<PAGE>

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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 September 30, 1999

                                      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 0-19654



                       VITESSE SEMICONDUCTOR CORPORATION
            (Exact name of registrant as specified in its charter)

            Delaware                                        No. 77-0138960
  (State or other jurisdiction of                           (I.R.S. Employer
  incorporation or organization)                            Identification No.)




                     741 Calle Plano, Camarillo, CA  93012
                   (Address of principal executive offices)

      Registrant's telephone number, including area code:  (805) 388-3700

       Securities registered pursuant to Section 12(b) of the Act:  None

          Securities registered pursuant to Section 12(g) of the Act:
                         Common Stock, $0.01 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 (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 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]


     The aggregate market value of the voting stock held by non-affiliates of
the registrant, based upon the closing sale price of the Common Stock on
September 30, 1999 as reported on the Nasdaq National Market, was approximately
$6,612,689,548. Shares of Common Stock held by each officer and director and by
each person who owns 5% or more of the outstanding Common Stock have been
excluded in that such persons may be deemed to be affiliates. This determination
of affiliate status is not necessarily a conclusive determination for other
purposes.


     As of December 2, 1999, the registrant had outstanding 157,018,307 shares
of Common Stock.


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<PAGE>

                                    PART I

Item 1.  Business

     Certain statements in this Annual Report on Form 10-K, including certain
statements contained in "Business" and "Management's Discussion and Analysis of
Financial Condition and Results of Operations," constitute "forward-looking
statements" within the meaning of Section 27A of the Securities Act of 1933, as
amended (the "Securities Act"), and Section 21E of the Securities Exchange Act
of 1934, as amended (the "Exchange Act").  Such forward-looking statements
involve known and unknown risks, uncertainties and other factors which may cause
the actual results, performance or achievements of Vitesse Semiconductor
Corporation ("the Company") to be materially different from any future results,
performance or achievements expressed or implied by such forward-looking
statements.  See "Management's Discussion and Analysis of Financial Condition
and Results of Operations--Factors Affecting Future Operating Results" for
certain factors that could cause actual results to differ materially from these
forward-looking statements.

     The Company is a leading supplier of high-performance integrated circuits
("ICs") targeted at systems manufacturers in the communications and automatic
test equipment ("ATE") markets.  As a result of the deployment of communications
standards such as SONET/SDH, IP, ATM, Fibre Channel and Gigabit Ethernet as well
as other advances, there has been growing demand for high-performance ICs to
meet the increasingly rigorous standards of the communications industries.  The
requirements for high-performance ICs in the ATE industry have also become more
stringent in order to meet testing requirements of increasingly faster and more
complex ICs. In fiscal 1999, sales of communications and ATE products
represented 81% and 19%, respectively, of the Company's total revenues. The
Company's major customers include Cisco, Fujitsu, IBM, LTX, Lucent,
Schlumberger, Seagate, Tellabs and Sun Microsystems.

     Vitesse was incorporated in the state of Delaware in 1987. The Company's
principal offices are located at 741 Calle Plano, Camarillo, California, and
its phone number is (805) 388-3700.

Background

  Communications

     Public communications networks, such as those used by interexchange long
distance carriers ("IXCs") and local exchange carriers ("LECs") and specialized
networks such as those used by Internet service providers, are experiencing
dramatic growth in traffic.  The volume of information required to be
transmitted across public networks has increased significantly in recent years
as a result of a variety of factors, including the increase in data transmission
and facsimile use, the rapid growth of the Internet, the increase in demand for
high speed interconnectivity between wide area networks ("WANs") and local area
networks ("LANs"), and the growing demand for remote network access.  Public
network service providers have been required to upgrade their infrastructure to
provide high-speed data services to customers to meet these needs in addition to
providing their standard telephone services.  Infrastructure improvements to
public networks have most prominently included a dramatic increase in the
deployment of fiber optic technology to replace conventional copper wire.  Since
optical fiber offers substantially greater capacity, is less error prone and is
easier to administer than copper wire, it has become the transmission medium of
choice for IXCs and, increasingly, LECs.

     As fiber optic technology has spread, existing network standards for the
transmission of information, which had been developed primarily for copper wire
networks, have presented limitations to simultaneously transmitting voice and
data.  As a result, the SONET (Synchronous Optical Network) standard in the
United States and the equivalent SDH (Synchronous Digital Hierarchy) standard in
the rest of the world emerged as the next generation standards for high-speed
optical fiber transmission.  The SONET/SDH standard facilitates high data
integrity and improved performance in terms of network reliability and reduces
maintenance and other operations costs by standardizing interoperability among
different vendors' equipment.

     More recently, the demand for system bandwidth is being addressed by
transmitting multiple channels on a single fiber by a technique called
wavelength division multiplexing ("WDM").  The adoption of WDM has enabled
system operators to significantly increase system bandwidth without having to
deploy additional fiber cables, a long and costly process.  While WDM increases
the bandwidth carried by each optical fiber, it does not reduce the number of
electronic components required.  Instead, WDM has accelerated the growth of
SONET/SDH deployment by eliminating fiber installation as a growth limiter.

