<PAGE>   1
 
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                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549
                            ------------------------
 
                                   FORM 10-K
                            ------------------------
 
[X]   ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
     SECURITIES EXCHANGE ACT OF 1934
 
                  FOR THE FISCAL YEAR ENDED DECEMBER 31, 1998
 
                                       OR
 
[ ]   TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
     SECURITIES EXCHANGE ACT OF 1934
 
         FOR THE TRANSITION PERIOD FROM ____________ TO ____________ .
 
                         COMMISSION FILE NUMBER 0-9653
 
                                  XICOR, INC.
             (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
 
<TABLE>
<S>                                            <C>
                  CALIFORNIA                                     94-2526781
       (STATE OR OTHER JURISDICTION OF              (I.R.S. EMPLOYER IDENTIFICATION NO.)
        INCORPORATION OR ORGANIZATION)
 
              1511 BUCKEYE DRIVE
             MILPITAS, CALIFORNIA                                  95035
   (ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)                      (ZIP CODE)
</TABLE>
 
       REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (408) 432-8888
 
          SECURITIES REGISTERED PURSUANT TO SECTION 12(B) OF THE ACT:
                                      NONE
 
          SECURITIES REGISTERED PURSUANT TO SECTION 12(G) OF THE ACT:
                        COMMON STOCK, WITHOUT PAR VALUE
                                (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 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 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.  [ ]
 
     The aggregate market value of the voting stock (Common Stock, without par
value) held by non-affiliates of the Registrant was approximately $26,058,000 on
March 25, 1999.
 
     The aggregate number of outstanding shares of Common Stock, without par
value, of the Registrant was 20,209,121 on March 25, 1999.
 
                      DOCUMENTS INCORPORATED BY REFERENCE
 
     Portions of the following documents are incorporated by reference in Parts
II, III and IV of this Form 10-K Report: (1) Registrant's Annual Report to
Shareholders for the fiscal year ended December 31, 1998 and (2) Proxy Statement
for Registrant's 1999 Annual Meeting of Shareholders.
 
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<PAGE>   2
 
                                     PART I
 
     This report contains forward-looking statements within the meaning of
Section 27A of the Securities Act of 1933 and Section 21E of the Securities
Exchange Act of 1934. Words such as "anticipate," "believes," "expects,"
"future," "intends," "assuming," "projected" and similar expressions are used to
identify forward-looking statements. Undue reliance should not be placed on
these forward-looking statements, which apply only as of the date of this
report. Actual results could differ materially from those projected in the
forward-looking statements for many reasons, including the risk factors listed
in the "Factors Affecting Future Results" section of "Management's Discussion &
Analysis of Financial Conditions and Results of Operations" which is
incorporated by reference to the registrant's Annual Report to Shareholders for
the fiscal year ended December 31, 1998 in Part II, Item 7. of this report and
the risk factors included in Item 1. below.
 
ITEM 1. BUSINESS
 
     Xicor, Inc. ("Xicor" or the "Company") designs, develops, manufactures and
markets reprogrammable nonvolatile semiconductor integrated circuits containing
digital, analog and reprogrammable nonvolatile elements. Xicor's devices offer a
comprehensive set of features to its customers. By virtue of their
nonvolatility, Xicor's devices retain their information content when power is
lost or turned off. Reprogramming is accomplished by "writing" over the old data
without a need for first "erasing" the old data. Xicor's devices can be
reprogrammed bit by bit or in larger groups of bits called "words" and "pages"
without being removed from the system and operate from the same power source
used in microcontroller and microprocessor-based systems, or even lower voltages
common in hand-held and portable products. Xicor products are sold in a variety
of packages, including plastic, ceramic and chip scale packages for small
footprint and height.
 
     The combination of reprogrammability and nonvolatility has enabled Xicor's
customers to develop products which have characteristics that can be altered
from a remote location by a technician or on-site by a non-technical user
through a keyboard, or which are automatically self-calibrating, thereby
reducing field service costs. Microcontroller and microprocessor-based products
incorporating Xicor's devices can be customized by either the distributor or the
end user subsequent to the production process. This simplifies production
control, reduces the lead time required for such customization and permits lower
inventory levels to be maintained. Xicor products also offer programmable
security locks enabling system producers to prevent changes to embedded
programs.
 
     Xicor is continuing to apply its electrically reprogrammable memory
technology to develop innovative products combining nonvolatility and in-system
data alterability. More recently, certain Xicor products are also incorporating
analog elements. Xicor products are used by manufacturers of electronic products
throughout the world in a wide range of applications, including
telecommunications, consumer, computer, industrial, automotive and military
products.
 
