIERS AND OTHER SUBCONTRACTORS AND
A LOSS OF THESE RELATIONSHIPS MAY LEAD TO UNPREDICTABLE CONSEQUENCES WHICH MAY
HARM OUR RESULTS OF OPERATIONS IF ALTERNATIVE SUPPLY SOURCES ARE NOT AVAILABLE.

     We currently rely on several independent foundries to manufacture our
semiconductor products either in finished form or wafer form. Generally, we
conduct business with some of our foundries through written purchase orders as
opposed to long-term supply contracts. Therefore, these foundries are generally
not obligated to supply products to us for any specific period, in any specific
quantity or at any specified price. If a foundry terminates its relationship
with us or if our supply from a foundry is otherwise interrupted, we may not
have a sufficient amount of time to replace the supply of products manufactured
by that foundry. As a result, we may not be able to meet customer demands, which
could harm our business.

     Historically, there have been periods when there has been a worldwide
shortage of advanced process technology foundry capacity. The manufacture of
semiconductor devices is subject to a wide variety of factors, including the
availability of raw materials, the level of contaminants in the manufacturing
environment, impurities in the materials used, and the performance of personnel
and equipment. We are continuously evaluating potential new sources of supply.
However, the qualification process and the production ramp-up for additional
foundries have in the past taken, and could in the future take, longer than
anticipated. New supply sources may not be able or willing to satisfy our wafer
requirements on a timely basis or at acceptable quality or unit prices.

     We use multiple sources of supply for some of our products, which may
require customers to perform separate product qualifications. We have not
developed alternate sources of supply for all of our products and our newly
introduced products are typically produced initially by a single foundry until
alternate sources can be

                                        17
<PAGE>   19

qualified. In particular, our integrated single chip Fibre Channel controller is
manufactured by LSI Logic and integrates LSI Logic's transceiver technology. In
the event that LSI Logic is unable or unwilling to satisfy our requirements for
this technology, our marketing efforts related to Fibre Channel products would
be delayed and, as such, our results of operations could be materially and
adversely affected. The requirement that a customer perform separate product
qualifications, or a customer's inability to obtain a sufficient supply of
products from us, may cause that customer to satisfy its product requirements
from our competitors. Constraints or delays in the supply of our products, due
to capacity constraints, unexpected disruptions at our foundries or with our
subcontractors, delays in obtaining additional production at the existing
foundries or in obtaining production from new foundries, shortages of raw
materials or other reasons, could result in the loss of customers.

OUR PRODUCTS ARE COMPLEX AND MAY CONTAIN UNDETECTED SOFTWARE OR HARDWARE ERRORS
THAT COULD LEAD TO AN INCREASE IN OUR COSTS, REDUCE OUR NET REVENUES OR DAMAGE
OUR REPUTATION.

     Products as complex as ours frequently contain undetected software or
hardware errors when first introduced or as newer versions are released. We have
from time to time found errors in existing, new or enhanced products. The
occurrence of hardware or software errors could adversely affect sales of our
products, cause us to incur significant warranty and repair costs, divert the
attention of our engineering personnel from our product development efforts and
cause significant customer relations problems.

BECAUSE WE DEPEND ON FOREIGN CUSTOMERS AND SUPPLIERS, WE ARE SUBJECT TO
INTERNATIONAL ECONOMIC, REGULATORY AND POLITICAL RISKS THAT COULD HARM OUR
FINANCIAL CONDITION.

     We expect that export revenues will continue to account for a significant
percentage of our net revenues for the foreseeable future. As a result, we are
subject to several risks, which include:

     - a greater difficulty of administering our business globally;

     - compliance with multiple and potentially conflicting regulatory
       requirements, such as export requirements, tariffs and other barriers;

     - differences in intellectual property protections;

     - difficulties in staffing and managing foreign operations;

     - potentially longer accounts receivable cycles;

     - currency fluctuations;

     - export control restrictions;

     - overlapping or differing tax structures;

     - political and economic instability; and

     - general trade restrictions.

     A significant number of our customers and suppliers are located in Japan.
Historically, the Asian markets have suffered from economic uncertainty. This
uncertainty has taken place especially in countries that have had a collapse in
both their currency and stock markets. These economic pressures have reduced
liquidity in the banking systems of the affected countries and, when coupled
with spare industrial production capacity, could lead to widespread financial
difficulty among the companies in this region. Our export sales are invoiced in
U.S. dollars and, accordingly, if the relative value of the U.S. dollar in
comparison to the currency of our foreign customers should increase, the
resulting effective price increase of our products to such foreign customers
could result in decreased sales. There can be no assurance that any of the
foregoing factors will not have a material adverse effect on our business,
financial condition and results of operations.

                                        18
<PAGE>   20

WE MAY NEED TO ENGAGE IN FINANCIALLY RISKY TRANSACTIONS TO GUARANTEE WE HAVE
PRODUCTION CAPACITY WHICH MAY REQUIRE US TO SEEK ADDITIONAL FINANCING AND RESULT
IN DILUTION TO OUR STOCKHOLDERS.

     The semiconductor industry and we have, in the past, experienced shortages
of available foundry capacity. Accordingly, in order to secure an adequate
supply of wafers, we may consider various possible supply agreements. Those
types of agreements include the use of "take or pay" contracts, making equity
investments in, or advances to, wafer manufacturing companies in exchange for
guaranteed production capacity, or the formation of joint ventures to own and
operate or construct foundries or to develop certain products. Any of these
arrangements would involve financial risk to us and could require us to commit a
substantial amount of our funds or provide technology licenses in return for
guaranteed production capacity. The need to commit our own funds may require us
to seek additional equity or debt financing. The sale or issuance of additional
equity or convertible debt securities could result in dilution to our
stockholders. This kind of additional financing, if necessary, may not be
available on terms acceptable to us.

WE ANTICIPATE ENGAGING IN MERGERS, ACQUISITIONS AND STRATEGIC INVESTMENTS,
HOWEVER, THESE ACTIVITIES MAY ADVERSELY AFFECT OUR RESULTS OF OPERATIONS AND
STOCK PRICE IF THEY DO NOT COMPLEMENT OUR BUSINESS.

     We anticipate that our future growth may depend in part on our ability to
identify and acquire complementary businesses, technologies or product lines
that are compatible with ours. Mergers and acquisitions involve numerous risks,
including:

     - uncertainties in identifying and pursuing target companies;

     - difficulties in the assimilation of the operations, technologies and
       products of the acquired companies;

     - the diversion of management's attention from other business concerns;

     - risks associated with entering markets or conducting operations with
       which we have no or limited direct prior experience;

     - the potential loss of current customers and/or retention of the acquired
       company's customers; and

     - the potential loss of key employees of the acquired company.

     Further, we may never realize the perceived benefits of a business
combination. Future acquisitions by us could dilute stockholders' investment,
and cause us to incur debt, contingent liabilities and amortization expense
related to goodwill and other intangible assets, all of which could materially
adversely affect our results of operations. With respect to accounting for
future business combinations, the Financial Accounting Standards Board, or FASB,
has announced it will abolish pooling-of-interests accounting treatment. The
standard, as currently proposed, would affect transactions after January 1,
2002. If the FASB does eliminate pooling-of-interests accounting treatment, we
may not be able to complete a business combination without incurring goodwill or
other intangible assets. While the new proposal would eliminate the quarterly
and yearly recurring charges for the amortization of goodwill, a significant
charge to earnings may be recorded if it can be determined that the goodwill is
impaired. This potential charge could have a material impact on the Company's
results of operations.

     We have, and plan to continue, to make investments in technology companies,
including privately held companies in a development stage. Many of these private
equity investments are inherently risky because the companies' businesses may
never develop, and we may incur losses related to these investments. We may be
required to reduce the value of those investments as reflected on our balance
sheet, which also may affect our results of operations. If we incur a charge to
reflect other than temporary declines in the value of our private equity
investments below our recorded value, our balance sheet and results of
operations will be reduced.

OUR BUSINESS COULD BE MATERIALLY ADVERSELY AFFECTED AS A RESULT OF THE RISKS
ASSOCIATED WITH STRATEGIC ALLIANCES.

     We have alliances with leading information technology companies and we plan
to continue our strategy of developing key alliances in order to expand our
reach into emerging markets. There can be no assurance that we will be
successful in our ongoing strategic alliances or that we will be able to find
further suitable business

                                        19
<PAGE>   21

relationships as we develop new products and strategies. Any failure to continue
or expand such relationships could have a material adverse effect on our
business, results of operations or financial conditions.

     There can be no assurance that companies with which we have strategic
alliances, certain of which have substantially greater financial, marketing and
technological resources than us, will not develop or market products in
competition with us in the future, discontinue their alliances with us or form
alliances with our competitors.

CONTINUED RAPID GROWTH WILL STRAIN OUR OPERATIONS AND REQUIRE THAT WE INCUR
COSTS TO UPGRADE OUR INFRASTRUCTURE.

     We have recently experienced a period of rapid growth and expansion that
has placed, and continues to place, a significant strain on our resources.
Unless we manage this growth effectively, we may make mistakes in executing our
business such as inaccurate sales forecasting, material planning, inventory
management or financial reporting, which may result in unanticipated
fluctuations in our operating results. We may not be able to install adequate
control systems in an efficient and timely manner, and our current or planned
personnel, systems, procedures and controls may not be adequate to support our
future operations. In addition, we test substantially all of our products prior
to shipment. If our capacity to conduct this testing does not expand
concurrently with the anticipated growth of our business, product shipments
could be delayed, which could result in delayed or lost revenues and customer
dissatisfaction.

IF WE ARE UNABLE TO ATTRACT AND RETAIN KEY PERSONNEL, WE MAY NOT BE ABLE TO
SUSTAIN OR GROW OUR BUSINESS.

     Our future success largely depends on our key engineering, sales, marketing
and executive personnel, including highly skilled semiconductor design personnel
and software developers. We also must identify and hire additional personnel. If
we lose the services of key personnel, our business would be adversely affected.
We believe that the market for key personnel in the industries in which we
compete is highly competitive. In particular, periodically we have experienced
difficulty in attracting and retaining qualified engineers and other technical
personnel and anticipate that competition for such personnel will increase in
the future. We may not be able to attract and retain key personnel with the
skills and expertise necessary to develop new products in the future, or to
manage our business, both in the United States and abroad.

OUR PROPRIETARY RIGHTS MAY BE INADEQUATELY PROTECTED AND INFRINGEMENT CLAIMS OR
ADVERSE JUDGMENTS COULD HARM OUR COMPETITIVE POSITION.

     Although we have patent protection on some aspects of our technology in
some jurisdictions, we rely primarily on trade secrets, copyrights and
contractual provisions to protect our proprietary rights. There can be no
assurance that these protections will be adequate to protect our proprietary
rights, that others will not independently develop or otherwise acquire
equivalent or superior technology or that we can maintain such technology as
trade secrets. There also can be no assurance that any patents we possess will
not be invalidated, circumvented or challenged. In addition, the laws of certain
countries in which our products are or may be developed, manufactured or sold,
including various countries in Asia, may not protect our products and
intellectual property rights to the same extent as the laws of the United States
or at all. If we fail to protect our intellectual property rights, our business
would be negatively impacted.

