UNITED STATES
                        SECURITIES & EXCHANGE COMMISSION
                             Washington, D.C. 20549
                           --------------------------

                                    FORM 10-Q

(Mark One)

  X     Quarterly report pursuant to Section 13 or 15(d) of the Securities
----    Exchange Act of 1934. For the quarterly period ended April 2, 2000.

        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: 001-13748
                                               ---------

                                   ZILOG, INC.
            (Exact name of registrant as specified in its charter)

          Delaware                                       13-3092996
-------------------------------             ------------------------------------
(State or other jurisdiction of             (I.R.S. Employer Identification No.)
incorporation or organization)

              910 East Hamilton Avenue, Campbell, California, 95008
              -----------------------------------------------------
                    (Address of principal executive offices)

       Registrant's telephone number, including area code: (408) 558-8500


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

As of May 1, 2000, there were 31,092,014 shares of the Company's Voting
Common Stock, $.01 par value and 10,000,000 shares of the Company's Non-Voting
Common Stock, $.01 par value outstanding.


<PAGE>













This Report contains forward-looking statements within the meaning of
Section 27A of the Securities Act of 1933, as amended (the "Securities
Act"), and Section 21E of the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), regarding future events and the Company's plans and
expectations that involve risks and uncertainties.  When used in this
Report, the words "estimate," "project," "intend," "expect," "anticipate"
and similar expressions are intended to identify such forward-looking
statements.  Such statements are subject to certain risks and
uncertainties, including those discussed below, which could cause actual
results to differ materially from those projected.  Factors that may cause
or contribute to such differences include, but are not limited to, those
discussed below under "Factors That May Affect Future Results," as well as
those discussed elsewhere in this Report.  In light of the important
factors that can materially affect results, including those set forth in
this paragraph and below, the inclusion of forward-looking information
herein should not be regarded as a representation by the Company or any
other person that the objectives or plans for the Company will be
achieved.  The reader is therefore cautioned not to place undue reliance
on the forward-looking statements contained herein, which speak only as of
the date hereof.  ZiLOG undertakes no obligation to publicly release
updates or revisions to these statements.































Part I. FINANCIAL INFORMATION
Item 1. Financial Statements

                                   ZILOG, INC.
              CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
                                 (in thousands)
<TABLE>
<CAPTION>
                                        Three Months Ended
                                       -------------------
                                        April 2,  April 4,
                                           2000     1999
                                       --------- ---------
<S>                                    <C>       <C>
Net sales.............................  $59,518   $54,209
                                       --------- ---------

Costs and expenses:
  Cost of sales.......................   34,860    38,410
  Research and development............    9,761     7,263
  Selling, general and administrative.   15,489    14,506
                                       --------- ---------
                                         60,110    60,179
                                       --------- ---------
Operating loss........................     (592)   (5,970)

Other income (expense):
  Interest income.....................      768       610
  Interest expense....................   (7,278)   (7,229)
  Other, net..........................     (316)      (85)
                                       --------- ---------
Loss before income taxes..............   (7,418)  (12,674)
Provision for income taxes............      132       250
                                       --------- ---------
Net loss..............................  ($7,550) ($12,924)
                                       ========= =========
</TABLE>
   See accompanying notes to condensed consolidated financial statements.
<PAGE>




















                                   ZILOG, INC.
               CONDENSED CONSOLIDATED BALANCE SHEETS(Unaudited)
          (dollars in thousands, except shares and per share values)
<TABLE>
<CAPTION>
                                                           April 2,  December 31,
                                                            2000         1999
                                                        -----------  -----------
<S>                                                     <C>          <C>
                                  ASSETS
Current assets:
  Cash and cash equivalents.............................   $39,040      $60,806
  Accounts receivable, less allowance for doubtful
    accounts of $423 at April 2, 2000 and December
    31, 1999 ...........................................    30,838       31,834
  Inventories...........................................    32,306       28,456
  Prepaid expenses and other current assets.............    15,551       12,917
                                                        -----------  -----------
          Total current assets..........................   117,735      134,013
                                                        -----------  -----------
Property, plant and equipment, at cost..................   417,798      413,716
Less: accumulated depreciation and amortization.........  (287,433)    (277,570)
                                                        -----------  -----------
   Net property, plant and equipment....................   130,365      136,146

Other assets............................................    21,424       14,127
                                                        -----------  -----------
                                                          $269,524     $284,286
                                                        ===========  ===========
             LIABILITIES AND STOCKHOLDERS' DEFICIENCY
Current liabilities:
  Accounts payable......................................   $22,637      $21,998
  Accrued compensation and employee benefits............    32,115       32,656
  Other accrued liabilities.............................    16,200       23,797
                                                        -----------  -----------
          Total current liabilities.....................    70,952       78,451

Notes Payable...........................................   280,000      280,000

Other non-current liabilities...........................    15,002       15,603

Stockholders' deficiency:
  Preferred Stock, $100.00 par value; 5,000,000 shares
   authorized; 1,500,000 shares designated as Series A
   Cumulative Preferred Stock; 250,000 shares of Series
   A Cumulative Preferred Stock issued and outstanding
   at April 2, 2000 and December 31, 1999; aggregate
   liquidation preference $32,127.......................    25,000       25,000

  Common Stock, $0.01 par value; 70,000,000 shares
   authorized; 31,056,436 shares issued and outstanding
   at April 2, 2000 and 30,525,786 shares at December
   31, 1999. Class A Non-voting Common Stock, $0.01 par
   value; 30,000,000 shares authorized; 10,000,000 shares
   issued and outstanding at April 2, 2000 and December
   31, 1999.............................................       410          405
 Additional paid-in capital.............................     3,072        1,113
 Accumulated deficit....................................  (124,912)    (116,286)
                                                        -----------  -----------
          Total stockholders' deficiency................   (96,430)     (89,768)
                                                        -----------  -----------
                                                          $269,524     $284,286
                                                        ===========  ===========
</TABLE>
   See accompanying notes to condensed consolidated financial statements.
<PAGE>




















































                                   ZILOG, INC.
           CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
                             (dollars in thousands)
<TABLE>
<CAPTION>
                                                             Three Months Ended
                                                          ----------------------
                                                            April 2,    April 4,
                                                             2000        1999
                                                          ----------  ----------
<S>                                                       <C>         <C>
Cash flows from operating activities:
Net loss.................................................   ($7,550)   ($12,924)
  Adjustments to reconcile net loss to cash used by
     operating activities:
     Depreciation and amortization.......................    10,403      15,380
  Changes in assets and liabilities:
     Accounts receivable.................................       996      (2,026)
     Inventories.........................................    (3,850)     (3,565)
     Prepaid expenses and other assets ..................    (2,448)     (1,673)
     Accounts payable....................................       639       4,826
     Accrued compensation and employee benefits..........      (541)     (1,937)
     Other accrued and non-current liabilities...........   (11,607)        468
                                                          ----------  ----------
           Cash used by operating activities.............   (13,958)     (1,451)
                                                          ----------  ----------
Cash flows from investing activities:
   Capital expenditures..................................    (4,105)     (2,737)
   Purchase of equity interest in Qualcore Group, Inc. ..    (5,500)         --
                                                          ----------  ----------
          Cash used by investing activities..............    (9,605)     (2,737)
                                                          ----------  ----------
Cash flows from financing activities:
  Proceeds from issuance of common stock.................     1,964          --
  Principal payments under capital lease ................      (167)       (128)
                                                          ----------  ----------
           Cash provided (used) by financing activities..     1,797        (128)
                                                          ----------  ----------
Decrease in cash and cash equivalents....................   (21,766)     (4,316)
Cash and cash equivalents at beginning of period.........    60,806      50,856
                                                          ----------  ----------
Cash and cash equivalents at end of period...............   $39,040     $46,540
                                                          ==========  ==========
</TABLE>
   See accompanying notes to condensed consolidated financial statements.
<PAGE>














