<PAGE>   1
                                  UNITED STATES
                       SECURITIES AND 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 June 29, 1997.

 [ ]     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: 0-18738

                                   ZILOG, INC.
                                  (Registrant)


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

           210 East Hacienda Avenue, Campbell, California, 95008-6600
                    (Address of principal executive offices)

       Registrant's telephone number, including area code: (408) 370-8000


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




  20,234,226 Shares of Common Stock Issued and Outstanding as of July 27, 1997.






<PAGE>   2


Part I.  FINANCIAL INFORMATION
Item 1.  Financial Statements


                                  ZILOG, INC.
            CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Unaudited)
                    (in thousands, except per share amounts)



<TABLE>
<CAPTION>
                                                Three Months Ended               Six Months Ended
                                            -------------------------       -------------------------
                                             June 29,        June 30,        June 29,        June 30,
                                              1997             1996            1997            1996
                                            ---------       ---------       ---------       ---------
<S>                                         <C>             <C>             <C>             <C>
 Sales                                      $  71,258       $  85,459       $ 141,394       $ 166,458

 Costs and expenses:
   Cost of sales                               45,547          47,534          89,575          90,475
   Research and development                     8,119           7,412          14,751          14,999
   Selling, general and administrative         12,330          11,477          24,382          23,514
                                            ---------       ---------       ---------       ---------
                                               65,996          66,423         128,708         128,988
                                            ---------       ---------       ---------       ---------

 Operating income                               5,262          19,036          12,686          37,470

 Other income (expense):
   Interest income                                784             705           1,448           1,438
   Interest expense                               (69)            (82)           (138)           (163)
   Other, net                                     629            (726)           (251)         (1,094)
                                            ---------       ---------       ---------       ---------
 Income before income taxes                     6,606          18,933          13,745          37,651

 Provision for income taxes                     1,904           6,533           4,260          13,178
                                            ---------       ---------       ---------       ---------

 Net income                                 $   4,702       $  12,400       $   9,485       $  24,473
                                            =========       =========       =========       =========


 Net income per share                       $    0.23       $    0.60       $    0.46       $    1.19
                                            =========       =========       =========       =========

 Number of shares used in computing
 per share amounts                             20,416          20,662          20,658          20,523
                                            =========       =========       =========       =========
</TABLE>




                            See accompanying notes.







                                       2

<PAGE>   3
                                  ZILOG, INC.
                     CONDENSED CONSOLIDATED BALANCE SHEETS
                             (dollars in thousands)
<TABLE>
<CAPTION>
                                                           June 29,      December 31,
                                                            1997             1996
                                                          ---------       ---------
                                                          (Unaudited)
 <S>                                                      <C>             <C>
                                                                     ASSETS
 Current assets:
   Cash and cash equivalents                              $   7,776       $  15,511
   Short-term investments                                    69,034          53,412
   Accounts receivable, less allowance for doubtful
      accounts of $250 in 1997 and 1996                      36,817          29,395
   Inventories                                               29,695          34,469
   Prepaid expenses, deferred income taxes and
      other current assets                                   17,700          15,516
                                                          ---------       ---------
           Total current assets                             161,022         148,303

 Property, plant and equipment, at cost                     399,379         379,928
 Less: accumulated depreciation and amortization           (160,279)       (131,217)
                                                          ---------       ---------
   Net property, plant and equipment                        239,100         248,711
 Other assets                                                 2,890           4,052
                                                          ---------       ---------
                                                          $ 403,012       $ 401,066
                                                          =========       =========

                      LIABILITIES AND SHAREHOLDERS' EQUITY

 Current liabilities:
   Accounts payable                                       $  18,117       $  28,786
   Accrued compensation and employee benefits                17,738          17,545
   Other accrued liabilities                                  3,821           5,116
   Income taxes payable                                      11,034           8,289
                                                          ---------       ---------
           Total current liabilities                         50,710          59,736

 Deferred income taxes                                       16,050          16,050