INDUSTRY BACKGROUND
 
     Manufacturers have introduced a variety of nonvolatile semiconductor
memories offering different degrees of programming flexibility. Currently
available nonvolatile memory devices include read-only memories ("ROMs"),
programmable read only memories ("PROMs"), electrically programmable read-only
memories ("EPROMs"), electrically erasable programmable ROMs ("EEPROMs"),
nonvolatile random access memories ("NOVRAMs") and Flash Memories. A brief
description of these nonvolatile devices follows:
 
     ROMs and PROMs are one time programmable. ROMs have the data permanently
programmed into the memory during the manufacturing process according to
customer specifications, making necessary long-range planning before introducing
a new product incorporating ROMs. PROMs are programmable one time after
manufacture. However, programming a PROM is complex and in practice is only done
at the factory or by distributors.
 
     EPROMs can be reprogrammed several times. However, reprogramming an EPROM
is a two-step process, erasing the old data by exposing it to ultraviolet light
and then programming the new data into the
 
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system using voltages higher than 5 volts, the voltage most common in
microprocessor-based products. Since ultraviolet light and an auxiliary power
source are required, the erasure and reprogramming generally are performed
outside the system, thus requiring physical removal of the EPROM from the
printed circuit board.
 
     The development of EEPROMs provided significant programming flexibility.
These nonvolatile memories can be reprogrammed in-system tens of thousands of
times and can be altered one byte or several bytes at a time. EEPROMs are termed
serial or parallel depending on their connection to the system's processor.
Serial EEPROM devices transmit data through a single input-output port while
parallel devices transmit data through multiple ports concurrently.
 
     Devices called Flash memories offer a middle ground in price and features
between EPROMs and EEPROMs. Unlike EPROMs, Flash memories can be reprogrammed
while in a system. However, unlike the more flexible EEPROMs that can be altered
one byte or several bytes at a time, Flash memories can only be altered all at
once or in larger groups of bytes. In nonvolatile reprogrammable memory chips
containing less than 256K bits, the memory cell array takes up less than half of
the chip area and the support circuitry the balance. Accordingly, manufacturers
of Flash memories have focused on parallel interface high density devices where
customers are willing to forgo the ease of use of the full featured EEPROMs for
the lower cost of a Flash memory or where the Flash memory has achieved higher
density due to its smaller memory cell size.
 
     NOVRAMs were developed to combine the versatility and rapid data access of
the RAM with the nonvolatility of the full-featured EEPROM on a single
semiconductor. The complex dual-memory structure of the NOVRAM, while providing
substantially greater functionality than the EEPROM, results in a significantly
greater cost per memory bit.
 
XICOR PRODUCTS AND APPLICATIONS
 
     Xicor products are grouped in two categories: memory products and analog
products. Memory products include password-secured serial EEPROMs, standard
serial EEPROMs and proprietary serial EEPROMs, as well as parallel-interfaced
EEPROMs. Many of these memory products are used in space-limited hand held
applications. To enhance our customers' ability to further miniaturize their
products, in 1998 Xicor introduced a 128K serial EEPROM encapsulated in an
advanced chip-scale package which has essentially the same footprint and height
as the chip itself. The first customer to take volume shipments in 1998 is using
the device in an advanced model of cellular telephone.
 
     Xicor's emerging analog products group includes potentiometers (XDCPs)
which are digitally controlled. The digital control offers customers computer
control capabilities to achieve analog performance, thus eliminating the manual
adjustment required when using traditional mechanical potentiometers.
Furthermore, the solid state nature of the XDCP eliminates the disadvantages of
the traditional mechanical potentiometer associated with moving parts. XDCPs do
not change when exposed to vibrations, salty or oily environments, and are
adjustable remotely. Complementing XDCPs in this product group is an evolving
product line of system management products offering supervisory chips for
microcontroller-based systems.
 
MARKETING AND SALES
 
     Xicor's products are sold worldwide for a broad range of applications,
including telecommunications, consumer, computer, industrial, automotive and
military applications. In new applications, particularly for newly introduced
devices, Xicor's products generally require long "design-in" cycles for customer
applications with extensive field application engineering support by Xicor.
Xicor considers close support of its customers' design efforts to be an
important aspect of its marketing strategy.
 
     Xicor markets its products directly from its headquarters in Milpitas,
California and from regional domestic and foreign sales offices. Products are
also marketed domestically through a national network of independent sales
representatives, each of which has been granted an exclusive sales territory,
and through national and regional stocking distributors which also handle
competitive products. Xicor's products are also marketed abroad through an
international network of independent non-exclusive stocking sales representa-
 
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tives. Generally, sales to distributors and stocking sales representatives are
made under agreements allowing rights of return and price protection on unsold
merchandise. Xicor's policy is to defer recognition of sales and related costs
on such shipments until the products are sold by the distributors and stocking
sales representatives.
 