     Intellectual property claims have been made against us in the past, and
patent or other intellectual property infringement claims could be made against
us in the future. Although patent and intellectual property disputes may be
settled through licensing or similar arrangements, costs associated with these
arrangements may be substantial and the necessary licenses or similar
arrangements may not be available to us on satisfactory terms or at all. As a
result, we could be prevented from manufacturing and selling some of our
products. In addition, if we litigate these kinds of claims, the litigation
could be expensive and time consuming and could divert management's attention
from other matters. Our business could suffer regardless of the outcome of the
litigation. Our supply of wafers and other components can also be interrupted by
intellectual property infringement claims against our suppliers.

                                        20
<PAGE>   22

OUR CHARTER DOCUMENT AND SHAREHOLDER RIGHTS PLAN MAY DISCOURAGE COMPANIES FROM
ACQUIRING US AND OFFERING OUR STOCKHOLDERS A PREMIUM FOR THEIR STOCK.

     Pursuant to our certificate of incorporation, our board of directors is
authorized to approve the issuance of shares of currently undesignated preferred
stock without any vote or future action by the stockholders. Pursuant to this
authority, in June 1996 the board of directors adopted a shareholder rights plan
and declared a dividend of a right to purchase one one-hundredths of a share of
preferred stock for each outstanding share of our common stock. After adjustment
for each of the three two-for-one stock splits effected by us to date, our
common stock now carries one-eighth of the preferred stock purchase right per
share. The shareholder rights plan may have the effect of delaying, deferring or
preventing a change in control of our stock. This may discourage bids for our
common stock at a premium over the market price of the common stock and may
adversely affect the market price of the common stock.

OUR CORPORATE HEADQUARTERS AND PRINCIPAL DESIGN FACILITIES ARE LOCATED IN A
REGION THAT IS SUBJECT TO EARTHQUAKES AND OTHER NATURAL DISASTERS, AS WELL AS
ELECTRICITY SHORTAGES.

     Our California facilities, including our principal executive offices, our
principal design facilities, and our critical business operations are located
near major earthquake faults. We are not specifically insured for earthquakes,
or other such natural disasters. Any personal injury or damage to the facilities
as a result of such occurrences could have a material adverse effect on our
business, results of operations and financial condition. Additionally, our
operations depend upon a continuing adequate supply of electricity, natural gas
and water. These energy sources have historically been available on a continuous
basis and in adequate quantities for our needs. An interruption in the supply of
raw materials or energy inputs for any reason would have an adverse effect on
our manufacturing operations. Recently, California has had power shortages
resulting in rolling blackouts, or the temporary and generally unannounced loss
of electrical power. These shortages could affect our ability to supply products
to our customers on a timely basis.

ITEM 7a. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

  Interest Rate Sensitivity

     At April 1, 2001, our investment portfolio consisted of fixed income
securities, excluding those classified as cash equivalents, with a fair value of
$227.2 million (see Note 4 of Notes to Consolidated Financial Statements). The
carrying amount of these securities approximates fair market value. These
securities are subject to interest rate risk and will decline in value if market
interest rates increase. If market interest rates were to increase immediately
and uniformly by 10% from levels as of April 1, 2001, the decline in the fair
value of the portfolio would not be material to our financial position, results
of operations and cash flows.

     Our export revenues are denominated in U.S. dollars. As such, the Company
does not have a material exposure to fluctuation in foreign currency.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

     The financial statements of the Company are referenced in Item 14(a).

                                        21
<PAGE>   23

                          INDEPENDENT AUDITORS' REPORT

The Board of Directors
QLogic Corporation:

     We have audited the consolidated financial statements of QLogic Corporation
and subsidiaries as listed in Item 14(a). In connection with our audits of the
consolidated financial statements, we have also audited the financial statement
schedule as listed in Item 14(a). These consolidated financial statements and
the financial statement schedule are the responsibility of the Company's
management. Our responsibility is to express an opinion on these consolidated
financial statements and the financial statement schedule based on our audits.

     We conducted our audits in accordance with auditing standards generally
accepted in the United States of America. Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.

     In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the financial position of QLogic
Corporation and subsidiaries as of April 1, 2001 and April 2, 2000 and the
results of their operations and their cash flows for each of the years in the
three-year period ended April 1, 2001, in conformity with accounting principles
generally accepted in the United States of America. Also, in our opinion, the
related financial statement schedule, when considered in relation to the basic
consolidated financial statements taken as a whole, presents fairly, in all
material respects, the information set forth therein.

                                          KPMG LLP

Orange County, California
May 15, 2001

                                        22
<PAGE>   24

                               QLOGIC CORPORATION

                          CONSOLIDATED BALANCE SHEETS
                        APRIL 1, 2001 AND APRIL 2, 2000
                       (IN THOUSANDS, EXCEPT SHARE DATA)

                                     ASSETS

<TABLE>
<CAPTION>
                                                                2001         2000
                                                              --------    ----------
                                                                          (RESTATED)
<S>                                                           <C>         <C>
Cash and cash equivalents...................................  $128,273     $ 86,889
Short term investments......................................   227,210      117,762
Accounts and notes receivable, less allowance for doubtful
  accounts of $2,372 and $1,014 as of April 1, 2001 and
  April 2, 2000, respectively...............................    53,588       27,489
Inventories.................................................    46,510       25,092
Deferred income taxes.......................................    32,558       28,726
Prepaid expenses and other current assets...................     2,358        1,716
                                                              --------     --------
          Total current assets..............................   490,497      287,674
Long term investments.......................................        --       39,797
Property and equipment, net.................................    56,843       50,533
Other assets................................................    24,157       16,965
                                                              --------     --------
                                                              $571,497     $394,969
                                                              ========     ========
                        LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts payable............................................  $ 18,017     $  7,958
Accrued compensation........................................    15,413       11,091
Accrued warranty............................................     2,887        2,172
Income taxes payable........................................     6,295          207
Other accrued liabilities...................................     5,183        9,119
                                                              --------     --------
          Total current liabilities.........................    47,795       30,547
                                                              --------     --------
Other non-current liabilities...............................        --        5,097
Commitments and contingencies
Stockholders' equity:
  Preferred stock, $0.001 par value; 1,000,000 shares
     authorized, (200,000 shares designated as Series A
     Junior Participating Preferred, $0.001 par value); none
     issued and outstanding.................................        --           --
  Common stock, $0.001 par value; 500,000,000 shares
     authorized, 92,324,042 and 89,715,017 issued and
     outstanding at April 1, 2001 and April 2, 2000,
     respectively...........................................        92           90
  Additional paid-in capital................................   393,383      293,992
  Deferred stock-based compensation.........................    (5,751)          --
  Retained earnings.........................................   134,254       65,485
  Other comprehensive income (loss).........................     1,724         (242)
                                                              --------     --------
          Total stockholders' equity........................   523,702      359,325
                                                              --------     --------
                                                              $571,497     $394,969
                                                              ========     ========
</TABLE>

          See accompanying notes to consolidated financial statements.
                                        23
<PAGE>   25

                               QLOGIC CORPORATION

                       CONSOLIDATED STATEMENTS OF INCOME
          YEARS ENDED APRIL 1, 2001, APRIL 2, 2000, AND MARCH 28, 1999
                     (IN THOUSANDS, EXCEPT PER SHARE DATA)

<TABLE>
<CAPTION>
                                                               2001         2000          1999
                                                             --------    ----------    ----------
                                                                         (RESTATED)    (RESTATED)
<S>                                                          <C>         <C>           <C>
Gross revenues.............................................  $362,781     $216,860      $121,575
Sales discounts............................................     5,239          767            --
                                                             --------     --------      --------
Net revenues...............................................   357,542      216,093       121,575
Cost of revenues...........................................   128,739       70,982        49,034
                                                             --------     --------      --------
     Gross profit..........................................   228,803      145,111        72,541
                                                             --------     --------      --------
Operating expenses:
  Engineering and development..............................    56,315       47,451        29,809
  Selling and marketing....................................    36,482       22,623        15,248
  General and administrative...............................    14,828       11,202         8,803
  Merger and related expenses..............................    22,947           --            --
                                                             --------     --------      --------
          Total operating expenses.........................   130,572       81,276        53,860
                                                             --------     --------      --------
Operating income...........................................    98,231       63,835        18,681
Interest and other income..................................    18,706        9,181         5,759
                                                             --------     --------      --------
     Income before income taxes............................   116,937       73,016        24,440
Income tax provision.......................................    48,168       24,701         8,310
                                                             --------     --------      --------
     Net income............................................    68,769       48,315        16,130
Accretion on convertible preferred stock...................        --           12           762
                                                             --------     --------      --------
Net income attributable to common stockholders.............  $ 68,769     $ 48,303      $ 15,368
                                                             ========     ========      ========
Net income per share:
  Basic....................................................  $   0.76     $   0.56      $   0.20
                                                             ========     ========      ========
  Diluted..................................................  $   0.72     $   0.52      $   0.18
                                                             ========     ========      ========
Number of shares used in per share computations:
  Basic....................................................    91,073       86,485        77,823
                                                             ========     ========      ========
  Diluted..................................................    95,139       92,533        87,232
                                                             ========     ========      ========
</TABLE>

          See accompanying notes to consolidated financial statements.
                                        24
<PAGE>   26

                               QLOGIC CORPORATION

                CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
          YEARS ENDED APRIL 1, 2001, APRIL 2, 2000 AND MARCH 28, 1999
                                 (IN THOUSANDS)

<TABLE>
<CAPTION>
                                 PREFERRED STOCK    COMMON STOCK     ADDITIONAL    DEFERRED                OTHER        TOTAL
                                 ---------------   ---------------    PAID-IN     STOCK-BASED   RETAINED    COMP    STOCKHOLDERS'
                                 SHARES   AMOUNT   SHARES   AMOUNT    CAPITAL        COMP       EARNINGS   INCOME      EQUITY
                                 ------   ------   ------   ------   ----------   -----------   --------   ------   -------------
<S>                              <C>      <C>      <C>      <C>      <C>          <C>           <C>        <C>      <C>
Balance as of March 29, 1998...     --      $--    75,421    $75      $135,208      $    --     $ 3,972    $  --      $139,255
  Net income and comprehensive
    income.....................     --      --        --      --            --           --      16,130       --        16,130
  Sales of Series C Preferred
    Stock (net)................      1      --        --      --        10,208           --          --       --        10,208
  Warrants issued in connection
    with license agreement.....     --      --        --      --           768           --          --       --           768
  Conversions of Series A
    preferred stock............     --      --        71      --            --           --          --       --            --
  Conversions of Series B
    preferred stock............     --      --     2,110       2            (2)          --          --       --            --
  Conversions of Series C
    preferred stock............     (1)     --     3,796       4            (4)          --          --       --            --
  Issuance of common stock
    under employee stock plans
    (including tax benefit of
    $5,769)....................     --      --     2,719       4         9,345           --          --       --         9,349
                                  ----      --     ------    ---      --------      -------     --------   ------     --------
Balance as of March 28, 1999...     --      $--    84,117    $85      $155,523      $    --     $20,102    $  --      $175,710
  Adjustment to conform fiscal
    year of pooled entity......     --      --       385      --         6,410           --      (2,932)    (242)        3,236
  Net income and comprehensive
    income.....................     --      --        --      --            --           --      48,315       --        48,315
  Sales of common stock in
    secondary offering (net of
    issuance costs of
    $4,174)....................     --      --     1,319       1        64,888           --          --       --        64,889
  Sales of common stock........     --      --       148      --        14,820           --          --       --        14,820
  Warrants issued in connection
    with product sales and for
    services rendered..........     --      --        --      --           798           --          --       --           798
  Conversions of Series C
    preferred stock............     --      --       436       1            --           --          --       --             1
  Issuance of common stock
    under employee stock plans
    (including tax benefit of
    $34,007)...................     --      --     3,310       3        51,553           --          --       --        51,556
                                  ----      --     ------    ---      --------      -------     --------   ------     --------
Balance as of April 2, 2000....     --      $--    89,715    $90      $293,992      $    --     $65,485    $(242)     $359,325
  Net income...................     --      --        --      --            --           --      68,769       --        68,769
  Change in unrealized gain on
    securities, net of tax.....     --      --        --      --            --           --          --    1,966         1,966
                                                                                                                      --------
    Total comprehensive
      income...................     --      --        --      --            --           --          --       --        70,735
  Warrants issued in connection
    with product sales.........     --      --        --      --         5,239           --          --       --         5,239
  Shares issued for business
    acquisition................     --      --        23      --        11,403       (5,891)         --       --         5,512
  Amortization of deferred
    stock-based compensation...     --      --        --      --            --          140          --       --           140
  Issuance of common stock
    under employee stock plans
    (including tax benefit of
    $52,742)...................     --      --     2,586       2        82,749           --          --       --        82,751
                                  ----      --     ------    ---      --------      -------     --------   ------     --------
Balance as of April 1, 2001....     --      $--    92,324    $92      $393,383      $(5,751)    $134,254   $1,724     $523,702
                                  ====      ==     ======    ===      ========      =======     ========   ======     ========
</TABLE>

