Deposit agreement between Chartered Semiconductor
         Manufacturing Ltd. and PMC-Sierra, Inc. dated January 31, 2000.



                       Effective Date : 31st January 2000

                                     Between

                    CHARTERED SEMICONDUCTOR MANUFACTURING LTD


                                       And

                                PMC-SIERRA, INC.


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

                                DEPOSIT AGREEMENT
                       ----------------------------------



<PAGE>

                                DEPOSIT AGREEMENT

THIS  AGREEMENT  is made  effective  the 31st day of January,  2000  ("Effective
Date") by and between :-

(1)      CHARTERED  SEMICONDUCTOR  MANUFACTURING LTD, a company  incorporated in
         Singapore with its registered office at 60 Woodlands Industrial Park D,
         Street 2, Singapore  738406  (hereinafter  referred to as "CHARTERED");
         and

(2)      PMC-SIERRA,  INC., a company  incorporated in California and having its
         place of business at 105-8555 Baxter Place, Burnaby,  British Columbia,
         Canada, V5A 4VY (hereinafter referred to as "Customer"),

WHEREAS :

(A)      CHARTERED is engaged  primarily  in the business of the  manufacturing,
         marketing and selling of  semiconductors,  with its 5 wafer fabrication
         facilities situated in Singapore.

(B)      Customer  desires to deposit  certain  funds with  CHARTERED  to enable
         CHARTERED to procure increased wafer  fabrication  capacity and to make
         available to Customer  certain  wafer  manufacturing  capacity,  on the
         terms and conditions of this Agreement.

IT IS HEREBY AGREED as follows :

1.       THE DEPOSIT

1.1      In  consideration  of  the  on-going  business  relationship  with  the
         Customer, CHARTERED is agreeing to make available to the Customer up to
         __%  of the  Customer  Loading  Commitment  (as  hereinafter  defined),
         without a deposit,  in  accordance  with the  provisions  of Clause 2.1
         below.

1.2      For the excess  capacity over __% of the Customer  Loading  Commitment,
         the Customer will deposit with  CHARTERED the total sum of US$____ (the
         "Deposit")  on such dates and in such  amounts as  specified in Annex A
         (as may be revised in accordance with Clause 3.6 below).

1.3      The  Deposit  shall  be  paid by  telegraphic  transfer  to an  account
         designated  by  CHARTERED  and  such  Deposit  shall be  maintained  by
         Customer to the amount for each year as set out in Annex A A (as may be
         revised in  accordance  with Clause 3.6 below)  during the term of this
         Agreement.

1.4      Upon the expiry of this Agreement or the earlier termination thereof in
         accordance  with  Clause 6 or  Clause  7.2,  CHARTERED  will  return to
         Customer any Deposit  remaining with  CHARTERED in accordance  with the
         provisions of Clause 4.6 below.

<PAGE>


2.       CHARTERED SUPPLY COMMITMENT

2.1      CHARTERED agrees to make available  capacity of up to __% of Customer's
         Loading  Commitment  (as  hereinafter  defined)  for  6-inch and 8-inch
         wafers  in  each  calendar  quarter  as set  out in  Annex C (as may be
         revised in accordance  with Clause 3.2 below) with no deposit  required
         ("CHARTERED Supply Commitment"). However, any additional capacity above
         the CHARTERED  Supply  Commitment  will require a deposit of US$___ per
         wafer for additional  capacity guarantee per quarter in accordance with
         Clause 2.2 below.

2.2      In  consideration  of  the  payment  of the  Deposit  by  Customer  and
         Customer's  maintenance  of the full deposit  amount for each year with
         CHARTERED,   CHARTERED   will  make   available  to   Customer,   wafer
         manufacturing  capacity for 6-inch and 8-inch  wafers in each  calendar
         quarter  commencing  from the  January  01,  2000  until the  expiry or
         earlier termination of this Agreement, in such quantities as set out in
         Annex D (as may be revised in  accordance  with  Clause 3.6 below) (the
         "CHARTERED Additional Supply Commitment").