 Shareholders' equity:
  Common Stock, $.01 par value; 75,000,000 shares
   authorized; 20,229,412 shares issued and
   outstanding at June 29, 1997 (20,127,976 shares
   at December 31, 1996)                                        202             201
  Additional paid-in capital                                163,098         161,599
  Retained earnings                                         172,860         163,375
  Net unrealized gain on securities                              92             105
                                                          ---------       ---------
           Total shareholders' equity                       336,252         325,280
                                                          ---------       ---------

                                                          $ 403,012       $ 401,066
                                                          =========       =========
</TABLE>

                            See accompanying notes.









                                       3

<PAGE>   4
                                  ZILOG, INC.
          CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
                Increase (decrease) in cash and cash equivalents
                             (dollars in thousands)
<TABLE>
<CAPTION>
                                                                  Six Months Ended 
                                                              -----------------------
                                                              June 29,        June 30,
                                                                1997           1996
                                                              --------       --------
 <S>                                                          <C>            <C>
 Cash flows from operating activities:
  Net income                                                  $  9,485       $ 24,473
   Adjustments to reconcile net income to cash
   provided by operating activities:
      Depreciation and amortization                             31,151         21,093
      Loss from disposition of equipment                            24             96
   Changes in assets and liabilities:
      Accounts receivable                                       (7,422)         1,450
      Inventories                                                4,774         (5,940)
      Prepaid expenses, deferred income taxes and
        other assets                                            (1,032)        (1,813)
      Accounts payable                                         (10,669)         3,426
      Accrued compensation and employee benefits                   193           (139)
      Other accrued liabilities and income taxes payable         1,450          2,250
                                                              --------       --------

      Cash provided by operating activities                     27,954         44,896
                                                              --------       --------

 Cash flows from investing activities:
    Capital expenditures                                       (21,230)       (75,161)
    Short-term investments:
      Purchases                                                (46,553)       (17,552)
      Proceeds from sales                                       19,261         31,141
      Proceeds from maturities                                  11,333         12,592
                                                              --------       --------

           Cash used for investing activities                  (37,189)       (48,980)
                                                              --------       --------

 Cash flows from financing activities:
   Proceeds from issuance of stock                               1,500         11,101
                                                              --------       --------

 Increase (decrease) in cash and cash equivalents               (7,735)         7,017
 Cash and cash equivalents at beginning of period               15,511          7,784
                                                              --------       --------

 Cash and cash equivalents at end of period                   $  7,776       $ 14,801
                                                              ========       ========
</TABLE>


                            See accompanying notes.






                                       4
<PAGE>   5
                                  ZILOG,  INC.


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

1)  Interim information is unaudited; however, in the opinion of the Company's
    management, all adjustments (consisting only of normal recurring
    adjustments), necessary for a fair statement 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 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 Annual
    Report to Shareholders and the Company's Annual Report on Form 10-K for the
    year ended December 31, 1996. The Consolidated Balance Sheet at December 31,
    1996 has been derived from audited financial statements at that date.

2)  The following is a summary of total securities, which are all held as
    available-for-sale (in thousands):

<TABLE>
<CAPTION>
                                                        June 29, 1997
                              -----------------------------------------------------------------------------
                                                  Gross                   Gross                  Estimated
                              Cost              Unrealized               Unrealized                 Fair
                                                   Gains                   Losses                  Value
                              -----------------------------------------------------------------------------
<S>                           <C>                   <C>                      <C>                    <C>
Municipal Bonds               $68,902               $140                     $(8)                   $69,034
                              =============================================================================
</TABLE>



The gross realized gains and losses on sales have not been material for the
three and six month periods ended June 29, 1997 and June 30, 1996.