          See accompanying notes to consolidated financial statements.
                                        25
<PAGE>   27

                               QLOGIC CORPORATION

                     CONSOLIDATED STATEMENTS OF CASH FLOWS
          YEARS ENDED APRIL 1, 2001, APRIL 2, 2000, AND MARCH 28, 1999
                                 (IN THOUSANDS)

<TABLE>
<CAPTION>
                                                                2001          2000          1999
                                                              ---------    ----------    ----------
                                                                           (RESTATED)    (RESTATED)
<S>                                                           <C>          <C>           <C>
Cash flows from operating activities:
  Net income................................................  $  68,769    $  48,315     $  16,130
  Adjustments to reconcile net income to net cash provided
    by operating activities:
    Provisions for non-cash sales discounts and consulting
      services..............................................      5,239          798            --
    Depreciation and amortization...........................     10,806        6,447         4,709
    Write-off of acquired in-process technology.............        554        8,410         1,220
    Provision for doubtful accounts.........................      1,358           35           201
    Loss on disposal of property and equipment..............        449          219           189
    Benefit from deferred income taxes......................     (5,829)      (9,359)       (6,283)
    Tax benefit from issuance of stock under employee stock
      plans.................................................     52,742       34,007         5,769
    Changes in assets and liabilities:
      Accounts and notes receivable.........................    (27,457)     (11,296)       (3,225)
      Inventories...........................................    (21,418)     (13,313)       (5,340)
      Prepaid expenses and other current assets.............       (642)          41        (1,431)
      Other assets..........................................      1,389         (137)       (1,158)
      Accounts payable......................................     10,059          551         2,152
      Accrued compensation..................................      4,322        3,519         2,403
      Income taxes payable..................................      6,088       (7,117)       (3,770)
      Accrued warranty......................................        715        1,090            --
      Other accrued liabilities.............................     (3,907)       4,312         8,072
      Other non-current liabilities.........................     (5,097)          --          (466)
                                                              ---------    ---------     ---------
        Net cash provided by operating activities...........     98,140       66,522        19,172
                                                              ---------    ---------     ---------
Cash flows from investing activities:
  Additions to property and equipment.......................    (16,705)     (42,403)       (7,373)
  Purchases of investments..................................   (236,726)    (659,692)     (117,861)
  Acquisition of business, net of cash acquired.............     (2,346)      (8,860)       (1,957)
  Maturities of investments.................................    169,041      600,398        78,179
  Other, net................................................         --         (347)          (49)
                                                              ---------    ---------     ---------
        Net cash used in investing activities...............    (86,736)    (110,904)      (49,061)
                                                              ---------    ---------     ---------
Cash flows from financing activities:
  Principal payments on other non-current liabilities.......        (29)        (358)         (358)
  Proceeds from issuance of stock under stock plans.........     30,009       16,672         3,580
  Proceeds from sale of common and preferred stock..........         --       79,709        10,208
                                                              ---------    ---------     ---------
        Net cash provided by financing activities...........     29,980       96,023        13,430
                                                              ---------    ---------     ---------
Net increase (decrease) in cash and cash equivalents........     41,384       51,641       (16,459)
Adjustment to conform fiscal year end of pooled entity......         --      (14,384)           --
Cash and cash equivalents at beginning of year..............     86,889       49,632        66,091
                                                              ---------    ---------     ---------
Cash and cash equivalents at end of year....................  $ 128,273    $  86,889     $  49,632
                                                              =========    =========     =========
Supplemental disclosure of cash flow information:
Cash paid during the year for:
  Interest..................................................  $      60    $      38     $      53
                                                              =========    =========     =========
  Income taxes..............................................  $   2,318    $   6,068     $   6,068
                                                              =========    =========     =========
Supplemental schedule of non-cash investing and financing
  activities:
  Accrual for acquisition performance payment...............  $   1,244    $     841     $   1,321
                                                              =========    =========     =========
  Stock option plan assumed in acquisition..................  $   5,891    $      --     $      --
                                                              =========    =========     =========
  Stock issued in connection with business acquisition......  $   2,010    $      --     $      --
                                                              =========    =========     =========
</TABLE>

          See accompanying notes to consolidated financial statements.
                                        26
<PAGE>   28

                               QLOGIC CORPORATION

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE (1)  DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

  General Business Information

     QLogic Corporation ("QLogic" or the "Company") designs and supplies
semiconductor and board level input/output (I/O) products, full fabric switches,
and enclosure management semiconductors. The Company's I/O products provide a
high performance interface between computer systems and their attached data
storage peripherals, such as hard disk drives, tape drives, removable disk
drives and redundant array of independent disks subsystems, or RAID subsystems.
QLogic markets and distributes its products through a direct sales organization
supported by field application engineers, as well as through a network of
independent manufacturers' representatives and regional and international
distributors. The Company's primary OEM customers are major domestic and
international suppliers and manufacturers of servers, workstations and data
storage peripherals.

  Principles of Consolidation and Financial Reporting Period

     The consolidated financial statements include the financial statements of
QLogic Corporation and its wholly owned subsidiaries. All significant
intercompany balances and transactions have been eliminated in consolidation.
QLogic's fiscal year ends on the Sunday nearest March 31. The fiscal year ended
April 1, 2001 ("fiscal 2001") comprised 52 weeks, the fiscal year ended April 2,
2000 ("fiscal 2000") comprised 53 weeks and the fiscal year ended March 28, 1999
("fiscal 1999") comprised 52 weeks.

     As more fully described in Note (2), QLogic merged with Ancor
Communications, Inc. ("Ancor") on August 1, 2000 in a pooling of interests
transaction. Historically, the fiscal year of Ancor ended on December 31. In
order to report the historical fiscal year ends, the Company's consolidated
financial statements for the year ended March 28, 1999 were restated to include
Ancor's consolidated financial statements for the year ended December 31, 1998.
All years prior to March 28, 1999 were restated similarly. The Company's
consolidated financial statements for the fiscal year ended April 2, 2000 were
restated to include the Ancor balance sheet at March 31, 2000, and the results
of operations and cash flows of Ancor for the twelve months ended December 31,
1999. Ancor's net revenues and net loss of $6.9 million and $2.9 million,
respectively, in the three months ended March 31, 2000 were included as a
retained earnings adjustment in the fiscal year ended April 2, 2000. During the
three months ended March 31, 2000 Ancor issued 385,000 shares of common stock
with net proceeds of $6.4 million. Net cash outflow during the three months
ended March 31, 2000 amounted to $14.4 million.

     All references to share and per share data have been restated to give
effect to the Company's stock splits.

  Use of Estimates

     The preparation of financial statements in accordance with accounting
principles generally accepted in the United States of America, requires
management to make estimates that affect the amounts reported in the Company's
consolidated financial statements and accompanying notes. Actual results could
differ from these estimates.

  Revenue Recognition

     Revenue is generally recognized upon product shipment. Royalty revenue is
recognized when earned and receipt is assured. The customer's obligation to pay
the Company, and the payment terms, are set at the time of shipment and are not
dependent on subsequent resale of the Company's product. However, certain of the
Company's sales are made to distributors under agreements allowing limited right
of return and/or price protection. The Company recognizes revenue through these
distribution channels based on management's estimate as to the approximate point
the products have been resold. The Company warrants its products, on a limited
basis, to be free from defects for periods of one to five years from date of
shipment. The Company

                                        27
<PAGE>   29
                               QLOGIC CORPORATION

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

estimates and establishes allowances and reserves for product returns, warranty
obligations, doubtful accounts, and price adjustments. During fiscal year 2001,
the Company adopted the Securities and Exchange Commission's Staff Accounting
Bulletin ("SAB") 101, "Revenue Recognition in Financial Statements," as amended.
The adoption of SAB 101 did not have a material impact on the Company's
consolidated financial statements.

  Income Taxes

     Income taxes are accounted for under the asset and liability method.
Deferred tax assets and liabilities are recognized for the future tax
consequences attributable to differences between the financial statement
carrying amounts of existing assets and liabilities and their respective tax
bases and operating loss and tax credit carry forwards. Deferred tax assets and
liabilities are measured using enacted tax rates expected to apply to taxable
income in the years in which those temporary differences are expected to be
recovered or settled. The effect on deferred tax assets and liabilities of a
change in tax rates is recognized in income in the period that includes the
enactment date.

  Net Income per Share

     The Company applies the provisions of SFAS 128, "Earnings per Share." Basic
net income per common share was computed based on the weighted average number of
common shares outstanding during the periods presented. Diluted net income per
share was computed based on the weighted average number of common and dilutive
potential common shares outstanding during the periods presented. The Company
has granted certain stock options and warrants which have been treated as
dilutive potential common shares in computing diluted net income per share.

  Fair Value of Financial Instruments

     For certain of the Company's financial instruments, including cash and cash
equivalents, short-term investments, accounts receivable , accounts payable and
accrued liabilities, the carrying amounts approximate fair value due to their
short maturities. Long-term investments are carried at cost which approximates
fair value.

  Concentration of Credit Risk

     Financial instruments that potentially subject the Company to significant
concentrations of credit risk consist principally of cash equivalents,
investments in marketable securities, and trade accounts receivable. The Company
places its marketable securities primarily in municipal bonds, corporate bonds
and government securities, all of which are high investment grade. The Company,
by policy, limits the amount of credit exposure through diversification and
investment in highly rated securities. Sales to customers are denominated in
U.S. dollars. As a result, the Company believes its foreign currency risk is
minimal.

     The Company sells its products to original equipment manufacturers and
distributors throughout the world. The Company's four largest customers comprise
of 56% of total accounts receivable at April 1, 2001 and 53% at April 2, 2000.
The Company performs ongoing credit evaluations of its customers' financial
condition and, generally, requires no collateral from its customers. The Company
maintains an allowance for doubtful accounts based upon the expected
collectibility of all accounts receivable. There have not been significant
losses experienced on accounts receivable.