     Among the standards and protocols that are emerging to address the increase
in volume and complexity of data flowing through today's networks are
Asynchronous Transfer Mode ("ATM") and Internet Protocol ("IP"). ATM is based on
fixed-size packets, called cells, and is designed to efficiently integrate
voice, data and video and easily

<PAGE>

scale in bandwidth. IP is a packet-based protocol that is generally accepted as
the industry standard for LAN data transfer and is being increasingly used in
WANs as well. Both ATM and IP packet switching network technologies are being
deployed over optical networks based on the complementary SONET/SDH standards,
known as ATM over SONET and Packet over SONET ("POS"). Fiber optic applications
designed to the SONET/SDH and ATM standards use data transmission rates of 155
MHz, 622 MHz, 2.5 GHz or 10 GHz.

     Performance improvements in processors and peripherals, along with the
transition to distributed architectures such as client/server and external
storage area networks ("SANs"), have spawned the need for very high speed data
interconnect and networking applications.  This has led to a focus on the
methods of inter-connecting high-performance computers, peripheral equipment,
storage devices and networks.

     In 1988, the American National Standards Institute established a Fibre
Channel standard, which is a practical, inexpensive, yet expandable method for
achieving high-speed data transfer among workstations, mainframes, data storage
devices and other peripherals. The Fibre Channel standard addresses the need for
very fast transfers of large volumes of information, while at the same time
relieving system manufacturers from the burden of supporting the variety of
networks and channels currently in place. Fibre Channel is especially effective
in situations where large blocks of data must be transferred within and between
buildings and over campus environments. Fibre Channel is substantially faster
than existing network data transmission protocols. Fibre Channel is capable of
transmitting at rates exceeding 1 gigabit per second in both directions
simultaneously and is also able to transport existing protocols over both
optical fiber and copper wire.

     In the LAN environment, Ethernet is currently the most widespread standard,
operating at 10 to 100 megabits per second.  However, LAN backbones are rapidly
being upgraded to Gigabit Ethernet and ATM in order to increase available
bandwidth.  These network protocols, which enable expanded bandwidth in excess
of one gigabit per second, are emerging as the new standards for LAN backbones.

    All of these trends in the communications market have resulted in increased
demand for communication ICs to meet the speed, performance and bandwidth
requirements of high-performance systems.

  Automated Test Equipment Market

     ATE is used for the comprehensive testing of ICs, printed circuit boards
and electronic systems. The increasing worldwide demand for ICs in recent years
has led to an increase in the demand for IC test equipment. The ATE industry has
experienced changes arising from the increasing complexity of ICs, as manifested
by growing pin counts, higher speeds and greater levels of integration. These
changes have created challenges for ATE systems designers, since the equipment
used to test these complex devices must be capable of performance exceeding that
of the devices themselves.

     These changes have also led to major revisions in ATE architectures.
Historically, ATE systems were primarily based on a central resource
architecture where timing and pattern generation hardware and software were
centralized and allocated as needed to groups of pins on the "device under test"
("DUT").  Central resource architecture works best with relatively simple ICs,
but with newer, higher complexity devices, the test environment can be
significantly different for each pin.  This has led to a "tester-per-pin"
architecture in which tester resources are dedicated to each pin of the DUT.
This rapid increase in system complexity has resulted in a marked increase in
the number of electronic components needed in the pin channel.  These factors
have led ATE designers to seek to increase component integration.  The Company
believes that the low power dissipation and high complexity of its ICs, which
permit systems to be built with fewer ICs, are well-suited for the increasingly
demanding requirements of present generation ATE equipment.

Strategy

     The Company's strategy includes the following elements:

  Target Growing Markets

     Vitesse targets the growing communications and ATE markets.  Within the
communications markets, the Company's products are used in emerging high-growth
areas such as SONET/SDH, ATM, IP, Fibre Channel, and Gigabit Ethernet, which
require ICs that are capable of high-bandwidth data transmission.

                                       2
<PAGE>

  Reduce Costs of High-Performance Products

     The Company continually strives to reduce the cost of its high-performance
products.  The Company endeavors to continue to increase manufacturing yields
and decrease die sizes, as well as to decrease power dissipation to enable the
use of lower-cost plastic packaging.  Another critical element of this strategy
involves the integration of multiple functions onto a single chip.

  Provide Complete Customer Solutions

     One of the key elements of the Company's strategy is to address, in
addition to the physical layer, upper layers of high-performance communications
systems such as the switching and processing layers. This provides customers
with complete chip solutions for major portions of their hardware. Further, it
enables the Company to build defensible barriers against competitors who only
offer a partial or single circuit solution.

  Develop "Technology  Transparent" Products

     The Company believes that there is a variety of process technologies
available to meet the requirements of the broad range of products that its
customers need. The Company endeavors to offer chip solutions to its customers
using the most appropriate process technology for the particular application. In
addition to its internal wafer fabrication facilities, the Company subcontracts
its CMOS products to three state-of-the-art semiconductor foundries. The Company
intends to qualify other process technologies and foundries in the future.

  Establish Close Relationships with Customers' Engineering Management

     The Company establishes close relationships with its customers' engineering
management and believes these relationships enable it to better understand the
customers' needs and win designs for existing and new systems.

Pursue Strategic Acquisitions

     The Company frequently evaluates opportunities to enhance its products and
technologies through the acquisition of complementary products, technologies
and businesses. In fiscal 1999, the Company completed three such acquisitions.