ZILOG,  INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

1)      BASIS OF PRESENTATION

The accompanying interim financial information is unaudited.  In the
opinion of ZiLOG, Inc.'s ("ZiLOG" or the "Company") management, all
adjustments (consisting only of normal recurring adjustments) necessary
for a fair presentation of interim results have been included.  The
results for interim periods are not necessarily indicative of results to
be expected for the entire year.  These condensed consolidated financial
statements and notes should be read in conjunction with the Company's
annual consolidated financial statements and notes thereto contained in
the Company's 1999 Form 10-K filed on March 29, 2000.  The condensed
consolidated balance sheet at December 31, 1999 has been derived from
audited financial statements at that date, but does not include all of the
information and footnotes required by generally accepted accounting
principles for complete financial statements.  Certain reclassifications
have been made to the prior year condensed consolidated financial
statements to conform to the 2000 presentation.  Such reclassifications
had no effect on previously reported results of operations or accumulated
deficit.

As described in Note 10, Stockholders' Equity (Deficiency), to the
Consolidated Financial Statements of the Company's 1999 Annual Report on
Form 10-K, ZiLOG's Series A Cumulative Preferred Stock (Series A Stock)
accumulates dividends at a rate of 13.5% per annum, with dividends payable
quarterly at the election of the Board of Directors.  Unpaid dividends are
recognized as a charge to accumulated deficit and as an increase in the
liquidation preference of the Series A Stock.  As of April 2, 2000, the
Company has not paid any dividends on the Series A Stock and the
corresponding accrued dividends are $8.0 million.  During the three month
period ended April 2, 2000, $1.1 million of dividends on Series A Stock
were accrued and charged to accumulated deficit.

2)      EQUITY INVESTMENT

On March 22, 2000, ZiLOG acquired 3.0 million shares or 20% of the common
stock of Qualcore Group, Inc. ("Qualcore") for cash of $8.0 million, $5.5
million paid on March 22, 2000 and $2.5 million paid on April 14, 2000,
pursuant to a Purchase and Sale Agreement.  ZiLOG will account for its
investment in Qualcore common stock using the equity method. Under the
terms of the Agreement, ZiLOG has the option ("Option") until June 30,
2001 ("Expiration Date") to acquire all of the remaining common shares of
Qualcore for cash and common stock. Following an initial public offering
of ZiLOG's common stock prior to the Expiration Date, the Option will
automatically be exercised. If the Option is not exercised prior to the
Expiration Date, ZiLOG may be required to pay up to $5.2 million to
acquire up to 1.8 million additional shares of Qualcore common stock.


3)      INVENTORIES

The components of inventories are as follows (in thousands):

<TABLE>
<CAPTION>
                                  April 2,   December 31,
                                    2000        1999
                                 ----------- -----------
<S>                              <C>         <C>
     Raw materials...............    $1,513      $1,477
     Work-in-process.............    23,756      20,146
     Finished goods..............     7,037       6,833
                                 ----------- -----------
                                    $32,306     $28,456
                                 =========== ===========
</TABLE>


4)      SEGMENT REPORTING

ZiLOG is organized into three business units: Communications, Integrated
Controls and Home Entertainment.  Consistent with the rules of Statement of
Financial Account Standards ("SFAS") No. 131, the Company has aggregated
these three business units into two reportable segments.  Integrated
Controls was combined with Home Entertainment ("Connectivity" products) as
both of these business units have similar gross margin levels as well as
similar consumer and industrial customer applications that are based
largely on ZiLOG's Z-8 line of 8-bit microcontrollers and digital signal
processors.  The Communications business unit is generally more profitable
than the Company's other business units and is predominantly based on the
Company's Z80 line of 8-bit microprocessors and serial communication
devices.  Information for the three months ended April 4, 1999 has been
reclassified to conform with the presentation in the Company's 1999 Annual
Report on Form 10-K.

Information regarding reportable segments for the three months ended April
2, 2000 and April 4, 1999 is as follows (in thousands):

<TABLE>
<CAPTION>
                                                         Corporate
                                 Communica-                 and        Total
                                    tions    Connectivity  Other    Consolidated
                                 ----------- ----------- ---------- ------------
<S>                              <C>         <C>         <C>        <C>
      2000
---------------
Net sales .......................   $25,297     $34,221      $  --      $59,518

EBITDA ..........................     9,591        (557)       460        9,494
Depreciation and amortization ...    (2,500)     (7,902)        --      (10,402)
Interest income .................          --        --        768          768
Interest expense ................          --        --     (7,278)      (7,278)
                                                                    ------------
Loss before income taxes ........                                       ($7,418)
                                                                    ============
      1999
---------------
Net sales .......................   $21,223     $32,986      $  --      $54,209

EBITDA ..........................     8,999         362        (50)       9,311
Depreciation and amortization ...    (3,268)    (12,098)        --      (15,366)
Interest income .................          --        --        610          610
Interest expense ................          --        --     (7,229)      (7,229)
                                                                    ------------
Loss before income taxes ........                                      ($12,674)
                                                                    ============
</TABLE>


Major customers: During the three months ended April 2, 2000 and April 4,
1999, one distributor, who buys from both segments, accounted for
approximately 13.1% and 10.9% of net sales, respectively.

5) LEGAL PROCEEDINGS

The Company has been named as a defendant in a purported class action
lawsuit that was filed on January 23, 1998 in the U.S. District Court for
the Northern District of California.  Certain executive officers of the
Company are also named as defendants.  The plaintiff purports to represent
a class of all persons who purchased the Company's Common Stock between
June 30, 1997 and November 20, 1997 (the "Class Period").  The complaint
alleges that the Company and certain of its executive officers made false
and misleading statements regarding the Company that caused the market
price of its Common Stock to be "artificially inflated" during the Class
Period.  The complaint does not specify the amount of damages sought.  On
March 24, 1999, the district court granted ZiLOG's motion to dismiss and
entered judgment in favor of all defendants.  On April 16, 1999, the
plaintiffs filed their notice of appeal to the Ninth Circuit Court of
Appeals.  The matter is fully briefed and awaits oral argument, which is
presently scheduled for June 8, 2000.  Based upon information presently
known to management, the Company is unable to determine the ultimate
resolution of this lawsuit or whether it will have a material adverse
effect on the Company's financial condition.