                                        28
<PAGE>   30
                               QLOGIC CORPORATION

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

  Cash and Cash Equivalents

     For purposes of the consolidated statements of cash flows, the Company
considers all highly liquid investments purchased with original maturities of
three months or less on their acquisition date to be cash equivalents.

  Investments

     The Company invests primarily in debt securities. During the second fiscal
quarter ended October 1, 2001, the Company changed its classification of these
securities based on management's intent from "held to maturity" to "available
for sale" according to the definitions of SFAS 115, "Accounting for Certain
Investments in Debt and Equity Securities." Accordingly, the Company's debt
securities are carried at fair value in short-term investments in the
accompanying consolidated balance sheets. Unrealized gains and losses, net of
the related tax effect, if any, are excluded from earnings and reported as a
separate component of other comprehensive income until realized. Realized gains
or losses and other than temporary declines in fair value are determined on a
specific identification basis and reported in other income and expense as
incurred.

     The Company also holds minority investments in companies that are not
publicly traded. These investments are recorded at cost and are included in
other assets in the accompanying consolidated balance sheets. The Company
monitors these investments for impairment by reference to valuation of publicly
traded companies in similar sectors and other factors such as the status of the
investee's technology, product launch and customer acceptance. In some
circumstances, the Company may obtain an independent valuation of the
investment. If the Company determines that the investment has suffered an other
than temporary decline in value, this decline is reported in other income or
expense in the period in which the determination is made. As of April 1, 2001 no
other than temporary declines in value had occurred.

  Inventories

     Inventories are stated at the lower of cost (first-in, first-out) or net
realizable value.

  Impairment of Long-Lived Assets and Long-Lived Assets to be Disposed Of

     Long-lived assets and certain identifiable intangibles are reviewed for
impairment whenever events or changes in circumstances indicate that the
carrying amount of an asset may not be recoverable. Recoverability of assets to
be held and used is measured by the comparison of the carrying amount of an
asset to future undiscounted net cash flows expected to be generated by the
asset. If such assets are considered to be impaired, the impairment to be
recognized is measured by the amount by which the carrying amount of the assets
exceeds the fair value of the assets. Assets to be disposed of are reported at
the lower of the carrying amount or fair value less costs to sell.

  Property and Equipment

     Property and equipment are stated at cost. Depreciation is calculated using
the straight-line method over estimated useful lives of two to 39.5 years.
Leasehold improvements are amortized on a straight-line basis over the shorter
of the lease term or the estimated useful life of the related asset.

  Stock-Based Compensation

     The Company accounts for its employee and director stock options and
employee stock purchase plan in accordance with the provisions of Accounting
Principles Board Opinion No. 25 ("APB 25"), "Accounting for Stock Issued to
Employees." SFAS 123, "Accounting for Stock-Based Compensation," which was
effective for fiscal years beginning after December 31, 1995, provided an
alternative to APB 25, but allowed companies to account for employee and
director stock-based compensation under the current intrinsic value method as
                                        29
<PAGE>   31
                               QLOGIC CORPORATION

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

prescribed by APB 25. The Company has continued to account for its employee and
director stock plans in accordance with APB 25. Additional pro forma disclosures
as required under SFAS 123 are presented in Note (8) of notes to consolidated
financial statements. During fiscal year 2001, the Company adopted the FASB
Interpretation No. 44, "Accounting for Certain Transactions Involving Stock
Compensation -- an interpretation of APB No. 25", ("FIN 44"). The adoption of
FIN 44 did not have a material impact on the Company's consolidated financial
statements.

  Comprehensive Income

     Comprehensive income is defined as the change in equity of a company during
a period from transactions and other events and circumstances excluding
transactions resulting from investments by owners and distributions to owners.
The Company's comprehensive income consists of net income and the unrealized
gain on the available-for-sale securities, net of income taxes.

  Research and Development

     Research and development costs, including costs related to the development
of new products and process technology, as well as acquired in-process
technology, are expensed as incurred.

  Reclassifications

     Certain reclassifications have been made to the fiscal 2000 and fiscal 1999
consolidated financial statements to conform to the fiscal 2001 presentation.

NOTE (2)  BUSINESS COMBINATIONS

  Little Mountain Group, Inc.

     On January 23, 2001, the Company acquired the outstanding common stock of
Little Mountain Group, Inc. ("LMG"), for cash and stock which could amount to
$30 million over a four-year period. LMG is a designer of iSCSI silicon and
board level products to enable an ethernet Storage Area Network. The Company
accounted for the transaction as a purchase. Accordingly, the excess purchase
price paid over the fair value of the LMG net assets of $7.1 million was
recorded as goodwill, and will be amortized over five years. The structure of
the acquisition includes payments of stock based on performance milestones to be
achieved over the next four fiscal years. These payments will be charged to
engineering and development expense as the performance milestones are achieved.

  Ancor Communications, Inc.

     On August 1, 2000, the Company completed its merger with Ancor
Communications, Incorporated ("Ancor"). Ancor was a leading provider of Fibre
Channel switches. In connection with the merger, the Company issued 15,535,835
shares of its common stock in exchange for all shares of Ancor's common stock
and reserved 1,724,036 shares of its common stock for issuance upon exercise of
outstanding Ancor employee stock options and other rights assumed by the
Company. The merger was accounted for as a pooling of interests. Accordingly,
the Company's consolidated financial statements have been restated to include
the pooled operations of Ancor as if it had combined with the Company since
Ancor's inception. Included in net revenues for fiscal year 2000 and 1999 were
net revenues from Ancor of $13.0 and $4.4 million, respectively. Included in
restated net income for fiscal year 2000 and 1999 were net losses from Ancor of
approximately $8.7 million and $15.3 million, respectively. Restated diluted net
income per share for fiscal year 2000 and 1999 included losses of $0.09 and
$0.18 per share, respectively, from Ancor. Included in net revenues for the year
ended April 1, 2001, was $9.4 million from Ancor, recognized prior to the
closing of the merger on August 1, 2000. Included in net income for the year
ended April 1, 2001 were losses totaling $3.8 million from

                                        30
<PAGE>   32
                               QLOGIC CORPORATION

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

Ancor, incurred prior to August 1, 2000. There were no transactions between the
Company and Ancor prior to the consummation of the merger.

     In connection with the merger with Ancor, the Company recorded
approximately $22.9 million in charges for direct and other merger-related costs
including fees of investment bankers, attorneys, accountants and other direct
and incremental charges. Substantially all of the merger-related costs and fees
have been paid at April 1, 2001.

  AdaptiveRAID Technology

     On January 10, 2000, the Company acquired certain intellectual property
("AdaptiveRAID(R) technology") from Borg Adaptive Technologies, Inc., a wholly
owned subsidiary of nStor Corporation. The AdaptiveRAID(R) technology, which was
expected to provide next generation embedded RAID storage solutions for the
Intel Architecture workstation market, was purchased for $7.5 million in cash.
At the time of the acquisition, the AdaptiveRAID(R) technology was in the
development stage with no completed commercially viable storage solution
products and thus the entire purchase price was written-off to acquired
in-process technology. On February 26, 2001, the technology was sold to
YottaYotta, Inc. in exchange for a note receivable. The note is immediately
payable upon completion of YottaYotta, Inc.'s qualified financing, which is
currently in process. Due to the uncertainty regarding collection of the note,
the Company will record the ultimate gain from the sale of this technology upon
the collection of the note receivable from YottaYotta, Inc.

  Silicon Design Resources, Inc.

     On August 20, 1998, the Company acquired the net assets of Silicon Design
Resources, Inc. ("SDR") for $2 million in cash. In addition, the Company is
obligated to pay up to an additional $8 million in cash provided that certain
performance targets are achieved through fiscal year 2002. These payments will
be accounted for as additional purchase price and allocated to the intangible
assets acquired, specifically the in-process technology and the completed
technology. The Company accounted for the transaction using the purchase method
of accounting, and excluding the initial write-off of the acquired in-process
technology in the quarter ended September 27, 1998, the impact to the Company's
financial position and results of operations from the acquisition date was not
material. Additionally, the Company incurred approximately $413,000 in
professional fees related to the acquisition.

     At April 1, 2001 and April 2, 2000, a performance payment to the former
shareholders of SDR of $1,244,000 and $841,000, respectively, was included in
other accrued liabilities in the accompanying consolidated balance sheets. These
payments were allocated to the intangible assets acquired: $820,000 and
$554,000, respectively, were written-off as acquired in-process technology and
$424,000 and $287,000, respectively, were capitalized as completed technology.

NOTE (3)  NET INCOME PER SHARE

     The Company computed basic net income per share based on the weighted
average number of common shares outstanding during the periods presented.
Diluted income per share was computed based on the weighted average number of
common and dilutive potential common shares outstanding during the periods
presented. The Company has granted certain stock options and warrants which have
been treated as dilutive potential common shares.

                                        31
<PAGE>   33
                               QLOGIC CORPORATION

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

     The following table sets forth the computations of basic and diluted net
income per share:

<TABLE>
<CAPTION>
                                                         2001       2000       1999
                                                        -------    -------    -------
                                                               (IN THOUSANDS,
                                                          EXCEPT PER SHARE AMOUNTS)
<S>                                                     <C>        <C>        <C>
Numerator:
  Net income attributable to common stockholders......  $68,769    $48,303    $15,368
                                                        =======    =======    =======
Denominator:
  Denominator for basic net income per
     share -- weighted average shares.................   91,073     86,485     77,823
  Dilutive potential common shares, using treasury
     stock method.....................................    4,066      6,048      9,409
                                                        -------    -------    -------
  Denominator for diluted net income per share........   95,139     92,533     87,232
                                                        =======    =======    =======
Basic net income per share............................  $  0.76    $  0.56    $  0.20
                                                        -------    -------    -------
Diluted net income per share..........................  $  0.72    $  0.52    $  0.18
                                                        -------    -------    -------
</TABLE>

     Options to purchase 716,818, 133,732 and 579,530 shares of common stock
were outstanding as of April 1, 2001, April 2, 2000, and March 28, 1999,
respectively, but were not included in the computation of diluted net income per
share, as the effect would be antidilutive.