Products and Customers

  Communications

     The Company offers several products that address the needs of high-
performance communications systems at the 622 Mb/s, 1.0 Gb/s, 1.25 Gb/s, 2.5
Gb/s and 10 Gb/s data rates for the SONET, ATM, IP, Fibre Channel and Gigabit
Ethernet markets. These products support the increasing speed requirements of
transmission channels and the transmission of multiple channels on a single
fiber. Today, most SONET systems utilize the 2.5 Gb/s (OC-48) standard, though
use of the 10 Gb/s (OC-192) standard is starting to emerge. The Company
developed its first 2.5 Gb/s ICs in 1987 and today has a wide range of 2.5 Gb/s
ICs in the SONET market. Among the products offered in this area are
multiplexers, demultiplexers, switch cores, clock generation and recovery
circuits, laser drivers optoelectronic receivers and amplifiers. These cost
effective solutions for transmission, control and switching provide wide design
margins, increased integration and overall lower system costs to the
communications market.

     Today's internet data networking systems require ever increasing levels of
integration, functionality and performance to meet stringent customer
requirements for higher bandwidth, reduced cost and shorter time to market.  In
order to meet this challenge, complete line card and switch fabric chip set
solutions are being demanded from suppliers.  The Company is addressing this
need with an expanding set of POS/ATM framers, ethernet Media Access
Controllers, packet processors and switch fabrics, which are ideally suited for
high performance switch and router applications.  These products address the
need for high bandwidth ports supporting STS-12, STS-48, STS-192 and Gigabit
Ethernet and allow aggregate system bandwidths from 20 Gb/s to greater than 250
Gb/s.  The recent acquisition of XaQti Corporation has added active-flow
processor technology to the Company, forming the core of packet processing
components.

     The Company's Fibre Channel ICs allow for the very fast transfer of large
volumes of data in SANs, JBOD ("Just a Bunch of Disks") and RAID ("Redundant
Array of Inexpensive Disks") subsystems, and peripheral devices, surpassing the
capacity of today's SCSI interfaces.

                                       3
<PAGE>

     The entire line of the Company's Fibre Channel ICs focuses on eliminating
bandwidth bottlenecks in SANs, monitoring of vital statistics within the system,
and supplanting SCSI devices in today's fastest networks.  The Company's range
of ICs for disk drives, hub and repeaters, host adapters, JBOD and RAID systems,
port bypass circuits and switches service the Fibre Channel market with high
bandwidth solutions for copper, fiber optic and backplane interconnects.  The
Company has developed 2.0 Gb/s ICs that will increase bandwidth and further
reduce bottlenecks in the storage marketplace.  The Company has also developed
physical layer interface products for the Gigabit Ethernet market.  These
Gigabit Ethernet products increase the bandwidth of LAN backbones to 1.25 Gb/s
as new standards for LAN backbones emerge.

     The Company offers a line of gigabit analog chipsets for fiber optic
interfaces.  Its 622 Mb/s, 1.0 Gb/s and 2.5 Gb/s ICs are utilized in SONET/SDH,
Gigabit Ethernet, and Fibre Channel subsystems.  The Company introduced the
first low power, high-volume optoelectronic IC in 1995.  These small ICs reduce
board space requirements and lower overall system costs.  Vitesse is currently
expanding its higher speed optoelectronic product line to meet rapidly emerging
datacom and telecom requirements.

     Today's system designers need to overcome the limitations of parallel
interfaces used in system backplanes, such as timing problems, impedance
matching and physical size.  The Company's backplane products utilize a serial
approach and eliminate limitations by supplying compact and simple
interconnects.  The Company also supplies a series of crosspoint switches for
use in telecom and datacom applications.  These backplane and switch ICs
synchronize buffering across bits, words, or channels to eliminate data skew.

     Communications products accounted for 81% and 74% of the Company's total
revenues for fiscal 1999 and 1998, respectively.  In fiscal 1999, the Company's
significant communications customers included Alcatel, Ciena, Cisco, Ericsson,
Fujitsu, IBM, Lucent, NEC, Seagate, Sun Microsystems and Tellabs.

  Automated Test Equipment

     ATE products accounted for 19% and 26% of the Company's total revenues for
fiscal 1999 and fiscal 1998, respectively.  Vitesse provides gate arrays and
custom products that offer a combination of high complexity, low power
dissipation and high speed for ATE.  More recently, the Company has introduced a
line of standard products targeted at the ATE industry. In fiscal 1999, the
Company's significant ATE customers included Ando, Credence, Integrated
Measurement Systems, LTX, Schlumberger and Teradyne.

     The Company's ten largest customers accounted for approximately 66% and 69%
of total revenues in fiscal 1999 and fiscal 1998, respectively. In fiscal 1999
and fiscal 1998, sales to Lucent accounted for 18% and 23%, respectively, of the
Company's total revenues, and sales to Schlumberger accounted for 14% and 15%,
respectively, of the Company's total revenues.

