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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 March 31, 2002

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)

|                                                                                  |  |                                                
|--------------------------------------------------------------------------------- |  | -----------------------------------------------
|California
(State or other jurisdiction of
incorporation or organization)         |  | 94-2526781
(I.R.S. Employer
Identification No.)
|                                                                                 
|1511 Buckeye Drive, Milpitas, California
(Address of principal executive offices) |  | 95035
(Zip Code)                               

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 MARCH 31, 2002
22,444,003



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TABLE OF CONTENTS



|                              |                                                                                                |                                             |  |  |  |  |  | 
|----------------------------- | ---------------------------------------------------------------------------------------------- | ------------------------------------------- |  |  |  |  |  | 
|Part I: FINANCIAL INFORMATION
|                              | Item 1. Financial Statements.                                                                 
|                              |                                                                                                | CONSOLIDATED BALANCE SHEETS                
|                              |                                                                                                | CONSOLIDATED STATEMENTS OF OPERATIONS      
|                              |                                                                                                | CONSOLIDATED STATEMENTS OF CASH FLOWS      
|                              |                                                                                                | NOTES TO CONSOLIDATED FINANCIAL INFORMATION
|                              | Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations.
|                              | Item 7A. Quantitative and Qualitative Disclosures About Market Risk                           
|PART II: OTHER INFORMATION   
|                              | Item 1. Legal Proceedings.                                                                    
|                              | Item 6. Exhibits and Reports on Form 8-K.                                                     
|SIGNATURES                   



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XICOR, INC.

FORM 10-Q

QUARTER ENDED MARCH 31, 2002

INDEX

|           |  |                       |    |                                                                                                   |  |     
|---------- |  | --------------------- | -- | ------------------------------------------------------------------------------------------------- |  | ----
|           |  |                       |    |                                                                                                   |  | Page
|           |  |                       |    |                                                                                                   |  |     
|Part I:    |  | FINANCIAL INFORMATION
|          
|           |  | Item 1.               |    | Financial Statements                                                                              |  |     
|          
|           |  |                       |    | Consolidated Balance Sheets at March 31, 2002
and December 31, 2001                               |  | 1   
|          
|           |  |                       |    | Consolidated Statements of Operations for the three
months ended March 31, 2002 and April 1, 2001 |  | 2   
|          
|           |  |                       |    | Consolidated Statements of Cash Flows for the three
months ended March 31, 2002 and April 1, 2001 |  | 3   
|          
|           |  |                       |    | Notes to Consolidated Financial Information                                                       |  | 4   
|          
|           |  | Item 2.               |    | Managements Discussion and Analysis of Financial
Condition and Results of Operations             |  | 6   
|          
|Part II:   |  | OTHER INFORMATION     |    |                                                                                                  
|          
|           |  | Item 1.               |    | Legal Proceedings                                                                                 |  | 18  
|          
|           |  | Item 6.               |    | Exhibits and Reports on Form 8-K                                                                  |  | 18  
|          
|SIGNATURES |  |                       | 18

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Part I: FINANCIAL INFORMATION




Item 1. Financial Statements.

XICOR, INC.




CONSOLIDATED BALANCE SHEETS


(Unaudited)


