Document:

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                                                CONFIDENTIAL TREATMENT REQUESTED

                                                                   Exhibit 10.13

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*Portions denoted with an asterisk have
been omitted and filed separately with
the Securities and Exchange Commission
pursuant to a request for confidential
treatment.
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                                FOUNDRY AGREEMENT

THIS FOUNDRY AGREEMENT (the "Agreement") is made as of April 8, 1999. (the
"Effective Date") by and between Xicor Inc., a California corporation, having
its principal place of business at 1511 Buckeye Dr., Milpitas, CA 95035
("Xicor") and Zentrum Mikroelektronik Dresden GmbH, a corporation organized
under the laws of Germany, having its principal place of business at GrenzstraBe
28, 01109 Dresden, Germany ("ZMD"), with reference to the following facts:

        A. Xicor desires to have certain products of its design manufactured by
        ZMD for sale to Xicor.

        B. ZMD has the capability of manufacturing such products and desires to
        do so for sale to Xicor.

        C. Such products will be manufactured in a facility owned by ZMD and
        located at its principal place of business.

        D. Xicor may also in the future desire to transfer further production to
        the ZMD facility.

NOW, THEREFORE, in consideration of the foregoing and the covenants contained
below, the parties agree as follows:

1.  DEFINITIONS:

        1.1 "Products" shall mean fully processed silicon wafers containing
        finished die of Xicor's integrated circuit products.

        1.2 "Update" shall mean changes to a Product that result in a new
        version of the Product with improved performance, reduced size and/or
        minor changes in functionality over previous versions of the Product.

        1.3 "Production" shall mean the manufacturing of Products using a
        qualified Process. Milestones for Production operations are set forth in
        Exhibit 1.3 attached hereto and made a part hereof.

        1.4"Process" shall mean the wafer manufacturing process used for
        manufacturing of the Products.

2.  MANUFACTURING:

        2.1 Initial Focus: The initial Production focus shall be Xicor's DCP
        product lines and processes, specifically the C5.64 and C5.67 Processes.

        2.2 Foundry: ZMD owns a wafer fabrication facility (the "ZMD Fab")
        located at its principal place of business in Dresden, Germany that will
        be suitable for the purposes of this Agreement.

        2.3 Qualification of ZMD Fab: Qualification of the ZMD Fab will occur
        upon completion of the quality & reliability requirements set forth in
        Exhibit 6.1

        2.4 Manufacturing: Upon Xicor's orders therefor and subject to
        qualification pursuant to section 6 below, ZMD agrees to manufacture and
        sell Products, and Xicor agrees to purchase such Products from ZMD, on
        the terms and conditions set forth herein. The parties agree that the
        first Products to be manufactured hereunder shall be Xicor's DCP
        products on Xicor's C5.64 and C5.67 Processes with such additional
        Products or Processes as may from time to time be agreed to by the
        parties. If other Products or Processes are added, the appropriate
        Exhibits specific to the additional Products and Processes must be
        included. ZMD agrees to provide Xicor with appropriate documentation of
        the manufacturing Processes , which will include wafer and lot
        identification and traceability.

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        2.5 Deliverables by Xicor: With respect to each Product that Xicor
        requires ZMD to manufacture hereunder, Xicor shall provide all necessary
        technical information. Such information is set forth in Exhibit 2.5
        attached hereto and made a part hereof.

        2.6 Mask Sets: Xicor shall provide to ZMD at Xicor's expense, all masks
        and GDS-II data required to enable ZMD to manufacture the Products
        hereunder. Xicor shall provide all information necessary for using
        Xicor's masks for manufacturing at ZMD. ZMD shall provide Xicor with the
        final sizing tables for approval by Xicor. If under any circumstances a
        mask or mask set is lost or broken by ZMD, ZMD shall pay for the
        replacement mask or mask set. Additional mask sets required by ZMD for
        manufacturing purposes shall be at ZMD's expense.

3.  PRICE AND PAYMENT TERMS:

        3.1 Price: Xicor shall purchase the Products manufactured under this
        Agreement at the prices and on the payment terms set forth in Exhibit
        3.1 attached hereto and made a part hereof. Payment terms, shipping
        terms and obligation for taxes will be agreed to in Exhibit 3.1.

        3.2 Yield: The parties agree that ZMD's initial target yield for each
        Product ("Initial Target Yield") shall be as set forth in Exhibit 3.2
        attached hereto and made a part hereof. The Initial Target Yields will
        increase in accordance with Exhibit 3.2, subject to renegotiations as
        provided in Exhibit 3.2.

4. WAFER PROBE: ZMD shall perform wafer probe which shall be 100% electrical
test at wafer sort as soon as practicable. The applicable data sheet and test
requirements are set forth in Exhibit 4 attached hereto and made a part hereof.
Prices for wafer probe shall be listed in Exhibit 3.1.

5.  FORECAST AND ORDERS:

        5.1 Six Month Rolling Forecast: During the term of this Agreement, Xicor
        shall provide to ZMD a 24 weeks rolling forecast setting forth its
        estimated requirements for wafer starts by week for Products. ZMD will
        review the forecast and will respond within one week. ZMD agrees to use
        its reasonable best efforts to meet all commitments for the period of
        the forecast unless otherwise agreed to by both ZMD and Xicor. The first
        12 weeks of the forecast will be "firm" for 125 mm wafer starts. ZMD
        agrees that in exceptional cases, it will negotiate Xicor requested
        push-outs and cancellations of the firm backlog with Xicor.

        5.2 Orders: A "blanket" purchase order shall be initiated by Xicor and
        maintained on an ongoing basis. All releases issued by Xicor against the
        blanket purchase order shall state unit quantities, unit descriptions,
        unit prices, requested delivery dates, and shipping instructions.
        Provided that the release is consistent with the forecast provided to
        ZMD under section 5.1 hereof, the cycle times under section 5.3(c)
        hereof, and the other terms and conditions hereof, ZMD shall accept the
        order. ZMD shall acknowledge on Monday morning (Germany time) of each
        week its acceptance of the "queued" loaded schedule.

        5.3 Lots: Xicor shall order Products as specified below:

               (a) Engineering Lots: Xicor may order engineering lots where
               Xicor seeks the qualification of an Update or a Product not
               previously manufactured by ZMD, to seek or otherwise improve
               functionality and yield, or to make any other engineering
               changes. For purposes of this Agreement, an engineering lot shall
               contain at least six wafers. It shall be Xicor's responsibility
               to inform and provide ZMD with the specifications for the
               engineering changes to be made to an engineering lot before
               manufacturing begins. Specifications shall be attached to, or
               referenced by Xicor's purchase order. Any change to the
               specifications shall

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               be documented by Xicor to ZMD. The price for engineering lots are
               described in Exhibit 3.1. II.

               (b) Production Lots: Xicor shall order a Product by lot quantity.
               The normal wafer lot shall contain 25 wafers.

