<PAGE>


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

                                    FORM 10-Q

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

                For the quarterly period ended September 30, 2001

                                       OR

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

           For the transition period from _____________to_____________

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

                          Commission File 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
 incorporation or organization)                              Identification No.)
</TABLE>

<TABLE>
<S>                                                          <C>
1511 Buckeye Drive, Milpitas, California                          95035
(Address of principal executive offices)                        (Zip Code)
</TABLE>

       Registrant's telephone number, including area code: (408) 432-8888

         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
                             -----              -----

               NUMBER OF SHARES OUTSTANDING AT SEPTEMBER 30, 2001
                                   21,983,977
<PAGE>
                                   XICOR, INC.

                                    FORM 10-Q

                        QUARTER ENDED SEPTEMBER 30, 2001



                                      INDEX

<TABLE>
<CAPTION>
                                                                                               PAGE
                                                                                               ----
<S>          <C>                                                                          <C>
PART I:      FINANCIAL INFORMATION

             ITEM 1.           FINANCIAL STATEMENTS

                               Consolidated Balance Sheets at September 30, 2001            1
                                 and December 31, 2000

                               Consolidated Statements of Operations for the three          2
                                 and nine months ended September 30, 2001 and
                                 October 1, 2000

                               Consolidated Statements of Cash Flows for the nine           3
                                 months ended September 30, 2001 and October 1, 2000

                               Notes to Consolidated Financial Information                  4

             ITEM 2.           MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL            7
                                 CONDITION AND RESULTS OF OPERATIONS

PART II:     OTHER INFORMATION

             ITEM 1.           LEGAL PROCEEDINGS                                            17

             ITEM 6.           EXHIBITS AND REPORTS ON FORM 8-K                             17

SIGNATURES                                                                                  18
</TABLE>

                                      -i-
<PAGE>
PART I: FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS.

                                   XICOR, INC.
                           CONSOLIDATED BALANCE SHEETS
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                                  September 30,           December 31,
                                                                      2001                    2000
                                                                      ----                    ----
<S>                                                              <C>                     <C>
                                 ASSETS
Current assets:
   Cash and cash equivalents                                     $  27,401,000           $  29,121,000
   Accounts receivable                                               6,222,000              10,812,000
   Inventories                                                       7,710,000              14,380,000
   Prepaid expenses and other current assets                           227,000                 639,000
                                                                 -------------           -------------
         Total current assets                                       41,560,000              54,952,000

Property, plant and equipment,
   at cost less accumulated depreciation                             6,053,000               9,166,000
Other assets                                                         2,702,000                 205,000
                                                                 -------------           -------------
         Total assets                                            $  50,315,000           $  64,323,000
                                                                 =============           =============

                   LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
   Accounts payable                                              $  13,380,000           $  11,132,000
   Accrued expenses                                                  8,559,000              12,637,000
   Deferred income on shipments to distributors                     11,530,000              14,258,000
   Deferred gain on sale of fab assets                               2,711,000               4,600,000
   Current portion of long-term obligations                            530,000                 766,000
                                                                 -------------           -------------
         Total current liabilities                                  36,710,000              43,393,000

Long-term obligations                                                1,215,000                 715,000
                                                                 -------------           -------------
         Total liabilities                                          37,925,000              44,108,000
                                                                -------------           -------------
Shareholders' equity:
   Preferred stock; 5,000,000 shares authorized                             --                      --
   Common stock; 75,000,000 shares authorized;
     21,983,977 and 21,466,270 shares outstanding                  132,950,000             131,605,000
   Accumulated deficit                                            (120,560,000)           (111,390,000)
                                                                 -------------           -------------
         Total shareholders' equity                                 12,390,000              20,215,000
                                                                 -------------           -------------
         Total liabilities and shareholders' equity              $  50,315,000           $  64,323,000
                                                                 =============           =============
</TABLE>


          See accompanying notes to consolidated financial information


                                      -1-
<PAGE>
                                   XICOR, INC.
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                        Three Months Ended                              Nine Months Ended
                                                        ------------------                              -----------------
                                                September 30,           October 1,            September 30,           October 1,
                                                -------------           ----------            -------------           ----------
                                                    2001                   2000                   2001                   2000
                                                    ----                   ----                   ----                   ----
<S>                                             <C>                    <C>                    <C>                    <C>
Net sales                                       $ 15,167,000           $ 31,060,000           $ 58,321,000           $ 93,326,000
Cost of sales                                      7,642,000             18,606,000             39,250,000             54,565,000
                                                ------------           ------------           ------------           ------------
   Gross profit                                    7,525,000             12,454,000             19,071,000             38,761,000
                                                ------------           ------------           ------------           ------------

Operating expenses:
   Research and development                        3,184,000              3,966,000             10,845,000             11,993,000
   Selling, general and administrative             4,087,000              6,774,000             14,953,000             19,725,000
   Restructuring charge (credit)                          --               (256,000)             3,205,000               (445,000)
                                                ------------           ------------           ------------           ------------
                                                   7,271,000             10,484,000             29,003,000             31,273,000
                                                ------------           ------------           ------------           ------------

Income (loss) from operations                        254,000              1,970,000             (9,932,000)             7,488,000
Interest expense                                     (45,000)              (215,000)              (121,000)              (722,000)
Interest income                                      246,000                384,000              1,001,000              1,074,000
                                                ------------           ------------           ------------           ------------

Income (loss) before income taxes                    455,000              2,139,000             (9,052,000)             7,840,000
Provision for income taxes                            23,000                 94,000                118,000                370,000
                                                ------------           ------------           ------------           ------------
Net income (loss)                               $    432,000           $  2,045,000           $ (9,170,000)          $  7,470,000
                                                ============           ============           ============           ============