The amortized cost and estimated fair value of marketable debt securities are
shown below (in thousands):


<TABLE>
<CAPTION>
                                                              June 29, 1997
                                                        ----------------------------
                                                                         Estimated
                                                          Cost             Fair
                                                                           Value
                                                        -------          -------
 <S>                                                    <C>              <C>
 Due in 1 year or less                                  $48,109          $48,165
 Due after 1 year through 3 years                        19,293           19,370
 Due after 3 years                                        1,500            1,499
                                                        -------          -------
 Total debt securities                                  $68,902          $69,034
                                                        =======          =======
</TABLE>





                                       5
<PAGE>   6
3)  The components of inventories are as follows (in thousands):

<TABLE>
<CAPTION>
                                                     June 29,           December 31,
                                                       1997                1996
                                                     -------             -------
    <S>                                              <C>                 <C>
    Raw Materials                                    $ 4,834             $ 5,385
    Work-in-process                                   20,746              23,412
    Finished goods                                     4,115               5,672
                                                     -------             -------
                                                     $29,695             $34,469
                                                     =======             =======
 
</TABLE>


4)  In February 1997, the Financial Accounting Standards Board issued Statement
    No. 128, Earnings per Share, which is required to be adopted on December 31,
    1997. At that time, the Company will be required to change the method
    currently used to compute earnings per share and to restate all prior
    periods. Under the new requirements for calculating primary earnings per
    share, the dilutive effect of stock options will be excluded. Basic EPS
    calculated in accordance with Statement No. 128 would be the same net income
    per share for the second quarter ended June 29, 1997 and greater net income
    per share for the second quarter ended June 30, 1996 by $0.02 per share. For
    the six months ended June 29, 1997 and June 30, 1996, net income per share
    would be greater by $.01 and $.05 per share, respectively. Diluted earnings
    per share for the periods reported approximates net income per share as
    reported.

5)  The Company changed the state of incorporation from California to Delaware
    in May of 1997. As a result of that change, no par Common Stock became $.01
    par Common Stock under the State of Delaware Corporation laws. As of
    December 31, 1996, the Balance Sheet has been retroactively adjusted to
    reflect the $.01 par value.

6)  On July 21, 1997, the Company announced that it would be purchased by TPG
    Partners II, L.P. for $25 per share, subject to the satisfaction of certain
    conditions prior to closing. The transaction is being accounted for as a
    recapitalization, which would result in TPG owning 90% of the voting shares.
    For further information, see "Proposed Merger with Texas Pacific Group" at
    page 10.

PRIVATE SECURITIES LITIGATION REFORM ACT SAFE HARBOR STATEMENT:

         When used in this Report, the words "estimate," "project," "intend,"
and "expect" and similar expressions are intended to identify forward-looking
statements. Such statements are subject to risks and uncertainties that could
cause actual results to differ materially. For a discussion of certain of such
risks, see "Factors That May Affect Future Results." Readers are cautioned not
to place undue reliance on these forward-looking statements, which speak only as
of the date hereof. The Company undertakes no obligation to publicly release
updates or revisions to these statements.









                                        6

<PAGE>   7

PART I.  FINANCIAL INFORMATION

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


The following table presents 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 per share amounts and percentages.


RESULTS OF OPERATIONS

<TABLE>
<CAPTION>
                                Three Months Ended           Six Months Ended
                              ----------------------      ----------------------
                              June 29,      June 30,       June 29,     June 30,
                                1997          1996          1997          1996
                              --------      --------      --------      --------
 <S>                          <C>           <C>           <C>           <C>
 Sales                        $ 71,258      $ 85,459      $141,394      $166,458
 Operating Income             $  5,262      $ 19,036      $ 12,686      $ 37,470
 Net Income                   $  4,702      $ 12,400      $  9,485      $ 24,473
 Net Income Per Share         $   0.23      $   0.60      $   0.46      $   1.19
</TABLE>



Sales

         The Company's quarterly operating results have and will vary because
of a number of factors, including the timing and success of new product
introductions, changes in product mix, volume, timing and shipment of orders
and fluctuations in manufacturing productivity.  Quarter- to-quarter sales
comparisons are also subject to customer order patterns and seasonality.
Because the Company's products are available from both the Company and
distributors, the customer's decision to buy from a distributor or directly
from the Company can affect Zilog's quarterly sales and profitability.  See
"Factors That May Affect Future Results" for a discussion of additional
considerations which may affect the Company's future operating results.