               (c) Production Cycle Times: The target cycle time for ZMD for
               each Product manufactured hereunder shall be as per Exhibit 5.3.

        5.4 Process Termination: Xicor shall provide ZMD with at least twelve
        (12) months notice - but not sooner than Dec. 31st, 2000 -of the date on
        which Xicor will no longer schedule wafer starts on an existing process
        used to manufacture Products.

        5.5 Delays: Subject to section 13.12, Xicor shall have the right to
        cancel any order, in whole or in part, when delivery is not made within
        four (4) weeks of the agreed date. Cancellation will be Xicor's sole
        remedy in this case. In the case of late delivery of certain high volume
        Products, the parties may mutually agree to extend said delivery date
        for an additional 4 weeks.

6.  QUALIFICATION AND QUALITY CONTROL:

        6.1 Qualification: Products to be manufactured and the manufacturing
        processes to be used under this Agreement are subject to qualification
        by Xicor and ZMD pursuant to qualification criteria and procedures set
        forth in Exhibit 6.1 attached hereto and made a part hereof
        ("Qualification"). The parties agree to use their best efforts to
        complete any Qualification required in this section 6.1 and under
        section 6.2 hereof as soon as possible. ZMD may not ship production
        wafers to Xicor until ZMD has a Quality Plan approved by the Xicor
        Quality Organization and has been formally audited by Xicor unless
        specifically authorized to do so by Xicor.

        6.2  Changes:

               (a) ZMD Process Changes: After Qualification of a Product, ZMD
               may not make any process change without prior written consent
               from Xicor. Any such change must be in accordance with Exhibit
               6.2 attached hereto and made a part hereof and will be subject to
               qualification according to the applicable criteria and procedures
               set forth in Exhibit 6.1.

               (b) Xicor Process Changes: If Xicor desires ZMD to make a process
               change, Xicor shall notify ZMD in writing thereof. ZMD will not
               implement or act on any verbal change instructions. Upon receipt
               of such written instructions, ZMD will review the proposed change
               and provide to Xicor a written evaluation stating the cost and
               schedule to implement the same. The parties will then mutually
               agree on the terms and conditions of the implementation of such
               change. All changes agreed to by ZMD and Xicor shall be reflected
               in an update to the ZMD documentation of the baseline
               manufacturing process.

        6.3 Rework: ZMD may perform rework on wafers only to the extent that it
        has been authorized and approved by Xicor as set forth in Exhibit 6.3
        attached hereto and made a part hereof.

        6.4 Life Test and Reliability Monitors: Xicor may, at its option, from
        time to time, utilize life test and other agreed upon reliability
        monitors with respect to the Products manufactured by ZMD hereunder.
        These monitors, as per Exhibit 6.4 attached hereto and made a part
        hereof, will be established as soon as practicable. Commencing ninety
        (90) days after ZMD has begun manufacturing production lots of each
        Product, if these tests indicate that ZMD's manufacturing facility is
        not being maintained within required manufacturing parameters, the
        parties agree to confer with respect thereto, and ZMD agrees to take all
        reasonable measures to promptly correct any such problems.

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                                                CONFIDENTIAL TREATMENT REQUESTED

        6.5 Manufacturing and Quality Audits: Xicor may, at its option, but no
        more often than two times in any calendar year, conduct a manufacturing
        and quality audit of the ZMD Fab. These audits will be conducted during
        normal business hours. Xicor agrees to provide ZMD reasonable prior
        notice of its intention to conduct such audit. ZMD agrees to cooperate
        fully with Xicor during the audit, to give Xicor auditing personnel
        access to the ZMD Fab, and to provide whatever documents and other
        information regarding the operation of the ZMD Fab in connection with
        this Agreement that they may reasonably request. ZMD shall not allow
        Xicor and its auditing personnel access to ZMD's other customers' data.
        Disclosure of Confidential Information (as hereinafter defined) of ZMD
        shall be subject to section 11.1 hereof. Each party shall pay its own
        expenses actually incurred due to any such audits.

        6.6 Manufacturing Control Plan: ZMD shall develop and maintain a
        manufacturing control plan to identify the critical processes and
        implement SPC (Statistical Process Control) to monitor and control such
        critical processes. The critical processes will include, but not be
        limited to, facilities, environment, DI water and chemical purity, which
        ZMD shall monitor constantly to ensure consistent Product quality and
        reliability. These critical processes are set forth in Exhibit 6.6
        attached hereto and made a part hereof. ZMD shall provide monthly
        SPC/Cpk data for all critical processes as applicable. For all Cpks less
        than 1.67, ZMD shall provide an action plan to achieve at least 1.67 as
        soon as practicable, but the eventual Cpk goal for ZMD shall be 2.0. For
        manufacturing processes with Cpk less than 1.0, ZMD shall develop a
        "containment" plan. ZMD will also install and maintain appropriate Y2k
        compliant systems to enable it to provide Xicor with WIP status for all
        lots at all times.

        6.7 ISO 9000 Requirements: Quality systems defined by ISO 9000 shall be
        used as a part of manufacturing the Products hereunder. If any Xicor
        customers so require, QS-9000 certification shall also be required. In
        both cases, certification from an approved registrar shall be required.

7.  OTHER TERMS AND CONDITIONS.

        7.1 Controlling Document: The terms and conditions of this Agreement
        shall control all sales of Products hereunder, and any additional or
        different terms of conditions in either party's purchase order,
        acknowledgment, or similar document shall be of no effect.

        7.2 Delivery and Lead Time: ZMD shall deliver Products on the delivery
        dates specified in the purchase order releases placed in accordance with
        section 5. The shipping window will be -5 to +5 days.

        7.3 Shipping Documentation: All Products delivered pursuant to the terms
        of this Agreement shall be suitably packaged, marked and otherwise
        prepared in accordance with normal commercial practice while maintaining
        the safety of the Products. The Products shall be shipped as specified
        in Xicor's purchase order, and delivered to Xicor. Shipping and packing
        documents from ZMD shall include the Xicor Purchase Order and release
        number under which the contracted services shall be performed. Shipping
        documents shall include the following: 1) Product(s) being ordered,
        including Xicor Part Number; 2) Manufacturing Lot Number; 3) Quantity of
        Products; 4) Delivery Instructions, including designated carrier, if
        any; 5) Quantity of good die per wafer; and 6) yield, process, and/or
        parametric information as may be required under the terms of this
        Agreement, the exhibits hereto or the applicable purchase order.
        Shipping documents are set forth in Exhibit 7.3 attached hereto and made
        a part hereof.