Net income (loss) per common share:
   Basic                                        $       0.02           $       0.10           $      (0.42)          $       0.35
                                                ============           ============           ============           ============

   Diluted                                      $       0.02           $       0.09           $      (0.42)          $       0.32
                                                ============           ============           ============           ============


Shares used in per share calculations:
   Basic                                          21,905,000             21,280,000             21,679,000             21,115,000
                                                ============           ============           ============           ============
   Diluted                                        24,542,000             23,153,000             21,679,000             23,319,000
                                                ============           ============           ============           ============
</TABLE>

          See accompanying notes to consolidated financial information


                                      -2-
<PAGE>
                                   XICOR, INC.
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                                                      Nine Months Ended
                                                                                      -----------------
                                                                             September 30,           October 1,
                                                                                 2001                   2000
                                                                                 ----                   ----
<S>                                                                          <C>                    <C>
Cash flows from operating activities:
  Net income (loss)                                                          $ (9,170,000)          $  7,470,000
  Adjustments to reconcile net income (loss) to cash
    provided by operating activities:
      Depreciation                                                              3,054,000              3,020,000
      Amortization of fab gain                                                 (1,889,000)                    --
      Non-cash restructuring charge                                             1,249,000                     --
      Changes in assets and liabilities:
        Accounts receivable                                                     4,590,000             (3,572,000)
        Inventories                                                             6,670,000             (3,637,000)
        Prepaid expenses and other current assets                                 412,000                 93,000
        Other assets                                                                3,000                 50,000
        Accounts payable and accrued expenses                                  (1,830,000)             5,640,000
        Deferred income on shipments to distributors                           (2,728,000)               (38,000)
                                                                             ------------           ------------
Net cash provided by operating activities                                         361,000              9,026,000
                                                                             ------------           ------------

Cash flows from investing activities:
  Investment in Standard MEMS, Inc.                                            (2,500,000)                    --
  Investments in plant and equipment, net                                        (221,000)            (3,336,000)
                                                                             ------------           ------------
Net cash used in investing activities                                          (2,721,000)            (3,336,000)
                                                                             ------------           ------------

Cash flows from financing activities:
  Repayments of long-term obligations                                            (705,000)            (3,740,000)
  Net proceeds from sale of common stock                                        1,345,000              2,059,000
                                                                             ------------           ------------
Net cash provided by (used in) financing activities                               640,000             (1,681,000)
                                                                             ------------           ------------

Increase (decrease) in cash and cash equivalents                               (1,720,000)             4,009,000
Cash and cash equivalents at beginning of year                                 29,121,000             22,233,000
                                                                             ------------           ------------
Cash and cash equivalents at end of quarter                                  $ 27,401,000           $ 26,242,000
                                                                             ============           ============

Supplemental information:
Cash paid (refunded) during the year for:
  Interest expense                                                           $    134,000           $    717,000
  Income taxes                                                                    (63,000)               259,000
Equipment acquired pursuant to long-term obligations                              969,000                     --
</TABLE>

          See accompanying notes to consolidated financial information


                                      -3-
<PAGE>
                                   XICOR, INC.
                   NOTES TO CONSOLIDATED FINANCIAL INFORMATION
                                   (Unaudited)

NOTE 1 - THE COMPANY:

         In the opinion of management, all adjustments necessary for a fair
statement of the results of the interim periods presented (consisting only of
normal recurring adjustments) have been included. These financial statements,
notes and analyses should be read in conjunction with Xicor's Annual Report on
Form 10-K for the year ended December 31, 2000 filed with the Securities and
Exchange Commission.

NOTE 2 - NET INCOME (LOSS) PER SHARE:

         Basic net income (loss) per share is computed using the weighted
average number of common shares outstanding. Diluted net income (loss) per share
is computed using the weighted average number of common shares and all dilutive
potential common shares outstanding. Options to purchase 4,807,808 shares of
common stock were outstanding at September 30, 2001, but were excluded from the
earnings per share (EPS) computation for the nine months ended September 30,
2001 as they were antidilutive.

NOTE 3 - COMPREHENSIVE INCOME (LOSS):

         The net income (loss) for the periods reported also represented the
comprehensive net income (loss) for such periods.

NOTE 4 - BALANCE SHEET COMPONENTS:

<TABLE>
<CAPTION>
                                                September 30,           December 31,
                                                    2001                   2000
                                                    ----                   ----
<S>                                             <C>                    <C>
Inventories:
   Raw materials and supplies                   $    315,000           $    616,000
   Work in process                                 5,681,000              9,681,000
   Finished goods                                  1,714,000              4,083,000
                                                ------------           ------------
                                                $  7,710,000           $ 14,380,000
                                                ============           ============
Property, plant and equipment:
   Leasehold improvements                       $  2,722,000           $  3,846,000
   Equipment                                      37,357,000             41,318,000
   Furniture and fixtures                          1,098,000              1,228,000
   Construction in progress                           51,000                615,000
                                                ------------           ------------
                                                  41,228,000             47,007,000
   Accumulated depreciation                      (35,175,000)           (37,841,000)
                                                ------------           ------------
                                                $  6,053,000           $  9,166,000
                                                ============           ============
Accrued expenses:
   Accrued wages and employee benefits          $  1,418,000           $  2,842,000
   Accrued restructuring liabilities               1,197,000              2,537,000
   Other accrued expenses                          5,944,000              7,258,000
                                                ------------           ------------
                                                $  8,559,000           $ 12,637,000
                                                ============           ============
</TABLE>


                                      -4-
<PAGE>
Accounts receivable:

         Accounts receivable at September 30, 2001 and December 31, 2000 are
presented net of an allowance for doubtful accounts of $500,000.