The Company is a party to an insurance coverage lawsuit in the Superior
Court of the State of California in and for Santa Clara County filed on
July 29, 1996, in which its former insurers, Pacific Indemnity Company,
Federal Insurance Company and Chubb & Son, Inc., claim that insurance
coverage did not exist for allegations made in an underlying lawsuit
brought by employees of the Company and their families who claimed that
they suffered personal injuries and discrimination because of alleged
exposure to chemicals at Zilog's manufacturing plant in Nampa, Idaho in
1993 and 1994.   The  insurers  seek  a  declaration   that  insurance
coverage  under  the applicable policies did not exist, and they seek
reimbursement of attorneys' fees, costs and settlement funds expended on
the Company's behalf.  A total of approximately six million, three hundred
thousand dollars ($6,300,000) plus interest is sought by the insurers.
Both the insurers and the Company have each brought separate motions for
summary judgment or, in the alternative, motions for summary adjudication.
All such motions were denied by the Superior Court, and the Court of
Appeals denied each party's respective petition for review of each denial
of their summary judgment motions.  The Company petitioned the California
Supreme Court for review of the denial of its motion for summary judgment.
The California Supreme Court denied the Company's petition for review
without making a decision on the merits of the dispute.   The insurers
have renewed their motion for summary adjudication.  The Company is
opposing that motion. No trial date has been set.  Based upon information
presently known to management, the Company is unable to determine the
ultimate resolution of this lawsuit or whether it will have a material
adverse effect on the Company's financial condition.

Two parties have notified ZiLOG that it may be infringing certain patents
and other intellectual property rights.  In the event ZiLOG determines
that such notices may involve meritorious claims, ZiLOG may seek a
license.  Based on industry practice, ZiLOG believes that in most cases
any necessary licenses or other rights could be obtained on commercially
reasonable terms.  However, no assurance can be given that licenses could
be obtained on acceptable terms or that litigation will not occur.  The
failure to obtain necessary licenses or other rights or the advent of
litigation arising out of such claims could have a material adverse effect
on ZiLOG.

ZiLOG is participating in other litigation and responding to claims
arising in the ordinary course of business.  ZiLOG intends to defend
itself vigorously in these matters.  ZiLOG's management believes that it
is unlikely that the outcome of these matters will have a material adverse
effect on the Company, although there can be no assurance in this regard.

<PAGE>










































FINANCIAL INFORMATION

Item 2.  Management's Discussion and Analysis of Financial
          Condition and Results of Operations

The following tables present unaudited results.  The Company believes that
all necessary adjustments, consisting only of normal recurring
adjustments, have been included in the amounts shown below to state fairly
the selected quarterly information when read in conjunction with the
Condensed Consolidated Financial Statements included elsewhere herein.
Interim results are based on fiscal quarters of thirteen weeks in duration
ending on the last Sunday of each quarter.  The operating results for any
quarter are not necessarily indicative of results for any subsequent
quarter or the full fiscal year.  All tabular information is provided in
thousands, except percentages.

Results of Operations
---------------------

The Company's quarterly operating results have varied and will vary
because of a number of factors, including the timing and success of new
product introductions, customer design wins and losses, the success of
cost reduction programs, changes in product mix, volume, timing and
shipment of orders and fluctuations in manufacturing productivity.  Sales
comparisons are also subject to customer order patterns and seasonality.
Because the Company's products are available from both the Company and its
distributors, the customer's decision to buy from a distributor or
directly from the Company can affect ZiLOG's quarterly sales and
profitability.


<TABLE>
<CAPTION>
                                        Three Months Ended
                                       -------------------
                                        April 2,  April 4,
                                           2000     1999
                                       --------- ---------
<S>                                    <C>       <C>
Net sales.............................  $59,518   $54,209
Operating loss........................    ($592)  ($5,970)
Net loss..............................  ($7,550) ($12,924)
EBITDA................................   $9,494    $9,311

</TABLE>


EBITDA represents earnings (losses) from operations before interest income
and expense (including amortization of deferred financing costs), income
taxes, depreciation, amortization of intangible assets, non-cash stock
compensation expenses and special charges.  EBITDA is presented because it
is a widely accepted financial indicator of a leveraged company's ability
to service and/or incur indebtedness and because management believes that
EBITDA is a relevant measure of the Company's ability to generate cash
without regard to its capital structure or working capital needs.  EBITDA
as presented should not be used as an alternative to operating income or
net cash provided/(used) for operating activities, which are measured
under generally accepted accounting principles, and EBITDA may not be
comparable to similarly titled measures presented by other companies.

Overall, net sales for the first quarter of 2000 increased 9.8% from the
comparable period of 1999. The increase was partially the result of higher
overall average selling prices ("ASPs"), which increased approximately 22%
in the first quarter of 2000 when compared to the first quarter of 1999.
The increase in ASP is primarily attributable to a shift in sales mix
towards higher priced products.  Net sales of Communication products in
the first quarter of 2000 increased 19.2% over the same period in 1999 as
a result of higher unit shipments of serial communication controllers and
military products.  Net sales of Connectivity products in the first
quarter of 2000 increased 3.7% over the first quarter in 1999 as the
result of higher unit shipments of infrared remote and one-time-
programmable products, offset partially in a decline in unit shipments of
peripheral products. As previously announced, the Company began to de-
emphasize the peripheral product line in the second half of 1999.  In the
first quarter of 2000, the bookings rate for peripheral products was $3.0
million compared to $8.2 million in the same period in 1999. This bookings
trend is expected to result in sales of peripheral products at or below
current levels in the foreseeable future.

Domestic and international sales (sales attributable to the ship-to
locations of ZiLOG's customers)  in the first quarter of 2000 were 48.3%
and 51.7%, respectively,  compared to 37.2% and 62.8% in the  first
quarter of 1999.  The decrease in international sales as a percentage of
total sales in 2000 was due primarily to lower unit shipments of
peripheral products in Asia.

Gross Margin
------------

<TABLE>
<CAPTION>
                                        Three Months Ended
                                       -------------------
                                        April 2,  April 4,
                                           2000     1999
                                       --------- ---------
<S>                                    <C>       <C>
  Cost of sales.......................  $34,860   $38,410
  Gross margin .......................  $24,658   $15,799
  Gross margin percentage.............     41.4%     29.1%
</TABLE>


The Company's cost of sales represents the cost of its wafer fabrication,
assembly and test operations.  Cost of sales fluctuates, depending on
manufacturing productivity, product mix, equipment utilization and
depreciation. The improvement in gross margin percentage is primarily
attributable to reduced depreciation expense, particularly in the
Company's eight-inch wafer fabrication facility, increased production
volume, cost reductions as a result of manufacturing process improvements
and a shift in sales mix to higher priced communications and military
products.

Effective July 5, 1999, the Company changed the estimated useful lives of
certain machinery and equipment located in its eight-inch wafer fab in
Nampa, Idaho from five to seven years.  This change in accounting estimate
resulted in a $4.6 million reduction of depreciation expense in the first
quarter of 2000 as  compared  to  depreciation  expense that  would  have
been recorded under the previous useful life estimates.  The decision to
change the estimated service period for these assets was based on the
Company's  qualification of a new .35 micron wafer manufacturing process
in its eight-inch wafer fab and the transfer of many of ZiLOG's products
into volume production in this facility.