Technology

     The Company uses Gallium Arsenide ("GaAs") as the substrate in the internal
manufacturing of its products. GaAs has inherent physical properties which allow
electrons to move several times faster than within silicon. This higher electron
mobility provides the Company with the flexibility to manufacture ICs that
operate at much higher speeds than silicon devices or to operate at the same
speeds with reduced power consumption. The Company employs proprietary H-GaAs
process technology based on a refractory metal self-aligned gate ("SAG")
process. SAG technology is universally used in the manufacture of complex
silicon ICs. The process structure and logic implementation of the Company's
GaAs ICs are similar to a traditional silicon MOS process.

                                       4
<PAGE>



Manufacturing

  Wafer Fabrication

     The Company fabricates four-inch wafers at its Camarillo, California plant
in a 6,000 square foot clean room, which has a rating of Class 10 (meaning there
are fewer than ten particles larger than 0.5 micron per cubic foot of air). In
1998 the Company started fabricating six-inch wafers at a newly constructed
plant in Colorado Springs, Colorado which includes a 15,000 square foot Class 1
clean room. Wafer fabrication equipment used by the Company is generally
identical to that used in a sub-micron silicon MOS fabrication facility. Process
technology is generally similar to that used in advanced sub-micron silicon
process technologies, with certain modifications necessary to accommodate GaAs
material properties.

     As is typically the case with semiconductor manufacturing, the Company's
manufacturing yields vary significantly among products, depending on the
product's complexity and the Company's experience in manufacturing the
particular ICs.  While the Company's process technology utilizes standard
silicon semiconductor manufacturing equipment, aggregate production quantities
have been relatively low and the process technology is significantly less
developed than silicon process technology used by competitors.  This leads to
overall yields lower than levels typically achieved in the silicon process.  The
Company expects that many of its current and future products may never be
produced in high volume.

     Regardless of the process technology used, the fabrication of ICs is a
highly complex and precise process. Defects in masks, impurities in the
materials used, contamination of the manufacturing environment, equipment
failure and other difficulties in the fabrication process can cause a
substantial percentage of wafers to be rejected or numerous die on each wafer to
be non-functional.

     By utilizing standard silicon IC manufacturing equipment the Company is
able to employ developments in silicon manufacturing technology to continue to
improve minimum feature size, dimension control, deposition and etch
capabilities. By eliminating the need for 'custom" wafer fabrication equipment,
the Company can focus its resources on developing leading process technology
rather than on developing expensive customized manufacturing equipment.

     The Company outsources the manufacturing of its silicon-based products to
suppliers that deliver either finished wafers or fully assembled and tested
products.  The Company's semiconductor subcontractors include IBM, Taiwan
Semiconductor Manufacturing Corporation and LSI Logic.

                                       5
<PAGE>

  Assembly and Test

     A majority of the Company's ICs are packaged by third parties. For final
testing, the Company utilizes advanced automated VLSI testers and has
constructed several custom testers.  However, in many cases, the Company cannot
test its products at full speed and must rely on numerous sub-circuit path
measurements to determine the performance of the IC.

  Components and Raw Materials

     The Company manufactures its products using a variety of components
procured from third-party suppliers. A majority of the Company's integrated
circuits are packaged by third parties. Certain components, materials and
services are available from only a limited number of sources. GaAs substrates
and other raw materials and equipment used in the production of the Company's
ICs are available from several suppliers. Although lead times are occasionally
extended in the industry, the Company has not experienced any material
difficulty in obtaining raw materials or assembly services.

Engineering, Research and Development

     The market for the Company's products is characterized by rapid changes in
both GaAs and silicon process technologies.  Because of continual improvements
in these technologies, the Company believes that its future success will depend
largely on its ability to continue to improve its product and process
technologies, to develop new technologies in order to maintain the performance
of its products relative to competitors, to adapt its products and process
technologies to technological changes and to adopt emerging industry standards.

  Product Research and Development

     The Company's present product research and development efforts are focused
on developing new products for its communications and ATE product lines.
Considerable design effort is being expended to increase the speed and
complexity and reduce the power dissipation of the Company's products.

  Process Research and Development

     The Company has implemented H-GaAs IV, a 0.4 micron GaAs FET technology
that offers higher complexity and lower power dissipation than previous Vitesse
technologies. The Company is currently engaged in research and development
projects focused on other process-related improvements to increase yields and
improve the speed, complexity and power dissipation characteristics of its
devices.

     The Company's engineering, research and development expenses in fiscal
1999, 1998 and 1997 were $49.2 million, $33.0 million and $19.1 million,
respectively.

Competition

     The high-performance semiconductor market is highly competitive and subject
to rapid technological change, price erosion and heightened international
competition. The communications and ATE industries, which are the primary target
markets for the Company, are also becoming intensely competitive because of
deregulation and international competition. The Company currently competes
primarily directly with the following categories of companies:

 .    GaAs fabrication operations of companies such as Conexant and Fujitsu.

 .    Silicon high-performance integrated circuit manufacturers which use Emitter
     Coupled Logic ("ECL"), Bipolar Complementary Metal-Oxide-Semiconductor
     ("BiCMOS") or Complementary Metal-Oxide-Semiconductor ("CMOS") technologies
     such as Hewlett Packard, Fujitsu, Motorola, Lucent Technologies, Texas
     Instruments and Applied Micro Circuits Corporation.

 .    Internal integrated circuit manufacturing units of systems companies such
     as Lucent Technologies, Siemens and Fujitsu.