        7.4 Inspection and Acceptance: Product lots delivered by ZMD shall meet
        the quality requirements of Xicor and may be inspected and tested for
        verification. Quality requirements are defined in Exhibit 7.4 attached
        hereto and made a part hereof. Wafers and lots will be identifiable and
        traceable under the documentation provided under section 2.4 hereof. In
        the event any lot or wafer fails to meet the quality requirements of
        said Exhibit 7.4, Xicor shall have the right to reject such lot or wafer
        within thirty (30) days after invoice date and returns it to ZMD for
        replacement, provided that replacement is commercially reasonable.
        Replacement will be Xicor's exclusive remedy in this case. If
        replacement

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        is not commercially reasonable, Xicor may cancel that portion of the
        relevant purchase order relating to the defective wafers.

        7.5  Warranty:

               (a) ZMD warrants to Xicor that from the date of delivery and for
               a period of 12 months thereafter, each Product will
               satisfactorily pass the acceptance criteria identified in Exhibit
               7.4 attached hereto and shall be free from defects in material
               and workmanship under normal use and service. This warranty does
               not cover any failure resulting from (i) assembly not performed
               by ZMD, or (ii) misuse, abuse, abnormal conditions or shipment
               damage. This warranty is personal to Xicor and not transferable.

               (b) THE WARRANTY CONTAINED IN SECTION 7.5(a) IS THE ONLY WARRANTY
               GIVEN BY ZMD AND ZMD EXPRESSLY DISCLAIMS ALL OTHER WARRANTIES,
               WHETHER EXPRESS, IMPLIED, OR STATUTORY, INCLUDING, WITHOUT
               LIMITATION, THE IMPLIED WARRANTIES OF MERCHANTABILITY AND OF
               FITNESS FOR A PARTICULAR PURPOSE, ANY WARRANTY OF
               NON-INFRINGEMENT, AND ANY WARRANTY THAT MAY ARISE BY REASON OF
               USAGE OF TRADE, CUSTOM OR COURSE OF DEALING, AND XICOR HEREBY
               EXPRESSLY WAIVES ANY AND ALL SUCH WARRANTIES.

               (c) Xicor's exclusive remedy, and ZMD's exclusive obligation and
               liability, with respect to any Product that does not conform to
               the express warranty set forth in Section 7.5(a) hereof, shall be
               to perform failure analysis and to replace (or repair if
               applicable) such Product, without charge, and deliver it to
               Xicor; provided, however, that in each such case, repair or
               replacement is commercially reasonable. If such remedy is not
               commercially reasonable, ZMD shall refund to Xicor the amount
               paid for such Product. Upon discovering such defect, Xicor shall
               promptly return the affected Products to ZMD, adequately
               packaged, within the warranty period at Xicor's expense with a
               detailed statement of the defect. Xicor shall obtain a return
               material authorization (RMA) number and show it on the packaging.
               Any replacement Product shall also be warranted for a period of
               12 months from delivery. If ZMD's examination of the Products
               returned by Xicor does not disclose any warranty defect, Xicor
               agrees to pay ZMD's applicable charges for unpacking, testing and
               re-packing the Products for reshipment to Xicor. If ZMD's testing
               does disclose a warranty defect, ZMD will reimburse the return
               shipping charges paid by Xicor for such Products.

8.  LIMITATION OF LIABILITY.

        8.1 Under no circumstances shall ZMD be liable for the costs of
        procurement of substitute goods or services or for any special,
        indirect, incidental or consequential damages of any kind or nature
        whatsoever, arising out of or in any way related to this Agreement, the
        Products or the use or inability to use any Products, including, without
        limitation, lost goodwill, lost profits, work stoppage or impairment of
        other goods, and whether arising out of breach of warranty, breach of
        contract, tort (including negligence), strict liability or otherwise,
        even if advised of the possibility of such damage or if such damage
        could have been reasonably foreseen, and notwithstanding any failure of
        essential purpose of any exclusive remedy provided herein.

        8.2 In no event shall ZMD's total liability relating to or in connection
        with any Products or this Agreement, whether based on contract,
        warranty, tort (including negligence), strict liability or otherwise,
        exceed the actual amount paid to ZMD by Xicor hereunder.

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9.  INDEMNITY.

        9.1 ZMD shall not be held responsible and Xicor shall defend, indemnify
        and hold harmless ZMD and its United States subsidiary from and against
        any and all claims, demands, liabilities, damages, costs and expenses,
        including, without limitation, reasonable attorneys' fees and other
        legal and expert expenses, arising out of or relating to any actual or
        alleged infringement upon any patent right, copyrights or mask work
        right of any third party by any Product manufactured by ZMD for Xicor
        hereunder or by any process, material or technology provided to ZMD by
        Xicor hereunder for the manufacture of the Products. ZMD will give to
        Xicor written notice of any claim for which Xicor is providing
        indemnification hereunder. Xicor will have (i) the right to assume, in a
        prompt fashion, sole control of the defense or settlement of such claim
        (provided that Xicor cannot commit ZMD to the payment of any sums in
        settlement or otherwise), and (ii) the right to receive reasonable
        assistance from ZMD, at Xicor's request and expense. ZMD may, at its
        expense, participate in such defense with counsel of its own choice.

        9.2 Xicor shall not be held responsible and ZMD shall defend, indemnify
        and hold harmless Xicor from and against any and all claims, demands,
        liabilities, damages, costs and expenses, including, without limitation,
        reasonable attorneys' fees and other legal and expert expenses, arising
        out of or relating to any actual or alleged infringement upon any patent
        right, copyrights or mask work right of any third party by any process,
        material or technology used by ZMD in the performance of its obligations
        hereunder other than any process, material or technology provided to ZMD
        by Xicor hereunder for the manufacture of the Products. Xicor will give
        to ZMD written notice of any claim for which ZMD is providing
        indemnification hereunder. ZMD will have (i) the right to assume, in a
        prompt fashion, sole control of the defense or settlement of such claim
        (provided that ZMD cannot commit Xicor to the payment of any sums in
        settlement or otherwise), and (ii) the right to receive reasonable
        assistance from Xicor, at ZMD's request and expense. Xicor may, at its
        expense, participate in such defense with counsel of its own choice.

        9.3 THE FOREGOING STATES THE ENTIRE LIABILITY OF EITHER PARTY AND ITS
        AFFILIATES, AND THE SOLE AND EXCLUSIVE REMEDY OF THE OTHER PARTY AND ITS
        AFFILIATES, WITH RESPECT TO INFRINGEMENT OF INTELLECTUAL PROPERTY RIGHTS
        BY ANY PRODUCTS OR PROCESSES OF SUCH PARTY.

10. TECHNOLOGY OWNERSHIP AND NON-COMPETITION: Xicor shall retain ownership of
all designs, process technology and other information and materials provided to
ZMD for purposes of manufacturing Products. Xicor authorizes ZMD to use such
proprietary information supplied by Xicor under this Agreement only for the
purpose of manufacturing Products for sale to Xicor in accordance with the terms
of this Agreement. ZMD agrees that ZMD will not directly compete with Xicor with
products or semiconductor devices similar in nature and competitive to those
Xicor Products listed in Exhibit 10.0 during the term of this agreement and one
year after termination of the agreement (see Exhibit 10 for additional details).