Research and Development
------------------------

<TABLE>
<CAPTION>
                                        Three Months Ended
                                       -------------------
                                        April 2,  April 4,
                                           2000     1999
                                       --------- ---------
<S>                                    <C>       <C>
  Research and development............   $9,761    $7,263
  Percentage of sales.................     16.4%     13.4%
</TABLE>


For the three month period ended April 2, 2000, research and development
expenses increased $2.5 million or 34.4% over the same period in 1999. The
Company's research and development headcount also increased to 172 people
as of April 2, 2000, up from 135 people in the first quarter of 1999.  The
increase in research and development expense in the first quarter of 2000
was primarily attributable to higher product development costs, including
spending at ZiLOG's new design centers in India, Seattle and Fort Worth,
Texas.  Research and development expense in the current quarter also
includes $0.5 million of amortization relating to goodwill and other
intangible assets acquired in connection the Seattle and PLC design
centers.  During the first quarter of 2000, each of the Company's business
groups were engaged in new product development projects, including eZ80
and Cartezian microprocessors, 0.35 micron one-time programmable
microcontrollers, MailTV modules and Advanced Human Interface remote
control products.

Selling, General and Administrative
-----------------------------------

<TABLE>
<CAPTION>
                                        Three Months Ended
                                       -------------------
                                        April 2,  April 4,
                                           2000     1999
                                       --------- ---------
<S>                                    <C>       <C>
  Selling, general and administrative.  $15,489   $14,506
  Percentage of sales.................     26.0%     26.8%
</TABLE>


Selling, general and administrative expenses increased approximately $1.0
million or 6.8% from the similar period last year, primarily the result of
higher compensation and employee benefit related costs.  In addition,
commissions and marketing expenses were higher in connection with
increased sales.

Other Income/(Expense), Net
---------------------------

<TABLE>
<CAPTION>
                                        Three Months Ended
                                       -------------------
                                        April 2,  April 4,
                                           2000     1999
                                       --------- ---------
<S>                                    <C>       <C>
  Interest income ....................     $768      $610
  Interest expense ...................   (7,278)   (7,229)
  Other, net .........................     (316)      (85)
                                       --------- ---------
    Total income/(expense), net .....   ($6,826)  ($6,704)
                                       ========= =========
</TABLE>


Interest income represents interest earned on cash balances, all of which
have a maturity of less than ninety days.  Interest expense is primarily
comprised of the interest on the Company's 9.5% Senior Secured Notes
("Notes") and amortization of deferred financing costs of $0.3 million.
The Company incurs approximately $26.6 million in interest coupon payments
annually on the Notes.

Income Taxes
------------

The provision for income taxes was $0.13 million for the three months
ended April 2, 2000  compared to $0.25 million in the similar period of
1999.  The reduction in the 2000 estimated tax provision as compared to
1999 is related to the different foreign jurisdictions where profits are
expected to be earned.  Because of the Company's overall loss position, a
full valuation allowance was established for the tax assets originating
from current year losses and, therefore, no benefit is realized in the
2000 tax rate. The Company will continue to evaluate the realizability of
the deferred tax assets on a quarterly basis.


Liquidity and Capital Resources
-------------------------------

The Company's primary cash needs are debt service, working capital and
capital expenditures.  ZiLOG's semi-annual interest payment on the Notes
of approximately $13.3 million are payable each March 1 and September 1.
Additionally,  ZiLOG  has a  senior  secured  credit  facility  (the
"Facility") from a commercial lender (the "Lender") that provides for
total borrowings of up to $40.0 million, which consist of a three-year
revolving credit facility of up to $25.0 million and a five-year capital
expenditure line of up to $15.0 million and expires on December 30, 2001
and 2003, respectively.  Borrowings under the Facility bear interest  at a
rate  per  annum equal (at ZiLOG's option) to the Lender's  stated  prime
rate  or the London Interbank  Overnight Rate ("LIBOR") plus 2% for the
revolving credit facility and the Lender's prime rate plus 1% or LIBOR
plus 3% for the capital expenditure line. As of April 2, 2000, there have
been no borrowings under the  Facility and the calculated availability was
$38.5 million.  The Facility has certain financial covenants that apply
depending on the level of borrowings under the Facility.

Cash used by operating activities was $14.0 million for the three months
ended April 2, 2000, as compared to cash used of $1.5 million in the
similar period of 1999.  The use of cash by operating activities in the
first quarter of 2000 was primarily attributable to a decrease in other
accrued and noncurrent liabilities and accounts payable.  The Company also
incurred lower depreciation and amortization expense and a smaller net
loss in the first quarter of 2000 as compared to the first quarter of
1999.

Cash used by investing activities was $9.6 million for the three months
ended April 2, 2000 and was $2.7 million for the comparable period in
1999.  Cash used in 2000 was the result of a purchase of an equity
interest in Qualcore Group, Inc. ("Qualcore") and capital expenditures of
$4.1 million, primarily for manufacturing equipment and supply chain
management software.

On March 22, 2000, ZiLOG acquired 3.0 million shares or 20% of the common
stock of Qualcore for cash of $8.0 million pursuant to a Purchase and Sale
Agreement.  ZiLOG will account for its investment in Qualcore common stock
using the equity method. Under the terms of the Agreement, ZiLOG has the
option ("Option") until June 30, 2001 ("Expiration Date") to acquire all
of the remaining common shares of Qualcore for cash and common stock.
Following an initial public offering of ZiLOG's common stock prior to the
Expiration Date, the Option will automatically be exercised. If the Option
is not exercised prior to the Expiration Date, ZiLOG may be required to
pay up to $5.2 million to acquire up to 1.8 million additional shares of
Qualcore common stock.

Cash provided by financing activities for the three months ended April 2,
2000 was $1.8 million, that primarily represents proceeds from the
issuance of common stock, including the exercise of employee stock
options.

The Company has incurred substantial indebtedness in connection with the
recapitalization of the Company.  ZiLOG's ability to make scheduled
principal payments, or to pay the interest, or premium if any, or to
refinance its indebtedness (including the Notes), or to fund capital and
other expenditures will depend on its future performance, which, to a
certain extent, is subject to general economic, financial, competitive,
legislative, regulatory and other factors that are beyond its control.
Based upon the current level of operations, management believes that
available cash, cash  flow  from  operations  and  availability  under
its  credit  facility  will  be  adequate to meet ZiLOG's future
requirements for working capital, budgeted capital and other expenditures
and scheduled payments of principal and interest on its indebtedness,
including the Notes, for at least the next twelve months.  However, there
can be no assurance that ZiLOG's business will generate sufficient cash to
enable the Company to service its indebtedness, including the Notes, or
make anticipated capital and other expenditures.