     Many of these companies have substantially greater marketing, financial,
technical and manufacturing resources than those of the Company.

                                       6
<PAGE>

     Competition in the Company's markets is primarily based on
price/performance, product quality and the ability to deliver products in a
timely fashion. Product qualification is typically a lengthy process and some
prospective customers may be unwilling to invest the time or expense necessary
to qualify suppliers such as the Company. Prospective customers may also have
concerns about the relative advantages of our products compared to more familiar
silicon-based semiconductors. Further, customers may also be concerned about
relying on a relatively small company for a critical sole-sourced component.

Sales and Customer Support

     The Company's principal method of selling its products is through direct
sales to systems manufacturers by the Vitesse sales force. In certain markets
such as Japan, the Company also employs value-added distributors.

     Because of the large engineering support required in connection with the
sale of high performance ICs, the Company provides its customers with field
engineering support as well as engineering support from the Company's
headquarters. Typically, a field engineer will accompany a salesperson to the
initial customer visit to understand and evaluate the customer's requirements.
The salesperson and field engineer will determine whether additional engineering
analysis will be required by engineers based at the Company's headquarters. The
Company's sales cycle is typically lengthy and requires the continued
participation of salespersons, field engineers, engineers based at the Company's
headquarters, and senior management.

     The Company's sales headquarters is located in Camarillo, California.  The
Company has 13 additional sales and field application support offices in the
United States, and one each in Germany, Italy, Japan and United Kingdom.

     The Company generally warrants its products against defects in materials
and workmanship for a period of one year.

Licenses and Patents

     The Company has been awarded 15 U.S. patents for various aspects of design
and process innovations used in the design and manufacture of its products. The
Company has two patent applications pending in the U.S., three patent
applications pending in Japan and is preparing to file several more patent
applications. The Company believes that patents are of less significance in its
industry than such factors as technical expertise, innovative skills and the
abilities of its personnel.

     As is typical in the semiconductor industry, the Company has, from time to
time, received, and may receive in the future, letters from third parties
asserting patent rights, maskwork rights or copyrights on certain of the
Company's products and processes.  None of the claims to date has resulted in
the commencement of any litigation against the Company nor has the Company to
date believed it is necessary to license any of the patent rights referred to in
such letters.

Backlog

     Vitesse's sales are made primarily pursuant to standard purchase orders for
delivery of products.  Quantities of the company's products to be delivered and
delivery schedules are frequently revised to reflect changes in customer needs.
For these reasons, the Company's backlog as of any particular date is not
representative of actual sales for any succeeding period and the Company
therefore believes that backlog is not a good indicator of future revenue.

Environmental Matters

     The Company is subject to a variety of federal, state and local
governmental regulations related to the use, storage, discharge and disposal of
toxic, volatile or otherwise hazardous chemicals used in its manufacturing
process. Any failure to comply with present or future regulations could result
in the imposition of fines on the Company, the suspension of production or a
cessation of operations. In addition, such regulations could restrict the
Company's ability to expand its facilities at its present location or operate
its manufacturing facility in Colorado Springs, Colorado, or could require the
Company to acquire costly equipment or incur other significant expenses to
comply with environmental regulations or clean up prior discharges.

                                       7
<PAGE>

Employees

     As of September 30, 1999, the Company had 790 employees, including 346 in
engineering, research and development, 68 in marketing and sales, 345 in
operations and 31 in finance and administration.  The Company's ability to
attract and retain qualified personnel is essential to its continued success.
None of the Company's employees is represented by a collective bargaining
agreement, nor has the Company ever experienced any work stoppage.  The Company
believes its employee relations are good.

Item 2.  Properties

     The Company's executive offices and principal research and development and
fabrication facility is located in Camarillo, California, and is being leased
under a non-cancellable operating lease that expires in 2009.  The total space
occupied in this building is approximately 111,000 square feet.  The Company has
a second wafer fabrication facility in Colorado Springs, Colorado that is being
leased under a synthetic lease that expires in 2001.  The Company has the option
to purchase this facility at cost at the end of the lease term. The Company
leases an additional 43,000 square feet in Camarillo for product development and
21,000 square feet in Santa Clara, California for product development and sales
offices. The Company's Colorado Springs, Colorado facility is in a 100,000
square foot building that is being occupied on a five-year non-cancellable
operating lease with a purchase option at the end of the lease. This facility
includes a 10,000 square foot clean room for wafer fabrication, and a product
development center. The Company also leases space for six other product
development centers in Oregon, Texas, Florida, Vermont, New Hampshire and
Copenhagen, Denmark, and 16 sales and field application support offices (13 in
the United States, three in Europe and one in Japan).

Item 3.  Legal Proceedings

     The Company is currently involved in several legal proceedings; however, it
believes that resolution of these matters, if resolved against the Company,
would not have a material and adverse affect on the Company.

Item 4.  Submission of Matters to a Vote of Security Holders

     On Thursday, September 9, 1999, the Company held a Special Meeting of
Stockholders. At the meeting, the Company's stockholders approved a proposal to
amend the Company's Amended and Restated Certificate of Incorporation to provide
for an increase in authorized shares of Common Stock, par value $.01 per share,
of the Company from 100,000,000 to 250,000,000 shares.