11.  CONFIDENTIALITY.

        11.1  Confidential Information:

               (a) As used in this section 11.1, the term "Confidential
               Information" shall mean any information disclosed by one party to
               the other pursuant to this Agreement which is in written,
               graphic, machine-readable or other tangible form and is marked
               "Confidential," "Proprietary" or in some other manner to indicate
               its confidential nature. Confidential Information may also
               include oral information disclosed by one party to the other
               pursuant to this Agreement, provided that such information is
               designated as confidential at the time of disclosure and reduced
               to a written summary by the disclosing party within thirty (30)
               days after its oral disclosure, which is marked in a manner to
               indicate its confidential nature and delivered to the receiving
               party. Notwithstanding any failure to so identify it, however,
               all (i) technical materials, process technology and other
               information provided by Xicor to ZMD to enable or assist ZMD in
               manufacturing Products and (ii) ZMD processes that a Xicor

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               employee may observe as part of an audit or similar procedure,
               shall be deemed "Confidential Information" hereunder.

               (b) Each party shall treat as confidential all Confidential
               Information of the other party, shall not use such Confidential
               Information except as expressly set forth herein or otherwise
               authorized in writing, shall implement reasonable procedures to
               prohibit the disclosure, unauthorized duplication, misuse, or
               removal of the other party's Confidential Information and shall
               not disclose such Confidential Information to any third party
               except as obligations of such party under this Agreement, and
               subject to confidentiality obligations at least as protective as
               those set forth herein. Without limiting the foregoing, each of
               the parties shall use at least the same procedures and degree of
               care which it uses to prevent the disclosure of its own
               confidential information of like importance to prevent the
               disclosure of Confidential Information disclosed to it by the
               other party under this Agreement, but in no event less than
               reasonable care.

               (c) Notwithstanding the above, neither party shall have liability
               to the other with regard to any Confidential Information of the
               other which:

                      (i) was generally known and available in the public domain
                      at the time it was disclosed or becomes generally known
                      and available in the public domain through no fault of the
                      receiver;

                      (ii) was known to the receiver at the time of disclosure
                      as shown by the files of the receiver in existence at the
                      time of disclosure;

                      (iii) is disclosed with the prior written approval of the
                      discloser;

                      (iv) was independently developed by the receiver without
                      any use of the Confidential Information and by employees
                      or other agents of the receiver who have not been exposed
                      to the Confidential Information, provided that the
                      receiver can demonstrate such independent development by
                      documented evidence prepared contemporaneously with such
                      independent development;

                      (v) becomes known to the receiver from a source other than
                      the discloser without breach of this Agreement by the
                      receiver and otherwise not in violation of the discloser's
                      rights; or

                      (vi) is disclosed pursuant to the order or requirement of
                      a court, administrative agency, or other governmental
                      body, provided that the receiver shall provide prompt,
                      advance notice thereof to enable the discloser to seek a
                      protective order or otherwise prevent such disclosure.

               (d) "Residual Information" means information in non-tangible form
               that is or may be retained by persons who have had access to the
               Confidential Information of a party, including ideas, concepts,
               know-how or techniques contained therein. However, Residual
               Information shall not include (i) information which the employee
               knows, constitutes the Confidential Information of the other
               party hereunder, or (ii) information that is purposefully
               committed to memory by the employee for purposes of
               misappropriation. The parties acknowledge and agree that they and
               their respective employees may utilize for any purpose any
               Residual Information resulting from using or having access to
               Confidential Information. However, the non-disclosure obligations
               of this section 11 shall continue to apply to such Residual
               Information.

               (e) Each party shall obtain the execution of proprietary
               non-disclosure agreements with its employees, agents and
               consultants having access to Confidential Information of the
               other

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               party, and shall diligently enforce such agreements, or shall be
               responsible for the actions of such employees, agents and
               consultants in this respect.

               (f) If either party breaches any of its obligations with respect
               to confidentiality and unauthorized use of Confidential
               Information hereunder, the other party shall be entitled to
               equitable relief to protect its interest therein, including but
               not limited to injunctive relief, as well as money damages.

        11.2 Publicity: All publicity regarding the announcement of this
        Agreement shall be coordinated by both parties. Neither party shall
        disclose the terms of this Agreement without the prior written approval
        of the other party, except as required as a matter of law.

12.  TERM AND TERMINATION.

        12.1 Term: This Agreement shall begin on the date noted above and shall
        remain in effect for five years from such date, unless otherwise
        terminated earlier as provided below. This Agreement may be extended for
        successive periods of two years beyond such time by the written consent
        of both parties.

        12.2 Termination for Breach: If either party breaches any material term
        of condition of this Agreement and fails to cure that breach within
        thirty (30) days, or fails to cure such breach within a reasonable
        period of time if such breach can not reasonable be cured within the
        said thirty (30) day period, after receiving written notice of the
        breach, the other party shall have the right to terminate this
        Agreement, on written notice, at any time after the end of such thirty
        (30) day period or after such reasonable period if such breach could not
        reasonable be cured within the said thirty (30) day period.

        12.3 Termination for Insolvency: If either party becomes the subject of
        a voluntary or involuntary petition in bankruptcy or of any proceeding
        relating to insolvency, receivership, liquidation, or composition for
        the benefit of creditors, if that petition or proceeding is not
        dismissed with prejudice within sixty (60) days after filing, the other
        party may terminate this Agreement on thirty (30) days' notice.

        12.4 Return of Materials: Upon termination or expiration of this
        Agreement, ZMD shall return to Xicor all information, process technology
        and other items supplied to it under this Agreement.

        12.5 Survival of Provisions: The rights and obligations of the parties
        pursuant to sections 3.1, 5.5, 7.2, 7.3, 7.4, 7.5, 8, 9, 10, 11, 12.6
        and 13.2 shall survive the termination of this Agreement (as well as
        other provisions of this Agreement to the extent contemplated by section
        12.6 hereof).

        12.6 Effects of Termination: Except as and for the time period provided
        herein, upon the effective date of termination, ZMD shall cease
        manufacturing the Products. Xicor shall purchase, pay for and take
        delivery of Products in accordance paragraph 5.1. In addition, unless
        the parties agree otherwise (including agreement on appropriate payment
        to ZMD), Xicor shall take delivery of and pay, pursuant to the terms of
        this Agreement, for all Products affected by such termination, which at
        the time of the receipt of the applicable notice of termination are
        subject to purchase orders of Xicor that have been accepted by ZMD. Such
        addition delivery and payment includes the "die bank" and all in-process
        inventory in accordance with section 5.4 hereof and ZMD will either
        manufacture, complete and deliver such Products to Xicor in accordance
        with the provisions hereof, which may be after the effective date of
        termination, or, if requested by Xicor, Xicor may elect to compensate
        ZMD based on the percentage of mask layers completed.