NOTE (4)  INVESTMENTS

     The Company's portfolio of investments as of April 1, 2001 consists of the
following:

<TABLE>
<CAPTION>
                                                        GROSS         GROSS       ESTIMATED
                                                      UNREALIZED    UNREALIZED      FAIR
                                            COST         GAIN          LOSS         VALUE
                                          --------    ----------    ----------    ---------
                                                           (IN THOUSANDS)
<S>                                       <C>         <C>           <C>           <C>
Debt securities
  Municipal bonds.......................  $ 30,275      $  284         $(11)      $ 30,548
  Corporate bonds.......................    80,003       1,455           (9)        81,449
  U.S. Government securities............    92,770         884          (23)        93,631
  Other debt securities.................   153,522         109           --        153,631
                                          --------      ------         ----       --------
          Total available for sale
            securities..................   356,570       2,732          (43)       359,259
Less amounts classified as cash
  equivalents...........................   132,014          35           --        132,049
                                          --------      ------         ----       --------
                                          $224,556      $2,697         $(43)      $227,210
                                          ========      ======         ====       ========
</TABLE>

     The gross realized gains and losses on the sales of marketable securities
were immaterial in fiscal 2001, 2000 and 1999. The amortized cost and estimated
fair value of investments in debt securities as of April 1, 2001, by contractual
maturity, were as follows:

<TABLE>
<CAPTION>
                                                                     ESTIMATED
                                                                        FAIR
                                                           COST        VALUE
                                                         --------    ----------
                                                             (IN THOUSANDS)
<S>                                                      <C>         <C>
Mature in one year or less.............................  $238,438     $238,763
Mature after one year through five years...............   118,132      120,496
                                                         --------     --------
                                                         $356,570     $359,259
                                                         ========     ========
</TABLE>

                                        32
<PAGE>   34
                               QLOGIC CORPORATION

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

     At April 2, 2000 the gross unrealized gains and losses on securities were
immaterial. The Company's portfolio of investments as of April 2, 2000,
consisted of the following:

<TABLE>
<CAPTION>
                                                                   COST
                                                              --------------
                                                              (IN THOUSANDS)
<S>                                                           <C>
Debt securities
  Municipal bonds...........................................     $ 31,810
  Corporate bonds...........................................       99,760
  U.S. government securities................................       44,619
  Other debt securities.....................................       71,078
                                                                 --------
          Total debt securities.............................      247,267
Less amounts classified as cash equivalents.................       89,708
                                                                 --------
                                                                 $157,559
                                                                 ========
</TABLE>

NOTE (5)  INVENTORIES

     Components of inventories are as follows:

<TABLE>
<CAPTION>
                                                            2001       2000
                                                           -------    -------
                                                             (IN THOUSANDS)
<S>                                                        <C>        <C>
Raw materials............................................  $37,110    $17,797
Work in progress.........................................    8,021      4,796
Finished goods...........................................    1,379      2,499
                                                           -------    -------
                                                           $46,510    $25,092
                                                           =======    =======
</TABLE>

NOTE (6)  PROPERTY AND EQUIPMENT

     Components of property and equipment are as follows:

<TABLE>
<CAPTION>
                                                            2001       2000
                                                           -------    -------
                                                             (IN THOUSANDS)
<S>                                                        <C>        <C>
Land.....................................................  $11,663    $11,663
Building and improvements................................   21,819     21,589
Product and test equipment...............................   43,267     33,227
Furniture and fixtures...................................    3,835      3,343
Semiconductor tooling....................................    4,584      3,770
                                                           -------    -------
                                                            85,168     73,592
Less accumulated depreciation and amortization...........   28,325     23,059
                                                           -------    -------
                                                           $56,843    $50,533
                                                           =======    =======
</TABLE>

NOTE (7)  CAPITAL ACCOUNTS

  Common Stock

     On April 1, 2001 and April 2, 2000, the Company's authorized common stock
was 500,000,000 with 92,324,042 and 89,715,017 shares issued and outstanding,
respectively. At April 1, 2001, 26,512,050 shares were reserved for the exercise
of issued and unissued common stock options, 2,400,000 shares were reserved for
issuance in connection with the Company's Employee Stock Purchase Plan, and
791,250 shares were reserved for the exercise of issued common stock warrants.

                                        33
<PAGE>   35
                               QLOGIC CORPORATION

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

  Preferred Stock

     In fiscal 1994, the Company's stockholders approved an amendment and
restatement of the certificate of incorporation which authorized the future
issuance of 1,000,000 shares of preferred stock, $0.10 par value, with rights
and preferences to be determined by the Board of Directors. In January 2000, the
par value was adjusted to $0.001.

  Shareholder Rights Plan

     On June 4, 1996, the Board of Directors of the Company unanimously adopted
a Shareholder Rights Plan (the "Rights Plan") pursuant to which it declared a
dividend distribution of preferred stock purchase rights (a "Right") upon all of
the outstanding shares of the common stock.

     The Rights dividend was paid on June 20, 1996 to the holders of record of
shares of common stock on that date, at the rate of one-eighth of one whole
Right per one share of common stock, as adjusted pursuant to the Company's stock
splits. Each share of common stock presently outstanding that had been issued
since June 20, 1996 also includes one-eighth Right, and each share of common
stock that may be issued after the date hereof and prior to the Distribution
Date (as defined below) also will include one-eighth Right.

     The Rights become exercisable (i) the 10th business day following the date
of a public announcement that a person or a group of affiliated or associated
persons (an "Acquiring Person") has acquired beneficial ownership of 15% or more
of the outstanding shares of common stock, or (ii) the 10th business day
following the commencement of, or announcement of an intention to make a tender
offer or exchange offer the consummation of which would result in the person or
group making the offer becoming an Acquiring Person (the earlier of the dates
described in clauses (i) and (ii) being called the "Distribution Date").

     The Rights held by an Acquiring Person or its affiliates are not
exercisable. All shares of common stock that will be issued prior to the
Distribution Date will include such Rights. The Rights will expire at the close
of business on June 4, 2006 (the "Scheduled Expiration Date"), unless prior
thereto the Distribution Date occurs, or unless the Scheduled Expiration Date is
extended.

     Pursuant to the Rights Plan, as amended to date, each Right entitles the
registered holder, on and after the Distribution Date and until redemption of
all Rights, to purchase from the Company 1/100 of one whole share (a "Unit") of
the Company's Series A Junior Participating Preferred Stock, par value $.001 per
share (the "Series A Preferred Stock"). The purchase price is $425.00 per Unit.
In the event of certain acquisitions involving the Acquiring Person , directly
or indirectly, the holder of each Right will be entitled to purchase for $425.00
certain shares or assets of the Company or an Acquiring person that have a
market value of $850.00 at such time.

     The Company has 200,000 whole shares of Series A Preferred Stock authorized
(40,000,000 Units authorized), of which no shares or Units are issued or
outstanding at April 1, 2001. Each Unit would entitle the holder to (A) one
vote, voting together with the shares of common stock; (B) in the event the
Company's assets are liquidated, a payment of one dollar ($1.00) or an amount
equal to the payment to be distributed per share of common stock, whichever is
greater; and (C) in the event of any merger, consolidation or other transaction
in which shares of common stock are exchanged, a payment in an amount equal to
the payment received per share of common stock. The number of Rights per share
of common stock, and the purchase price, is subject to adjustment in the event
of each and any stock split, stock dividend or similar event.

     Holders of Rights will be entitled to purchase shares or assets of the
Company or an Acquiring Person with a value that is double the exercise price in
the event of certain acquisitions involving the Acquiring Person, directly or
indirectly.

                                        34
<PAGE>   36
                               QLOGIC CORPORATION

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

  Common Stock Splits

     In February 1999, July 1999 and February 2000, the Company effected
two-for-one splits of the outstanding shares of common stock. All share and per
share data presented in the consolidated financial statements and footnotes has
been retroactively adjusted to reflect these two-for-one stock splits.

NOTE (8)  STOCK PLANS

  Employee Stock Purchase Plan

     In fiscal year 1999, the Company's Board of Directors adopted an Employee
Stock Purchase Plan (the "ESPP"). Under the ESPP, employees of the Company who
elect to participate are granted options to purchase common stock at a 15%
discount from the lower of the market value of the common stock at the beginning
or end of each three month offering period. The ESPP permits an enrolled
employee to make contributions to purchase shares of common stock by having
withheld from their salary an amount between 1% and 10% of compensation. The
ESPP is administered by the Compensation Committee of the Board of Directors.
The total number of shares of common stock that may be issued pursuant to
options granted under the ESPP is 2,400,000. The total number of shares issued
under the ESPP were 145,831 and 79,572 as of the years ended April 1, 2001 and
April 2, 2000, respectively.

  Incentive Compensation Plans

     On January 12, 1994, the Company's Board of Directors adopted the QLogic
Corporation Stock Awards Plan (the "Stock Awards Plan") and the QLogic
Corporation Non-Employee Director Stock Option Plan (the "Director Plan")
(collectively the "Stock Option Plans"). Additionally, the Company issues
options on an ad hoc basis from time to time.

     The Stock Awards Plan provides for the issuance of incentive and
non-qualified stock options, restricted stock and other stock-based incentive
awards for officers and key employees. The Stock Awards Plan permits the
Compensation Committee of the Board of Directors to select eligible employees to
receive awards and to determine the terms and conditions of awards. As of April
1, 2001, a total of 22,800,000 shares were reserved for issuance under the Stock
Awards Plan, no shares of restricted stock were issued, options to purchase
6,404,664 shares of Common Stock were outstanding, and there were 7,447,180
shares available for future grants.

     Options granted under the Company's Stock Awards Plan provide that an
employee holding a stock option may exchange mature stock which the employee
already owns as payment against the exercise of an option. This provision
applies to all options outstanding as of April 1, 2001. All stock options
granted under the Company's Stock Awards Plan have ten-year terms and vest
ratably over four years from the date of grant.

     Under the terms of the Director Plan, new directors receive an option
grant, at fair market value, to purchase 64,000 shares of common stock of the
Company upon election to the Board, and the plan provides for annual grants to
each non-employee director (other than the Chairman of the Board) of options to
purchase 32,000 shares of common stock. The plan also provides for annual grants
to the Chairman of the Board of options to purchase 54,000 shares of common
stock. A total of 1,800,000 shares have been reserved for issuance under the
Director Plan. As of April 1, 2001, options for a total of 405,999 shares were
outstanding, and 489,338 shares were available for grant. All stock options
granted under the Director Plan have ten-year terms and vest ratably over three
years from the date of grant.

     As of April 1, 2001, ad hoc stock options have been issued representing
options to purchase 80,000 shares, with a total of 48,500 options outstanding.

                                        35
<PAGE>   37
                               QLOGIC CORPORATION

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

     As a result of the Company's acquisitions, the Company assumed stock
options granted under stock option plans established by each acquired company;
no additional options will be granted under those plans. As of April 1, 2001,
1,832,050 shares of common stock were reserved for issuance under these stock
option plans, with options to purchase 639,502 shares outstanding.

  Warrants

     As part of an agreement with Sun Microsystems, Inc. ("Sun"), the Company
granted a warrant to Sun to purchase up to 791,250 shares of the Company's
common stock at an exercise price of $13.84 per share. The warrant shares are
earned at the rate of one share for each $127.00 of switch product revenue the
Company receives from Sun through September 30, 2002. In each period in which
the warrant shares are earned, a non-cash sales discount is recorded. The amount
of non-cash sales discount is the fair value of the warrant shares which are
earned in the period. The fair value of the warrant shares is calculated by
using the Black-Scholes option pricing model. The assumptions used in the fair
value calculation of the warrant shares was consistent with those assumptions
disclosed in the Pro Forma Information later in this Note. None of the warrant
shares vested until the Company received a total of $10 million in cumulative
switch product revenue from Sun. During the fourth fiscal quarter of 2001,
approximately 79,125 warrants became vested as switch revenues from Sun reached
$10 million. Warrants will continue to vest quarterly through September 30,
2002. As of April 1, 2001, the number of warrants vested was 126,361.