Restructuring:

         In the fourth quarter of 2000, Xicor committed to certain workforce
reductions to streamline operations and further implement the Company's
outsourced manufacturing strategy. The related restructuring accrual balance of
$2.5 million at December 31, 2000 consisted of $2.0 million of severance costs
to reduce Xicor's workforce by approximately 50 employees, primarily in
administrative, manufacturing and support groups, and $0.5 million of other
restructuring related costs.

         In the first quarter of 2001, Xicor announced its plan to exit from
offering stand alone low-density serial EEPROM memory products and complete the
move to fully outsourced test and assembly operations. Accordingly, Xicor's
first quarter 2001 results included a $3.2 million restructuring charge and an
$8.2 million charge to cost of sales to write down inventories to their net
realizable value. The restructuring charge included a $2.0 million accrual
consisting of $1.5 million of severance-related costs for an additional
reduction in Xicor's workforce of approximately 95 employees, primarily in
manufacturing, sales and support groups, and $0.5 million of other restructuring
related costs. The $1.2 million balance of the restructuring charge recorded in
the first quarter of 2001 related principally to the write-off of leasehold
improvements in the facility that was vacated as a result of the restructuring
plan.

         In the nine months ended September 30, 2001, Xicor reduced its
workforce by approximately 135 employees and utilized $2.8 million of the
restructuring reserve for related severance costs and $0.5 million for other
restructuring related costs. The remaining reductions in workforce are planned
to occur in the fourth quarter of 2001. At September 30, 2001, the restructuring
accrual of $1.2 million consisted of $0.7 million of severance costs (including
costs to reduce the workforce by approximately 10 employees primarily in
manufacturing support and administrative groups) and $0.5 million of other costs
associated with vacated facilities, including the building which housed our test
operations.

Legal Proceedings:

         On April 17, 2001 Xicor filed suit against Catalyst Semiconductor in
Delaware Federal District Court alleging violation of a Xicor Digital
Potentiometer patent. Xicor has asked the court to issue a permanent injunction
barring Catalyst from using Xicor's patented technology in their recently
announced mixed-signal, nonvolatile, Digitally Programmable Potentiometer
products. The case is in the discovery stage and while the Company believes that
the ultimate outcome of this matter will not have a material adverse effect on
the Company's financial position or results of operations, legal costs
associated with protecting the Company's Digital Potentiometer patent are
expected to increase.


                                      -5-
<PAGE>
Investments

         During the third quarter of 2001, Xicor invested $2.5 million in one of
its third-party foundries, Standard MEMS, Inc., representing a 5% ownership.
Headquartered in Burlington, Massachusetts, Standard MEMS is a manufacturer of
micro electro mechanical systems for transducer, photonic and fluid
applications. The Company is accounting for the investment using the cost
method. The investment is included in other assets on the balance sheet.

Recent Accounting Pronouncements:

         In July 2001, the Financial Accounting Standards Board (FASB) issued
FASB Statements Nos. 141 and 142 (FAS 141 and FAS 142), "Business Combinations"
and "Goodwill and Other Intangible Assets." FAS 141 replaces APB 16 and
eliminates pooling-of-interests accounting prospectively. It also provides
guidance on purchase accounting related to the recognition of intangible assets
and accounting for negative goodwill. FAS 142 changes the accounting for
goodwill from an amortization method to an impairment-only approach. Under FAS
142, goodwill will be evaluated annually and to determine whether events or
circumstances have occurred indicating that goodwill might be impaired. FAS 141
and FAS 142 are effective for all business combinations completed after June 30,
2001. The Company believes that adopting FAS 141 and FAS 142 will not have a
material impact on its financial position and results of operations.

         In August 2001, FASB Statement No. 143 (FAS 143), "Accounting for Asset
Retirement Obligations" was issued. This Statement addresses financial
accounting and reporting for obligations associated with the retirement of
tangible long-lived assets and the associated asset retirement costs. FAS 143
applies to legal obligations associated with the retirement of long-lived assets
that result from the acquisition, construction, development and (or) the normal
operation of a long-lived asset, except for certain obligations of lessees. FAS
143 is effective for financial statements issued for fiscal years beginning
after June 25, 2002. The Company expects that the initial application of FAS 143
will not have an impact on its financial statements.

         In October 2001, FASB Statement No. 144 (FAS 144), "Accounting for the
Impairment or Disposal of Long-lived Assets" was issued. The objectives of FAS
144 are to address significant issues relating to the implementation of FAS No.
121 (FAS 121), "Accounting for the Impairment of Long-lived Assets and for
Long-lived Assets to be Disposed Of," and to develop a single accounting model,
based on the framework established by FAS 121, for long-lived assets to be
disposed of by sale, whether previously held and used or newly acquired. FAS No.
144 is effective for financial statements issued for fiscal years beginning
after December 15, 2001, and interim periods within those fiscal years. The
Company expects that the initial application of FAS 144 will not have a material
impact on its financial statements.


                                      -6-
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS.

         The following discussion should be read in conjunction with the
accompanying Quarterly Financial Information and Notes thereto and Xicor's
Annual Report on Form 10-K for the year ended December 31, 2000. The results of
operations for the three and nine months ended September 30, 2001 are not
necessarily indicative of results to be expected in future periods.

RESULTS OF OPERATIONS

         Xicor's sales are derived from two product groups, mixed-signal
products and memory products. Mixed-signal product sales represent our core
market. Memory product sales comprise Xicor's legacy businesses of serial
EEPROMs, which we are in the process of exiting, and parallel EEPROMs, which
business we are retaining.

         Mixed-signal product sales for the third quarter of 2001 were $8.2
million compared to $10.9 million in the second quarter of 2001 and $12.6
million in the third quarter of 2000. For the nine months ended September 30,
2001 mixed-signal sales were $29.9 million compared to $32.7 million in the
comparable prior year period. Overall economic and industry-wide conditions have
been weak throughout 2001, and mixed-signal sales declined in the three and nine
months ended September 30, 2001 due to lower unit sales.