                                        7

<PAGE>   8

         Sales decreased 16.6% for the second quarter of 1997 from the
comparable quarter of 1996, and decreased 15.1% for the first half of 1997
compared to the same period of 1996.  During the quarter, sales decreased
primarily because of lower modem sales in the datacommunications market.
Overall unit volume has increased in the second quarter of 1997 when compared
to the same quarter of 1996.  However, volume growth was offset by lower
average selling prices.  The Company currently anticipates that revenues for
the three months ended September 28, 1997 will not exceed the revenues
generated during the three months ended June 29, 1997.

         During the second quarter of 1997, over-capacity in the industry led
to price pressure on many of the Company's product lines.  The Company is
uncertain for how long this trend may continue.  Domestic sales accounted for
39.0% of revenues in the second quarter of 1997, representing a decrease from
the second quarter of 1996 when domestic sales accounted for 47.6% of revenues.
The fastest growing international area is Hong Kong.


<TABLE>
<CAPTION>
                                Three Months Ended              Six Months Ended
                            -------------------------       -------------------------
                             June 29,       June 30,        June 29,        June 30,
                               1997           1996            1997             1996
                            ---------       ---------       ---------       ---------
 <S>                        <C>             <C>             <C>             <C>
 Cost of Sales              $  45,547       $  47,534       $  89,575       $  90,475
 Percentage of Sales             63.9%           55.6%           63.4%           54.4%
</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.  Cost of sales increased as a percentage of sales in the second
quarter of 1997 to 63.9% from 55.6% in the same quarter of 1996.  For the six
months ending June 29, 1997, cost of sales increased to 63.4% from 54.4%
compared with the same period of 1996.  The increase in the percentage of cost
of sales to sales for both the second quarter of 1997 and for the year to date
was attributable to additional depreciation expenses, lower average selling
prices and a shift in product mix.


<TABLE>
<CAPTION>
                                    Three Months Ended             Six Months Ended
                                 -----------------------       -------------------------
                                  June 29,       June 30,       June 29,        June 30,
                                   1997           1996           1997            1996
                                 --------       --------       ---------       ---------
 <S>                             <C>            <C>            <C>             <C>
 Research and Development        $  8,119       $  7,412       $  14,751       $  14,999
 Percentage of Sales                 11.4%           8.7%           10.4%            9.0%
</TABLE>


         Research and development expenditures increased during the second
quarter of 1997 in absolute dollars and  as a percentage of sales when compared
to the same period of 1996.  The increase in research and development dollars
for the second quarter of 1997 is primarily attributable to an increase in
costs for outside consulting services associated with new product development.













                                       8


<PAGE>   9
         The Company introduced nine new products during the quarter.  Of
these, six products were for the consumer market and three for the
datacommunications market.

         The Company plans to invest a major portion of its estimated $50
million capital expenditures budget for 1997 in a new research facility with
the capability of designing to a .35 micron feature size in mixed signal
processes.  The Company believes that achieving commercial production of this
process will be important to continued introduction of new products in its
chosen markets.  The Company remains committed to new product development and
manufacturing process technology.


<TABLE>
<CAPTION>
                                                 Three Months Ended              Six Months Ended
                                            -------------------------       -------------------------
                                             June 29,         June 30,       June 29,        June 30,
                                              1997             1996            1997           1996
                                            ---------       ---------       ---------       ---------
<S>                                              <C>             <C>             <C>           <C>
Selling, General and Administrative         $  12,330       $  11,477       $  24,382       $  23,514
Percentage of Sales                              17.3%           13.4%           17.2%           14.1%
</TABLE>


         Selling, general and administrative expenses increased in dollars and
as a percentage of sales during the second quarter of 1997 when compared to the
same period of the prior year.  The increase in the dollar amount of selling,
general and administrative expenses during the quarter is essentially due to
recruiting and sales-related expenses.  The increase in selling, general and
administrative expenses as a percentage of sales in the second quarter of 1997,
as compared to the same period of 1996, is attributable to lower sales in 1997.