     Stock option activity in fiscal 2001, 2000 and 1999 under the Company's
Stock Option Plans was as follows:

<TABLE>
<CAPTION>
                                                                       AVERAGE
                                                                    OPTION PRICE
                                                        SHARES        PER SHARE
                                                      ----------    -------------
<S>                                                   <C>           <C>
Options outstanding as of March 29, 1998............   7,157,608       $ 2.89
Granted.............................................   3,522,892         6.96
Canceled............................................    (236,183)        9.47
Exercised...........................................  (2,644,494)        1.19
                                                      ----------       ------
Options outstanding as of March 28, 1999............   7,799,823         4.43
Granted.............................................   2,931,456        40.98
Canceled............................................    (207,057)        3.75
Exercised...........................................  (3,006,856)        6.17
                                                      ----------       ------
Options outstanding as of April 2, 2000.............   7,517,366        21.35
Granted.............................................   2,670,757        68.71
Canceled............................................    (259,799)       58.07
Exercised...........................................  (2,429,659)       10.81
                                                      ----------       ------
Options outstanding as of April 1, 2001.............   7,498,665       $39.94
                                                      ==========       ======
</TABLE>

                                        36
<PAGE>   38
                               QLOGIC CORPORATION

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

     As of April 1, 2001, April 2, 2000, and March 28, 1999, the number of
options exercisable was 2,696,620, 3,038,868 and 2,903,735 respectively, and the
weighted average exercise price of those options was $22.95, $24.63 and $2.74,
respectively.

<TABLE>
<CAPTION>
                                 OPTIONS OUTSTANDING                     OPTIONS EXERCISABLE
                    ---------------------------------------------   ------------------------------
                                       WEIGHTED                                        WEIGHTED
                     OUTSTANDING       AVERAGE        REMAINING      EXERCISABLE       AVERAGE
     RANGE OF           AS OF       EXERCISE PRICE   CONTRACTUAL        AS OF       EXERCISE PRICE
 EXERCISE PRICES    APRIL 1, 2001     PER OPTION     LIFE (YEARS)   APRIL 1, 2001     PER OPTION
------------------  -------------   --------------   ------------   -------------   --------------
<S>                 <C>             <C>              <C>            <C>             <C>
 $ 0.11 to $  7.53    2,054,778         $ 3.63           6.50         1,437,645         $ 3.18
 $ 7.88 to $ 31.31    1,943,910          26.12           8.08           727,799          25.07
 $34.12 to $ 63.98    1,962,639          58.73           9.10           275,321          51.24
 $65.69 to $150.95    1,537,338          81.96           9.23           255,855          97.57
                      ---------         ------           ----         ---------         ------
 $ 0.11 to $150.95    7,498,665         $39.94           8.15         2,696,620         $22.95
                      =========         ======           ====         =========         ======
</TABLE>

  Pro Forma Information

     The Company applies APB 25 in accounting for its Stock Option Plans and,
accordingly, no compensation cost has been recognized for its stock options in
the consolidated financial statements. For the purpose of pro forma disclosure,
the estimated fair value of the options is amortized over the options vesting
period. The Company's pro forma information is indicated below:

<TABLE>
<CAPTION>
                                                         2001           2000           1999
                                                      ----------     ----------     ----------
                                                      (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<S>                                                   <C>            <C>            <C>
Net income attributable to common stockholders as
  reported..........................................   $68,769        $48,303        $15,368
Assumed stock compensation cost, net of tax.........   $38,277        $19,675        $10,578
                                                       -------        -------        -------
Pro forma net income................................   $30,492        $28,628        $ 4,790
                                                       -------        -------        -------
Diluted net income per share as reported............   $  0.72        $  0.52        $  0.18
Pro forma diluted net income per share..............   $  0.32        $  0.31        $  0.05
</TABLE>

     The Company uses the Black-Scholes option-pricing model for estimating the
fair value of its equity instruments. The following represents the
weighted-average fair value of options granted and the assumptions used for the
calculations:

<TABLE>
<CAPTION>
                                            2001           2000           1999
                                         -----------    -----------    -----------
<S>                                      <C>            <C>            <C>
Stock volatility.......................  98.5 - 136.6%  84.6 - 140.0%  79.5 - 131.0%
Risk-free interest rate................   4.9 - 5.9%     5.9 - 6.4%     5.1 - 5.6%
Expected life (years)..................      5.0         3.5 - 5.0      3.5 - 5.0
</TABLE>

     The fair value of each option grant, as defined by SFAS 123, is estimated
on the date of grant using the Black-Scholes option-pricing model. The
Black-Scholes model, as well as other currently accepted option valuation
models, was developed to estimate the fair value of freely tradable, fully
transferable options without vesting restrictions, which significantly differ
from the Company's stock option awards. These models also require highly
subjective assumptions, including future stock price volatility and expected
time until exercise, which greatly effect the calculated fair value on the grant
date. The weighted average estimated fair value of options granted under the
Company's Stock Option Plans during fiscal 2001, 2000 and 1999 was $61.10,
$30.35 and $22.32, respectively.

NOTE (9)  EMPLOYEE RETIREMENT SAVINGS PLAN

     The Company has established a pretax savings and profit sharing plan under
Section 401(k) of the Internal Revenue Code for substantially all domestic
employees. Under the plan, eligible employees are able to contribute up to 15%
of their compensation. Company contributions match up to 3% of a participant's

                                        37
<PAGE>   39
                               QLOGIC CORPORATION

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

compensation. The Company's direct contributions on behalf of its employees were
$941,000, $647,000 and $458,000 in fiscal 2001, 2000, and 1999, respectively.

NOTE (10)  COMMITMENTS AND CONTINGENCIES

  Line of Credit

     On July 6, 2000, the Company renewed its unsecured line of credit from a
bank. Maximum borrowings under the line of credit are $5.0 million, subject to a
borrowing base based on accounts receivable, with a $3.0 million sub-limit for
letters of credit. Interest on outstanding advances is payable monthly at the
bank's prime rate (8% at April 1, 2001). The line of credit expires on July 6,
2001. The line of credit contains certain restrictive covenants that, among
other things, require the maintenance of certain financial ratios and restrict
the Company's ability to incur additional indebtedness. The Company was in
compliance with all such covenants as of April 1, 2001. There were no borrowings
under the line of credit as of April 1, 2001. The Company expects to extend the
line of credit through the end of fiscal year 2002.

  Leases

     The Company leases certain equipment and facilities under non-cancelable
operating lease agreements, which expire at various dates through fiscal year
2006. Future minimum non-cancelable lease commitments are as follows:

<TABLE>
<CAPTION>
                                                         (IN THOUSANDS)
<S>                                                      <C>
Fiscal year:
  2002.................................................      $1,951
  2003.................................................       1,401
  2004.................................................         843
  2005.................................................         649
  2006.................................................          45
                                                             ------
          Total minimum lease payments.................      $4,889
                                                             ======
</TABLE>

     Rent expense for fiscal 2001, 2000, and 1999 was $1,400,000, $2,287,000 and
$1,791,000 respectively.

  Litigation

     QLogic is involved in various legal proceedings, which have arisen in the
ordinary course of business. In the opinion of management, the ultimate
disposition of these matters will not have a material adverse effect on the
Company's consolidated financial position, results of operations or liquidity.

                                        38
<PAGE>   40
                               QLOGIC CORPORATION

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

NOTE (11)  INCOME TAXES

     The components of the income tax provision are as follows:

<TABLE>
<CAPTION>
                                                         2001       2000       1999
                                                        -------    -------    -------
                                                               (IN THOUSANDS)
<S>                                                     <C>        <C>        <C>
Current:
  Federal.............................................  $45,597    $30,402    $12,892
  State...............................................    7,952      2,564      1,701
  Foreign.............................................      448      1,094          0
                                                        -------    -------    -------
          Total current...............................   53,997     34,060     14,593
Deferred:
  Federal.............................................   (3,544)    (8,351)    (6,179)
  State...............................................   (2,285)    (1,008)      (104)
                                                        -------    -------    -------
          Total deferred..............................   (5,829)    (9,359)    (6,283)
                                                        -------    -------    -------
Total income tax provision............................  $48,168    $24,701    $ 8,310
                                                        =======    =======    =======
</TABLE>

     A reconciliation of the income tax provision with the amount computed by
applying the federal statutory tax rate to pretax income is as follows:

<TABLE>
<CAPTION>
                                                         2001       2000       1999
                                                        -------    -------    -------
                                                               (IN THOUSANDS)
<S>                                                     <C>        <C>        <C>
Expected income tax provision at the statutory rate...  $40,928    $25,555    $ 8,554
State income tax, net of Federal tax benefit..........    3,683      2,522      1,283
Tax benefit of research and development and other
  credits.............................................   (1,304)    (2,120)    (1,240)
Foreign Sales Corporation tax benefit.................   (1,137)      (430)      (203)
Nondeductible business combination related costs......    7,609         --         --
Tax exempt income.....................................     (326)      (617)      (882)
Other, net............................................   (1,285)      (209)       798
                                                        -------    -------    -------
                                                        $48,168    $24,701    $ 8,310
                                                        =======    =======    =======
</TABLE>

                                        39
<PAGE>   41
                               QLOGIC CORPORATION

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

     The tax effects of temporary differences that give rise to significant
portions of the deferred tax assets and liabilities are as follows:

<TABLE>
<CAPTION>
                                                            2001       2000
                                                           -------    -------
                                                             (IN THOUSANDS)
<S>                                                        <C>        <C>
Deferred tax assets:
  Reserves and accruals not currently deductible.........  $21,685    $12,758
  Property and equipment.................................    1,104      1,415
  Acquired in-process technology.........................    4,157      4,072
  Net operating losses...................................   16,694     26,623
  Research credits.......................................    6,532      1,959
  Other..................................................    2,997         --
                                                           -------    -------
          Total gross deferred tax assets................   53,169     46,827
                                                           -------    -------
Deferred tax liabilities:
  Research and development expenditures..................    1,534      1,524
  State tax expense......................................       --        508
  Other..................................................       --        349
                                                           -------    -------
          Total gross deferred tax liabilities...........    1,534      2,381
                                                           -------    -------
  Net deferred tax assets................................  $51,635    $44,446
                                                           =======    =======
</TABLE>

     Based upon the Company's current and historical pre-tax earnings,
management believes it is more likely than not that the Company will realize the
benefit of the existing net deferred tax assets as of April 1, 2001. Management
believes the existing net deductible temporary differences will reverse during
periods in which the Company generates net taxable income or that there would be
sufficient tax carry backs available; however, there can be no assurance that
the Company will generate any earnings or any specific level of continuing
earnings in future years.

     The tax benefits associated with dispositions from employee stock plans of
approximately $52.7 million, $34 million and $5.8 million in fiscal 2001, 2000
and 1999 respectively, were recorded directly to additional paid-in capital.

     As of April 1, 2001 the Company has federal net operating loss
carryforwards of approximately $45.3 million and aggregate state net operating
loss carryforwards of approximately $29.6 million. The federal net operating
loss carryforwards expire on various dates between 2009 and 2020. The aggregate
state net operating loss carryforwards expire on various dates between 2002 and
2015. All net operating loss carryforwards relate to acquired companies and are
subject to limitations on their utilization.

     As of April 1, 2001 the Company has federal and state tax credit
carryforwards of approximately $7 million and $1 million respectively. If not
utilized, the federal and state tax credit carryforwards will begin to expire in
2006. Approximately $2 million of the federal and $245,000 of the state tax
credits relate to acquired companies and are subject to limitations on their
utilization.