13.  MISCELLANEOUS.

        13.1 Governing Law: This Agreement shall be governed by and interpreted
        in accordance with the laws of the State of California without reference
        to conflict of laws principles.

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        13.2 Arbitration: Any dispute or claim arising out of or in connection
        with this Agreement shall be finally settled by binding arbitration in
        the English language. If Xicor institutes the proceedings, they shall be
        held in Dresden, Germany under the rules of arbitration of the
        International Chamber of Commerce by one arbitrator appointed in
        accordance with said rules. If ZMD institutes the proceedings, they
        shall be held in San Francisco, California under the rules of
        arbitration of the American Arbitration Association by one arbitrator
        appointed in accordance with said rules. Judgment on the award rendered
        by the arbitrator may be entered in any court having jurisdiction
        thereof. Notwithstanding the foregoing, (i) the parties may apply to any
        court of competent jurisdiction for injunctive relief without breach of
        this arbitration provision, and (ii) collection matters shall
        specifically be excluded from this arbitration provision.

        13.3 Assignment: Neither party may assign or delegate this Agreement or
        any of its licenses, rights or duties under this Agreement without the
        prior written consent of the other, except either party may assign this
        Agreement to a person or entity into which it has merged or which has
        otherwise succeeded to all or substantially all of its business and
        assets, and which has assumed in writing or by operation of law its
        obligations under this Agreement.

        13.4 Authority: Each party represents that all corporate action
        necessary for the authorization, execution and delivery of this
        Agreement by such party and the performance of its obligations hereunder
        has been taken.

        13.5 Export Controls: The parties agree that no technical information
        disclosed by one party to the other party under this Agreement or any
        direct product of such technical information is intended to or will be
        exported or re-exported, directly or indirectly, to any destination
        restricted or prohibited by applicable law without necessary
        authorization by the appropriate government authorities.

        13.6 Notices: All notices and other communications required or permitted
        hereunder shall be in writing and shall be mailed or otherwise delivered
        by hand, by messenger or by telecommunication, addressed to the
        addresses first set forth above or at such other address furnished with
        a notice in the manner set forth herein. Such notices shall be deemed to
        have been served when delivered or, if delivery is not accomplished by
        reason of some fault of the addressee, when tendered.

        13.7 Partial Invalidity: If any paragraph, provision, or clause thereof
        in this Agreement shall be found or be held to be invalid or
        unenforceable in any jurisdiction in which this Agreement is being
        performed, the remainder of this Agreement shall be valid and
        enforceable and the parties shall negotiate, in good faith a substitute,
        valid and enforceable provision which most nearly effects the parties'
        intent in entering into this Agreement.

        13.8 Counterparts: This Agreement may by executed in two (2) or more
        counterparts, all of which, taken together, shall be regarded as one and
        the same instrument.

        13.9 Waiver: The failure of either party to enforce at any time the
        provisions of this Agreement shall in no way be constituted to be a
        present or future waiver of such provisions, nor in any way affect the
        validity of either party to enforce each and every such provision
        thereafter.

        13.10 Entire Agreement: The terms and conditions herein contained
        constitute the entire agreement between the parties and supersede all
        previous agreements and understandings, whether oral or written, between
        the parties hereto with respect to the subject matter hereof and no
        agreement or understanding varying or extending the same shall be
        binding upon either party hereto unless in a written document signed by
        the party to be bound thereby.

        13.11 Section Headings: The section headings contained in this Agreement
        are for reference purposes only and shall not affect in any way the
        meaning or interpretation of this Agreement.

        13.12 Force Majeure: Neither party shall be liable or responsible for
        any defaults or delays in performance due to strikes, riots, acts of
        God, shortages of lab or materials, war, governmental laws,

                                       9
<PAGE>   10
                                                CONFIDENTIAL TREATMENT REQUESTED

        regulations or restrictions or any other cause of any kind whatsoever
        that is beyond the reasonable control of the party whose performance has
        been delayed.

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be signed
by duly authorized officers or representatives as of the date first above
written.

XICOR INC.                                ZMD GMBH

By /s/ Bruce Gray                         By /s/ W. Nolde      /s/ Detlef Golla
   ----------------------------------        ---------------   -----------------
Bruce Gray                                Dr. Wolfgang Nolde   Detlef Golla
President and Chief Operating Officer     Geschaftsfuhrer      Geschaftsfuhrer
April 8, 1999                             April 8, 1999

                                       10
<PAGE>   11
                                                CONFIDENTIAL TREATMENT REQUESTED

                                LIST OF EXHIBITS

<TABLE>
<CAPTION>
Number                          Title
<S>                             <C>
1.3.                            Milestones for Process Qualification and
                                Production Operation

2.3                             Facility Qualification

2.5                             Xicor Deliverables

3.1                             Prices

3.2                             Initial Target Yields

4                               Wafer Probe Documentation

5.3                             Production Cycle Times

6.1                             Process Qualification Criteria and Procedures

6.2                             Product and Process Change Control

6.3                             Specifications for Wafer Rework

6.4                             Life Test and Reliability Monitors

6.6                             Critical Processes

7.3                             Shipping Documents

7.4                             Quality Requirements

10.0                            Products for Non-competition clause
</TABLE>

                                       11
<PAGE>   12
                                                CONFIDENTIAL TREATMENT REQUESTED

                                   EXHIBIT 1.3

Milestones for  Process Qualification and Production Operation

                           See attached project plan.

                                       12
<PAGE>   13
                                                CONFIDENTIAL TREATMENT REQUESTED

                                   EXHIBIT 2.3

Facility Qualification:

        Verification per ISO 9001 criteria and QS9000 qualification shall be
        completed prior to the beginning of Risk Production Starts.

                                       13
<PAGE>   14
                                                CONFIDENTIAL TREATMENT REQUESTED

                                   EXHIBIT 2.5

Xicor Deliverables

        -  Process Flow

        -  Lot Traveller

        -  Process Recipes

        -  Critical Monitor Data

                                       14
<PAGE>   15
                                                CONFIDENTIAL TREATMENT REQUESTED

                                   EXHIBIT 3.1

I.  Non-recurring Expenses

        Non-recurring expenses will be a total of $ * to be paid at 3 intervals:

        A. 1st payment of $ * to be paid 30 days after the signing of the
        Agreement by both parties .

        B. 2nd payment of $ * to be paid at the start of the 1st qualification
        lot as called for in the Process Qualification Milestones shown in
        EXHIBIT 1.3.

        C. 3rd and final payment of $ * to be paid at the beginning of RISK
        production again as called for in the Process Qualification Milestones
        shown in EXHIBIT 1.3.

 II.    Engineering Wafer cost  $  *  / Wafer
        (Minimum Wafer  Quantity is 6 wafers / Engineering Lot)

 III.   Payment and Shipping Terms:

        A. Payment Terms--Payment terms are net 60 days from date of invoice
        after the delivery of PCM tested wafers or 30 days from date of invoice
        after the delivery of die sorted wafers.