         Memory product sales for the third quarter of 2001 were $7.0 million
compared to $8.2 million in the second quarter of 2001 and $18.5 million in the
third quarter of 2000. For the nine months ended September 30, 2001 memory
product sales were $28.4 million compared to $60.6 million in the comparable
prior year period. The year over year decline in memory product sales is
principally attributable to the serial EEPROM business that Xicor is in the
process of exiting and, to a lesser extent, lower unit shipments of parallel
EEPROMs.

         Overall economic and industry wide conditions have been weak throughout
2001. Absent an indication of an industry wide economic recovery, we anticipate
continuing weakness in demand in the fourth quarter of 2001. Furthermore, we
expect serial EEPROM sales to continue to decline as we exit from that business.
Accordingly, we currently expect fourth quarter 2001 sales to decline up to
approximately 20% sequentially across both of our product groups.

         Gross profit as a percentage of sales was 50% in the third quarter of
2001 compared to 47% in the second quarter of 2001 and 40% in the third quarter
of 2000. The gross profit percentage for the nine months ended September 30,
2001 was 33%. As discussed below, cost of sales for the first quarter of 2001
included an $8.2 million charge to write down inventories. Excluding the
inventory write-down, gross profit as a percentage of sales was 47% in the nine
months ended September 30, 2001 compared to 42% in the comparable prior year
period.

         The gross profit percentage in the three and nine months ended
September 30, 2001 benefited from a shift in the product mix to a larger
percentage of higher margin mixed-signal and parallel EEPROM sales and a smaller
percentage of lower margin serial EEPROM sales, the


                                      -7-
<PAGE>
quarterly amortization of $0.6 million of the deferred gain of the sale of the
fab assets and lower costs associated with our shift to fully outsourced
manufacturing. The gross profit percentage is expected to fluctuate from quarter
to quarter as a result of changes in product mix, product costs and average
selling prices.

         Research and development expenses declined 20% from $4.0 million in the
third quarter of 2000 to $3.2 million in the third quarter of 2001 primarily due
to lower personnel costs and spending controls. For the nine months ended
September 30, 2001 research and development expenses declined 10% to $10.8
million from $12.0 million in the comparable period of 2000 principally due to
the aforementioned lower expense level in the third quarter of 2001.

         Selling, general and administrative expenses declined 40% from $6.8
million in the third quarter of 2000 to $4.1 million in the third quarter of
2001. Selling, general and administrative expenses for the nine months ended
September 30, 2001 declined 24% to $15.0 million from $19.7 million in the
comparable prior year period. The year over year decline in expenses is due
primarily to headcount reductions and lower commission expenses resulting from
the decreased sales, partially offset by increased legal costs associated with
protecting the Company's intellectual property rights.

         In the first quarter of 2001, Xicor announced its plan to exit from
offering stand alone low-density serial EEPROM memory products and complete the
move to fully outsourced test and assembly operations. Accordingly, Xicor's
first quarter 2001 results included an $8.2 million charge to cost of sales to
write down inventories to their net realizable value and a $3.2 million
restructuring charge. While Xicor's goal is to sell the serial memory business,
the compound effect of the current overall weak economic and industry-wide
conditions and uncertain sales in the serial memory business necessitated the
inventory write-down. The $3.2 million restructuring charge consisted of $1.5
million of severance-related costs for an additional reduction in Xicor's
workforce of approximately 95 employees, $1.2 million of fixed asset write-offs
principally related to leasehold improvements in the facility that housed our
test operation and $0.5 million of other restructuring-related costs. The
restructuring activities are expected to be completed in 2001. Estimated annual
cost reductions of $6.0 million associated with the completion of the
restructuring plan are expected to mitigate the effect of lower memory product
sales.

         In December 1999 Xicor's Board of Directors decided to close its
Milpitas in-house wafer fabrication facility during 2000 and use third-party
foundries for all of Xicor's wafer fabrication production. In connection with
the planned closure, a restructuring charge was taken in the fourth quarter of
1999. Results for the three and nine months ended October 1, 2000 include
restructuring credits of $0.3 million and $0.4 million, respectively. The third
quarter 2000 restructuring credit related primarily to lower than expected
equipment lease costs due to a slight movement in the timing of the wafer fab
disposition. During the nine months ended October 1, 2000, Xicor also completed
certain facility related restructuring items for costs lower than previously
estimated and accrued. The difference between the amount accrued and the actual
cost has been recognized as a restructuring credit.


                                      -8-
<PAGE>
         Third quarter 2001 operating income was $0.3 million. Although we are
continuing our emphasis on spending controls, in light of the anticipated sales
decline, we expect to incur an operating loss in the fourth quarter of 2001.

         Interest expense decreased in the three and nine months ended September
30, 2001 compared to the comparable prior year periods due to lower long-term
debt. In November 2000, the Company paid off substantial equipment lease debt
related to the wafer fabrication assets in connection with the sale of its
Milpitas wafer fabrication assets.

         Interest income decreased in the three and nine months ended September
30, 2001 primarily as a result of lower interest rates. Interest income is
expected to decrease sequentially in the fourth quarter of 2001 as a result of
lower interest rates and a decrease in the average balance invested caused by
the use of cash in operating activities, including costs associated with
restructuring activities, and to repay long-term obligations.

         The provision for income taxes for the first three quarters of 2001 and
2000 consisted primarily of federal and state minimum taxes, which resulted from
limitations on the use of net operating loss carryforwards, and foreign taxes.
Net deferred tax assets of $49.9 million at December 31, 2000 remain fully
reserved because of the uncertainty regarding the ultimate realization of these
assets.