<TABLE>
<CAPTION>
                                   Three Months Ended            Six Months Ended
                                 ---------------------        ---------------------
                                  June 29,     June 30,       June 29,       June 30
                                   1997          1996           1997          1996
                                 --------       ------        --------       ------
<S>                              <C>            <C>           <C>            <C>
Other Income (Expense), net      $  1,344       $ (103)       $  1,059       $  181
Percentage of Sales, net              1.9%        (0.1%)           0.7%         0.1%
</TABLE>


         Other income net increased to $1,344 in income in the second quarter of
1997 from $103 of expenses for the same period in 1996. The primary reason for
the increase was that the Company received royalty income for two quarters
during the second quarter of 1997 because a licensee withheld royalty payments
during the first quarter of 1997 while renegotiating an extension of a license
agreement. The agreement was successfully renegotiated during the second quarter
of 1997 and resulted in a royalty payment for two quarters. Royalty income is
dependent on end user volume and can vary significantly from quarter to quarter.





                                       9
<PAGE>   10


Taxes

         The provision for income taxes was 31.0% for the six months ended June
29, 1997 compared to 35.0% for the same period of 1996. The lower tax provision
for 1997 is primarily attributable to a larger impact of tax exempt revenue and
foreign income taxed at a lower than U.S. rate.


Proposed Merger with Texas Pacific Group

         On July 21, 1997, the Company announced that it signed an Agreement and
Plan of Merger with TPG Partners II, L.P. Pursuant to that Agreement, TPG will
purchase approximately 93.3% interest in Zilog for $25.00 per share. The
remaining shares will be retained by existing shareholders of the Company to
permit the transaction to be afforded recapitalization accounting treatment.
Warburg, Pincus Capital Co. L.P. and related affiliates ("Warburg") have
committed to elect to retain up to 400,000 shares, ensuring that all
shareholders who do not elect to retain stock in the Company will receive $25.00
in cash for their shares.

         Following the merger, TPG will own approximately 90% of Zilog's voting
common stock and the shares to be retained will represent the remaining 10% of
the voting shares. In addition, TPG will own non-voting common stock that will
increase its overall economic interest in Zilog to approximately 93.3%. The
shares to be retained will have an economic interest of approximately 6.7%. It
is not expected that Zilog will have publicly listed shares following the
merger.

         The Board of Directors of Zilog has approved the merger agreement. The
merger, which is subject to completion of the contemplated financing, requires
Zilog shareholder and regulatory approvals and is expected to be consummated
early in the fourth quarter of 1997. Warburg has agreed to vote its shares,
which represent approximately 27% of Zilog's current shares outstanding, in
favor of the merger. The Company has filed a Merger Agreement as an Exhibit to
its Form 8-K filed with the Securities and Exchange Commission on July 22, 1997.


Factors That May Affect Future Results

         A number of uncertainties exist that may affect the Company's future
operating results, including efffects of the announcement of the planned merger,
uncertain political and general economic conditions, market acceptance of the
Company's new products, the Company's ability to introduce new products and
technologies on a timely basis, changes in product mix or fluctuations in
manufacturing yield that affect the Company's gross margins, and numerous
competitive factors.

         The present increased activity in mergers and acquisitions in the
electronics marketplace involves Zilog and Zilog's customers. When such mergers
and acquisitions occur at Zilog's customers, there may be some interruption in
customer ordering patterns as inventories are rebalanced, or the historic Zilog
revenue stream with the customer may change significantly as new ownership
redirects marketing priorities.