Year 2000 Compliance
--------------------

In prior years, the Company discussed the nature and progress of its plans
to become Year 2000 ("Y2K") ready.  In late 1999, ZiLOG completed its
remediation and testing of systems.  As a result of those planning and
implementation efforts, the Company to date, has experienced no
significant disruptions in mission critical information technology and
non-information technology systems and believes those systems successfully
responded to the Y2K date change.  The Company had intended to replace
such systems in the ordinary course of business and the implementation was
not substantially accelerated due to Y2K.  ZiLOG expended approximately
$4.7 million through April 2, 2000 in connection with information system
enhancements.  To date, the Company is not aware of any material problems
resulting from Y2K issues, either with its products, its internal systems,
or the products and services it receives form third parties.  The Company
will continue to monitor its mission critical applications and those of
its suppliers and vendors throughout the year 2000 to ensure that any Y2K
matters that may arise are addressed properly.  However, there can be no
assurance that the Company has identified and remediated all Y2K-related
systems issues.


FACTORS THAT MAY AFFECT FUTURE RESULTS

CHANGE IN NORTH AMERICAN DISTRIBUTORS. In January 2000, The Company
announced its intention to terminate its existing relationships with Arrow
Electronics Inc. ("Arrow"), Future Electronics Inc. ("Future") and Unique
Technologies ("Unique") in the North American marketplace.  In 1999, these
distributors purchased $42.3 million of product from ZiLOG.  The Company
has franchised Pioneer-Standard Electronics, Inc. ("Pioneer") as its
exclusive full service distributor in North America.  Pioneer is expected
to take over the majority of the business that ZiLOG previously conducted
with Arrow, Future and Unique, but no assurances can be given that this
transition will occur smoothly.  Although most of ZiLOG's products are
only produced by the Company, some products sold through distribution,
such as the Z85C30 CMOS serial communications controller, are manufactured
and sold by other companies.  Terminated distributors may try to direct
their customers to these second sourced products.  Other customers may not
wish to transfer their business to Pioneer and ZiLOG may lose certain
business formerly sold through distribution in this transition.  There can
be no guarantee that Pioneer will meet or exceed the level of business
formerly generated by Arrow, Future and Unique.  As a result, the
Company's financial results may differ materially from prior years.

SUBSTANTIAL LEVERAGE AND ABILITY TO SERVICE INDEBTEDNESS.  ZiLOG has
incurred substantial indebtedness in connection with the recapitalization
of the Company, which became effective February 27, 1998.  At April 2,
2000, ZiLOG had $280.0 million of consolidated long-term indebtedness and
stockholders' deficiency of $96.4 million.

The high degree to which the Company is leveraged may have important
consequences to the Company, including the following:  (i) the Company's
ability to obtain additional financing for working capital, capital
expenditures, product development, future acquisitions (if any), or other
purposes  may be  impaired or any  such  financing  may not be available
on terms favorable to the Company; (ii) a substantial portion of the
Company's cash flow available from operations after satisfying certain
liabilities arising in the ordinary course of business will be dedicated
to the payment of debt service, thereby reducing funds that would
otherwise be available to the Company; (iii) a decrease in net operating
cash flows or an increase in expenses could make it difficult for the
Company to meet its debt service requirements or force it to modify its
operations; and (iv) high leverage may place the Company at a competitive
disadvantage, limit its flexibility in reacting to changes in its
operating environment and make it vulnerable to a downturn in its business
or the economy generally.

To satisfy the Company's obligations under the Notes, the Company will be
required to generate substantial operating cash flow.  The ability of the
Company to meet debt service and other obligations or to refinance any
such obligation will depend on the future performance of the Company,
which will be subject to prevailing economic conditions and to financial,
business and other factors, certain of which may be beyond the control of
the Company.  While the Company believes that, based on current levels of
operations and its business plan, it will be able to meet its debt service
and other obligations or to refinance its indebtedness, there can be no
assurances with respect thereto. Moody's current rating of the Company's
corporate credit and the Notes is B2.  Standard and Poor's current rating
of the Company's corporate credit and the Notes is a single B.  These
ratings agencies can raise or lower their ratings of the Company at any
time based on their analysis of the Company's financial condition and
operating results.  These ratings, particularly if they decline, could
adversely affect the Company's ability to raise additional financing on
acceptable terms or at all.

RECENT AND ANTICIPATED OPERATING RESULTS.  The Company's operating results
are affected by a wide variety of factors which could have a material
adverse effect on it including, but not limited to, the Company's ability
to introduce and sell new products and technologies on a timely basis,
execute on cost reduction programs, changes in product mix or fluctuations
in manufacturing yields which affect the Company's gross profit, market
acceptance of the Company's and its customers' products, the level of
orders that are received and can be shipped in a quarter, customer order
patterns and seasonality, cyclicality in the semiconductor industry,
increases in freight costs, gain or loss of a significant customer and
whether the Company's customers buy from a distributor or directly from
the Company.

The Company has learned that it is being designed out of pointing device
applications at a number of customers.  The bookings rate for peripheral
products decreased substantially in the second half of 1999 to
approximately $9.9 million from approximately $17.0 million in the first
half of 1999.  In the first quarter of 2000, the bookings rate was $3.0
million compared to $8.2 million in the same period in 1999.  This
bookings trend is expected to result in sales of peripheral products at or
below current levels in the foreseeable future.

In 1997 and 1998, the Company experienced significant declines in its
overall average selling prices.  Significant reductions in selling prices
may have a material adverse effect on the Company.  The Company will
likely experience substantial period-to-period fluctuations in future
operating results due to general industry conditions including cyclical
periods of diminished product demand, product mix, accelerated erosion of
average selling prices and production over-capacity or events occurring in
the United States economy or the economies of the worldwide markets the
Company serves.  A significant decline in demand for the Company's
products could have a material adverse effect on the Company, and there
can be no assurance that any new products will receive or maintain
substantial market acceptance.

Many of the factors which affect the Company's operating performance are
outside the Company's control and there can be no assurance that the
Company's business strategy will be successful or that results of
operations will not decline.  Implementation of the Company's business
plan requires significant expenditures and there can be no assurance that
the Company will be in a position to implement it fully or that such
expenditures will generate any increase in revenue.  Significant declines
in operating performance could have a material adverse effect on the
Company and its ability to meet its debt service and other obligations.
Similar to other semiconductor companies, the Company has implemented and
is considering implementing additional cost-cutting measures which may
include, but are not limited to, the following: refocusing of business
priorities; renegotiations with vendors and service providers to lower the
costs of materials and services; reallocation of personnel and
responsibilities to better utilize human resources; reductions in
workforce; realignment or elimination of certain of the Company's sales
representative or distributor relationships; changes of manufacturing mix;
increased use of subcontractors or wafer manufacturers for greater
efficiency and lower short term costs; changes in shift structures; and
temporary plant shutdowns. Such cost-cutting measures may not result in
increased efficiency or profitability. The Company intends to spend
approximately $40.0 million in capital expenditures in 2000. There is no
assurance that the capital expenditures will increase the Company's future
sales or profitability.

Beginning in July 1999, the Company implemented a new Enterprise Resource
Planning ("ERP") system that is intended to improve order entry, supply
chain management and financial reporting.  In the second half of 2000, the
Company intends to install an Advanced Planning System ("APS") which is
intended to enable the Company to improve its planning, operations and
customer service. While ZiLOG believes that the ERP system was properly
implemented and the APS will be properly installed without material
adverse effect on the Company, there can be no assurance that unforeseen
circumstances concerning ZiLOG's operation of the ERP system and the APS
will not have a material adverse effect on the Company.