2.3      The  Parties  agree that the  technology  mix of the  CHARTERED  Supply
         Commitment and the CHARTERED  Additional  Supply  Commitment will be as
         follows :-

         Technology

2.4      Unless  otherwise  expressly  provided in this  Agreement,  the sale of
         wafers  by  CHARTERED  to  Customer,  the  capacity  of  which  is made
         available to Customer  under this  Agreement,  shall be governed by the
         terms and  conditions  of  CHARTERED's  manufacturing  agreement  to be
         entered into by CHARTERED and Customer (the "Manufacturing Agreement").

2.5      The Deposit amount for the CHARTERED  Additional  Supply Commitment for
         each calendar year is calculated based on the following formulae :-

           US$__         x the CHARTERED  Additional  Supply Commitment for that
                         year  set  out  in  Annex  D  (as  may  be  revised  in
                         accordance with Clause 3.6 below)

2.6      CHARTERED  reserves the right to adjust the selling  price of wafers to
         be supplied by  CHARTERED  from time to time  depending  on  prevailing
         market conditions,  provided however that CHARTERED shall give Customer
         not less than __ months' prior written notice of such adjustment.

3.       CUSTOMER LOADING COMMITMENT

3.1      Customer  agrees  to place  purchase  orders  with  CHARTERED  for such
         quantity of 6-inch and 8-inch  wafers for delivery  during the calendar
         quarters  set out in  Annex B (as may be  revised  in  accordance  with
         Clause 3.2 below) (the "Customer Loading Commitment").  The quantity of
         wafers for which orders are placed by Customer is hereinafter  referred
         to as the "Customer Actual Loading."

<PAGE>

3.2      Every  calendar  quarter,  Customer  agrees to provide to  CHARTERED  a
         rolling  __-month  loading  forecast  and  thereafter,   CHARTERED  and
         Customer shall  negotiate and mutually agree in writing on the forecast
         ("Forecast").  In the  event  the  Parties  agree on a  Forecast  which
         differs  from the  quantities  for the  relevant  period set out in the
         Customer Loading Commitment in Annex B, then :-

         (a) such Forecast shall supersede the quantities set out in Annex B and
         shall be the Customer Loading Commitment for the period stated therein;
         and

         (b) the quantities set out in Annex C shall be revised to be __% of the
         quantities  in  such  Forecast  which  shall  be the  CHARTERED  Supply
         Commitment for the period stated therein.

         In the event the Parties are unable to agree on the Forecast,  then the
         quantities  set out in the Customer  Loading  Commitment in Annex B for
         the relevant period shall apply and be the Customer Loading Commitment.

3.3      Customer shall place purchase orders with CHARTERED as follows :-

         (1) for __% of the quantity for the __ quarter of each Forecast;

         (2) for plus or minus __ of the  quantity  for the __  quarter  of each
         Forecast;

         (3) for plus or minus __% of the quantities for the __ quarters of each
         Forecast; and

         (4) no  purchase  orders as the __ quarters  of each  Forecast  are not
         binding commitments to purchase.

3.4      The Customer  Actual Loading for each calendar  quarter during the term
         of the Agreement shall be equal to the Customer Loading Commitment.  In
         addition,  the month to month  variation in the Customer Actual Loading
         shall not exceed __% without the prior written  consent of CHARTERED in
         the form of the agreed Forecast.

3.5      As a separate  requirement  from the  quarterly  Forecast as set out in
         Clause 3.1, by June 1st of each  calendar  year during the term of this
         Agreement, Customer shall review its loading forecast for the following
         calendar  year and Customer  may,  with  CHARTERED's  written  consent,
         increase or reduce the quantities  set out in the CHARTERED  Additional
         Supply Commitment in Annex D.

3.6      In the event the Parties mutually agree on any increase or reduction in
         the CHARTERED  Additional  Supply Commitment for any calendar year, the
         Deposit  amount for such year shall be calculated  in  accordance  with
         Clause 2.5 above.


<PAGE>

4.       DEPOSIT RETENTION AND REFUND

4.1      The quantity of wafers for which orders are placed by Customer  that is
         in excess of __% of the  Customer  Loading  Commitment  is  hereinafter
         referred to as the "Customer Actual Additional Loading".