     As part of a product review conducted during 1998, Xicor recognized the
need for a dedicated and focused sales effort in the growing but complex smart
card market. Consequently, in November 1998, Xicor entered into a strategic
alliance with ATMI, Inc. focused on the selling of Xicor's secure memory ICs by
ATMI into smart card applications. As part of this agreement, ATMI received
certain rights to the product line for smart card applications.
 
     During the years ended December 31, 1998, 1997 and 1996, Xicor's
international sales constituted 46%, 44% and 45%, respectively, of revenues.
Xicor's international sales are generally denominated in US dollars. Due to the
magnitude of its international sales, Xicor is subject to risks common to all
export activities, including currency fluctuations, governmental regulation and
the risk of imposition of tariffs or other trade barriers. Further, export sales
must be licensed by the Office of Export Administration of the US Department of
Commerce.
 
     One distributor accounted for 15% of Xicor's revenues in 1998, 16% in 1997
and 14% in 1996. Distributors are not themselves end users, but rather serve as
a channel of sale to many end users of Xicor's products.
 
     Volume purchase orders received by Xicor do not necessarily result in sales
as they are in most cases, consistent with industry practice, terminable by the
customer without penalty. Consequently, backlog figures are not necessarily
indicative of future sales.
 
MANUFACTURING
 
     Historically, Xicor manufactured in-house all silicon wafers used to
provide the semiconductor chips for its products. However, the rapidly
escalating capital investments and the increasing need for larger size factories
required to efficiently spread the high level of fixed costs associated with
complex semiconductor manufacturing operations have led to the emergence of
wafer fabrication foundries, enabling many semiconductor companies to outsource
portions or all of their wafer requirements. Xicor has made the decision to also
outsource some of its wafer fabrication. Yamaha Ltd. was selected to become
Xicor's first foundry, and in 1997 Xicor commenced the transfer of its
technology to Yamaha's plant in Kagoshima, Japan. In the third quarter of 1998,
the Kagoshima factory was qualified as an outside foundry for Xicor. Several
customers have qualified Yamaha produced product and Xicor is transferring
additional products to Yamaha to increase volume there. Assuming continuing
successful transfer of products to Yamaha and timely qualification of
Yamaha-manufactured products by Xicor's customers, Xicor expects to start a
significant portion of its total wafers at Yamaha in late 1999. Concurrently,
Xicor is further outsourcing product testing. Chip packaging has been outsourced
from inception.
 
     Wafer fabrication processes are highly complicated, utilize numerous highly
toxic and corrosive chemicals and gases, and require stringent control of many
extremely precise steps, similar to those used in the semiconductor industry for
the production of other large scale integrated circuits. These steps include
complex processes such as microphotolithography, wet chemical and dry plasma
etch, chemical vapor deposition, high temperature diffusion and oxidation, ion
implantation and vacuum metallization, which are applied to silicon wafers to
form several hundred to several thousand devices ("chips") per wafer depending
on the product. Each chip, in turn, contains thousands to millions of individual
transistors and other circuit elements. The sensitivity of the manufacturing
process to dust and other contaminants requires the production process to take
place in a highly controlled, clean environment. Sophisticated
computer-controlled testing equipment is used to test each chip on the wafer to
identify those potentially meeting the desired electrical criteria.
 
     Although the wafer manufacturing process is highly controlled, minute
impurities, difficulties in the process or defects in the masks can cause wafers
to be rejected or a substantial percentage of individual chips to be
non-functional, a problem indigenous to the semiconductor industry. From time to
time Xicor and its
 
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foundry experience a variety of technical issues in the manufacturing processes
which adversely affect manufacturing yields until they are corrected.
Maintaining and improving manufacturing yields is essential for profitability.
 
     Each chip on the fabricated wafer is tested and the nonfunctional chips are
identified. The wafers are then shipped to subcontractors in Taiwan, Thailand,
South Korea, the Philippines, China or Malaysia, where the wafers are separated
into individual chips. Each functional chip is encapsulated in a plastic or
ceramic package having external leads to which the chip is connected by
extremely fine wires. The packaged chips undergo comprehensive electrical
testing offshore at one of Xicor's independent subcontractors located in Taiwan,
Thailand, South Korea, the Philippines and China. A limited amount of testing is
also performed in Milpitas. Chip-scale packaged products are encapsulated by a
subcontractor based in Israel and tested in Milpitas. In accordance with
industry practice, Xicor provides a limited warranty for its devices against
defects in materials and workmanship for periods ranging from 90 days to one
year.
 
     Reliance on overseas wafer fabrication, assembly and test contractors and
Xicor's maintenance of inventories at contractors' facilities entails certain
political and economic risks, including political instability and expropriation,
currency controls and exchange fluctuations, and changes in tariff and freight
rates. Furthermore, in the event Xicor's overseas wafer fabrication, assembly or
test operations, or air transportation to or from foreign contractors, are
disrupted for any reason, Xicor's operations may be materially adversely
affected.
 