     The vote on this proposal was as follows:

     FOR: 60,661,526
          -------------
     AGAINST: 6,148,424
              ---------
     ABSTAIN: 90,748
              ---------

                                       8
<PAGE>

                                    PART II

Item 5.  Market for Company's Common Stock and Related Stockholder Matters

     The information required by this item appears on page 11 of the Company's
1999 Annual Report to Shareholders and is incorporated herein by reference.

Item 6.  Selected Financial Data

     The selected financial data for each of the five years ended September 30,
1999, appears on page 10 of the Company's 1999 Annual Report to Shareholders and
is incorporated herein by reference.

Item 7.  Management's Discussion and Analysis of Financial Condition and Results
         of Operations

     The information required by this item appears on pages 12 to 20 of the
Company's 1999 Annual Report to Shareholders and is incorporated herein by
reference.

Item 7A. Quantitative and Qualitative Disclosures about Market Risk

     None.

Item 8.  Financial Statements and Supplementary Data

     Information required by this item is included in pages 22 to 36 of the
Company's 1999 Annual Report to Shareholders, and is incorporated herein by
reference.

Item 9.  Changes in and Disagreements with Accountants on Accounting and
         Financial Disclosure

     None.

                                       9
<PAGE>

                                   PART III

Item 10.  Directors and Executive Officers of the Registrant

     The directors and executive officers of the Company are as follows:

<TABLE>
<CAPTION>
         Name                           Age      Position
         ----                           ---      --------
         <S>                            <C>      <C>
              Louis R. Tomasetta         50      President and Chief Executive Officer, Director
              Christopher R. Gardner     39      Vice President & General Manager, Telecommunications
              Eugene F. Hovanec          47      Vice President, Finance & Chief Financial Officer
              Kenneth M. Jones           36      Vice President & General Manager, ATE
              James Mikkelson            51      Vice President, Technology Devel., Chief Technical Officer
              Michael Millhollan         55      Vice President & General Manager, Data Communications
              Neil Rappaport             53      Vice President, Sales
              James A. Cole              57      Director
              Alex Daly                  38      Director
              Pierre R. Lamond           69      Chairman of the Board
              John C. Lewis              64      Director
</TABLE>

     Louis R. Tomasetta, a co-founder of the Company, has been President, Chief
Executive Officer and a Director since the Company's inception in February 1987.
From 1984 to 1987, he served as President of the integrated circuits division of
Vitesse Electronics Corporation.  Prior to that, Dr. Tomasetta was the director
of the Advanced Technology Implementation department at Rockwell International
Corporation.  Dr. Tomasetta has over 25 years experience in the management and
development of GaAs based businesses, products, and technology.  He received
B.S., M.S., and Ph.D. degrees in electrical engineering from the Massachusetts
Institute of Technology.

     Christopher R. Gardner joined the Company in February 1987 and held various
engineering and engineering management positions through September 1996 when he
became Vice President & General Manager, ATE.  In April 1999, he became Vice
President & General Manager, Telecommunications.  Prior to 1987, Mr. Gardner was
a member of technical staff at AT&T Bell Laboratories.  Mr. Gardner holds a B.S.
degree in electrical engineering from Cornell University and an M.S. degree in
electrical engineering from the University of California at Berkeley.

     Eugene F. Hovanec joined the Company as Vice President, Finance and Chief
Financial Officer in December 1993.  From 1989 to 1993, Mr. Hovanec served as
Vice President, Finance & Administration, and Chief Financial Officer at Digital
Sound Corporation.  Prior to that, from 1984 to 1989, he served as Vice
President and Controller at Micropolis Corporation. Mr. Hovanec holds a Bachelor
of Business Administration degree from Pace University, New York.  Mr. Hovanec
also serves as a Director of Interlink Electronics, Inc.

     Kenneth M. Jones joined the Company as Vice President & General Manager of
the ATE Division in April 1999. From 1997 to 1999, Mr. Jones served as Director
of Marketing and Sales at MicroModule Corporation. From 1987 to 1997 he held
several managerial positions at LTX Corporation, a semiconductor test equipment
manufacturer, most recently as Marketing and Engineering Applications Manager.
Mr. Jones holds B.A., B.E. and M.E. degrees in electrical engineering from
Dartmouth College in New Hampshire.

     James Mikkelson, a co-founder of the Company, became Chief Technical
Officer in September 1997. He has served as Vice President of Technology
Development since the Company's inception in February 1987. From 1984 to 1987,
he served as Vice President, Operations at Vitesse Electronics Corporation.
Prior to that, he served as Project Manager at Hewlett-Packard Company,
responsible for the development and manufacturing of MOS VLSI circuits. Mr.
Mikkelson holds B.S. and M.S. degrees in electrical engineering from the
Massachusetts Institute of Technology.

     Michael Millhollan joined the Company in July 1989 as Director of the
Sunnyvale Product Development Center and became Vice President and General
Manager of Standard Products in October 1992.  From 1976 to 1989, he held
various senior design engineering positions with National Semiconductor
Corporation, a semi-conductor manufacturer, most recently as Director of
programmable logic product development.  Prior to that, he was at Motorola,
Inc., a semiconductor manufacturer, for seven years in various design
engineering positions.  Mr. Millhollan holds a B.S. degree in electrical
engineering from the Georgia Institute of Technology.