|                                                                     |                                                                              |  |                                            |          |   |                |        |              |   |        |  | 
|-------------------------------------------------------------------- | ---------------------------------------------------------------------------- |  | ------------------------------------------ | -------- | - | -------------- | ------ | ------------ | - | ------ |  | 
|                                                                     |                                                                              |  |                                            |          |   | March 31,      |        | December 31,
|                                                                     |                                                                              |  |                                            |          |   | 2002           |        | 2001        
|                                                                     |                                                                              |  |                                            |          |   |                |        |             
|                                                                     |                                                                              |  |                                            |          |   | (In thousands)
|ASSETS                                                              
|Current assets:                                                      |                                                                              |  |                                            |          |   |                |        |             
|                                                                     | Cash and cash equivalents                                                    |  | $                                          | 52,431   |   |                | $      | 56,367       |  
|                                                                     | Accounts receivable                                                          |  |                                            | 3,715    |   |                |        | 3,501        |  
|                                                                     | Inventories                                                                  |  |                                            | 7,741    |   |                |        | 9,404        |  
|                                                                     | Prepaid expenses and other current assets                                    |  |                                            | 524      |   |                |        | 192          |  
|                                                                     |                                                                              |  |                                            |          |   |                |        |             
|                                                                     |                                                                              |  | Total current assets                       |          |   | 64,411         |        |              |   | 69,464 | 
|Property, plant and equipment,
at cost less accumulated depreciation |                                                                              |  | 4,677                                      |          |   |                | 5,223  |             
|Other assets                                                         |                                                                              |  | 5,806                                      |          |   |                | 5,764  |             
|                                                                     |                                                                              |  |                                            |          |   |                |        |             
|                                                                     |                                                                              |  | Total assets                               |          | $ | 74,894         |        |              | $ | 80,451 | 
|                                                                     |                                                                              |  |                                            |          |   |                |        |             
|LIABILITIES AND SHAREHOLDERS EQUITY                                
|Current liabilities:                                                 |                                                                              |  |                                            |          |   |                |        |             
|                                                                     | Accounts payable                                                             |  | $                                          | 8,400    |   |                | $      | 9,646        |  
|                                                                     | Accrued expenses                                                             |  |                                            | 7,185    |   |                |        | 7,867        |  
|                                                                     | Deferred income on shipments to distributors                                 |  |                                            | 8,291    |   |                |        | 10,465       |  
|                                                                     | Deferred gain on sale of fab assets                                          |  |                                            | 1,452    |   |                |        | 2,082        |  
|                                                                     | Current portion of long-term obligations                                     |  |                                            | 761      |   |                |        | 841          |  
|                                                                     |                                                                              |  |                                            |          |   |                |        |             
|                                                                     |                                                                              |  | Total current liabilities                  |          |   | 26,089         |        |              |   | 30,901 | 
|Convertible subordinated notes                                       |                                                                              |  | 32,048                                     |          |   |                | 31,896 |             
|Long-term obligations                                                |                                                                              |  | 655                                        |          |   |                | 738    |             
|                                                                     |                                                                              |  |                                            |          |   |                |        |             
|                                                                     |                                                                              |  | Total liabilities                          |          |   | 58,792         |        |              |   | 63,535 | 
|                                                                     |                                                                              |  |                                            |          |   |                |        |             
|Shareholders equity:                                                |                                                                              |  |                                            |          |   |                |        |             
|                                                                     | Preferred stock; 5,000 shares authorized                                     |  |                                            |         |   |                |        |             |  
|                                                                     | Common stock; 75,000 shares authorized;
22,444 and 22,339 shares outstanding |  |                                            | 138,109  |   |                |        | 137,775      |  
|                                                                     | Accumulated deficit                                                          |  |                                            | (122,007 | ) |                |        | (120,859     | )
|                                                                     |                                                                              |  |                                            |          |   |                |        |             
|                                                                     |                                                                              |  | Total shareholders equity                 |          |   | 16,102         |        |              |   | 16,916 | 
|                                                                     |                                                                              |  |                                            |          |   |                |        |             
|                                                                     |                                                                              |  | Total liabilities and shareholders equity |          | $ | 74,894         |        |              | $ | 80,451 | 
|                                                                     |                                                                              |  |                                            |          |   |                |        |             

See accompanying notes to consolidated financial information

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XICOR, INC.




CONSOLIDATED STATEMENTS OF OPERATIONS


(Unaudited)