     The principal raw materials utilized in the production process are polished
silicon wafers, ultra-pure metals, chemicals and gases. Encapsulation materials
that enclose the chip and provide the external connecting leads are provided by
the independent assembly contractors or are purchased by Xicor and shipped to
such contractors. Shortages could occur in various essential materials due to
interruption of supply or due to increased demand in the industry. Shortages
have occurred in the Company's history and lead times have been extended in the
industry on occasion without materially adversely affecting the Company.
However, future shortages, if any, could have a material adverse effect on
Xicor's operations.
 
     Cost reduction is an important on-going activity at Xicor since continually
lower selling prices are essential to maintain and improve Xicor's competitive
position. Typically, integrated circuit product cost reduction programs are
designed to minimize defects, simplify testing and reduce the physical size of
the chips. As Xicor reduces the quantity of wafers which are fabricated in its
underutilized factory, the increasing supply of lower cost wafers from the
outside foundry is expected to reduce Xicor's average wafer cost. The expected
benefit of a higher percentage of lower cost products made by the foundry will
be realized only after the first half of 1999 as foundry shipment volume ramps
up.
 
  Compliance with Environmental Regulations
 
     The manufacture of semiconductors requires the use and storage of
substantial amounts of toxic chemicals, solvents and gases. Government
regulations impose various environmental controls on the storage, use and
disposal of such materials. Such regulations have grown more complex and
enforcement more rigorous over time as increasing attention has been focused on
the environmental impact of semiconductor manufacturing operations. While Xicor
to date has not experienced any materially adverse effect on its business from
environmental regulations, changes in such regulations could necessitate the
acquisition of more costly equipment or require more costly procedures or
process changes to be initiated.
 
RESEARCH AND DEVELOPMENT
 
     Continuing development of more advanced processes and products is essential
to maintain and enhance Xicor's competitive position. Such development
activities are difficult and lengthy. There can be no assurance that any
research and development efforts will be successfully completed or that future
products will be available on a timely basis or achieve market acceptance.
 
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     Research and development activities require an increasing degree of
complexity of design and manufacturing process, and consequently a significant
percentage of revenues is continuously invested in research and development.
 
     During the years ended December 31, 1998, 1997 and 1996, Xicor expended
$17,429,000, $18,475,000 and $15,074,000, respectively, on research and
development.
 
PATENTS AND LICENSES
 
     Xicor holds numerous United States patents and corresponding foreign
patents covering various circuit designs and the structure of its devices.
Further, additional patent applications for such products are pending in the
United States and abroad. However, patents granted or pending may not provide
Xicor with any meaningful protection. Similar to other semiconductor
manufacturers, Xicor has granted licenses under its patents and may continue to
do so in the future. Xicor believes that, due to the rapidly changing technology
in the semiconductor industry, its future success will be dependent primarily
upon the technical expertise and creative skills of its personnel rather than
patent protection.
 
     As is the case with many companies in the semiconductor industry, it may
become necessary or desirable for Xicor to obtain licenses relating to its
products from others. Xicor has received notices claiming infringement of
patents from several semiconductor manufacturers and other patent holders with
respect to certain aspects of Xicor's processes, devices and equipment use and
these matters are under investigation and review. Although patent holders
typically offer licenses and Xicor has in prior years entered into such license
agreements, there can be no assurance that licenses can be obtained on
acceptable terms or that in all cases the dispute will be resolved without
costly litigation.
 
COMPETITION
 
     The semiconductor industry is highly competitive and characterized by
steadily declining prices, particularly during periods of industry oversupply.
Numerous companies are currently selling products which compete with those of
Xicor. In addition to price, important elements determining success in
competition include product performance, quality and reliability, delivery
capability, diversity of product line, application support, financial strength
and the ability to respond rapidly to technological innovations. Xicor may be at
a disadvantage in competing with major domestic and foreign concerns that have
significant financial resources, established and diverse product lines,
worldwide vertically integrated production facilities and extensive research and
development staffs. Further, the industry is characterized by rapid
technological change and Xicor will be required to continually develop or have
access to new and improved manufacturing processes and products to remain
competitive.
 
EMPLOYEES
 
     At December 31, 1998 Xicor had 565 employees. None of the employees are
represented by a labor organization and Xicor considers its employee relations
to be good. Many of Xicor's employees are highly skilled and Xicor's success
will depend in significant part on its ability to attract and retain such
employees in the highly competitive semiconductor industry.
 