4.2      In the  event  that the  Customer  Actual  Additional  Loading  for any
         calendar year is less than the CHARTERED  Additional  Supply Commitment
         (as may be revised in accordance  with Clause 3.6 above) for that year,
         CHARTERED  shall be  entitled  to  retain a  deposit  retention  amount
         ("Deposit  Retention  Amount")  from the Deposit paid for that calendar
         year calculated as follows :-

             ADP x (CASC - CAAL)

             Where :-

             ADP     =   CHARTERED's Average Deposit Price of US$__ per wafer
             CASC    =   the CHARTERED  Additional  Supply Commitment (as may be
                         revised in  accordance  with Clause 3.6 above) for that
                         calendar year
             CAAL    =   Customer  Actual  Additional  Loading for that calendar
                         year

4.3      CHARTERED shall refund  Customer the Deposit paid to secure  additional
         capacity for each calendar year less any Deposit  Retention  Amount for
         that year that may have been  retained by CHARTERED  pursuant to Clause
         4.2 above (the  "Refund"),  provided  always that the  Deposit  paid to
         secure  capacity for a calendar year shall be refunded only in the year
         following such calendar year in accordance with Clause 4.4 below.

4.4      The  Refund  for  each  calendar  year  shall be made by  CHARTERED  to
         Customer within sixty (60) days after the calendar year-end.

4.5      All Refunds of the Deposit shall cease upon either (a) the depletion of
         the Deposit with CHARTERED; or (b) the expiry or earlier termination of
         this Agreement, whichever occurs earlier.

4.6      Upon the expiry of this Agreement or the earlier termination thereof in
         accordance with Clause 6 or Clause 7.2 below, :-

         (a)   CHARTERED  shall return to Customer,  without any  interest,  any
               Deposit  remaining  with  CHARTERED at the time of such expiry or
               termination,  subject to any  deductions,  refunds and/or set-off
               made pursuant to Clause 5.1 of this Agreement; or

         (b)   Customer may at their option,  subject to CHARTERED's  agreement,
               roll over any  remaining  amount of the  Deposit to secure  wafer
               capacity  in  the  calendar   year   following   such  expiry  or
               termination,  and the terms and conditions of such wafer capacity
               shall be mutually agreed by the Parties in writing.

<PAGE>


5.       DEDUCTION AND SET OFF

5.1      CHARTERED  shall be  entitled  to deduct  and/or  set-off  against  the
         Deposit any payment falling due and remaining  unpaid by Customer under
         the Manufacturing Agreement.

5.2      CHARTERED's right of deduction and set-off pursuant to Clause 5.1 shall
         be in  addition to  CHARTERED's  right to claim the  aforesaid  overdue
         payments  separately  as a debt due from  Customer and shall not in any
         way  prejudice  such  right  or any  other  rights  or  remedies  which
         CHARTERED may have at law or in equity.

6.       TERM AND TERMINATION

6.1      Unless renewed in accordance with Clause 14 below, this Agreement shall
         expire  on 31  December  2003  and  may be  terminated  earlier  in the
         following manner :-

         (a)   At the option of  CHARTERED,  in the event that Customer does not
               deposit with  CHARTERED  any portion of the Deposit in accordance
               with the terms of this Agreement;

         (b)   At the option of CHARTERED, in the event that the Customer Actual
               Loading is in  aggregate  less than __% of the  Customer  Loading
               Commitment for __ calendar months;

         (c)   At the option of Customer,  in the event that CHARTERED  fails to
               deliver to Customer  in  aggregate  at least __% of the  Customer
               Actual Loading for __ calendar months;

         (d)   At the option of either Party, in any of the following events:-

                (i)     the  inability of the Party to pay in the normal  course
                        of business; or

                (ii)    the other Party ceasing or  threatening  to cease wholly
                        or  substantially  to carry on its  business,  otherwise
                        than for the purpose of a reconstruction or amalgamation
                        without insolvency; or

                (iii)   any  encumbrancer  taking  possession  of or a receiver,
                        manager,  trustee or judicial  manager  being  appointed
                        over  the   whole  or  any   substantial   part  of  the
                        undertaking, property or assets of the other Party; or

                (iv)    the  making  of  an  order  by  a  court  of   competent
                        jurisdiction  or the  passing  of a  resolution  for the
                        winding-up of the other Party or any company controlling
                        the other  Party,  otherwise  than for the  purpose of a
                        reconstruction or amalgamation without insolvency.