NOTE (12)  PRODUCT REVENUES, EXPORT REVENUES AND SIGNIFICANT CUSTOMERS

     Operating segments, as defined by SFAS 131, are components of an enterprise
for which separate financial information is available and is evaluated regularly
by the Company in deciding how to allocate resources and in assessing
performance. SFAS 131 also requires disclosures about products and services,
geographic areas, and significant customers. The Company operates in one
operating segment for purposes of SFAS 131.

                                        40
<PAGE>   42
                               QLOGIC CORPORATION

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

  Product Revenues

     The Company designs and supplies switch products, semiconductor and board
I/O, and enclosure management products. These products utilize one of three
technology standards: Fibre Channel, SCSI and IDE. Net revenues for the
Company's products are grouped by technology standard as they function using
similar technologies.

<TABLE>
<CAPTION>
                                                       2001        2000        1999
                                                     --------    --------    --------
                                                              (IN THOUSANDS)
<S>                                                  <C>         <C>         <C>
Fibre Channel......................................  $185,085    $ 73,026    $ 24,189
SCSI...............................................   167,527     131,694      96,761
IDE................................................     4,930      11,373         625
                                                     --------    --------    --------
                                                     $357,542    $216,093    $121,575
                                                     ========    ========    ========
</TABLE>

  Geographic Revenues

     The Company's net revenues by country based on ship-to location are:

<TABLE>
<CAPTION>
                                                       2001        2000        1999
                                                     --------    --------    --------
                                                              (IN THOUSANDS)
<S>                                                  <C>         <C>         <C>
United States......................................  $158,665    $101,190    $ 58,342
Japan..............................................   131,691      78,395      39,732
United Kingdom.....................................    32,908      17,149      11,261
Rest of World......................................    34,278      19,359      12,240
                                                     --------    --------    --------
                                                     $357,542    $216,093    $121,575
                                                     ========    ========    ========
</TABLE>

  Significant Customers

     The following table represents sales to customers accounting for greater
than 10% of the Company's net revenues. With the exception of these customers,
management believes that the loss of any one customer would not have a material
adverse effect on its operations.

<TABLE>
<CAPTION>
                                                              2001    2000    1999
                                                              ----    ----    ----
<S>                                                           <C>     <C>     <C>
Customer 1..................................................   29%     27%     24%
Customer 2..................................................   18%     13%     18%
</TABLE>

                                        41
<PAGE>   43
                               QLOGIC CORPORATION

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

NOTE (13)  CONDENSED QUARTERLY RESULTS (UNAUDITED)

     The following summarizes certain unaudited quarterly financial information
for fiscal 2001, 2000, and 1999.

<TABLE>
<CAPTION>
                                                                 THREE MONTHS ENDED
                                                     -------------------------------------------
                                                      JUNE      SEPTEMBER    DECEMBER     MARCH
                                                     -------    ---------    --------    -------
<S>                                                  <C>        <C>          <C>         <C>
FISCAL 2001:
Net revenues.......................................  $76,773     $85,971     $95,129     $99,669
Operating income(1)................................   25,849       6,888      33,252      32,242
Net income (loss)(1)...............................   19,624      (1,308)     25,208      25,245
Net income (loss) per diluted share(1).............     0.20       (0.01)       0.26        0.27
                                                     =======     =======     =======     =======
FISCAL 2000:
Net revenues.......................................  $44,706     $51,091     $56,350     $63,946
Operating income...................................   13,831      16,836      19,241      13,929
Net income.........................................   10,112      12,325      14,392      11,486
Net income per diluted share.......................     0.11        0.14        0.15        0.12
                                                     =======     =======     =======     =======
FISCAL 1999:
Net revenues.......................................  $25,157     $27,829     $30,529     $38,060
Operating income (loss)............................    3,070        (857)      6,249      10,219
Net income.........................................    2,951         419       5,092       7,668
Net income per diluted share.......................     0.03        0.00        0.06        0.08
                                                     =======     =======     =======     =======
</TABLE>

---------------
(1) Operating income, net income (loss) and net income (loss) per diluted share
    includes a $22.9 million charge for merger and related expenses in the
    third-quarter of fiscal 2001.

                                        42
<PAGE>   44

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
        FINANCIAL DISCLOSURE.

     None.

                                    PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.

     Reference is made to the Company's Definitive Proxy Statement for its 2001
Annual Meeting of Stockholders, to be filed with the Securities and Exchange
Commission within 120 days after the end of fiscal 2001, for information
relating to the Company's Directors under the heading "Nomination and Election
of Directors," for information relating to the Company's executive officers
under the heading "Executive Officers" and for information relating to reporting
compliance under the heading "Section 16(a) Beneficial Ownership Reporting
Compliance." Such information is incorporated herein by reference.

ITEM 11. EXECUTIVE COMPENSATION

     Reference is made to the Company's Definitive Proxy Statement for its 2001
Annual Meeting of Stockholders, to be filed with the Securities and Exchange
Commission within 120 days after the end of fiscal 2001, for information
relating to executive compensation under the heading "Executive Compensation and
Other Information" excluding the "Report of Executive Compensation Committee"
and the "Stockholder Return Performance Presentation." Such information is
incorporated herein by reference.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

     Reference is made to the Company's Definitive Proxy Statement for its 2001
Annual Meeting of Stockholders, to be filed with the Securities and Exchange
Commission within 120 days after the end of fiscal 2001, for information
relating to security ownership of certain beneficial owners and management under
the headings "Principal Stockholders" and "Stock Ownership of Management." Such
information is incorporated herein by reference.

     There are no arrangements, known to the Company, which might at a
subsequent date result in a change in control of the Company.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

     Reference is made to the Company's Definitive Proxy Statement for its 2001
Annual Meeting of Stockholders, to be filed with the Securities and Exchange
Commission within 120 days after the end of fiscal 2001, for information
relating to certain relationships and related transactions, if any, under the
headings "Compensation Committee Interlocks and Insider Participation" and
"Certain Transactions." Such information is incorporated herein by reference.

                                        43
<PAGE>   45

                                    PART IV

ITEM 14. EXHIBITS, FINANCIAL STATEMENTS, SCHEDULES AND REPORTS ON FORM 8-K

     (a) Financial Statements and Schedules

          (1) Consolidated Financial Statements

     The following consolidated financial statements of the Company for the
years ended April 1, 2001, April 2, 2000, and March 28, 1999 are filed as part
of this report:

                           FINANCIAL STATEMENT INDEX

<TABLE>
<CAPTION>
                                                               PAGE
                         STATEMENT                            NUMBER
                         ---------                            ------
<S>                                                           <C>
QLogic Corporation:
  Independent Auditors' Report..............................    22
  Consolidated Balance Sheets as of April 1, 2001 and April
     2, 2000................................................    23
  Consolidated Statements of Income for the years ended
     April 1, 2001, April 2, 2000 and March 28, 1999........    24
  Consolidated Statements of Stockholders' Equity for the
     years ended April 1, 2001, April 2, 2000 and March 28,
     1999...................................................    25
  Consolidated Statements of Cash Flows for the years ended
     April 1, 2001, April 2, 2000 and March 28, 1999........    26
  Notes to Consolidated Financial Statements................    27
</TABLE>

          (2) Financial Statement Schedule

     The following consolidated financial statement schedule of the Company for
the years ended April 1, 2001, April 2, 2000 and March 28, 1999 is filed as part
of this report:

<TABLE>
<CAPTION>
                                                              PAGE NUMBER OF
                                                               THIS REPORT
                                                              --------------
<S>                                                           <C>
Schedule II -- Valuation and Qualifying Accounts............        48
</TABLE>

     All other Schedules for which provision is made in the applicable
accounting regulations of the Securities and Exchange Commission are not
required under the related instructions or are not applicable and, therefore,
have been omitted.

     (3) Exhibit Index

<TABLE>
<CAPTION>
    EXHIBIT
    NUMBER                             ITEM CAPTION
    -------                            ------------
    <C>        <S>
     2.1       Distribution Agreement dated as of January 24, 1994 among
               Emulex Corporation, a Delaware corporation, Emulex
               Corporation, a California Corporation and QLogic
               Corporation.(1)

     2.2       Agreement and Plan of Merger dated as of May 8, 2000 by and
               among QLogic Corporation, Amino Acquisition Corp. and Ancor
               Communications, Incorporated.(10)

     3.1       Certificate of Incorporation of Emulex Micro Devices
               Corporation, dated November 13, 1992.(1)

     3.2       EMD Incorporation Agreement, dated as of January 1, 1993.(1)

     3.3       Certificate of Amendment of Certificate of Incorporation,
               dated May 26, 1993.(1)

     3.4       By-Laws of QLogic Corporation.(1)

     3.5       Amendments to By-Laws of QLogic Corporation.(2)
</TABLE>

                                        44
<PAGE>   46

<TABLE>
<CAPTION>
    EXHIBIT
    NUMBER                             ITEM CAPTION
    -------                            ------------
    <C>        <S>

     3.6       Certificate of Amendment of Certificate of Incorporation,
               dated May 26, 1993.(1)

     3.7       Certificate of Amendment of Certificate of Incorporation,
               dated February 15, 1999.(7)

     3.8       Certificate of Amendment of Certificate of Incorporation,
               dated January 5, 2000.(8)

     4.1       Rights Agreement, dated as of June 4, 1996 between QLogic
               Corporation and Harris Trust Company of California, which
               includes as Exhibit B thereto the form of Rights
               Certificate.(3)

     4.2       Amendment to Rights Agreement, dated as of November 19, 1997
               between QLogic Corporation and Harris Trust Company of
               California.(4)

     4.3       Amendment to Rights Agreement, dated as of January 24, 2000
               between QLogic Corporation and Harris Trust Company of
               California.(9)

    10.1.2     Form of QLogic Corporation Non-Employee Director Stock
               Option Plan, as amended.

    10.2.2     QLogic Corporation Stock Awards Plan, as amended.

    10.3       Form of Tax Sharing Agreement among Emulex Corporation, a
               Delaware corporation, Emulex Corporation, a California
               corporation, and QLogic Corporation.(1)

    10.4       Administrative Services Agreement, dated as of February 21,
               1993, among Emulex Corporation, a California corporation,
               Emulex Corporation, a Delaware corporation and QLogic
               Corporation.(1)

    10.5       Employee Benefits Allocation Agreement, dated as of January
               24, 1994, among Emulex Corporation, a Delaware corporation,
               Emulex Corporation, a California corporation, and QLogic
               Corporation.(1)

    10.6       Form of Assignment, Assumption and Consent Re: Lease among
               Emulex Corporation, a California corporation, QLogic
               Corporation and C.J. Segerstrom & Sons, a general
               partnership.(1)

    10.7       Intellectual Property Assignment and Licensing Agreement,
               dated as of January 24, 1994, between Emulex Corporation, a
               California Corporation, and QLogic Corporation.(1)

    10.8       Form of QLogic Corporation Savings Plan.*(1)

    10.9       Form of QLogic Corporation Savings Plan Trust.*(1)

    10.10      Loan and Security Agreement with Silicon Valley Bank dated
               July 6, 1998.(5)

    10.11      Form of Indemnification Agreement between QLogic Corporation
               and Directors.(2)

    10.13      Industrial Lease Agreement between the Registrant, as
               lessee, and AEW/Parker South, LLC, as lessor.(6)

    10.15      Form QLogic Corporation 1998 Employee Stock Purchase
               Plan.(7)

    10.16      Loan and Security Agreement with Silicon Valley Bank dated
               July 6, 2000.(11)

    21.2       Subsidiaries of the Registrant.

    23.1       Consent of KPMG LLP.
</TABLE>

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

 (1) Previously filed as an exhibit to Registrant's Registration Statement on
     Form 10 on January 28, 1994, and incorporated herein by reference.