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EXECUTIVE OFFICERS OF THE REGISTRANT
 
     The following table sets forth each executive officer of Xicor, their ages
(as of December 31, 1998) and office with Xicor:
 
<TABLE>
<CAPTION>
                 NAME                   AGE                    OFFICE
                 ----                   ---                    ------
<S>                                     <C>    <C>
Raphael Klein.........................  55     Chairman of the Board and Chief
                                               Executive Officer
Bruce Gray............................  48     President and Chief Operating Officer
Joseph Drori..........................  53     Vice President, Product Definition
Geraldine N. Hench....................  41     Vice President, Finance and Chief
                                               Financial Officer
Klaus G. Hendig.......................  59     Senior Vice President, Administration
Timothy D. Kanemoto...................  52     Vice President, Product Operations
Michael P. Levis......................  41     Vice President, Marketing
Daniel L. Lewis.......................  49     Vice President, Worldwide Sales
James McCreary........................  52     Vice President, Engineering
Ira McLain............................  55     Vice President, Information Technology
William H. Owen, III..................  50     Vice President, Technology Development
                                               and Intellectual Properties
</TABLE>
 
     Raphael Klein, Chairman of the Board and Chief Executive Officer. From
August 1987 until January 1998 Mr. Klein was Xicor's President and Chief
Executive Officer. Since January 1998 Mr. Klein has shared the Office of the
President with Mr. Bruce Gray. Mr. Klein is Xicor's Chief Executive Officer with
primary responsibility for finance and administration and shared responsibility
for the direction of the company. Mr. Klein has been a director of the Company
since founding Xicor in August 1978 and its Chairman of the Board since August
1982. Mr. Klein received the degree of Master of Science in Physics from the
Israeli Institute of Technology ("Technion") and is the inventor or co-inventor
of two patented inventions.
 
     Bruce Gray, President and Chief Operating Officer. Mr. Gray joined Xicor in
September 1996 as Vice President, Wafer Operations and since January 1998 has
shared the Office of the President with Mr. Raphael Klein. Mr. Gray is Xicor's
President and Chief Operating Officer with principal profit and loss
responsibility and shared responsibility for the direction of the Company. Mr.
Gray has 27 years of experience in the semiconductor industry in engineering,
manufacturing and management. From September 1994 through September 1996, Mr.
Gray served as the Managing Director of the Advanced Technology Group at
National Semiconductor Corporation. From August 1989 through September 1994, Mr.
Gray was the Director of Santa Clara Operations and Services for National
Semiconductor with operational responsibility for four high-volume wafer
fabrication lines. Mr. Gray was also involved in advanced technology development
and wafer foundry activities. Mr. Gray has a Bachelor of Science Degree in
Metallurgy and Materials Science from the Massachusetts Institute of Technology
(MIT) and is the inventor or co-inventor of three patented inventions.
 
     Joseph Drori, Vice President, Product Definition. Mr. Drori has been
employed by Xicor since October 1979 and became a Vice President in June 1988.
Mr. Drori received the degree of Master of Science in Electrical Engineering
from the University of California at Los Angeles and is the inventor or
co-inventor of several patented inventions in the semiconductor field.
 
     Geraldine N. Hench, Vice President, Finance and Chief Financial Officer.
Ms. Hench, a certified public accountant, joined Xicor in November 1987 and
became a Vice President in June 1993 and Xicor's Chief Financial Officer in
January 1998. Ms. Hench received the degree of Bachelor of Science in Accounting
from Santa Clara University and the degree of Master's in Business
Administration from St. Mary's College.
 
     Klaus G. Hendig, Senior Vice President, Administration. Mr. Hendig, a
certified public accountant, has been employed by Xicor since February 1981 and
became a Vice President in January 1983. Mr. Hendig served as Xicor's Chief
Financial Officer from September 1987 until January 1998. Mr. Hendig received
the degree of Bachelor of Science in Accounting and Finance from San Jose State
University.
 
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     Timothy D. Kanemoto, Vice President, Product Operations. Mr. Kanemoto
joined Xicor in January 1990, and became a Vice President in June 1994. He
received the Degree of Bachelor of Science in Business Administration from
California State University, Hayward.
 
     Michael P. Levis, Vice President, Marketing. Mr. Levis joined Xicor in
January 1998 as Vice President, Marketing. Mr. Levis has 15 years of experience
in marketing and business development. From 1996 through 1997, Mr. Levis served
as General Partner at ASCII of America, a venture capital firm. From 1993
through 1996, Mr. Levis was the Vice President of Marketing at Crosspoint
Solutions, Inc., a semiconductor company. Prior to 1993 Mr. Levis held various
marketing and business development positions at Crosspoint Solutions, Inc.,
Samsung Semiconductors and Zilog, Inc. Mr. Levis received the degree of Bachelor
of Science in Electrical Engineering from Purdue and the degree of Master of
Science in Electrical Engineering from Stanford University.
 