LIQUIDITY AND CAPITAL RESOURCES

         At September 30, 2001, Xicor had $27.4 million in cash and cash
equivalents compared to $29.1 million at the end of 2000. During the nine months
ended September 30, 2001, Xicor generated $0.4 million of cash from operating
activities and $1.3 million from employee stock plans. Xicor used $2.5 million
to invest in Standard MEMS, $0.7 million to repay long-term obligations and $0.2
million for net equipment purchases ($1.2 million of equipment purchases, net of
$1.0 million of equipment financing).

         During the balance of 2001 Xicor expects to use cash in operating
activities, including costs associated with restructuring activities, and to
repay long-term obligations. Capital expenditures for the fourth quarter of 2001
are currently planned at less than $0.5 million. At September 30, 2001, Xicor
had entered into commitments for equipment purchases aggregating less than $0.1
million.

         Xicor has a line of credit agreement with a financial institution that
expires March 31, 2002, provides for borrowings of up to $7.5 million against
eligible accounts receivable and is secured by all of Xicor's assets. Interest
on borrowings is charged at the prime lending rate plus 2% and is payable
monthly. At September 30, 2001, approximately $6.0 million was available to
Xicor based on the eligible accounts receivable balances and the borrowing
formulas. To date, no amounts have been borrowed under this line of credit.
At September 30, 2001, $1.0 million of the line of credit was reserved to
secure a standby letter of credit. Management believes that currently available
cash and the existing line of credit facility will be adequate to support
Xicor's operations for the next twelve months.


                                      -9-
<PAGE>
"SAFE HARBOR" STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF
1995

                  This quarterly 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, including statements regarding
continuing weakness in demand in the fourth quarter of 2001; the expectation for
serial EEPROM sales to continue to decline as we exit from that business; the
expectation for fourth quarter 2001 sales to decline up to approximately 20%
sequentially across both of our product groups; the expectation that the gross
profit percentage will fluctuate from quarter to quarter as a result of changes
in product mix, product costs and average selling prices; the goal to sell the
serial memory business; restructuring plans to reduce Xicor's workforce;
expected cost reductions from Xicor's restructuring plan; the expectation that
we will incur an operating loss in the fourth quarter of 2001; the expectation
that interest income will decrease sequentially in the fourth quarter of 2001;
and the expectation that sufficient cash and credit will be available to support
operations for the next twelve months. These forward-looking statements are
subject to certain risks and uncertainties that could cause the actual results
to differ materially from those projected. Factors that could cause actual
results to differ materially include the risk factors listed from time to time
in Xicor's SEC reports, including but not limited to the "Factors Affecting
Future Results" section following and Part I, Item 1. of Xicor's Annual Report
on Form 10-K for the year ended December 31, 2000. Readers are cautioned not to
place undue reliance on these forward-looking statements, which speak only as of
the date hereof. Xicor undertakes no obligation to publicly release or otherwise
disclose the result of any revision to these forward-looking statements that may
be made as a result of events or circumstances after the date hereof or to
reflect the occurrence of unanticipated events.

FACTORS AFFECTING FUTURE RESULTS

THE RISKS DESCRIBED BELOW ARE NOT THE ONLY ONES FACING OUR COMPANY. ADDITIONAL
RISKS NOT PRESENTLY KNOWN TO US OR THAT WE CURRENTLY BELIEVE ARE NOT MATERIAL
MAY ALSO IMPAIR OUR BUSINESS OPERATIONS.

OUR OPERATING RESULTS FLUCTUATE SIGNIFICANTLY, AND AN UNANTICIPATED DECLINE IN
REVENUE MAY DISAPPOINT SECURITIES ANALYSTS OR INVESTORS AND RESULT IN A DECLINE
IN OUR STOCK PRICE.

         You should not use our past financial performance to predict future
operating results. We have incurred net losses in three of the last four years.
Our recent quarterly and annual operating results have fluctuated, and will
continue to fluctuate, due to the following factors, all of which are difficult
to forecast and many of which are out of our control: the cyclical nature of
both the semiconductor industry and the markets addressed by our products
including the current severe business down cycle; competitive pricing pressures
and related changes in selling prices; new product announcements and
introductions of competing products by us or our competitors; market acceptance
and subsequent design-in of new products; unpredictability of changes in demand
for, or in the mix of, our products; the timing of significant orders including
the fact that the sales level in any specific quarter depends significantly on
orders received during that quarter; the gain or loss of significant customers;
the availability, timely deliverability and cost of


                                      -10-
<PAGE>
products manufactured on our behalf by third-party suppliers; product
obsolescence; lower of cost or market inventory adjustments; changes in the
channels through which our products are distributed; exchange rate fluctuations;
general economic, political and environmental-related conditions, such as
natural disasters; difficulties in forecasting, planning and managing of
inventory levels; and unanticipated research and development expenses associated
with new product introductions.

THE EXIT FROM A PORTION OF OUR MEMORY BUSINESS HAS CHANGED OUR BUSINESS MODEL
AND IS CAUSING A REDUCTION IN OUR REVENUES.

         In the first quarter of 2001, Xicor announced its plan to exit from
offering stand-alone low-density serial EEPROM memory products. Xicor's goal is
to sell the serial memory business. However, Xicor may be unable to secure a
buyer for the business, particularly in light of the current weak economic
conditions.

         The transition out of the serial EEPROM memory business is requiring
the Company to devote significant time and expense to transition activities at
the same time it is increasing its focus on its mixed-signal products. If
Xicor's penetration of the mixed-signal market does not increase, Xicor's
operating results could be seriously harmed and its stock price could decline.
Further, as a result of the transition, Xicor has become a smaller company with
limited resources and a reduced workforce. Xicor may not be able to effectively
use its limited resources to increase new product development and build its
mixed-signal product business. This could cause a further decline in Xicor's
revenues.