|                                       |                                     |   |                       |        |          |   |         |        |  
|-------------------------------------- | ----------------------------------- | - | --------------------- | ------ | -------- | - | ------- | ------ | -
|                                       |                                     |   | Three Months Ended   
|                                       |                                     |   |                      
|                                       |                                     |   | March 31,             |        | April 1,
|                                       |                                     |   | 2002                  |        | 2001    
|                                       |                                     |   |                       |        |         
|                                       |                                     |   | (In thousands, except
|                                       |                                     |   | per share amounts)   
|                                       |                                     |   |                      
|Net sales                              |                                     | $ | 10,047                |        |          | $ | 24,035  |       
|Cost of sales                          |                                     |   | 5,012                 |        |          |   | 21,519  |       
|                                       |                                     |   |                       |        |          |   |         |       
|                                       | Gross profit                        |   |                       | 5,035  |          |   |         | 2,516  |  
|                                       |                                     |   |                       |        |          |   |         |       
|Operating expenses:                    |                                     |   |                       |        |          |   |         |       
|                                       | Research and development            |   |                       | 3,006  |          |   |         | 3,894  |  
|                                       | Selling, general and administrative |   |                       | 2,996  |          |   |         | 5,967  |  
|                                       | Restructuring charge                |   |                       |       |          |   |         | 3,205  |  
|                                       |                                     |   |                       |        |          |   |         |       
|                                       |                                     |   | 6,002                 |        |          |   | 13,066  |       
|                                       |                                     |   |                       |        |          |   |         |       
|Income (loss) from operations          |                                     |   | (967                  | )      |          |   | (10,550 | )     
|Interest expense                       |                                     |   | (821                  | )      |          |   | (45     | )     
|Interest and other income              |                                     |   | 640                   |        |          |   | 423     |       
|                                       |                                     |   |                       |        |          |   |         |       
|Income (loss) before income taxes      |                                     |   | (1,148                | )      |          |   | (10,172 | )     
|Provision for income taxes             |                                     |   |                      |        |          |   | 61      |       
|                                       |                                     |   |                       |        |          |   |         |       
|Net income (loss)                      |                                     | $ | (1,148                | )      |          | $ | (10,233 | )     
|                                       |                                     |   |                       |        |          |   |         |       
|Net income (loss) per common share:    |                                     |   |                       |        |          |   |         |       
|                                       | Basic                               |   | $                     | (0.05  | )        |   | $       | (0.48  | )
|                                       |                                     |   |                       |        |          |   |         |       
|                                       | Diluted                             |   | $                     | (0.05  | )        |   | $       | (0.48  | )
|                                       |                                     |   |                       |        |          |   |         |       
|Shares used in per share calculations: |                                     |   |                       |        |          |   |         |       
|                                       | Basic                               |   |                       | 22,377 |          |   |         | 21,487 |  
|                                       |                                     |   |                       |        |          |   |         |       
|                                       | Diluted                             |   |                       | 22,377 |          |   |         | 21,487 |  
|                                       |                                     |   |                       |        |          |   |         |       

See accompanying notes to consolidated financial information

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XICOR, INC.




CONSOLIDATED STATEMENTS OF CASH FLOWS


(Unaudited)