     Daniel L. Lewis, Vice President, Worldwide Sales. Mr. Lewis joined Xicor in
May 1998 as Vice President, Worldwide Sales. Mr. Lewis has 27 years of
experience in various sales and marketing roles. From June 1991 through April
1998, Mr. Lewis was Vice President of Sales at Integrated Device Technology,
Inc. Mr. Lewis received the degree of Bachelor of Science in Electrical
Engineering from the University of Michigan.
 
     James McCreary, Vice President, Engineering. Mr. McCreary joined Xicor in
October 1998 as Vice President, Engineering. From 1996 through 1998 Mr. McCreary
was involved in private business ventures. In 1983 Mr. McCreary co-founded Micro
Linear Corp. where he was Vice President of Engineering from 1983 through 1995.
Mr. McCreary received the degrees of Master of Science in Electrical Engineering
and Ph.D. at the University of California, Berkeley and is the author of several
patents.
 
     Ira McLain, Vice President, Information Technology. Mr. McLain joined Xicor
in May 1998 as Vice President, Information Technology (IT). Mr. McLain has 29
years of IT experience with National Semiconductor (NSC), Fairchild
Semiconductor and Schlumberger. From 1987 to 1998, Mr. McLain was an IT Director
with NSC. Mr. McLain received a Bachelor of Arts degree from Lamar University.
 
     William H. Owen, III, Vice President, Technology Development and
Intellectual Properties. Mr. Owen, one of Xicor's founders, joined Xicor in
October 1978, shortly after its formation to aid in the development of its
advanced memory devices, with principal responsibility for circuit design. Mr.
Owen is presently involved in process development and patent activities. Mr.
Owen received the degree of Master of Science in Electrical Engineering from the
University of Wisconsin and is the inventor or co-inventor of several patented
inventions in the semiconductor field.
 
INSURANCE
 
     Xicor presently carries various insurance coverages including property
damage, business interruption and general liability including certain product
liability coverage. Xicor has been unable to obtain pollution and earthquake
insurance at reasonable costs and limits.
 
ITEM 2. PROPERTIES
 
     Xicor leases a 43,834 square foot facility in Milpitas, California which
contains Xicor's silicon wafer fabrication and process technology development
operations. The lease, which expires in 2001, provides for an annual base rental
of $626,145 and requires Xicor to pay all real estate taxes, utilities and
insurance and to maintain the building and premises. Xicor has two successive
five-year renewal options upon the same terms and conditions at increased rental
rates based on the consumer price index, not to exceed 15% for the prior
five-year period.
 
     Xicor leases a 55,767 square foot facility near its wafer fabrication
facility which houses its product testing and distribution operations and a
small quick-turn assembly line. The lease, which expires in 1999, provides for
an annual base rental of $401,520. Xicor has a five-year renewal option upon the
same terms and conditions, except that the rental will be 95% of the then market
rental rate in the industrial park where the property is located.
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<PAGE>   9
 
     Xicor leases a 73,622 square foot facility adjacent to its existing wafer
fabrication facility. This facility houses Xicor's design, research and
development and reliability operations and executive, marketing and
administrative offices and also serves as Xicor's main stockroom. This lease
expires in 2000 and provides for an annual base rental of $1,285,776 and
requires Xicor to pay all real estate taxes, utilities and insurance and to
maintain the building and premises. Xicor has three successive five-year renewal
options upon the same terms and conditions at increased rental rates based on
the consumer price index, not to exceed 15% for the prior five-year period.
 
     Xicor believes that its existing facilities should be adequate for its
needs in the foreseeable future.
 
ITEM 3. LEGAL PROCEEDINGS
 
     Xicor is not a party, nor is its property subject, to any material pending
legal proceedings.
 
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
 
     None
 
                                    PART II
 
ITEM 5. MARKET FOR THE REGISTRANT'S COMMON STOCK AND RELATED STOCKHOLDER MATTERS
 
     The information required by this Item is incorporated by reference to page
16 of the Company's 1998 Annual Report to Shareholders.
 
ITEM 6. SELECTED FINANCIAL DATA
 
     The selected financial data for the five years ended December 31, 1998,
which appears on page 7 of the Company's 1998 Annual Report to Shareholders, is
incorporated by reference in this Annual Report on Form 10-K.
 
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
 
     The information required by this Item is incorporated by reference to pages
4 to 6 of the Company's 1998 Annual Report to Shareholders.
 
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
 
     The financial statements, together with the report thereon of
PricewaterhouseCoopers LLP dated January 27, 1999, appearing on pages 8 to 15
and the unaudited financial information by quarter appearing on page 16 of the
Company's 1998 Annual Report to Shareholders, are incorporated by reference in
this Annual Report on Form 10-K.
 