<PAGE>

6.2      Termination of this Agreement  pursuant to Clause 6.1 shall take effect
         immediately  upon the issue of a written  notice to that  effect by the
         Party  terminating the Agreement to the other.  The termination of this
         Agreement   howsoever   caused  shall  be  without   prejudice  to  any
         obligations  or rights of either Party which have accrued prior to such
         termination  and shall not affect any provision of this Agreement which
         is  expressly or by  implication  provided to come into effect on or to
         continue in effect such termination.

7.       FORCE MAJEURE

7.1      CHARTERED's  obligation to provide the CHARTERED Supply  Commitment and
         the CHARTERED Additional Supply Commitment and Customer's obligation to
         place  purchase  orders in accordance  with the terms of this Agreement
         shall be suspended upon the occurrence of a force majeure event such as
         act of God, flood, earthquake,  fire, explosion act of government, war,
         civil  commotion,   insurrection,   embargo,  riots,  lockouts,  labour
         disputes  affecting  CHARTERED or Customer as the case may be, for such
         period as such force majeure event, the affected Party shall notify the
         other  Party in  writing  of the same and shall by  subsequent  written
         notice after the cessation of such force majeure event inform the other
         Party of the date on which that Party's obligation under this Agreement
         shall be reinstated.

7.2      Notwithstanding  anything  in this Clause 7, upon the  occurrence  of a
         force majeure  event  affecting  either  Party,  and such force majeure
         event continues for a period  exceeding 6 consecutive  months without a
         prospect  of a cure of such  event,  the  other  Party  shall  have the
         option,  in its sole  discretion,  to terminate  this  Agreement.  Such
         termination  shall take effect  immediately  upon the written notice to
         that  effect  from the other  Party to the Party  affected by the force
         majeure event.

8.       CONFIDENTIALITY

8.1      All  Confidential   Information  shall  be  kept  confidential  by  the
         recipient   unless  or  until  the  recipient   Party  can   reasonably
         demonstrate  that any such  Confidential  Information is, or part of it
         is, in the public domain through no fault of its own,  whereupon to the
         extent that it is in the public  domain or is required to be  disclosed
         by law this obligation shall cease. For the purposes of this Agreement,
         "Confidential  Information" shall mean all  communications  between the
         Parties,  and  all  information  and  other  materials  supplied  to or
         received  by  either of them from the other (a) prior to or on the date
         of this  Agreement  whether or not marked  confidential;  (b) after the
         date of this Agreement which is marked confidential with an appropriate
         legend,  marking,  stamp or other obvious written identification by the
         disclosing  Party,  and (c) all  information  concerning  the  business
         transactions  and the  financial  arrangements  of the Parties with any
         person  with whom any of them is in a  confidential  relationship  with
         regard  to the  matter  in  question  coming  to the  knowledge  of the
         recipient.

<PAGE>


8.2      The Parties and shall take all reasonable steps to minimize the risk of
         disclosure  of  Confidential  Information,  by ensuring  that only they
         themselves and such of their  employees and directors whose duties will
         require  them to possess  any of such  information  shall  have  access
         thereto, and will be instructed to treat the same as confidential.

8.3      The  obligation  contained in this Clause shall endure,  even after the
         termination of this Agreement, for a period of 5 years from the date of
         receipt  of  the  Confidential   Information   except  and  until  such
         Confidential enters the public domain as set out above.

9.       NOTICES

9.1      Addresses

         All notices,  demands or other communications  required or permitted to
         be given or made under or in connection with this Agreement shall be in
         writing and shall be  sufficiently  given or made (a) if  delivered  by
         hand or commercial  courier or (b) sent by pre-paid  registered post or
         (c) sent by legible facsimile  transmission  (provided that the receipt
         of such facsimile  transmission is confirmed and a copy thereof is sent
         immediately  thereafter by pre-paid  registered  post) addressed to the
         intended  recipient at its address or facsimile number set out below. A
         Party may from time to time  notify the others of its change of address
         or facsimile number in accordance with this Clause.