|                                                    |                                         |                                                                                      |                                                  |                                              |        |                    |        |               |         |       |        |  
|--------------------------------------------------- | --------------------------------------- | ------------------------------------------------------------------------------------ | ------------------------------------------------ | -------------------------------------------- | ------ | ------------------ | ------ | ------------- | ------- | ----- | ------ | -
|                                                    |                                         |                                                                                      |                                                  |                                              |        | Three Months Ended
|                                                    |                                         |                                                                                      |                                                  |                                              |        |                   
|                                                    |                                         |                                                                                      |                                                  |                                              |        | March 31, 2002     |        | April 1, 2001
|                                                    |                                         |                                                                                      |                                                  |                                              |        |                    |        |              
|                                                    |                                         |                                                                                      |                                                  |                                              |        | (In thousands)    
|Cash flows from operating activities:               |                                         |                                                                                      |                                                  |                                              |        |                    |        |              
|                                                    |                                         | Net income (loss)                                                                    |                                                  | $                                            | (1,148 | )                  |        | $             | (10,233 | )    
|                                                    |                                         | Adjustments to reconcile net income (loss) to cash
provided by operating activities: |                                                  |                                              |        |                    |        |               |         |      
|                                                    |                                         |                                                                                      | Depreciation                                     |                                              |        | 757                |        |               |         | 1,087 |       
|                                                    |                                         |                                                                                      | Amortization of fab gain                         |                                              |        | (630               | )      |               |         | (630  | )     
|                                                    |                                         |                                                                                      | Amortization of debt issuance costs and warrants |                                              |        | 303                |        |               |         |      |       
|                                                    |                                         |                                                                                      | Non-cash restructuring charge                    |                                              |        |                   |        |               |         | 1,249 |       
|                                                    |                                         |                                                                                      | Changes in assets and liabilities:               |                                              |        |                    |        |               |         |       |       
|                                                    |                                         |                                                                                      |                                                  | Accounts receivable                          |        |                    | (214   | )             |         |       | 2,938  |  
|                                                    |                                         |                                                                                      |                                                  | Inventories                                  |        |                    | 1,663  |               |         |       | 7,972  |  
|                                                    |                                         |                                                                                      |                                                  | Prepaid expenses and other current assets    |        |                    | (332   | )             |         |       | (5     | )
|                                                    |                                         |                                                                                      |                                                  | Other assets                                 |        |                    | (193   | )             |         |       | (15    | )
|                                                    |                                         |                                                                                      |                                                  | Accounts payable and accrued expenses        |        |                    | (1,928 | )             |         |       | 1,332  |  
|                                                    |                                         |                                                                                      |                                                  | Deferred income on shipments to distributors |        |                    | (2,174 | )             |         |       | (1,383 | )
|                                                    |                                         |                                                                                      |                                                  |                                              |        |                    |        |              
|Net cash provided by operating activities           |                                         |                                                                                      | (3,896                                           | )                                            |        |                    | 2,312  |              
|                                                    |                                         |                                                                                      |                                                  |                                              |        |                    |        |              
|Cash flows from investing activities:               |                                         |                                                                                      |                                                  |                                              |        |                    |        |              
|                                                    | Investments in plant and equipment, net |                                                                                      |                                                  | (211                                         | )      |                    |        | (644          | )      
|                                                    |                                         |                                                                                      |                                                  |                                              |        |                    |        |              
|Net cash used in investing activities               |                                         |                                                                                      | (211                                             | )                                            |        |                    | (644   | )            
|                                                    |                                         |                                                                                      |                                                  |                                              |        |                    |        |              
|Cash flows from financing activities:               |                                         |                                                                                      |                                                  |                                              |        |                    |        |              
|                                                    | Repayments of long-term obligations     |                                                                                      |                                                  | (163                                         | )      |                    |        | (268          | )      
|                                                    | Net proceeds from sale of common stock  |                                                                                      |                                                  | 334                                          |        |                    |        | 87            |        
|                                                    |                                         |                                                                                      |                                                  |                                              |        |                    |        |              
|Net cash provided by (used in) financing activities |                                         |                                                                                      | 171                                              |                                              |        |                    | (181   | )            
|                                                    |                                         |                                                                                      |                                                  |                                              |        |                    |        |              
|Increase (decrease) in cash and cash equivalents    |                                         |                                                                                      | (3,936                                           | )                                            |        |                    | 1,487  |              
|Cash and cash equivalents at beginning of year      |                                         |                                                                                      | 56,367                                           |                                              |        |                    | 29,121 |              
|                                                    |                                         |                                                                                      |                                                  |                                              |        |                    |        |              
|Cash and cash equivalents at end of period          |                                         | $                                                                                    | 52,431                                           |                                              |        | $                  | 30,608 |              
|                                                    |                                         |                                                                                      |                                                  |                                              |        |                    |        |              
|Supplemental information:                           |                                         |                                                                                      |                                                  |                                              |        |                    |        |              
|Cash
paid (refunded) during the period for:         |                                         |                                                                                      |                                                  |                                              |        |                    |        |              
|                                                    | Interest expense                        |                                                                                      | $                                                | 38                                           |        |                    | $      | 43            |        
|                                                    | Income taxes                            |                                                                                      |                                                  | (24                                          | )      |                    |        | (116          | )      