THE SELLING PRICES FOR OUR PRODUCTS ARE VOLATILE AND HAVE HISTORICALLY DECLINED
OVER THE LIFE OF A PRODUCT. IN ADDITION, THE CYCLICAL NATURE OF THE
SEMICONDUCTOR INDUSTRY PRODUCES FLUCTUATIONS IN OUR OPERATING RESULTS.

         The semiconductor industry has historically been cyclical,
characterized by wide fluctuations in product supply and demand. From time to
time, the industry has also experienced significant downturns, often in
connection with, or in anticipation of, maturing product cycles and declines in
general economic conditions. Downturns are generally characterized by diminished
product demand, production over-capacity and accelerated decline of average
selling prices, and in some cases have lasted for more than one year. We are
presently experiencing an economic downturn that is harming our business. Our
continued success depends on a better supply and demand balance within the
industry and the various electronics industries that use semiconductors,
including networking, communications and industrial companies, returning to more
normal buying patterns.

WE DO NOT TYPICALLY ENTER INTO LONG-TERM CONTRACTS WITH OUR CUSTOMERS AND WE
CANNOT BE CERTAIN AS TO FUTURE ORDER LEVELS FROM OUR CUSTOMERS.

         The composition of our major customer base changes as the market demand
for our customers' products change. A small number of customers have accounted
for a substantial


                                      -11-
<PAGE>
portion of our sales. A reduction, delay, or cancellation of orders from a large
customer could harm our business. The loss of, or reduced orders by, any of our
key customers could result in a significant decline in our sales.

WE DEPEND ON DISTRIBUTORS AND MANUFACTURERS' REPRESENTATIVES TO GENERATE A
MAJORITY OF OUR SALES.

         Distributors serve as a channel of sale to many end users of our
products. During the third quarter of 2001, approximately 41% of sales were
through distribution, with one distributor accounting for 21% of our sales. Our
distributors and manufacturers' representatives could discontinue selling our
products at any time. The loss of any significant distributor or manufacturers'
representative could seriously harm our operating results by impairing our
ability to sell our products.

OUR BACKLOG MAY NOT RESULT IN FUTURE REVENUE, WHICH WOULD SERIOUSLY HARM OUR
BUSINESS.

         Due to possible customer changes in delivery schedules and
cancellations of orders, our backlog at any particular date is not necessarily
indicative of actual sales for any succeeding period. A reduction of backlog
during any particular period, or the failure of our backlog to result in future
revenue, could harm our business.

OUR FUTURE SUCCESS DEPENDS IN PART ON THE CONTINUED SERVICES OF OUR KEY DESIGN,
ENGINEERING, SALES, MARKETING AND EXECUTIVE PERSONNEL AND OUR ABILITY TO
IDENTIFY, RECRUIT AND RETAIN QUALIFIED PERSONNEL.

         There is significant competition for qualified personnel in the
semiconductor industry, in particular for the highly skilled engineers involved
in the design and development of our mixed-signal products. At times competition
has been especially intense in Silicon Valley, where our design, research and
development, and corporate headquarters are located. The failure to recruit and
retain key design engineers or other technical and management personnel could
harm our business.

OUR DEPENDENCE ON THIRD-PARTY FOUNDRIES TO MANUFACTURE OUR PRODUCTS AND ON
SUBCONTRACTORS TO SORT, ASSEMBLE AND TEST OUR PRODUCTS AND SHIP OUR PRODUCTS TO
CUSTOMERS SUBJECTS US TO A NUMBER OF RISKS.

         Xicor outsources all manufacturing operations. Our reliance on
third-party foundries and subcontractors to manufacture our products and ship
our products to customers involves the following significant risks:

-        reduced control over delivery schedules and quality;

-        the potential lack of adequate capacity during periods of strong
         demand;

-        difficulties selecting and integrating new foundries and
         subcontractors;

-        limited warranties by third-party manufacturers on products supplied to
         us; and

-        potential increases in product costs due to capacity shortages and
         other factors.


                                      -12-
<PAGE>
         These risks may lead to a possible loss of sales, increased costs,
delayed product delivery or loss of competitive advantage, which would harm our
profitability and customer relationships.

         Additionally, as Xicor shifts manufacturing of existing products
between foundries and third-party subcontractors, certain customers require
requalification of such products prior to accepting delivery. Delays in customer
qualification schedules or lack of qualification of such products could result
in the loss of sales, which could seriously harm our operating results.

OUR OPERATING EXPENSES ARE RELATIVELY FIXED, AND WE ORDER MATERIALS IN ADVANCE
OF ANTICIPATED CUSTOMER DEMAND. THEREFORE, WE HAVE LIMITED ABILITY TO REDUCE
EXPENSES QUICKLY IN RESPONSE TO ANY REVENUE SHORTFALLS.

         Our operating expenses are relatively fixed, and we therefore have
limited ability to reduce expenses quickly in response to any revenue
shortfalls. Consequently, our operating results will be harmed if our sales do
not meet our revenue projections. Revenue shortfalls can occur for any of the
following reasons: economic slowdowns in the markets we serve; significant
pricing pressures that occur because of declines in selling prices over the life
of a product; the reduction, rescheduling or cancellation of customer orders;
and sudden shortages of raw materials or fabrication, sort, test or assembly
capacity constraints that lead our suppliers to allocate available supplies or
capacity to other customers which, in turn, harm our ability to meet our sales
obligations.

         In addition, we typically plan our production and inventory levels
based on internal forecasts of customer demand, which are highly unpredictable
and can fluctuate substantially. From time to time, in response to anticipated
long lead times to obtain inventory and materials from our outside suppliers and
foundries, we order materials and produce finished products in advance of
anticipated customer demand. This advance ordering and production has and may
continue to result in excess inventory levels or inventory write-downs if
expected orders fail to materialize or prices decrease substantially.