         CHARTERED

         60 Woodlands Industrial Park D
         Street 2
         Singapore 738406
         Attn:      The Legal Department

         Customer

         105-8555 Baxter Place
         Burnaby, B.C.
         Canada, V5A4V7
         Attn:      Mr. Bob Bailey
                    President

9.2      Deemed Delivery

         Any such notice,  demand or communication  shall be deemed to have been
         duly served (a) if delivered by hand or commercial  courier, or sent by
         pre-paid  registered  post, at the time of delivery;  or (b) if made by
         successfully  transmitted  facsimile  transmission,   at  the  time  of
         dispatch  (provided that the receipt of such facsimile  transmission is
         confirmed and that immediately  after such dispatch,  a copy thereof is
         sent by prepaid registered post.

<PAGE>

10.      WAIVER AND REMEDIES

10.1     No delay or neglect on the part of either  Party in  enforcing  against
         the  other  Party  any  term  or  condition  of  this  Agreement  or in
         exercising any right or remedy under this Agreement  shall either be or
         be deemed to be a waiver or in any way prejudice any right or remedy of
         that Party under this Agreement.

10.2     No remedy  conferred  by any of the  provisions  of this  Agreement  is
         intended  to be  exclusive  of any  other  remedy  which  is  otherwise
         available at law, in equity, by statute or otherwise and each and every
         other  remedy  shall be  cumulative  and shall be in  addition to every
         other  remedy given  hereunder or now or hereafter  existing at law, in
         equity,  by statute or  otherwise.  The  election of any one or more of
         such  remedies by either of the Parties  hereto shall not  constitute a
         waiver by such Party of the right to pursue any other available remedy.

11.      SEVERANCE

         If any provision or part of this Agreement is rendered void, illegal or
         unenforceable  in any respect  under any  enactment or rule of law, the
         validity, legality and enforceability of the remaining provisions shall
         not in any way be affected or impaired thereby.

12.      ENTIRE AGREEMENT

         This Agreement and the  Manufacturing  agreement  constitute the entire
         agreement  between  CHARTERED  and Customer with respect to the subject
         matter  hereof  and  shall   supersede  all  previous   agreements  and
         undertakings between Parties.

13.      GOVERNING LAW

         This  Agreement  shall be governed by and construed in accordance  with
         the laws of Singapore.  The Parties  hereby  irrevocably  submit to the
         non-exclusive jurisdiction of the courts of Singapore.

14.      RENEWAL OPTION

         One year before the  expiration of this  agreement,  Customer will have
         the option to renew this  agreement  for a period of up to four  years,
         with the terms of the renewal to be negotiated by the parties.


<PAGE>

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

Signed by Robert Baxter,                    )
Senior Vice President, Business Operations  )
CHARTERED SEMICONDUCTOR                     )
MANUFACTURING LTD                           )
in the presence of:-                        )     ______________________________



--------------------------------
Signature and name of witness



Signed by Bob Bailey,                       )
President                                   )
PMC-SIERRA, INC.                            )
in the presence of:-                        )     ______________________________




-------------------------------
Signature and name of witness





<PAGE>



                                     ANNEX A

                       Deposit Amount and Payment Schedule
--------------- ------------------------------  --------------------------------
Deposit Amount  To secure additional capacity                 Payable on
                          in calendar year
--------------- -----------------------------   --------------------------------
US$__                         2000            Date of signing of this Agreement
                                              ---------------------------------
--------------- ----------------------------  ----------------------------------
     US$__                    2001            Date of signing of this Agreement
--------------- ---------------------------   ----------------------------------
     US$__                    2002                          2 January 2001
--------------- ---------------------------  -----------------------------------
     US$__                    2003                          2 January 2002
--------------- ---------------------------  -----------------------------------
 Total = US$__
--------------- --------------------------- ------------------------------------

PMC-SIERRA, INC.