See accompanying notes to consolidated financial information

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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, 2001 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 4,988,784 and
4,396,300 shares of common stock were outstanding at March 31, 2002, and April
1, 2001, respectively, but were excluded from the earnings per share (EPS)
computation for the three months ended March 31, 2002 and April 1, 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:

|                               |                                     |   |                |         |              |   |        |         |  
|------------------------------ | ----------------------------------- | - | -------------- | ------- | ------------ | - | ------ | ------- | -
|                               |                                     |   | March 31,      |         | December 31,
|                               |                                     |   | 2002           |         | 2001        
|                               |                                     |   |                |         |             
|                               |                                     |   | (In thousands)
|Inventories:                   |                                     |   |                |         |              |   |        |        
|                               | Raw materials and supplies          |   | $              | 208     |              |   | $      | 212     |  
|                               | Work in process                     |   |                | 5,799   |              |   |        | 7,252   |  
|                               | Finished goods                      |   |                | 1,734   |              |   |        | 1,940   |  
|                               |                                     |   |                |         |              |   |        |        
|                               |                                     | $ | 7,741          |         |              | $ | 9,404  |        
|                               |                                     |   |                |         |              |   |        |        
|Property, plant and equipment: |                                     |   |                |         |              |   |        |        
|                               | Leasehold improvements              |   | $              | 2,788   |              |   | $      | 2,725   |  
|                               | Equipment                           |   |                | 36,190  |              |   |        | 37,118  |  
|                               | Furniture and fixtures              |   |                | 279     |              |   |        | 345     |  
|                               | Construction in progress            |   |                | 119     |              |   |        | 39      |  
|                               |                                     |   |                |         |              |   |        |        
|                               |                                     |   | 39,376         |         |              |   | 40,227 |        
|                               | Accumulated depreciation            |   |                | (34,699 | )            |   |        | (35,004 | )
|                               |                                     |   |                |         |              |   |        |        
|                               |                                     | $ | 4,677          |         |              | $ | 5,223  |        
|                               |                                     |   |                |         |              |   |        |        
|Accrued expenses:              |                                     |   |                |         |              |   |        |        
|                               | Accrued wages and employee benefits |   | $              | 1,223   |              |   | $      | 1,412   |  
|                               | Accrued restructuring liabilities   |   |                | 215     |              |   |        | 691     |  
|                               | Other accrued expenses              |   |                | 5,747   |              |   |        | 5,764   |  
|                               |                                     |   |                |         |              |   |        |        
|                               |                                     | $ | 7,185          |         |              | $ | 7,867  |        
|                               |                                     |   |                |         |              |   |        |        

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Accounts receivable:

Accounts receivable at March 31, 2002 and December 31, 2001 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.

During 2001, Xicor reduced its workforce by approximately 140 employees
and utilized $3.1 million of the restructuring reserve for related severance
costs and $0.7 million for other restructuring related costs. At December 31,
2001, the restructuring accrual of $0.7 million consisted of $0.4 million of
severance costs (including costs to reduce the workforce by approximately 10
employees primarily in sales and administrative groups) and $0.3 million of
other costs associated with vacated sales offices.

In the three months ended March 31, 2002, Xicor completed the previously
accrued reduction in workforce and utilized $0.3 million of the restructuring
reserve for related severance costs and $0.2 million for other restructuring
related costs. At March 31, 2002, the restructuring accrual of $0.2 million
consisted of $0.1 million of severance costs payable to terminated employees
and $0.1 million of other costs associated with vacated sales offices.

Note 5. 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
mixed-signal, nonvolatile, Digitally Programmable Potentiometer products.

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Note 6. Subsequent Events

On April 16, 2002, Xicor acquired Analog Integration Partners, LLC (AIP)
for approximately $15 million, consisting of 1,012,761 shares of Xicor common
stock and cash of $5 million. AIP, a privately held company, designs and
develops high-performance analog signal processing and data conversion
circuits. AIP implements high frequency analog front end technology and signal
processing solutions in standard digital logic processes. The use of fine-line
and deep sub-micron CMOS has enabled the company to develop cost effective,
high-performance analog mixed-signal products with significant performance
improvements compared to existing solutions. Xicor will account for the
transaction using the purchase method of accounting.




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, 2001. The results
of operations for the three months ended March 31, 2002 are not necessarily
indicative of results to be expected in future periods.