WE HAVE ENTERED INTO CERTAIN MINIMUM WAFER PURCHASE COMMITMENTS WITH FOUNDRY
PARTNERS IN EXCHANGE FOR CAPACITY COMMITMENTS AND PLAN OUR PRODUCTION BASED ON
INTERNAL FORECASTS OF CUSTOMER DEMAND. SHOULD DEMAND FOR OUR PRODUCTS DECREASE,
WE MAY BE REQUIRED TO MAKE PAYMENTS FOR UNUSED CAPACITY WHICH WOULD CAUSE OUR
COSTS TO INCREASE.

BECAUSE OUR PRODUCTS TYPICALLY HAVE LENGTHY SALES CYCLES, WE MAY EXPERIENCE
SUBSTANTIAL DELAYS BETWEEN INCURRING EXPENSES RELATED TO RESEARCH AND
DEVELOPMENT AND THE GENERATION OF SALES.

         Due to the length of the product design-in cycle we usually require
more than nine months to realize volume shipments after a customer first samples
our product. We first work with customers to achieve a design win, which may
take three months or longer. Our customers


                                      -13-
<PAGE>
then complete the design, testing and evaluation process and begin to ramp up
production, a period which typically lasts an additional six months or longer.
As a result, a significant period of time may elapse between our research and
development efforts and our realization of revenue, if any, from volume
purchasing of our products by our customers.

WE FACE INTENSE COMPETITION FROM COMPANIES WITH SIGNIFICANTLY GREATER FINANCIAL,
TECHNICAL AND MARKETING RESOURCES THAT COULD ADVERSELY AFFECT OUR ABILITY TO
INCREASE SALES OF OUR PRODUCTS.

         We compete with major domestic and international semiconductor
companies such as Atmel Corporation, ST Microelectronics, Maxim, and Analog
Devices, all of whom have substantially greater financial, technical, marketing,
distribution, and other resources than we do and have their own facilities for
the production of semiconductor components. In addition, our foundry partners
have the right to develop and fabricate products based on our process
technology.

OUR MARKETS ARE SUBJECT TO RAPID TECHNOLOGICAL CHANGE AND, THEREFORE, OUR
SUCCESS DEPENDS ON OUR ABILITY TO DEVELOP AND INTRODUCE NEW PRODUCTS.

         The markets for our products are characterized by rapidly changing
technologies; evolving and competing industry standards; changing customer
needs; frequent new product introductions and enhancements; increased
integration with other functions; and rapid product obsolescence.

         To develop new products for our target markets, we must develop, gain
access to and use leading technologies in a cost-effective and timely manner and
continue to expand our technical and design expertise. In addition, we must have
our products designed into our customers' future products and maintain close
working relationships with key customers in order to develop new products that
meet their rapidly changing needs.

         We cannot assure you that we will be able to identify new product
opportunities successfully, develop and bring to market new products at
competitive costs, achieve design wins or respond effectively to new
technological changes or product announcements by our competitors. Furthermore,
we may not be successful in developing or using new technologies or in
developing new products or product enhancements that achieve market acceptance.
Our pursuit of necessary technological advances may require substantial time and
expense. Failure in any of these areas could harm our operating results.

OUR COST OF SALES MAY INCREASE IF WE ARE REQUIRED TO PURCHASE ADDITIONAL
MANUFACTURING CAPACITY IN THE FUTURE.

         To obtain additional manufacturing capacity in the future, we may be
required to make deposits, equipment purchases, loans, enter into joint
ventures, equity investments or technology licenses in or with wafer fabrication
companies. These transactions could involve a commitment of substantial amounts
of our capital and technology licenses in return for production capacity.


                                      -14-
<PAGE>
We may be required to seek additional debt or equity financing in order to
secure this capacity and we may not be able to obtain such financing.

OUR ABILITY TO COMPETE SUCCESSFULLY WILL DEPEND, IN PART, ON OUR ABILITY TO
PROTECT OUR INTELLECTUAL PROPERTY RIGHTS, WHICH WE MAY NOT BE ABLE TO DO
SUCCESSFULLY.

         We rely on a combination of patents, trade secrets, copyright and mask
work production laws and rights, nondisclosure agreements and other contractual
provisions and technical measures to protect our intellectual property rights.
Our operating results could be seriously harmed by the failure to be able to
protect our intellectual property. Policing unauthorized use of our intellectual
property, however, is difficult, especially in foreign countries. Litigation may
be necessary to enforce our intellectual property rights, to protect our trade
secrets, to determine the validity and scope of the proprietary rights of
others, or to defend against claims of infringement or invalidity. We recently
filed suit against a competitor to protect our intellectual property. Litigation
of this type can result in substantial costs and diversion of resources and can
harm our business, operating results and financial condition regardless of the
outcome of the litigation.

IF XICOR OR ANY OF OUR FOUNDRIES OR THIRD PARTY SUBCONTRACTORS IS ACCUSED OF
INFRINGING THE INTELLECTUAL PROPERTY RIGHTS OF OTHER PARTIES, WE MAY BECOME
SUBJECT TO TIME-CONSUMING AND COSTLY LITIGATION. IF WE LOSE OR SETTLE CLAIMS, WE
COULD SUFFER A SIGNIFICANT NEGATIVE IMPACT ON OUR BUSINESS AND BE FORCED TO PAY
ROYALTIES AND DAMAGES.

         Third parties have and may continue to assert that our products
infringe their proprietary rights, or may assert claims for indemnification
resulting from infringement claims against us. Any such claims may cause us to
delay or cancel shipment of our products or pay royalties and damages that could
seriously harm our business, financial condition and results of operations. In
addition, irrespective of the validity or the successful assertion of such
claims, we could incur significant costs in defending against such claims.