        B. Exchange Rate--All wafer/die prices set forth in this Agreement are
        based on an exchange rate of 1.70DM = $U.S. $1. If the average exchange
        rate for the previous six months is less than 1.60DM = $U.S. $1 or
        exceeds 1.80DM = $U.S. $1, the parties will review the wafer/die as soon
        as practicable to renegotiate prices. The exchange rate is defined as
        the New York foreign exchange mid-range rates applying to trading among
        banks in amounts of $1 million and more, as published in the Wall Street
        Journal.

        C. Shipping Terms--Shipping, delivery and pricing terms are set FCA
        Dresden according Incoterms. Xicor will advise ZMD of its choice of
        freight carrier.

        D. Taxes and Duties -- The prices and fees do not include sales, use,
        transfer, property, ad valorem, excise, privilege or value added taxes,
        import duties, export duties or other custom duties or tariffs or any
        other taxes, duties or charges not based on ZMD's net income, all of
        which shall be paid by Xicor. Xicor agrees to promptly pay, or reimburse
        ZMD for, the amount of such tax or charge and all reasonable attorneys'
        fees and other costs and expenses incurred by ZMD in connection
        therewith, and the amount of any fine or penalty assessed against ZMD in
        connection therewith. Where applicable, Xicor will provide ZMD with
        exemption certificate(s) in form and substance satisfactory to the
        relevant taxing or governmental authorities.

IV.     Wafer Prices (per 5" wafer)

        A1:  Wafer Pricing:  (includes raw wafer costs)

             C5.6 Wafers = Per following table (based on cumulative wafer
                           volume)

        A.2.:  C7 Technology:  = to be defined separately

* Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to the
omitted portions.

                                       15
<PAGE>   16
                                                CONFIDENTIAL TREATMENT REQUESTED

<TABLE>
<CAPTION>
        CUMULATIVE VOLUME           WAFER PRICE (C5.6 @ * layers)

<S>                                 <C>
        up to  *  wafers            $  *  /wafer

        *  to  *  wafers            $  *  /wafer

        *  to  *  wafers            $  *  /wafer
</TABLE>

        -  For wafer volumes in excess of  *  , lower prices to be negotiated

        -  Wafer prices will be adjusted to the final production layer amount
           with the following scheme

               Production Wafer Price = (Wafer price as listed above / * ) *
               Final production layer amount

                      Example:  $  *  = $  *  x  *  /  *

               Timing: Once every 6 months. These calculations are inspired by
               two things:

               *

               Calculation: Every 6 months, Xicor will calculate the actual die
               sort yield percentages and compare them to the actual die sort
               yield established in the first month following the initial 6
               month period. This die sort yield percentage shall become the
               target die sort yield, but in no case shall target die sort yield
               be less than the actual established die sort yield at Xicor.

               *

               *

        SCRAP CRITERIA

               If the individual wafer sort yield falls below the mean-3sigma
               distribution demonstrated for the 6 month interval, then, that
               wafer is scrapped and returned back to ZMD for full credit.

        A3: Device Pricing

               To be defined separately.

        A4: Die Test Pricing

               To be defined separately.

V.  Volume Expectations

        The pricing provided for herein is based on an assumed volume of - *
        wafers per month. If the actual wafer volumes differ significantly from
        this assumption, the parties agree to meet as soon as practicable to
        renegotiate pricing.

VI.     Equipment

        Xicor shall provide ZMD with the manufacturing equipment for production
        of the Xicor technologies at ZMD on request by ZMD as follows:

               .  *

* Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to the
omitted portions.

                                       16
<PAGE>   17
                                                CONFIDENTIAL TREATMENT REQUESTED

               .  *

        Specific details will be mutually determined in a separate MOU.
        As incremental wafer requirements occur similar arrangements for
        additional equipment will be agreed upon.

* Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to the
omitted portions.

                                       17
<PAGE>   18
                                                CONFIDENTIAL TREATMENT REQUESTED

                                   EXHIBIT 3.2

Initial Target Yields

<TABLE>
<CAPTION>
        Technology                          1st 6 months Die Sort Yield
        ----------                          ---------------------------
<S>                                         <C>
        C5.6                                       *  %
</TABLE>

        This average yield is limited to die sizes not larger than
12mm(squared). For die sizes larger than this size the die sort yield shall be
agreed upon before volume production.

* Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to the
omitted portions.

                                       18
<PAGE>   19
                                                CONFIDENTIAL TREATMENT REQUESTED

                                    EXHIBIT 4

Wafer Probe Documentation

To be provided during technology transfer.

                                       19
<PAGE>   20
                                                CONFIDENTIAL TREATMENT REQUESTED

                                   EXHIBIT 5.3

Production Cycle Times:

        Production Cycle Times shall be less than or equal to * days per mask
layer.

* Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to the
omitted portions.

                                       20
<PAGE>   21
                                                CONFIDENTIAL TREATMENT REQUESTED

                                         EXHIBIT 6.1

Process Qualification Criteria and Procedures

        -  The quality and reliability specifications are defined in detail in
           the following Xicor specifications: 06020110, 06020101, 06020311, and
           06020324.

        -  ZMD shall provide Xicor with the following PQC for the required
           processes:

               - Gate Oxide integrity (Bvox and Qbd)

               - Hot carrier

               - Electromigration

               - Stress Migration

                                       21
<PAGE>   22
                                                CONFIDENTIAL TREATMENT REQUESTED

                                   EXHIBIT 6.2

Product and Process Change Control

        Product and process control changes are defined in the Xicor
specification 100213.

                                       22
<PAGE>   23
                                                CONFIDENTIAL TREATMENT REQUESTED

                                   EXHIBIT 6.3

Specifications for Wafer Rework

        Xicor authorizes ZMD for the following reworks on Xicor products:

               -   Photoresist rework

All other rework not listed in this attachment is not authorized and requires
written approval by Xicor on either case-by-case base or an amendment to this
exhibit.

                                       23
<PAGE>   24
                                                CONFIDENTIAL TREATMENT REQUESTED

                                   EXHIBIT 6.4

Life Test and Reliability Monitors

        The quality and reliability specifications are defined in detail in the
following Xicor specifications:

        06020110, 06020101, 06020311, and 06020324.

                                       24
<PAGE>   25
                                                CONFIDENTIAL TREATMENT REQUESTED

                                   EXHIBIT 6.6

Critical Processes

        Critical Processes defined by Xicor:

               -  *

* Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to the
omitted portions.

                                       25
<PAGE>   26
                                                CONFIDENTIAL TREATMENT REQUESTED

                                   EXHIBIT 7.3

Shipping Documents

        To be generated later in conjunction with ZMD's capabilities and United
        States and/or German Import/Export regulations..