RESULTS OF OPERATIONS

Sales

Sales for the first quarter of 2002 were $10.0 million and included a benefit
of $0.4 million resulting from Xicor putting all global distribution partners
on Xicors fiscal calendar. This change was made in connection with the
realignment of Xicors distribution channel to better serve fulfillment and
demand creation efforts.

Xicors sales are derived from two product groups, mixed-signal products and
memory products. Mixed-signal product sales represent Xicors core market.
Memory product sales comprise Xicors legacy businesses of serial EEPROMs,
which Xicor is in the process of exiting, and parallel EEPROMs, which business
Xicor is retaining. Sales by product group were:

|                           |  |                |        |         |  |   |        | 
|-------------------------- |  | -------------- | ------ | ------- |  | - | ------ | 
|                           |  | Q1 2002        |        | Q1 2001
|                           |  |                |        |        
|                           |  | (In thousands)
|Mixed-signal product sales |  | $              | 4,802  |         |  | $ | 10,847 | 
|Memory product sales       |  |                | 5,245  |         |  |   | 13,188 | 
|                           |  |                |        |         |  |   |        | 
|Total sales                |  | $              | 10,047 |         |  | $ | 24,035 | 
|                           |  |                |        |         |  |   |        | 

Overall economic and industry-wide conditions were weak in 2001, and while
mixed-signal sales were level sequentially in the first two quarters of 2001,
mixed-signal sales declined in the second half of 2001 on lower unit sales.
Sales of mixed-signal products for the first quarter of 2002 remained
relatively stable at $4.8 million compared to $5.0 million in the fourth
quarter of 2001.

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Memory product sales declined 60% from the first quarter of 2001 compared to
the first quarter of 2002 principally due to a decline in serial EEPROM sales
from $7.6 million to $1.7 million as Xicor continues to exit from that business
and, to a lesser extent, lower unit shipments of parallel EEPROMs.

Xicor believes that 2002 will be a challenging year for the mixed-signal
business as the difficult industry conditions experienced in 2001 extend into
2002. Serial EEPROM sales are expected to decline significantly in 2002
compared to 2001 as Xicor completes the exit from that business in 2002. As a
result, Xicor expects total sales for 2002 to be significantly below 2001
levels and anticipates incurring losses in 2002.

Cost of Sales and Gross Profit

Gross profit as a percentage of sales was 50% in the first quarter of 2002 and
10% in the first quarter of 2001. 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 45% in the first quarter of 2001. The gross profit percentage in
the first quarter of 2002 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 amortization of
$0.6 million of the deferred gain on the sale of the fab assets over a lower
sales level and lower costs associated with the shift to fully outsourced
manufacturing. These benefits were partially offset by lower absorption of
fixed costs as manufacturing volumes were reduced in the first quarter of 2002
due to the weak industry-wide economic conditions. 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

Research and development expenses amounted to $3.0 million or 30% of sales in
the first quarter of 2002 compared to $3.9 million or 16% of sales in the first
quarter of 2001. While research and development expenses increased as a
percentage of sales in the first quarter of 2002 compared to the first quarter
of 2001 due to the lower sales level, the dollar amount of research and
development expenses decreased, primarily due to lower personnel costs and
spending controls.

Selling, General and Administrative

Selling, general and administrative expenses amounted to $3.0 million or 30% of
sales in the first quarter of 2002 compared to $6.0 million or 25% of sales in
the first quarter of 2001. The decrease in the dollar amount of selling,
general and administrative expenses in the first quarter of 2002 compared to
the first quarter of 2001 is primarily due to headcount reductions and lower
commission expenses related to the decreased sales in 2002.

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Restructuring

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 three months ended March 31, 2002, Xicor completed the previously
accrued reduction in workforce and utilized $0.3 million of the restructuring
reserve for related severance costs and $0.2 million for other restructuring
related costs. Xicor is continuing to focus on sizing its workforce
commensurate with the sales levels and industry conditions.

At March 31, 2002,
the restructuring accrual of $0.2 million consisted of $0.1 million of
severance costs payable to terminated employees and $0.1 million of other costs
associated with vacated sales offices.