From time to time, the Company has experienced a shortage of certain
products, which caused delays in shipment to its customers.  The Company
is experiencing shortages in obtaining certain materials necessary to
produce its products.  Customers of the Company are unable to obtain
particular products from other vendors that cause them to defer
acquisition of the Company's products.  This is particularly prevalent in
certain home entertainment products. Given the highly competitive market
where the Company is headquartered, from time to time, the Company
experiences difficulty in attracting qualified employees for certain
positions.  A failure by the Company to obtain materials or qualified
employees in a timely manner or by the Company's customers to obtain key
components from other vendors could adversely  impact the Company's
operating results.

RISKS OF ACQUISITIONS. ZiLOG acquired substantially all of the assets and
assumed the operating liabilities of Seattle Silicon Corporation on April
20, 1999 for approximately $6.1 million. On March 22, 2000, ZiLOG acquired
20% of the common stock of Qualcore Group, Inc. ("Qualcore") for cash of
$8.0 million, $5.5 million paid on March 22, 2000 and $2.5 million paid on
April 14, 2000, pursuant to a Purchase and Sale Agreement.  The Company
intends to consider acquisitions from time to time of other companies and
businesses, and to pursue attractive acquisition opportunities.  However,
no assurance can be given that ZiLOG will consummate any further
acquisitions.  Acquisitions involve a number of risks that could adversely
affect ZiLOG.  The Company may not have had any experience with
technologies and markets involved with the acquired business and
accordingly, may not have the experience necessary to successfully operate
and integrate the business.  The successful operation of an acquired
business will require communication and cooperation in product development
and marketing among senior executives and key technical personnel.  This
cooperation may not occur.  In addition, ZiLOG may not be able to
successfully integrate its operations with those of the acquired
businesses, and acquisitions may disrupt the acquired business and ZiLOG's
existing business and divert management's attention.  There can be no
assurance that ZiLOG will retain key technical, management, sales and
other personnel, or that the Company will realize any of the other
anticipated benefits of the acquisition.  Furthermore, acquisitions would
require investment of financial resources, and may require debt or equity
financing.

THE SEMICONDUCTOR INDUSTRY.  The semiconductor industry has been
characterized by cyclicality.  The industry has experienced significant
economic downturns at various times in the past, characterized by
diminished product demand, accelerated erosion of average selling prices
and production over-capacity.  The Company will likely experience
substantial period-to-period fluctuations in future operating results that
are attributable to general industry conditions or events occurring in the
general economy.  The fluctuations are difficult to foresee and there can
be no assurance that future fluctuations will not be more severe or
prolonged or otherwise would not have a material adverse effect on the
Company.

Certain of the Company's products are incorporated into personal computers
and peripherals.  As a result, a slowdown in the demand for personal
computers and related peripherals or industry pressure to reduce prices
could adversely affect the Company's operating results.  A significant
portion of the Company's sales are to the consumer electronics markets for
use in products such as television sets, infrared remote controls and
garage door openers.  The consumer electronics markets are volatile and
rapid changes in customer preferences for electronics products could have
a material adverse effect on the Company.  The Company has entered into an
end of life agreement with Arrow-Zeus to discontinue the sale of the
Company's military products.  This agreement is expected to be fully
consummated by December 31, 2000 and after that time the Company does not
expect to continue to realize revenues from the sale of its military
products.  If the Company is unable to replace the revenue from military
products in future years, sales and operating results could be adversely
impacted.

DEPENDENCE ON NEW PRODUCTS AND TECHNOLOGIES.  The Company's operating
results will depend to a significant extent on its ability to continue to
introduce and sell new products.  The success of new product introductions
is dependent on several factors, including proper new product selection,
timely completion and introduction of new product designs, complexity of
the new products to be designed and manufactured, development of support
tools and collateral literature that make complex new products easy for
engineers to understand and use and market acceptance of customers' end
products.  In addition, the Company contracts with third parties to assist
in the design, development and manufacture of certain of its new products.
There can be no assurance that any new products will receive or maintain
substantial market acceptance.  Any  sales  of new products are subject
to the success or failure  of  the  customer's  product.   There  can  be
no assurance that the Company will successfully identify new product
opportunities and develop and bring new products to market in a timely and
cost-effective manner, or that products or technologies developed by
others will not render the Company's products or technologies obsolete or
noncompetitive.  A fundamental shift in technology in ZiLOG's product
markets could have a material adverse effect on the Company.

CUSTOMER CONCENTRATION.  For the three months ended April 2, 2000, the
Company's 10 largest customers accounted for approximately 53.8% of the
Company's net sales, although no single customer accounted for more than
13.1% of net sales.  Among the Company's ten (10) largest customers were
three (3) distributors who sell the Company's products in North America.
In January 2000, the Company announced its intention to sever its
relationships with Arrow, Future and Unique in North America and to
replace them with an exclusive full service distributor, Pioneer.  It is
anticipated that Pioneer will become the Company's largest distributor
customer.  In 1999, Arrow, Future and Unique purchased $42.3 million of
its products on a worldwide basis and $36.5 million in North America.
These distributors are permitted to continue to sell ZiLOG products into
the second quarter of 2000.  The Company anticipates that during 2000,
Pioneer will take over most of this business.  Particular customers may
change from period to period but the Company expects that sales to a
limited number of customers will continue to account for a significant
percentage of its revenue in any particular period for the foreseeable
future.  The Company has very few contracts with its direct customers.  It
does have a contract with Pioneer and other distributors.  There can be no
assurance that its current customers will place additional orders, or that
the Company will obtain orders of similar magnitude from other customers.
The loss of one or more major customers or any reduction, delay or
cancellation  of orders by any such customer or the failure of the Company
to market successfully to new customers, could have a material adverse
effect on the Company. There can be no assurance that sales to one or more
significant customers will not decline in the future or that any such
decline will not have a material adverse effect on the Company.

PRODUCTION YIELDS AND MANUFACTURING RISKS.  The manufacture of
semiconductor products is highly complex and production yields are
sensitive to a wide variety of factors, including the level of
contaminants in the manufacturing environment, impurities in the materials
used and the performance of personnel and equipment.  In addition, as is
common in the semiconductor industry, the Company has from time to time
experienced difficulty in effecting transitions to new manufacturing
processes, delays in product deliveries or reduced yields.  As an example,
operating results could be adversely affected if any problems occur that
make it difficult to produce quantities of commercial product that the
Company anticipates producing at its newer .35 and .65 micron CMOS process
facility ("MOD III") in Nampa, Idaho.  Such difficulties can include, but
are not limited to (i) equipment being delivered later than or not
performing as expected; (ii) process technology changes not operating as
expected; and (iii) employees not operating equipment as expected.  The
Company believes that an important competitive factor will be its ability
to continue to successfully increase production capacity to meet customer
demand and shorten delivery time.  No assurance can be given that the
Company or its outside wafer foundries will not experience production
yield problems in  the  future which could have a material adverse effect
on the Company.  While the Company believes its manufacturing capacity is
sufficient, the failure to increase production capacity through the
successful and efficient expansion of production at its MOD III facility
or to obtain wafers or other production materials from outside suppliers
as needed during periods of increased demand could have a material adverse
effect on the Company.