                                       10
<PAGE>

     Neil Rappaport joined the Company as Vice President, Sales in August 1987.
From September 1982 to 1987, Mr. Rappaport was national sales manager with
Applied Micro Circuits Corporation, a manufacturer of ECL integrated circuits.
Prior to that, he held various sales positions with Signetics Corporation, a
semiconductor manufacturer.  Prior to that, he was a design engineer at Hughes
Aircraft Company.  Mr. Rappaport has a B.S. degree from Fairleigh Dickinson
University and an A.S. degree in electronics technology from the RCA Institute.

     James A. Cole has served as a Director of the Company since February 1987.
He has been a General Partner of Windward Ventures since 1997 and he has been a
General Partner of Spectra Enterprise Associates since 1986. He was a founder
and Executive Vice President of Amplica, Inc., a GaAs microwave IC and sub-
system company. Mr. Cole also serves as a Director of Giga-Tronics, Inc. and
Spectrian Corporation.

     Alex Daly became a Director of the Company in January 1998.  He has been
President and Chief Executive Officer of Cygnus Solutions, a developer of
software tools, since May 1998.  From 1995 to 1998 he served as Vice President
of Sales and Marketing and Chief Marketing Officer at C-Cube Microsystems, a
developer of digital video communications products.  From 1990 to 1995, he
served at Intel Corporation, a semiconductor company, most recently as Director
of Marketing for the mobile computing group.

     Pierre R. Lamond has been the Chairman of the Board of Directors since the
Company's inception in February 1987.  Since August 1981, he has been a General
Partner of Sequoia Capital, a venture capital firm.  Sequoia has financed
companies such as Cypress Semiconductor Corporation, Cisco, and C-Cube
Microsystems.  Mr. Lamond was founder and Vice President of National
Semiconductor Corporation.  He is also a Director of Redback Networks and a
number of privately held companies.

     John C. Lewis became a Director of the Company in January 1990.  He is
currently Chairman of the Board of Directors of Amdahl Corporation, a
manufacturer of large general purpose computer storage systems and software
products.  Before joining Amdahl in 1977, he was President of Xerox Business
Systems.  Mr. Lewis also serves as a Director of Cypress Semiconductor
Corporation, Cygnus Solutions and Pinnacle Systems.

Item 11.  Executive Compensation

     This item is answered by reference to the information set forth under the
captions "Executive Compensation," "Stock Option Plans," "1991 Employee Stock
Purchase Plan," "401(k) Plan" and "Certain Transactions" in the Company's Proxy
Statement for the 2000 Annual Meeting of Shareholders filed with the Commission
on December 14, 1999.

Item 12.  Security Ownership of Certain Beneficial Owners and Management

     This item is answered by reference to the information set forth under the
caption "Principal Share Ownership" in the Company's Proxy Statement for the
2000 Annual Meeting of Shareholders filed with the Commission on December 14,
1999.

Item 13.  Certain Relationships and Related Transactions

     This item is answered by reference to the information set forth under the
caption "Certain Transactions" in the Company's Proxy Statement for the 2000
Annual Meeting of Shareholders to be filed with the Commission on December 14,
1999.

                                       11
<PAGE>

                                    PART IV


Item 14.  Exhibits, Financial Statement Schedules and Reports on Form 8-K


    (a) The following documents are filed as part of this report:

<TABLE>
<CAPTION>
                                                                 Page in
                                                                 -------
                                                               Annual Report
                                                               -------------
<S>                                                            <C>
     1.   Financial Statements:

          The financial statements of the Company listed below
          are incorporated herein by reference to the following
          pages of the 1999 Annual Report to Shareholders:

          Independent Auditors' Report                                21
          Consolidated Balance Sheets as of September 30, 1999
          and 1998                                                    22
          Consolidated Statements of Operations for the years
          ended September 30, 1999, 1998 and 1997                     23
          Consolidated Statements of Shareholders' Equity for the
          years ended September 30, 1999, 1998 and 1997               24
          Consolidated Statements of Cash Flows for the years
          ended September 30, 1999, 1998 and 1997                     25
          Notes to Consolidated Financial Statements                  26

     2.   Consolidated Financial Statement Schedules:                Page
                                                                     ----

          The consolidated financial statement schedules of the
          Company are included in Part IV of this report on the
          pages indicated:

          Independent Auditors' Report on Consolidated Financial
          Statement Schedule                                          15

          For the three fiscal years ended September 30, 1999--
           II -- Valuation and Qualifying Accounts                    16

          All other schedules are omitted because they are not applicable or are
          not required.

     3.   Exhibits:


          See Item 14(c) below.


  (b)  Reports on Form 8-K


       No reports on Form 8-K were filed during the last quarter of the fiscal
       year ended September 30, 1999.

  (c)  Exhibits


       The exhibits listed on the accompanying index immediately following the
       signature page are filed As part of this report.

  (d)  Financial Statement Schedules

     See Item 14(a) above.
</TABLE>

                                       12
<PAGE>

                                  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.