Other Income and Expense

Interest expense increased in the first quarter of 2002 compared to the first
quarter of 2001 due to interest expense and amortization resulting from Xicors
November 2001 issuance of $35 million of 5.5% convertible subordinated notes
and warrants. Interest expense will increase in 2002 compared to 2001 as the
convertible subordinated notes and warrants will be outstanding for the full
year.

Interest and other income for the
quarter ended March 31, 2002 included a one-time benefit of
$400,000 associated with the sale of the Company's wafer fabrication
facility in 2000. Interest income was $240,000 in the first quarter
of 2002 compared to $423,000 in the first quarter of 2001. Interest
income decreased primarily as a result of lower interest rates, the
effect of which was partially offset by an increase in the average
balance invested caused primarily by funds generated from the
November 2001 issuance of convertible subordinated notes and
warrants. Interest income is expected to decrease in 2002 compared to
2001 due to lower interest rates, partially offset by the higher
average balance invested caused primarily by funds generated from the
November 2001 issuance of convertible subordinated notes and warrants.

Taxes

The provision for income taxes for 2001 consisted primarily of federal and
state minimum taxes, which resulted from limitations on the use of net
operating loss carryforwards, and foreign taxes. No taxes were provided in
2002 due to the net loss. Net deferred tax assets at March 31, 2002 and
December 31, 2001 were fully reserved because of the uncertainty regarding the
ultimate realization of these assets.

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LIQUIDITY AND CAPITAL RESOURCES

At March 31, 2002, Xicor had $52.4 million in cash and cash equivalents
compared to $56.4 at the end of 2001. During the three months ended March 31,
2002, Xicor used $3.9 million of cash in operating activities (including $0.5
million associated with restructuring activities), $0.2 million to repay
long-term obligations and $0.2 million for equipment purchases. During the
same time period, Xicor generated $0.3 million from the issuance of stock under
employee stock plans.

In April 2002, Xicor acquired AIP for approximately $15 million, consisting of
Xicor common stock and $5 million in cash. During the balance of 2002, Xicor
also expects to use cash in operating activities (including interest payments
on the convertible note), to repay long-term obligations and purchase
equipment. Capital expenditures for 2002 are currently planned at
approximately $1.2 million and are primarily related to product design and
equipment for product test development. At March 31, 2002, Xicor had entered
into commitments for equipment purchases aggregating less than $0.2 million.
Management believes that currently available cash will be adequate to support
Xicors operations for the next twelve months.

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 the belief that 2002 will
be a challenging year for the mixed-signal business as the difficult industry
conditions experienced in 2001 extend into 2002; the expectation for serial
EEPROM sales to decline significantly in 2002 compared to 2001; the plan to
complete our exit from the serial EEPROM business in 2002; the expectation that
total sales for 2002 will be significantly below 2001 levels; the anticipation
that Xicor will incur losses in 2002; 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 expectation that
interest expense will increase in 2002 compared to 2001 as the convertible
subordinated notes and warrants are expected to be outstanding for the full
year; the expectation that interest income will decrease in 2002 compared to
2001 due to lower interest rates, the expectation to use cash in 2002
in operating activities, to repay long-term debt and purchase
equipment; and the
expectation that currently available cash will be adequate to support
operations for the next twelve months.

Except for historical information, the
matters discussed in this Quarterly Report
on Form 10-Q are forward-looking statements that 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 following; general economic conditions and conditions specific to
the semiconductor industry; fluctuations in customer demand, including loss of
key customers, order cancellations or reduced bookings; product mix;
competitive factors such as pricing pressures on existing products and the
timing and market acceptance of new product introductions (both by Xicor and
its competitors); Xicors ability to have available an appropriate amount of
low cost foundry production capacity in a timely manner; our foundry partners
timely ability to successfully manufacture products for Xicor using Xicors
proprietary technology; any disruptions of our foundry relationships;
manufacturing efficiencies; the ability to continue

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effective cost reductions; currency fluctuations; the timely development and
introduction of new products and submicron processes, and 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, 2001.
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 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 has been
unable to secure a buyer for the business, particularly in light of the current
weak economic conditions, and plans to complete its exit from that business in
2002.