                                       26
<PAGE>   27
                                                CONFIDENTIAL TREATMENT REQUESTED

                                   EXHIBIT 7.4

Quality Requirements

        Quality requirements

               - Monthly reporting of Cp and Cpk values for critical process
                 steps

               - Process Control Plan

               - Failure Mode Effects Analysis (FMEA) procedure established in
                 factory for process changes

                                       27
<PAGE>   28
                                                CONFIDENTIAL TREATMENT REQUESTED

                                   EXHIBIT 10

Products from Non-competition clause

ZMD explicitly is permitted to sell the following products and product families:

ZMD                          . nvSRAM products     U63xxx

                             . SRAM products       U62xxx

                             . DRAM products       U61xxx

                             . Digitrim ZM534

                             . Ldreg ZM884

                             . Scope IC ZM407

                             . ASIC developments and Foundry Services according
                               ZMD customer specifications even if competitive
                               or similar to those manufactured by ZMD for Xicor

ZMD explicitly is NOT permitted to sell the following products and product
families:

1.  E2 Micro-Peripherals:

    -   System Controller

        X5114

    -   Microcontroller Supervisors with EEPROM

        X25043        X25045        X25163         X25164        X25165

        X25166        X25168        X25169         X25323        X25324

        X25325        X25326        X25328         X25329        X25383

        X25385        X25643        X25644         X25645        X25646

        X25648        X25649

1.  Parallel EEPROM's:

    -   Universal WordWide x8, x16, x32

        XM28C010P     XM28C020P     XM2064P

    -   Universal ByteWide

        X2804C        X2816C        X28C64/HC64    X28VC256      X28C256/HC256

        X28C512       X28LC512      X28HT512       X28C010       X28HT010

        XM28C010      XM28C020      XM28C040       XM28C080

1.  Micro Port Saver (MPS) EEPROM

        X84041        X84161        X84641         X84129

2.  Serial

    -   NOVRAM

        X24C44        X24C45        X25401

    -   EEPROM

        X24C00        X24C01        X24C01A        X24C02        X24C04

        X24C08        X24C16        X24001         X24012        X24022

        X24042        X24128        X24164         X24165        X24320

        X24321        X24325        X24640         X24641        X24645

        X25C02        X25020        X25040         X25057        X25080

        X25097        X25128        X25138         X25160        X25320

        X25330        X25383        X25385         X25640        X25642

        X25650

    -   Serial Flash

                                       28
<PAGE>   29
                                                CONFIDENTIAL TREATMENT REQUESTED

        X24F016       X24F032       X24F064        X24F128       X25F008

        X25F016       X25F032       X25064         X25F128       X25F047

        X25F087

1.  Parallel NOVRAMs

        X20C04        X20C05        X20C16         X20C17        XM20C64

        X22C10        X22C12

2.  Digitally Controlled Potentiometers

    -   Quad 64 Tap DCP

        X9241Y        X9241W        X9241U         X9241M        X9400W

        X9408W        X9410W        X9418W         X9448W

    -   32 Tap DCP

        X9313Z        X9313W        X9313U         X9313T        X9314W

        X9315Z        X9315W        X9316Z         X9316W

    -   Dual 64 Tap DCP

        X9221Y        X92221W       X9221U         X9410W        X9418W

    -   100 Tap DCP

        X9C102        X9C103        X9C503         X9C104        X9312Z

        X9312W        X9312U        X9312T

    -   32 Tap PushPOTs

        X9511Z        X9511W        X95514W

1.  Smart Card Modules

        X76F041       X76F100       X76F101        X76F128       X76F640

        X24026        X24165        X24325         X24645        X25320

        X25650

2.  Secure Serial Flash

        X76F041       X76F100       X76F101        X76F128       X76F640

                                       29<PAGE>   1
                                                CONFIDENTIAL TREATMENT REQUESTED

                                                                   Exhibit 10.14

*Portions denoted with an asterisk have
been omitted and filed separately with
the Securities and Exchange Commission
pursuant to a request for confidential
treatment.

                                  XICOR - SANYO
                  SEMICONDUCTOR MANUFACTURING FOUNDRY AGREEMENT

This Agreement is made and entered into this 1st day of May 1999 by and between
Xicor, Inc., a corporation established and existing under the laws of
California, USA and having its principal office at 1511 Buckeye Drive, Milpitas,
CA 95035 USA (hereinafter called "Xicor"); and Sanyo Corporation, a corporation
established and existing under the laws of Japan and having its principal office
at 5-2, 2chome, Keighan-Hendori, Moriguchi, Osaka, Japan (hereinafter called
"Sanyo").

WHEREAS XICOR, designs and markets integrated circuit products, and desires to
obtain an additional manufacturing source for certain of its products, and

WHEREAS SANYO, manufactures integrated circuits designed and marketed by other
parties and possesses wafer fabrication facilities suitable for manufacturing
the Xicor products, and

WHEREAS XICOR, desires to entrust Sanyo with the manufacture of certain
integrated circuit products; and

WHEREAS SANYO, desires to manufacture and supply these products to Xicor and is
willing to undertake to manufacture such products with technical assistance and
cooperation from Xicor, and to deliver such Product to Xicor.

NOW, THEREFORE, in consideration of the above premises and the mutual covenants
herein contained, the parties hereto agree as follows:

1.0     DEFINITIONS:

        1.1 "Wafer[s]" shall mean 150 mm epitaxial silicon wafers carrying dice
        designed by Xicor and built by Sanyo according to Xicor's C5 (1.2um
        process) or C7 (0.6um process) process flows, or a generally similar
        process flow, through pad mask and parametric test that meet the
        Specifications as per Appendix C.

        1.2 "Device[s]" shall mean individual die of Xicor designed integrated
        circuits in Wafer form.

        1.3 "Specifications" shall mean the parametric, electrical, reliability,
        quality, yield and endurance specifications for each Wafer and Device
        type as set forth in Appendix C.

        1.4 "Good Device[s]" shall mean individual Devices that meet the
        Specifications.

<PAGE>   2
                                                CONFIDENTIAL TREATMENT REQUESTED

        1.5 "Sanyo Process" shall mean the Sanyo process, and/or such other
        processes or successor processes, qualified by Xicor in accordance with
        Appendix D, or as modified and approved thereafter in accordance with
        Paragraph 3.9 of this Agreement, that produce Wafers and Devices that
        meet the Specifications.

        1.6 "Design[s]" shall mean all Xicor integrated circuit designs for
        systems, circuits and pattern layouts concerning the Wafers and Devices
        contained thereon.