         We have received notices claiming infringement of patents from several
semiconductor manufacturers with respect to certain aspects of our processes and
devices and these matters are under investigation and review. Although patent
holders typically offer licenses and we have entered into such license
agreements in the past, we may not be able to obtain licenses on acceptable
terms, and disputes may not be resolved without costly litigation.

OUR BUSINESS MAY SUFFER DUE TO RISKS ASSOCIATED WITH INTERNATIONAL SALES AND
OPERATIONS.

         Our international sales accounted for approximately 57% of total sales
in the third quarter of 2001. Our international business activities are subject
to a number of risks, any of which could impose unexpected costs on us that
would have an adverse effect on our operating results. These risks include
difficulties in complying with regulatory requirements and standards; tariffs
and other trade barriers; costs and risks of localizing products for foreign
countries; severe


                                      -15-
<PAGE>
currency fluctuations and economic deflation; reliance on third parties to
distribute our products; longer accounts receivable payment cycles; potentially
adverse tax consequences; and burdens of complying with a wide variety of
foreign laws.

BUSINESS INTERRUPTIONS COULD HARM OUR BUSINESS.

         Our operations and those of our foundries and other manufacturing
subcontractors are vulnerable to interruption by fire, earthquake, power loss,
telecommunications failure and other events beyond our control. Our facilities
and the facility of one of our foundries in the State of California may be
subject to electrical blackouts due to a shortage of available electrical power.
If these blackouts continue or increase in severity, they could disrupt Xicor's
operations. Business interruption insurance may not provide protection due to
the deductible periods or be enough to compensate us for losses that may occur.
Additionally, Xicor has been unable to obtain earthquake insurance of reasonable
costs and limits.

         Our business depends on the free flow of products and services through
the channels of commerce. Recently, in response to terrorists' activities and
threats aimed at the United States, transportation, mail, financial and other
services have been slowed or stopped altogether. Further delays or stoppages in
transportation, mail, financial or other services, particularly any such delays
or stoppages which harm our ability to obtain an adequate supply of wafers and
products from our foreign foundries or contractors, could harm our business,
results of operations and financial condition. Furthermore, we may experience an
increase in operating costs, such as costs for transportation, insurance and
security as a result of the activities and potential activities. We may also
experience delays in receiving payments from customers that have been affected
by the terrorist activities and potential activities. The United States economy
in general is being adversely affected by terrorist activities and potential
terrorist activities. Any economic downturn could adversely impact our results
of operations, impair our ability to raise capital or otherwise adversely affect
our ability to grow our business. Moreover, we cannot determine whether other
attacks may occur in the future and the effects of such attacks on our business.

WE MAY REQUIRE ADDITIONAL CAPITAL IN ORDER TO BRING NEW PRODUCTS TO MARKET, AND
THE ISSUANCE OF NEW EQUITY SECURITIES WILL DILUTE YOUR INVESTMENT IN OUR COMMON
STOCK.

         To implement our strategy of diversified product offerings, we need to
bring new products to market. Bringing new products to market and ramping up
production requires significant working capital. We have in place a line of
credit agreement with Coast Business Credit that provides up to $7.5 million of
borrowings to support potential ongoing working capital requirements. We may
need to borrow under this credit facility at some time. We may also sell
additional shares of our stock or seek additional borrowings or outside capital
infusions. We cannot assure you that such financing options will be available on
terms acceptable to us, if at all. In addition, if we issue shares of our common
stock, our shareholders will experience dilution with respect to their
investment.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK


                                      -16-
<PAGE>
         Xicor does not use derivative financial instruments in its investment
portfolio. Xicor has an investment portfolio of fixed income securities that are
classified as "held-to-maturity securities".

         These securities, like all fixed income instruments, are subject to
interest rate risk and will fall in value if market interest rates increase.
Xicor attempts to limit this exposure by investing primarily in short-term
securities. Due to the short duration and conservative nature of Xicor's
investment portfolio, a movement of 10% by market interest rates would not have
a material impact on Xicor's operating results and the total value of the
portfolio over the next fiscal year.

         Xicor is exposed to risks associated with foreign exchange rate
fluctuations due to our international manufacturing and sales activities. Xicor
generally has not hedged currency exposures. These exposures may change over
time as business practices evolve and could negatively impact our operating
results and financial condition. All of our sales are denominated in U.S.
dollars. An increase in the value of the U.S. dollar relative to foreign
currencies could make our products more expensive and therefore reduce the
demand for our products. Such a decline in the demand could reduce sales and/or
result in operating losses.

PART II: OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS.

         On April 17, 2001 Xicor filed suit against Catalyst Semiconductor in
Delaware Federal District Court alleging violation of a Xicor Digital
Potentiometer patent. Xicor has asked the court to issue a permanent injunction
barring Catalyst from using Xicor's patented technology in their recently
announced mixed-signal, nonvolatile, Digitally Programmable Potentiometer
products.

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.

(a)      Exhibits:

         None.

(b)      Reports on Form 8-K:

         No reports on Form 8-K were filed with the Securities and Exchange
         Commission during the quarter ended September 30, 2001.


                                      -17-
<PAGE>
                                   SIGNATURES

         Pursuant to the requirements 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.

                             XICOR, INC., a
                             California Corporation


                             By /s/ Louis DiNardo
                                --------------------------
                             Louis DiNardo
                             Chief Executive Officer
                             (Principal Executive Officer)


                             By /s/ Geraldine N. Hench
                                --------------------------
                             Geraldine N. Hench
                             Vice President, Finance and Administration
                             (Principal Financial Officer)

Date: November 13, 2001


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