 (2) Previously filed as an exhibit to Registrant's Annual Report on Form 10-K
     for the year ended April 2, 1995, and incorporated herein by reference.

 (3) Previously filed as an exhibit to Registrant's Registration Statement on
     Form 8-A on June 19, 1996, and incorporated herein by reference.

 (4) Previously filed as an exhibit to Registrant's Registration Statement on
     Form 8-A/A on November 25, 1997, and incorporated herein by reference.

                                        45
<PAGE>   47

 (5) Previously filed as an exhibit to Registrant's Quarterly Report on Form
     10-Q for the quarter ended June 28, 1998, and incorporated herein by
     reference.

 (6) Previously filed as an exhibit to Registrant's Quarterly Report on Form
     10-Q for the quarter ended December 27, 1998, and incorporated herein by
     reference.

 (7) Previously filed as an exhibit to Registrant's Annual Report on Form 10-K
     for the year ended March 28, 1999, and incorporated herein by reference.

 (8) Previously filed as an exhibit to Registrant's Quarterly Report on Form
     10-Q for the quarter ended December 26, 1999, and incorporated herein by
     reference.

 (9) Previously filed as and exhibit to Registrant's Registration Statement on
     Form 8-A/A dated June 1, 2000, and incorporated herein by reference.

(10) Previously filed as an exhibit to Registrant's Amendment No. 1 to
     Registration Statement on Form S-4 on June 22, 2000, and incorporated
     herein by reference.

(11) Previously filed as an exhibit to Registrant's Quarterly Report on Form
     10-Q for the quarter ended July 2, 2000, and incorporated herein by
     reference.

 *   Compensation plan, contract or arrangement required to be filed as an
     exhibit pursuant to applicable rules of the Securities and Exchange
     Commission.

     (b) Reports on Form 8-K

     (1) The Registrant filed a Current Report on Form 8-K on May 8, 2000, with
respect to an Agreement and Plan of Merger by and between QLogic Corporation and
Ancor Communications, Inc., reported under Item 5.

     (2) The Registrant filed a Current Report on Form 8-K on August 1, 2000,
with respect to the Registrant issuing a press release regarding the completion
of merger between QLogic Corporation and Ancor Communications, Inc., reported
under Item 5.

     (3) The Registrant filed a Current Report on Form 8-K on January 23, 2001,
with respect to a merger pursuant to which a wholly owned subsidiary of QLogic
Corporation merged with and into Little Mountain Group, Inc. a California
Corporation with Little Mountain Group surviving as a wholly owned subsidiary of
the Company, reported under Item 5.

     (4) The Company filed a Current Report on Form 8-K on March 6, 2001, with
respect to the Company issuing a press release detailing the sale of certain of
its assets located at its Boulder, Colorado facility, including the sale of its
AdaptiveRAID(R) technology, to YottaYotta, Inc., a New Brunswick Canada
corporation, reported under Item 5.

                                        46
<PAGE>   48

                                   SIGNATURES

     Pursuant to the requirements of Section 13 or 15(d) 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.

                                          QLOGIC CORPORATION

                                          By:        /s/ H.K. DESAI
                                            ------------------------------------
                                                         H.K. Desai
                                                Chairman of the Board, Chief
                                                      Executive Officer
                                                       and President

Date: July 2, 2001

     Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
Registrant and in the capacities indicated on.

<TABLE>
<CAPTION>
                  SIGNATURE                                        TITLE
                  ---------                                        -----
<S>                                            <C>
PRINCIPAL EXECUTIVE OFFICER:

               /s/ H.K. DESAI                     Chairman of the Board, Chief Executive
---------------------------------------------              Officer and President
                 H.K. Desai

PRINCIPAL FINANCIAL AND ACCOUNTING OFFICER:

           /s/ THOMAS R. ANDERSON               Vice President and Chief Financial Officer
---------------------------------------------
             Thomas R. Anderson

             /s/ GEORGE D. WELLS                                 Director
---------------------------------------------
               George D. Wells

            /s/ CAROL L. MILTNER                                 Director
---------------------------------------------
              Carol L. Miltner

             /s/ LARRY R. CARTER                                 Director
---------------------------------------------
               Larry R. Carter

              /s/ JIM FIEBIGER                                   Director
---------------------------------------------
                Jim Fiebiger

         /s/ KENNETH E. HENDRICKSON                              Director
---------------------------------------------
           Kenneth E. Hendrickson
</TABLE>

                                        47
<PAGE>   49

                                                                     SCHEDULE II

                               QLOGIC CORPORATION

                       VALUATION AND QUALIFYING ACCOUNTS
          YEARS ENDED APRIL 1, 2001, APRIL 2, 2000 AND MARCH 28, 1999
                                 (IN THOUSANDS)

<TABLE>
<CAPTION>
                                                               ADDITIONS     DEDUCTIONS--
                                                BALANCE AT     CHARGED TO       AMOUNTS       BALANCE AT
                                               BEGINNING OF    COSTS AND     WRITTEN OFF/       END OF
                                                  PERIOD        EXPENSES       RECOVERED        PERIOD
                                               ------------    ----------    -------------    ----------
<S>                                            <C>             <C>           <C>              <C>
CLASSIFICATION:
Year ended April 1, 2001
  Allowance for doubtful accounts............     $1,014         $1,358         $   --          $2,372
Year ended April 2, 2000
  Allowance for doubtful accounts............     $  979         $   35         $   --          $1,014
Year ended March 28, 1999
  Allowance for doubtful accounts............     $  778         $  201         $   --          $  979
</TABLE>

                                        48
<PAGE>   50

                                 EXHIBIT INDEX

<TABLE>
<CAPTION>
EXHIBIT
NUMBER                            ITEM CAPTION
-------                           ------------
<C>       <S>

  2.1     Distribution Agreement dated as of January 24, 1994 among
          Emulex Corporation, a Delaware corporation, Emulex
          Corporation, a California Corporation and QLogic
          Corporation.(1)

  2.2     Agreement and Plan of Merger dated as of May 8, 2000 by and
          among QLogic Corporation, Amino Acquisition Corp. and Ancor
          Communications, Incorporated.(10)

  3.1     Certificate of Incorporation of Emulex Micro Devices
          Corporation, dated November 13, 1992.(1)

  3.2     EMD Incorporation Agreement, dated as of January 1, 1993.(1)

  3.3     Certificate of Amendment of Certificate of Incorporation,
          dated May 26, 1993.(1)

  3.4     By-Laws of QLogic Corporation.(1)

  3.5     Amendments to By-Laws of QLogic Corporation.(2)

  3.6     Certificate of Amendment of Certificate of Incorporation,
          dated May 26, 1993.(1)

  3.7     Certificate of Amendment of Certificate of Incorporation,
          dated February 15, 1999.(7)

  3.8     Certificate of Amendment of Certificate of Incorporation,
          dated January 5, 2000.(8)

  4.1     Rights Agreement, dated as of June 4, 1996 between QLogic
          Corporation and Harris Trust Company of California, which
          includes as Exhibit B thereto the form of Rights
          Certificate.(3)

  4.2     Amendment to Rights Agreement, dated as of November 19, 1997
          between QLogic Corporation and Harris Trust Company of
          California.(4)

  4.3     Amendment to Rights Agreement, dated as of January 24, 2000
          between QLogic Corporation and Harris Trust Company of
          California.(9)

 10.1.2   Form of QLogic Corporation Non-Employee Director Stock
          Option Plan, as amended.

 10.2.2   QLogic Corporation Stock Awards Plan, as amended.

 10.3     Form of Tax Sharing Agreement among Emulex Corporation, a
          Delaware corporation, Emulex Corporation, a California
          corporation, and QLogic Corporation.(1)

 10.4     Administrative Services Agreement, dated as of February 21,
          1993, among Emulex Corporation, a California corporation,
          Emulex Corporation, a Delaware corporation and QLogic
          Corporation.(1)

 10.5     Employee Benefits Allocation Agreement, dated as of January
          24, 1994, among Emulex Corporation, a Delaware corporation,
          Emulex Corporation, a California corporation, and QLogic
          Corporation.(1)

 10.6     Form of Assignment, Assumption and Consent Re: Lease among
          Emulex Corporation, a California corporation, QLogic
          Corporation and C.J. Segerstrom & Sons, a general
          partnership.(1)

 10.7     Intellectual Property Assignment and Licensing Agreement,
          dated as of January 24, 1994, between Emulex Corporation, a
          California Corporation, and QLogic Corporation.(1)

 10.8     Form of QLogic Corporation Savings Plan.*(1)

 10.9     Form of QLogic Corporation Savings Plan Trust.*(1)

 10.10    Loan and Security Agreement with Silicon Valley Bank dated
          July 6, 1998.(5)

 10.11    Form of Indemnification Agreement between QLogic Corporation
          and Directors.(2)

 10.13    Industrial Lease Agreement between the Registrant, as
          lessee, and AEW/Parker South, LLC, as lessor.(6)

 10.15    Form QLogic Corporation 1998 Employee Stock Purchase
          Plan.(7)

 10.16    Loan and Security Agreement with Silicon Valley Bank dated
          July 6, 2000.(11)

 21.2     Subsidiaries of the Registrant.

 23.1     Consent of KPMG LLP.
</TABLE>

                                        49
<PAGE>   51

---------------
 (1) Previously filed as an exhibit to Registrant's Registration Statement on
     Form 10 on January 28, 1994, and incorporated herein by reference.

 (2) Previously filed as an exhibit to Registrant's Annual Report on Form 10-K
     for the year ended April 2, 1995, and incorporated herein by reference.

 (3) Previously filed as an exhibit to Registrant's Registration Statement on
     Form 8-A on June 19, 1996, and incorporated herein by reference.

 (4) Previously filed as an exhibit to Registrant's Registration Statement on
     Form 8-A/A on November 25, 1997, and incorporated herein by reference.

 (5) Previously filed as an exhibit to Registrant's Quarterly Report on Form
     10-Q for the quarter ended June 28, 1998, and incorporated herein by
     reference.

 (6) Previously filed as an exhibit to Registrant's Quarterly Report on Form
     10-Q for the quarter ended December 27, 1998, and incorporated herein by
     reference.

 (7) Previously filed as an exhibit to Registrant's Annual Report on Form 10-K
     for the year ended March 28, 1999, and incorporated herein by reference.

 (8) Previously filed as an exhibit to Registrant's Quarterly Report on Form
     10-Q for the quarter ended December 26, 1999, and incorporated herein by
     reference.

 (9) Previously filed as and exhibit to Registrant's Registration Statement on
     Form 8-A/A dated June 1, 2000, and incorporated herein by reference.

(10) Previously filed as an exhibit to Registrant's Amendment No. 1 to
     Registration Statement on Form S-4 on June 22, 2000, and incorporated
     herein by reference.

(11) Previously filed as an exhibit to Registrant's Quarterly Report on Form
     10-Q for the quarter ended July 2, 2000, and incorporated herein by
     reference.

 *   Compensation plan, contract or arrangement required to be filed as an
     exhibit pursuant to applicable rules of the Securities and Exchange
     Commission.

                                        50