The Company's future success is dependent upon its ability to develop and
implement new design and process technologies.  Semiconductor design and
process methodologies are extremely complex and subject to rapid
technological change, requiring large expenditures for research and
development.  Most new products are extremely complex in design and many
use the Company's .35 and .65 micron CMOS processes.  A failure to
successfully transition  eligible  products  to either the .35 or .65
micron CMOS process could have a material adverse effect on the Company.
Manufacture of large complex integrated circuits involves a significant
technological risk.  The failure to complete new product designs in time
to meet market requirements and achieve volume production of new products
at acceptable yields using the new manufacturing processes would have a
material adverse effect on the Company.

The Company intends to have some of its new products fabricated by other
foundry manufacturers.  Shortages in foundry capacity could adversely
impact the Company's financial results.  Should the Company be unable to
obtain the requisite foundry capacity to manufacture its complex new
products, the Company's ability to achieve continued revenue growth might
be restricted.  The inability to have new products manufactured at
foundries could also result in the loss of customers.

The Company uses outside contract assemblers for packaging its products.
Shortages in contract assembly capacity could adversely impact the
Company's financial results.  Should the Company be unable to obtain
additional assembly capacity, the Company's ability to achieve continued
revenue growth might be restricted.  Shortage of product could also result
in the loss of customers.

COMPETITION.  The semiconductor industry is intensely competitive and is
characterized by price erosion, rapid technological change and heightened
foreign competition in many markets.  The industry consists of major
domestic and international semiconductor companies, many of which have
substantially greater financial and other resources than the Company with
which to pursue engineering, manufacturing, marketing and distribution of
their products.  Emerging companies are also increasing their
participation in the semiconductor market.  The ability of the Company to
compete successfully in its markets depends on factors both within and
outside of its control including, but not limited to, success in designing
and manufacturing new products that implement new technologies, protection
of the Company's products by effective utilization of intellectual
property laws, product quality, reliability, ease of use, price, diversity
of product line, efficiency of production, the pace at which customers
incorporate the Company's microprocessors, microcontrollers, digital
signal processors and other devices into their products, success of
competitors' products and general economic conditions.

INTERNATIONAL OPERATIONS.  Approximately 51.7% of the Company's net sales
in the first three months of 2000 were to foreign customers as compared to
62.8% in the similar period of 1999. The Company expects that
international sales will continue to represent a significant portion of
sales, although there can be no assurance that international sales, as a
percentage of net sales, will remain at current levels.

The Company purchases a substantial portion of its raw materials and
equipment from foreign suppliers.  While the Company's export sales are
primarily United States dollar denominated transactions, the Company is
subject to the risks of conducting business internationally, including
unexpected changes in, or impositions of, legislative or regulatory
requirements, fluctuations in the United States dollar against foreign
currencies, which could increase the sales price in local currencies of
the Company's products in foreign markets or increase the cost of wafers
or other production materials purchased by the Company, delays resulting
from difficulty in obtaining export licenses for certain technology,
tariffs and other barriers and restrictions, potentially longer payment
cycles, greater difficulty in accounts receivable collection, potentially
adverse taxes and the burdens of complying with a variety of foreign laws.
In addition, the Company is subject to general geo-political risks, such
as political and economic instability and changes in diplomatic and trade
relationships, which could affect, among other things, customers' ordering
patterns and inventory levels.  There can be no assurance that such
regulatory, geo-political, economic and other factors will not adversely
impact the Company in the future or require ZiLOG to modify its current
business practices.  In addition, the laws of certain foreign countries
may not protect the Company's intellectual property rights to the same
extent as do the laws of the United States.

The Company uses subcontractors for certain assembly and test services
located in the Philippines, Indonesia, Taiwan and Malaysia. The Company
also operates test facilities in the Philippines through two wholly owned
subsidiaries and has a significant capital investment at certain of these
facilities.  A wholly owned subsidiary for software design and support
tool products was established by the Company in India in 1999.  The
Company's reliance on personnel and assets and its maintenance of
inventories at these facilities entails certain political and economic
risks, including political instability  and expropriation,  currency
controls  and exchange fluctuations, as well as changes in tax laws,
tariff and freight rates.  No assurances of political or economic
stability in these countries can be given.  The Company has not
experienced any significant interruptions in its business operations at
these locations to date.  Nonetheless, any loss or disruption of
production could have a material adverse effect on the Company,
particularly if operations or air transportation from these locations were
disrupted for a substantial period of time.

INTELLECTUAL PROPERTY RIGHTS.  The Company's ability to compete will be
affected by its ability to protect its proprietary information.  The
Company relies primarily on its trade secrets and technological know-how
in conducting  its business.  There can be no assurance that the steps
taken by the Company to protect its intellectual property will be adequate
to prevent misappropriation of its technology or that the Company's
competitors will not independently develop technologies that are
substantially equivalent or superior to the Company's technology.  The
semiconductor industry is characterized by frequent claims and related
litigation regarding patent and other intellectual property rights.  There
can be no assurance that third parties will not assert additional claims
or initiate litigation against the Company, its foundries or its customers
with respect to existing or future products.  In addition, the Company may
initiate claims or litigation against third parties for infringement of
the Company's proprietary rights or to determine the scope and validity of
the proprietary rights of the Company or others.  Litigation by or against
the Company could result in significant expense to the Company and divert
the efforts of the Company's technical and management personnel, whether
or not litigation is determined in favor of the Company.  In the event of
an adverse result in any such litigation, the Company could be required to
pay substantial damages, cease the manufacture, use, sale, offer for sale
and importation of infringing products, expend significant resources to
develop or obtain non-infringing technology, discontinue the use of
certain processes, or obtain licenses to the technology which is the
subject of the litigation.  There can be no assurance that the Company
would be successful in such development or acquisition or that any such
licenses, if available, would be obtainable on commercially reasonable
terms, and any such development or acquisition could require expenditures
by the Company of substantial time and other resources.  Any such
litigation or adverse result therefrom could have an adverse effect on the
Company.

Two parties have notified ZiLOG that it may be infringing certain patents
and other intellectual property rights. In the event ZiLOG determines that
such notices may involve meritorious claims, ZiLOG may seek a license.
Based on industry practice, ZiLOG believes that in most cases any
necessary licenses or other rights could be obtained on commercially
reasonable terms.  However, no assurance can be given that licenses could
be obtained on acceptable terms or that litigation will not occur.  The
failure to obtain necessary licenses or other rights or the advent of
litigation arising out of such claims could have a material adverse effect
on ZiLOG.