                                       10
<PAGE>   11

         During 1996, Zilog introduced a total of 48 new products for its
datacommunications, intelligent peripheral controller and consumer product
lines.  The success of these new products is dependent on a number of factors,
including the Company's ability to continue to achieve design wins for these
products and the  Company's ability to manufacture the products in sufficient
quantities to meet anticipated demand.  New products may exhibit technological
defects which may impede market acceptance if defects are not resolved
promptly.  The Company believes that a significant portion of its future
revenues will come from these new products.  Gross margins for new products are
generally higher and are expected to somewhat offset price reductions in older
products.

         The Company's operating results will depend, to a significant extent,
on its ability to continue to introduce 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,
development of support tools and collateral literature that make complex new
products easy for engineers to understand as well as use, and market acceptance
of customers' end products.

         During the second quarter of 1997, Zilog introduced 9 new products.
There can be no assurance that any new products will receive or maintain
substantial market acceptance, nor can there be assurance that the Company will
continue to introduce new products at a similar pace to that established over
the past year.

         Operating results could be adversely affected if the Company is unable
to develop and implement new design and process technologies.  Design and
process technology advances are extremely complex areas subject to rapid
technological change and significant risk.  New product designs must be
completed in time to meet market requirements, and volume production of new
products at acceptable yields must be achieved for business plan operating
results to be realized.  New products anticipated from and introduced by Zilog
could create uncertainty in the marketplace and cause customers to defer or
alter design wins or purchasing decisions.  Additionally, new products or
product enhancements from competitors of  the Company, or significant pricing
pressures, could have an adverse impact on the Company's operating results.

         As is typical in the semiconductor industry, the Company has from time
to time experienced lower than anticipated production yields.  Operating
results could be adversely affected if any problems occur that make it
difficult to produce the quantities of commercial product that the Company
anticipates producing in its Mod III facility and its new research and
development fabrication line expected to begin operations in 1997.  Such
difficulties include but are not limited to: equipment being delivered later
than or not performing as expected; process technology changes not operating as
expected; engineers not operating equipment as expected; and other possible
problems.  The Company cannot at this time foresee with certainty any such
problems, but such problems have occurred in the past in the start-up and ramp
of production in  new facilities.  The Company is also experiencing certain
inflationary pressures in labor and materials.  Operating results could be
affected if the Company is unable to pass these cost increases in labor, raw
materials and capital equipment through to the Company's customers.





                                       11

<PAGE>   12

         The Company has used outside wafer foundries and assemblers to supply a
portion of its manufacturing needs, and the Company expects to continue to rely
on one or more wafer foundries and assemblers for a portion of its manufacturing
needs. No assurance can be given that these foundries will not raise prices or
meet expected delivery quantities. In addition, no assurance can be given that
the Company or its outside wafer foundries or assemblers will not experience
production yield problems in the future which could result in an adverse effect
on the Company's results of operations. The prolonged failure of the Company to
increase production capacity, obtain wafers or assembly services from outside
suppliers as needed could adversely affect the Company's operating results.

         Certain of the Company's products are incorporated into disk drives,
printers, keyboards and modems. As a result, a slowdown in the demand for
personal computers and related peripherals 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 telephone answering machines. The consumer
electronics markets are subject to volatile and rapid changes in customer
preferences for electronics products that could adversely impact the Company's
results.

         Because of the foregoing, as well as other factors affecting the
Company's operating results, past financial performance should not be considered
to be a reliable indicator of future performance, and investors should not use
historical trends to anticipate results or trends in future periods. In
addition, the Company participates in a highly dynamic industry that may result
in significant volatility of Zilog's common stock price.