ITEM 9. CHANGES IN AND DISAGREEMENTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
 
     None
---------------
 
     With the exception of the information incorporated in Items 5, 6, 7, 8 and
14 of Parts II and IV of this Form 10-K, the Company's 1998 Annual Report to
Shareholders is not to be deemed filed as a part of this Annual Report on Form
10-K.
 
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<PAGE>   10
 
                                    PART III
 
     Certain information required by Part III is omitted from this Report in
that the Registrant will file a definitive proxy statement pursuant to
Regulation 14A (the "Proxy Statement") not later than 120 days after the end of
the fiscal year covered by this Report, and certain information included therein
is incorporated herein by reference.
 
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
 
     Certain information concerning the Company's directors and executive
officers required by this Item is incorporated by reference to the information
contained in the sections captioned "Election of Directors" and "Section 16(a)
Beneficial Ownership Reporting Compliance" in the Company's Proxy Statement.
 
     The information concerning the Company's executive officers required by
this Item is included in Part I hereof under the caption "Executive Officers of
the Registrant".
 
ITEM 11. EXECUTIVE COMPENSATION
 
     The information required by this Item is incorporated by reference to the
information contained in the section captioned "Executive Compensation" in the
Company's Proxy Statement.
 
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
 
     The information required by this Item is incorporated by reference to the
information contained in the section captioned "Security Ownership of Certain
Beneficial Owners and Management" in the Company's Proxy Statement.
 
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
 
     The information required by this Item is incorporated by reference to the
information contained in the section captioned "Election of Directors" in the
Company's Proxy Statement.
 
                                        9
<PAGE>   11
 
                                    PART IV
 
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K
 
     (a) The following documents are filed as a part of this report:
 
     (1) Financial Statements. The following Consolidated Financial Statements
         of Xicor, Inc. and the Report of Independent Accountants are
         incorporated by reference from the indicated pages of the Company's
         1998 Annual Report to Shareholders:
 
<TABLE>
<CAPTION>
                                                              PAGE IN
                                                              ANNUAL
                                                              REPORT
                                                              -------
<S>                                                           <C>
Consolidated Statements of Operations for each of the three
  years in the period ended December 31, 1998...............    9
Consolidated Balance Sheets as of December 31, 1998 and
  1997......................................................    8
Consolidated Statements of Shareholders' Equity for each of
  the three years in the period ended December 31, 1998.....    9
Consolidated Statements of Cash Flows for each of the three
  years in the period ended December 31, 1998...............    10
Notes to Consolidated Financial Statements..................  11-15
Report of Independent Accountants...........................    15
</TABLE>
 
     (2) Financial Statement Schedule.
 
        All schedules have been omitted since the required information is not
        applicable, not significant or because the information required is
        included in the consolidated financial statements or notes thereto.
 
     (3) Exhibits. The exhibits listed in the accompanying Index to Exhibits are
         filed or incorporated by reference as part of this Annual Report.
 
     (b) Reports on Form 8-K
 
        None.
 
                                       10
<PAGE>   12
 
                                   SIGNATURES
 
     Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this Annual Report to be
signed on its behalf by the undersigned, thereunto duly authorized, in the City
of Milpitas, State of California, on the 26th day of March 1999.
 
                                          XICOR, INC.
                                          Registrant
 
                                          By        /s/ RAPHAEL KLEIN
 
                                            ------------------------------------
                                                       Raphael Klein
                                                 Chairman of the Board and
                                                  Chief Executive Officer
                                               (Principal Executive Officer)
 
                               POWER OF ATTORNEY
 
     KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints Raphael Klein and Klaus G. Hendig, and
each of them, jointly and severally, his attorneys-in-fact, each with the power
of substitution, for him in any and all capacities, to sign any and all
amendments to this Report on Form 10-K and to file the same, with exhibits
thereto and other documents in connection therewith, with the Securities and
Exchange Commission, hereby ratifying and confirming all that each of said
attorneys-in-fact, or his substitute or substitutes, may do or cause to be done
by virtue hereof.
 
     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 and on the dates indicated:
 
<TABLE>
<CAPTION>
                      SIGNATURE                                     TITLE                    DATE
                      ---------                                     -----                    ----
<C>                                                    <S>                              <C>
                  /s/ RAPHAEL KLEIN                    Chairman of the Board and Chief  March 26, 1999
-----------------------------------------------------  Executive Officer (Principal
                   (Raphael Klein)                     Executive Officer)
 
                   /s/ BRUCE GRAY                      President, Chief Operating       March 26, 1999
-----------------------------------------------------  Officer and Director
                    (Bruce Gray)
 
                  /s/ JULIUS BLANK                     Director                         March 26, 1999
-----------------------------------------------------
                   (Julius Blank)
 
                 /s/ ANDREW W. ELDER                   Director                         March 26, 1999
-----------------------------------------------------
                  (Andrew W. Elder)
 
               /s/ GERALDINE N. HENCH                  Vice President, Finance and      March 26, 1999
-----------------------------------------------------  Chief Financial Officer
                (Geraldine N. Hench)                   (Principal Financial Officer
                                                       and Principal Accounting
                                                       Officer)
</TABLE>
 
                                       11
<PAGE>   13
 
                                  XICOR, INC.
 