ENVIRONMENTAL REGULATION.  The Company is subject to a variety of
government regulations related to the discharge or disposal of hazardous
materials used in its manufacturing process.  Although the Company
believes that it is in substantial compliance with all relevant
regulations and has all permits necessary to conduct its business, the
failure to comply with present or future regulations or the loss of any
permit could result in fines being imposed on the Company, limitation or
suspension of production or cessation of operations.  Compliance with any
such future regulations could require the Company to acquire additional
equipment or to incur substantial other expenses.  Any failure by the
Company to control the use of, or adequately restrict the discharge of,
hazardous materials could subject it to future liabilities.  Further,
there can be no assurance that the Company will not in the future incur
significant expense in connection with governmental investigations and/or
environmental or employee health and safety matters.

RESTRICTIVE DEBT COVENANTS.  The terms of the Notes and the Facility
contain a number of significant covenants that, among other things,
restrict the ability of the Company to dispose of assets, incur additional
indebtedness, prepay other indebtedness or amend certain debt instruments,
pay dividends, create liens on assets, enter into sale and leaseback
transactions, make investments, loans or advances, make acquisitions,
engage in mergers or consolidations, change the business conducted by the
Company or its subsidiaries, make capital expenditures or engage in
certain transactions with affiliates and otherwise restrict certain
corporate activities.

The Company's ability to comply with such agreements may be affected by
events beyond its control, including prevailing economic, financial and
industry conditions.  The breach of any of such covenants or restrictions
could result in a default, which would permit the holders of the Notes or
the Lender on the Facility, to declare all amounts borrowed thereunder to
be due and payable, together with accrued and unpaid interest.

LACK OF PUBLIC MARKET FOR CAPITAL STOCK AND RESTRICTIONS ON RESALE.  There
is currently no established market for the Company's capital stock.  There
can be no assurance as to the development or liquidity of any market for
capital stock.  The Company does not currently have plans to list its
capital stock on any securities exchange or for quotation through an
automated quotation system.

The liquidity of, and trading market for, the Notes and capital stock also
may be adversely affected by general declines in the market for similar
securities.  Such a decline may adversely affect such liquidity and
trading markets independent of the financial performance of and prospects
for, the Company.


Item 3.  Quantitative and Qualitative Disclosure About Market Risk

Interest Rate Risk

The Company's exposure to market risk for changes in interest rates
relates primarily to the Company's investment portfolio and long-term debt
obligations.  The Company does not use derivative financial investments in
its investment portfolio.  The Company's primary investment objectives are
to preserve capital and maintain liquidity.  These objectives are met by
investing in high quality credit issuances and limiting the amount of
credit exposure to any one company.  The Company mitigates default risk by
investing in only the highest quality securities and monitoring the credit
ratings of such investments.  The Company has no cash flow exposure due to
rate changes for its cash equivalents or the Notes as these instruments
have fixed interest rates.

The table below presents principal amounts and related average interest
rates by year of maturity for the Company's cash equivalents and debt
obligations as of April 2, 2000 (dollars in thousands):

<TABLE>
<CAPTION>
                                         2000      2005      Total    Fair Value
                                       --------- --------- ---------- ----------
<S>                                    <C>       <C>       <C>        <C>
Cash Equivalents:
  Fixed rate .........................  $38,821    $   --    $38,821    $38,821
  Average interest rate ..............     5.89%       --       5.89%       --

Long-Term Debt:
  Fixed rate .........................       --  $280,000   $280,000   $250,600
  Stated interest rate ...............       --      9.50%      9.50%       --
</TABLE>


<PAGE>













Part II.  OTHER INFORMATION
Item 1.  Legal Proceedings

The Company has been named as a defendant in a purported class action
lawsuit that was filed on January 23, 1998 in the U.S. District Court for
the Northern District of California.  Certain executive officers of the
Company are also named as defendants.  The plaintiff purports to represent
a class of all persons who purchased the Company's Common Stock between
June 30, 1997 and November 20, 1997 (the "Class Period").  The complaint
alleges that the Company and certain of its executive officers made false
and misleading statements regarding the Company that caused the market
price of its Common Stock to be "artificially inflated" during the Class
Period.  The complaint does not specify the amount of damages sought.  On
March 24, 1999, the district court granted ZiLOG's motion to dismiss and
entered judgment in favor of all defendants.  On April 16, 1999, the
plaintiffs filed their notice of appeal to the Ninth Circuit Court of
Appeals.  The matter is fully briefed and awaits oral argument, which is
presently scheduled for June 8, 2000.  Based upon information presently
known to management, the Company is unable to determine the ultimate
resolution of this lawsuit or whether it will have a material adverse
effect on the Company's financial condition.

The Company is a party to an insurance coverage lawsuit in the Superior
Court of the State of California in and for Santa Clara County filed on
July 29, 1996, in which its former insurers, Pacific Indemnity Company,
Federal Insurance Company and Chubb & Son, Inc., claim that insurance
coverage did not exist for allegations made in an underlying lawsuit
brought by employees of the Company and their families who claimed that
they suffered personal injuries and discrimination because of alleged
exposure to chemicals at Zilog's manufacturing plant in Nampa, Idaho in
1993 and 1994.   The  insurers  seek  a  declaration   that  insurance
coverage  under  the applicable policies did not exist, and they seek
reimbursement of attorneys' fees, costs and settlement funds expended on
the Company's behalf.  A total of approximately six million, three hundred
thousand dollars ($6,300,000) plus interest is sought by the insurers.
Both the insurers and the Company have each brought separate motions for
summary judgment or, in the alternative, motions for summary adjudication.
All such motions were denied by the Superior Court, and the Court of
Appeals denied each party's respective petition for review of each denial
of their summary judgment motions.  The Company petitioned the California
Supreme Court for review of the denial of its motion for summary judgment.
The California Supreme Court denied the Company's petition for review
without making a decision on the merits of the dispute.  No trial date has
been set. Based upon information presently known to management, the
Company is unable to determine the ultimate resolution of this lawsuit or
whether it will have a material adverse effect on the Company's financial
condition.

Two parties have notified ZiLOG that it may be infringing certain patents
and other intellectual property rights.  In the event ZiLOG determines
that such notices may involve meritorious claims, ZiLOG may seek a
license.  Based on industry practice, ZiLOG believes that in most cases
any necessary licenses or other rights could be obtained on commercially
reasonable terms.  However, no assurance can be given that licenses could
be obtained on acceptable terms or that litigation will not occur.  The
failure to obtain necessary licenses or other rights or the advent of
litigation arising out of such claims could have a material adverse effect
on ZiLOG.

ZiLOG is participating in other litigation and responding to claims
arising in the ordinary course of business.  ZiLOG intends to defend
itself vigorously in these matters.  ZiLOG's management believes that it
is unlikely that the outcome of these matters will have a material adverse
effect on the Company, although there can be no assurance in this regard.



Item 6.  Exhibits and Reports on Form 8-K

a)  The following exhibits are filed herewith:
Exhibit 27 Financial Data Schedule

b)   Reports on Form 8-K:
        None.


<PAGE>









































ZILOG, INC.

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.




Date:  May 12, 2000
                                        ZiLOG, INC.






                                       /s/ Gary Patten
                                       -------------------
                                       Senior Vice President and
                                       Chief Financial Officer
                                       (Principal Financial Officer and
                                       Duly Authorized Officer)


<PAGE>