Liquidity and Capital Resources

<TABLE>
<CAPTION>
                                                            Six months ended
                                                        ------------------------
                                                        June 29,        June 30,
                                                          1997            1996
                                                        --------        --------
 <S>                                                    <C>             <C>
 Cash, Cash Equivalents and
    Short-Term Investments                              $ 76,810        $ 61,957
 Working Capital                                        $110,312        $ 83,828
 Cash Provided By Operating Activities                  $ 27,954        $ 44,896
 Cash Used In Investing Activities                      $ 37,189        $ 48,980
 Cash Provided By Financing Activities                  $  1,500        $ 11,101
</TABLE>


         Cash and Short-Term Investments increased to $76,810 for the second
quarter of 1997 from $61,957 in the same period of 1996. Accounts receivables
decreased to $36,817 in the second quarter of 1997 from $41,611 in the same
quarter of 1996. Inventory levels decreased to $29,695 from $34,092 due to the
Company carrying less raw materials, work-in-process and finished goods as a
result of the lower sales level.





                                       12
<PAGE>   13

         The Company expects to make total capital additions of approximately
$50 million in 1997.  These expenditures will primarily be used for the design,
construction and equipping of the Company's new wafer fabrication and research
facility in Nampa, Idaho and other engineering capital expenditures.  The
expansion will provide increased production capacity and research facilities.

           To the extent that the proposed merger with TPG is not consummated,
the Company believes its current cash, cash equivalents and short-term
investment balances, together with funds expected to be generated from
operations, will provide adequate cash to fund the Company's anticipated
liquidity needs for at least the next twelve months.  The Company may also use
bank borrowings and capital leases, depending on the terms available.  The
Company's cash requirements in the future may also be financed by a combination
of additional equity or debt financing.



















                                       13


<PAGE>   14

Part II.  Other Information


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

         On May 21, 1997 at 3:00 PM, the Annual Meeting of Zilog, Inc.
("Company") was held at 210 East Hacienda Avenue, Campbell, CA.  There were
present or represented at the meeting 18,551,055 shares of Common Stock.  The
Common Stock Shareholders elected Edgar A. Sack, Thomas J.  Connors, William H.
Janeway, Henry Kressel, Robert M. White and Larry W. Wangberg to the Company's
Board of Directors.  The vote was as follows:  Dr. Sack:  For 18,414,792,
Withheld 136,263; Mr. Connors:  For 18,413,278, Withheld 137,777; Mr. Janeway:
For 18,416,196, Withheld 134,859; Dr. Kressel:  For 18,415,246, Withheld
135,809;  Dr. White:  For 18,415,116; Withheld 135,939;  Mr. Wangberg: For
18,414,766, Withheld 136,289.  The selection of Ernst & Young, LLP as the
Company's auditors for the fiscal year ending December 31, 1997 was ratified:
18,487,745 shares were voted to confirm Ernst & Young, LLP; 35,162 voted
Against, 28,148 abstained and there were no broker non-votes.  The Common Stock
Shareholders approved the proposal to change the state of incorporation of the
Company from California to Delaware.  The vote was as follows: For 11,481,902;
Against 4,730,164; Abstained 42,993; Broker Non-Vote 2,295,996.  No other
business was transacted at the Annual Meeting and there have not been any other
submissions of matters to a vote of the security holders.

Item 6.  Exhibits and Reports on Form 8-K

a)  The following exhibit is filed herewith:
         Exhibit 27 Financial Data Schedule

b)   Reports on Form 8-K:

         On May 22, 1997, the Company submitted a Form 8-K, Item 5, regarding
the change of its domicile from the State of California to the State of
Delaware.

         On July 21, 1997, the Company submitted a Form 8-K with the Agreement
and Plan of Merger between TPG Partners II, L.P. and Zilog, Inc. dated as of
July 20, 1997.















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<PAGE>   15

                                   ZILOG, INC.

                                   SIGNATURES

         Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, the registrant has duly caused this report to be signed on its behalf
by the undersigned thereunto duly authorized.




Date:   August 12, 1997                         ZILOG, INC.


                                             /s/  ROBERT E. COLLINS    
                                           -----------------------------------
                                           Robert E. Collins
                                           Vice President and
                                           Chief Financial Officer

















                                       15



<PAGE>   16

                                INDEX TO EXHIBITS


Exhibit
Number                 Exhibits
------                 --------

27                  Financial Data Schedule