                               INDEX TO EXHIBITS
                                  ITEM 14(A)3.
 
<TABLE>
<CAPTION>
EXHIBIT
NUMBER                             DESCRIPTION
-------                            -----------
<C>        <S>
  3.1      Amended and Restated Articles of Incorporation dated
           December 9, 1987 filed as Exhibit 3.1 with Form 10-K for the
           year ended December 31, 1987, is hereby incorporated by
           reference.
  3.2      By-laws, as amended to date, filed as Exhibit 3.2 with Form
           10-K for the year ended December 31, 1987, is hereby
           incorporated by reference.
  3.2A     Certificate of Amendment of By-Laws effective as of January
           28, 1998 is filed herewith as Exhibit 3.2A.
 10.1      Non-Qualified (Non-Incentive) and Incentive Stock Option
           Plan as amended as of December 31, 1987 filed as Exhibit
           10.1 with Form 10-K for the year ended December 31, 1987, is
           hereby incorporated by reference.
 10.1A     Amended and Restated Xicor, Inc. 1990 Incentive and
           Non-incentive Stock Option Plan filed as Exhibit 10.1A with
           Form 10-K for the year ended December 31, 1995, is hereby
           incorporated by reference.
 10.2      Lease dated July 2, 1980, Exhibit 13-E of the Exhibits filed
           with Form S-1 Registration Statement, File No. 2-69109, is
           hereby incorporated by reference.
 10.2A     Amendment to lease dated July 2, 1980 filed as Exhibit 10.2A
           with Form 10-K for the year ended December 31, 1990, is
           hereby incorporated by reference.
 10.3      Lease dated November 23, 1983, Exhibit 1 of the Exhibits
           filed with Form 10-K for the year ended December 31, 1983,
           is hereby incorporated by reference.
 10.3A     Amendment to lease dated November 23, 1983 filed as Exhibit
           10.3A with Form 10-K for the year ended December 31, 1990,
           is hereby incorporated by reference.
 10.4      Lease dated February 15, 1984, Exhibit 10(v) of the Exhibits
           filed with Form 10-K for the year ended December 31, 1984,
           is hereby incorporated by reference.
 10.4A     Amendment to lease dated February 15, 1984 filed as Exhibit
           10.4A with Form 10-K for the year ended December 31, 1994,
           is herein incorporated by reference.
 10.6      Form of Indemnification Agreement entered into between
           Xicor, Inc. and each of its Officers and Directors filed as
           Exhibit 10.6A with Form 10-Q for the quarterly period ended
           June 30, 1996, is hereby incorporated by reference.
 10.7      Lingsen-Xicor Dedicated Production Agreement dated September
           21, 1988 as amended on March 11, 1989, April 14, 1989 and
           September 8, 1989 filed as Exhibit 10.8 with Form 10-K for
           the year ended December 31, 1989, is hereby incorporated by
           reference.
 10.8      Loan and Security Agreement dated March 10, 1993 with
           CoastFed Business Credit Corporation filed as Exhibit 10.8
           with Form 10-K for the year ended December 31, 1992, is
           hereby incorporated by reference.
 10.9      Xicor, Inc. 1995 Director Option Plan filed as Exhibit 10.9
           with Form 10-K for the year ended December 31, 1995, is
           hereby incorporated by reference.
 10.10*    Xicor-Yamaha Semiconductor Manufacturing Foundry Agreement
           dated February 6, 1997 is filed herewith as Exhibit 10.10.
 10.11     Xicor, Inc. 1998 Employee Stock Purchase Plan is filed
           herewith as Exhibit 10.11.
 10.12     Xicor, Inc. 1998 Nonstatutory Stock Option Plan is filed
           herewith as Exhibit 10.12.
 13.1      Pertinent pages of the 1998 Annual Report to Shareholders
           (to be deemed filed only to the extent required by the
           instructions to exhibits for reports on Form 10-K).
</TABLE>
 
                                       12
<PAGE>   14
 
<TABLE>
<CAPTION>
EXHIBIT
NUMBER                             DESCRIPTION
-------                            -----------
<C>        <S>
 21.       List of Subsidiaries.
 23.       Consent of PricewaterhouseCoopers LLP.
 24.       Powers of Attorney (included on the signature pages hereof).
 27.       Financial Data Schedule.
</TABLE>
 
---------------
* Confidential treatment of certain portions has been requested.
 
                                       13