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The transition out of the serial EEPROM memory business has reduced Xicors
revenues and 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 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 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. 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.

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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 out sources all manufacturing operations. Our reliance on third-party
foundries and subcontractors to manufacture our products and to 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.

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.

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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.

In 2001 we invested in a company whose stock is not publicly traded. They
completed a round of funding in the first quarter of 2002 and are pursuing
additional funding. If they cannot obtain additional funding at a valuation
that is at least equivalent to our investment valuation, this could result in a
decline in the value of our investment, thereby possibly requiring an
impairment charge in the future.

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 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 semiconductor companies such as Analog Devices, Atmel
Corporation, Catalyst Semiconductor and Maxim, most 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

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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 and loans and 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. 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. In 2001 we 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

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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 52% of total sales in the
first quarter of 2002. 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 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 facility
in the State of California may be subject to electrical blackouts due to a
shortage of available electrical power. If these blackouts were to occur, 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.

We may face interruption of production and services due to increased security
measures in response to recent and potential future terrorist activities.

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 these 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

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whether other attacks may occur in the future and the effects of such attacks
on our business could be severe.

Our November 2001 debt financing substantially increased our indebtedness which
may make it more difficult to obtain financing in the future and cause our
business to suffer.

As a result of our November 2001 sale of notes and warrants, we incurred $35
million of additional indebtedness. The level of our indebtedness, among other
things, could make it difficult for us to obtain any necessary financing in the
future for working capital, capital expenditures, debt service requirements or
other purposes; limit our flexibility in planning for, or reacting to changes
in, our business; and make us more vulnerable in the event of a downturn in our
business. If any of these risks materialize we may be unable to successfully
execute our business plan.

Our business could be harmed if the net proceeds from the November 2001 debt
financing is used ineffectively.

We have flexibility in applying the net proceeds of the debt financing. We
intend to use the proceeds of this offering for working capital and general
corporate purposes. We may also use the proceeds for acquisitions, including
acquisitions of intellectual property and design teams, if appropriate
candidates can be identified and mutually acceptable terms can be agreed upon.
These purposes could also include funding research, development, sales and
marketing and capital expenditures. The failure to apply these net proceeds
effectively could harm our business, results of operations and financial
condition.

The conversion of our outstanding convertible debt and exercise of warrants
issued in connection with our convertible debt may result in dilution to
holders of our common stock and a reduction in the price of our common stock.

In November 2001 we issued $35 million in convertible notes and related
warrants. The convertible notes enable the holders to convert principal
amounts owed under the notes into an aggregate of approximately 3.1 million
shares of common stock at a conversion price of $11.22 per share. In
connection with the issuance of the convertible notes we also issued warrants
for the purchase of approximately one million shares of common stock that are
exercisable at a price of $12.24 per share. If the price of our common stock
exceeds the conversion price of the notes and exercise price of the warrants,
holders of the notes and warrants may convert the debt and exercise the
warrants. Xicor may force the conversion of all or a portion of the notes and
warrants in certain circumstances. Our issuance of common stock at prices of
$11.22 per share upon conversion of the debt and $12.24 per share upon exercise
of the warrants may result in dilution to other holders of common stock and may
cause the price of our common stock to fall. In addition, if note and warrant
holders elect to sell the common stock issued upon the conversion of the debt
and exercise of the warrants, the price of our common stock may fall.

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.

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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 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.

We may fail to successfully integrate our business and technologies with those
of the company that we recently acquired.

We completed our first acquisition in April 2002. If we fail to integrate this
business successfully or properly, our quarterly and annual results may be
seriously harmed. Integrating people, technology and services with our
existing business could be expensive, time-consuming and a strain on our
resources. Specific issues that we face with regard to our acquisition include
the difficulty of integrating acquired technology, the potential disruption of
our ongoing business and distraction of management, the failure to successfully
develop acquired technology resulting in the impairment of amounts
capitalized as intangible assets, unanticipated expenses related to technology
integration and the potential unknown liabilities associated with the acquired
business.




Item 7A. Quantitative and Qualitative Disclosures About Market Risk

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.

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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 March 31, 2002.




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: May 14, 2002

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