                                   VITESSE SEMICONDUCTOR CORPORATION



Date: December 22, 1999            By:     /s/ Eugene F. Hovanec
                                        -------------------------------
                                               Eugene F. Hovanec
                                           Vice President, Finance
                                           & Chief Financial Officer


     Pursuant to the requirements of the Securities 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
          ---------                                          -----                                 ----
<S>                                              <C>                                         <C>
    /s/ Louis R. Tomasetta                       President and Chief Executive               December 22, 1999
---------------------------------------------    Officer (Principal Executive Officer)
             Louis R. Tomasetta


    /s/ Eugene F. Hovanec                        Vice President, Finance and                 December 22, 1999
---------------------------------------------    Chief Financial Officer
             Eugene F. Hovanec


    /s/ James A. Cole                            Director                                    December 22, 1999
---------------------------------------------
             James A. Cole


    /s/ Alex Daly                                Director                                    December 22, 1999
---------------------------------------------
             Alex Daly


    /s/ Pierre R. Lamond                         Chairman of the Board of Directors          December 22, 1999
---------------------------------------------
             Pierre R. Lamond


    /s/ John C. Lewis                            Director                                    December 22, 1999
---------------------------------------------
             John C. Lewis
</TABLE>

                                       13
<PAGE>

Item 16   Exhibits and Financial Statement Schedules

 (a)  Exhibits

  Exhibit Number
  --------------
      3.1           Certificate of Incorporation of Registrant, as amended to
                    date.
      3.2/(2)/      Bylaws of Registrant as amended to date.
      4.1/(2)/      Specimen of Company's Common Stock Certificate.
     10.1/(2)/      1989 Stock Option Plan.
     10.2/(2)/      1991 Stock Option Plan.
     10.3/(2)/      1991 Employee Stock Purchase Plan.
     10.4/(2)/      1991 Directors' Stock Option Plan.
     10.5/(2)/      Standard Form of Indemnification Agreement between
                    Registrant and its officers and directors.
     10.9/(1)/      First Amendment to Lease between Carson Estate Company
                    (formerly Victoria Partnership) and Registrant.
     10.10/(2)/     Lease dated January 31, 1991 between Camarillo I Development
                    Corporation and Registrant.
     10.11/(2)/     Standard Form Proprietary Information Agreement.
     10.16/(3)/     Agreement dated October 30, 1996 between ABN AMRO Bank N.V.,
                    Lease Plan North America, Inc. and Registrant.
     10.17/(3)/     Agreement dated August 15, 1997 between ABN AMRO Bank N.V.,
                    Lease Plan North America, Inc. and Registrant.
     10.20/(4)/     Agreement dated July 9, 1998 between Metlife Capital
                    Corporation and Registrant.
     13.1           Annual Report to Security Holders
     23.1           Accountants' Consent
     27.1           Financial Data Schedule

(1)  Incorporated by reference from the Company's annual report on Form 10-K for
     the period ended September 30, 1992.

(2)  Incorporated by reference from the Company's registration statement on Form
     S-1 (File no. 33-43548), effective December 10, 1991.

(3)  Incorporated by reference from the Company's annual report on Form 10-K for
     the period ended September 30, 1997.

(4)  Incorporated by reference from the Company's annual report on Form 10-K for
     the period ended September 30, 1998.

                                       14
<PAGE>

                         INDEPENDENT AUDITORS' REPORT



The Board of Directors
Vitesse Semiconductor Corporation:


Under date of October 14, 1999, we reported on the consolidated balance sheets
of Vitesse Semiconductor Corporation and subsidiaries as of September 30, 1999
and 1998, and the related consolidated statements of operations, shareholders'
equity, and cash flows for each of the years in the three-year period ended
September 30, 1999, as contained in the 1999 annual report to shareholders.
These consolidated financial statements and our report thereon are incorporated
by reference in the annual report on Form 10-K for the year ended September 30,
1999. In connection with our audits of the aforementioned consolidated financial
statements, we also audited the related consolidated financial statement
schedule as listed in the accompanying index. The financial statement schedule
is the responsibility of the Company's management. Our responsibility is to
express an opinion on the financial statement schedule based on our audits.


In our opinion, such 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.






Los Angeles, California
October 14, 1999

                                       15
<PAGE>

                       VITESSE SEMICONDUCTOR CORPORATION
               SCHEDULE II -- Valuation and Qualifying Accounts
                 Years ended September 30, 1999, 1998 and 1997
                                (in thousands)


<TABLE>
<CAPTION>
                                                    Balance at         Charged to                            Balance
                                                   Beginning of        Costs and         Deductions/         at end
                                                      Period            Expenses         Write-offs         of Period
                                                      ------            --------         ----------         ---------
<S>                                                <C>                 <C>               <C>                <C>
Year ended September 30, 1999
   Deducted from Inventories:
      Reserve for obsolescence                        $4,155              $3,774             $1,266            $6,663
   Deducted from Accounts Receivable:
      Allowance for doubtful accounts
       and sales returns                               1,088               4,945              2,533             3,500

Year ended September 30, 1998
   Deducted from Inventories:
      Reserve for obsolescence                         3,121               1,034                ---             4,155
   Deducted from Accounts Receivable:
      Allowance for doubtful accounts
       and sales returns                               1,000                 878                790             1,088
</TABLE>

                                       16