<PAGE>



                                     ANNEX B

CUSTOMER LOADING COMMITMENT

        Number of 8-inch and 6-inch silicon wafers


       1Q00            2Q00            3Q00           4Q00         Yr. 2000
----------------  -------------  --------------  -------------  -------------
        8"              8"              8"             8"          Total 8"
        --              --              --             --             --
        6"              6"              6"             6"          Total 6"
        --              --              --             --             --
 -------------------------------------------------------------------------------


       1Q01            1Q01            3Q01           4Q01         Yr. 2001
----------------  -------------  --------------   ------------  -------------
        8"              8"              8"             8"          Total 8"
        --              --              --             --             --
        6"              6"              6"             6"          Total 6"
        --              --              --             --             --
--------------------------------------------------------------------------------


       1Q02            2Q02            3Q02           4Q02         Yr. 2002
----------------  -------------   -------------  -------------  -------------
        8"              8"              8"             8"          Total 8"
        --              --              --             --             --
        6"              6"              6"             6"          Total 6"
        --              --              --             --             --
--------------------------------------------------------------------------------

       1Q03            2Q03            3Q03           4Q03         Yr. 2003
  ----------------  ------------  -------------  ------------  -------------
        8"              8"              8"             8"          Total 8"
        --              --              --             --             --
        6"              6"              6"             6"          Total 6"
        --              --              --             --             --
--------------------------------------------------------------------------------
<PAGE>


                                     ANNEX C

                           CHARTERED SUPPLY COMMITMENT

                   Number of 8-inch and 6-inch silicon wafers



       1Q00            2Q00            3Q00           4Q00         Yr. 2000
  --------------- -------------- --------------- -------------- --------------
          8"              8"              8"             8"          Total 8"
          --              --              --             --             --
         6"              6"              6"             6"          Total 6"
         --              --              --             --             --
  -----------------------------------------------------------------------------


        1Q01            1Q01            3Q01           4Q01         Yr. 2001
  -------------- -------------- --------------- -------------- --------------
         8"              8"              8"             8"          Total 8"
         --              --              --             --             --
         6"              6"              6"             6"          Total 6"
         --              --              --             --             --
  ----------------------------------------------------------------------------


       1Q02            2Q02            3Q02           4Q02         Yr. 2002
  -------------- -------------- --------------- -------------- --------------
         8"              8"              8"             8"          Total 8"
        --              --              --             --             --
        6"              6"              6"             6"          Total 6"
        --              --              --             --             --
  ---------------------------------------------------------------------------


       1Q03            2Q03            3Q03           4Q03         Yr. 2003
  ---------------- -------------- --------------- -------------- --------------
        8"              8"              8"             8"          Total 8"
        --              --              --             --             --
        6"              6"              6"             6"          Total 6"
        --              --              --             --             --
  --------------------------------------------------------------------------


<PAGE>


                                     ANNEX D

                     CHARTERED ADDITIONAL SUPPLY COMMITMENT

                   Number of 8-inch and 6-inch silicon wafers


     1Q00            2Q00            3Q00           4Q00         Yr. 2000
---------------- -------------- --------------- -------------- --------------
      8"              8"              8"             8"          Total 8"
      --              --              --             --             --
      6"              6"              6"             6"          Total 6"
      --              --              --             --             --
---------------- -------------- --------------- -------------- --------------

     1Q01            1Q01            3Q01           4Q01         Yr. 2001
---------------- -------------- --------------- -------------- --------------
      8"              8"              8"             8"          Total 8"
      --              --              --             --             --
      6"              6"              6"             6"          Total 6"
      --              --              --             --             --
---------------- -------------- --------------- -------------- --------------

     1Q02            2Q02            3Q02           4Q02         Yr. 2002
---------------- -------------- --------------- -------------- --------------
      8"              8"              8"             8"          Total 8"
      --              --              --             --             --
      6"              6"              6"             6"          Total 6"
      --              --              --             --             --


     1Q03            2Q03            3Q03           4Q03         Yr. 2003
---------------- -------------- --------------- -------------- --------------
      8"              8"              8"             8"          Total 8"
      --              --              --             --             --
      6"              6"              6"             6"          Total 6"
      --              --              --             --             --
---------------- -------------- --------------- -------------- --------------