        1.7 "Proprietary Information" shall mean (i) this Agreement, including
        all appendixes, exhibits, attachments and any technical specifications,
        prices, schedules, specifications and the like negotiated in
        implementation of this Agreement, and (ii) any information including,
        but not limited to, technical information, database tapes,
        specifications, test tapes, masks and supporting documentation provided
        either orally, in writing or in machine readable format and masks or
        reticles generated by or for Sanyo using Xicor's database tapes,
        provided that all such information is marked "Confidential" or
        similarly, or, if oral, identified as proprietary within 30 days
        following the time of disclosure. Notwithstanding the foregoing,
        Proprietary Information does not include information generally available
        to the public, information independently developed or known by the
        receiving Party without reference to information disclosed hereunder,
        provided that the receiving Party can demonstrate such independent
        development or knowledge by substantial documentation, information
        rightfully received from a third party without confidentiality
        obligations, information authorized in writing for release by the
        disclosing Party hereunder, or information required to be disclosed
        pursuant to law or governmental regulation provided that the disclosing
        Party gives reasonable notice to the other party prior to any such
        disclosure.

        1.8 "Yield" shall mean the number of good Devices to the total Devices
        on a particular Wafer.

        1.9 "Substrates" shall mean 150 mm silicon epitaxial substrates as per
        the specification in Appendix C.

        1.10 "Effective Date" shall mean the date of Japanese governmental
        approval of this Agreement pursuant to Japanese laws and regulation in
        effect on the date this Agreement is executed. If such approval is not
        obtained within 30 days following execution, Xicor shall have the right
        to terminate this Agreement by notice to Sanyo. Sanyo will make all
        filings necessary for such approval within ten (10) business days
        following execution of this Agreement.

        1.11 "Forecast" shall mean a six (6) month rolling forecast of Xicor's
        delivery requirements for Wafers and/or Devices by Device type.

        1.12 "Order[s]" shall mean Xicor purchase orders or purchase order
        releases for specific Wafer and/or Device types, quantities and delivery
        dates.

                                       2
<PAGE>   3
                                                CONFIDENTIAL TREATMENT REQUESTED

        1.13 "Risk Starts" shall mean any Wafers and/or Devices ordered by Xicor
        prior to full and complete qualification of Sanyo's process per Appendix
        D.

        1.14 "Process Change" shall mean any change in process chemicals, gases,
        chemical or physical structures or impurities embedded in the silicon or
        in layers above silicon, cross-sections, surface properties, physical or
        chemical environment which the wafer encounter during processing or
        storage, photolithographic and electrically charged processes and any
        other change which could impact the yield, quality, reliability,
        performance, physical structure and /or appearance of Wafers and/or
        Devices.

2.0     PRODUCTION:

        2.1 Sanyo agrees to manufacture and supply to Xicor Wafers and/or
        Devices as described in this Agreement and Xicor agrees to purchase from
        Sanyo, the Wafers and/or Devices under the terms and conditions set
        forth herein.

        2.2 Sanyo hereby assumes responsibility for the manufacture of Wafers
        and/or Devices based on the Designs, and manufactured to the
        Specifications, utilizing the Sanyo Process. Sanyo will produce Wafers
        and/or Devices to fill Xicor's orders, as further outlined below.

        2.3    Orders shall be provided by Xicor to Sanyo as follows:

               2.3.1 Within thirty (30) days of successful qualification of the
               Sanyo Process, Wafers and Devices produced therein, and
               specifically conditioned upon successful agreement by the parties
               to Lead-Times, Pricing, Specifications, and Monitoring Criteria
               contained in Appendixes A, B, C and D respectively, Xicor shall
               provide Orders to Sanyo for Wafers and/or Devices. Orders placed
               by Xicor will be open purchase orders or releases for fixed
               quantities of Wafers and/or Devices based upon the Xicor
               forecast. Sanyo shall use its best efforts to fulfill said Orders
               within the lead times outlined in Appendix A.

               2.3.2 On the twentieth (20th) day of each month Xicor will
               provide Sanyo a Forecast. The first two months of the Forecast
               shall be firm and supported by released Orders. All subsequent
               months shall be for planning purposes only and in no way
               represent a firm commitment to purchase Wafers and/or Devices by
               Xicor.

        2.4 Defective Wafers and Devices: When a Wafer manufactured by Sanyo
        fails to meet the Yield Specifications, or a Device manufactured by
        Sanyo fails meet the Device Specifications, Xicor and Sanyo will work
        together to investigate and determine the root cause of the defect. The
        party which is found to be responsible for causing such failures will,
        at its own cost and responsibility, remove such cause or causes with
        minimum delay.

                                       3
<PAGE>   4
                                                CONFIDENTIAL TREATMENT REQUESTED

        If the root cause of the defect can not be determined the parties agree
        to act in good faith to reach an equitable resolution acceptable to both
        parties.

        2.5 Partial Shipments. Xicor will accept deliveries of Wafers or Devices
        made in timely installments from Sanyo. Any partial shipments will be
        invoiced as made, and payments therefor are subject to the terms of
        payment noted below.

        2.6 Quantity Variance. If the monthly quantity shipped by Sanyo of each
        Wafer and/or Device ordered by Xicor is within +/- 5 percent of the
        quantity ordered, such quantity shall constitute compliance with Xicor's
        order. Over shipments may be accepted at Xicor's discretion, in which
        case the respective quantity of such over shipment may be subtracted
        from the following months' quantity. Any under shipment may, at Xicor's
        discretion, be added to the following months Order.

        2.7 Modifications. If Xicor determines that modifications to the
        Specifications are required, including modifications to mask tooling,
        process or testing, Sanyo agrees to investigate to make such
        modifications within a reasonable period of time after notification in
        writing by Xicor. The parties will negotiate adjustment to price and
        delivery schedule as well as charges for retooling costs if warranted by
        such modifications.

        2.8 Substitutions. Xicor may, at Xicor's sole discretion, add or
        substitute Wafer and/or Device types as long as the Wafer and/or Device
        type utilizes the same or similar Sanyo Process approved by Xicor and
        Sanyo for existing production, provided that the agreed upon quantities
        of Wafers and/or Devices required by Xicor do not exceed those
        determined pursuant to Paragraph 2.3 and 2.6 except with the consent of
        Sanyo. Such Wafer and/or Device types are those which can be
        manufactured using the same process and in accordance with the same
        qualification plan as Wafers and/or Devices currently manufactured by
        Sanyo under this Agreement.

        2.9 Parametric Failure. If a Devices fails to meet the agreed upon
        Parametric Specifications, and in Xicor's reasonable opinion such
        failure appears material, Xicor may request Sanyo to stop production. If
        Sanyo is unable to correct such failures within a reasonable time, Xicor
        may cancel such particular Orders at no charge to Xicor. Xicor will
        notify Sanyo in writing of its intention to suspend or cancel such
        Orders and will include any substantiating data.

        2.10 Reports and Reviews: Sanyo shall provide Xicor with a weekly
        delivery report. Sanyo will provide a system in 1999 that will be
        capable of weekly updating of wafer fabrication work in process for each
        Wafer and/or Device type. The details and format of such Reports shall
        be as agreed upon by the parties. To enable Xicor to track process
        control, Sanyo shall also provide weekly status and data summarizing the
        DC parametric measurements for Sanyo Process. In addition, the parties
        agree to meet quarterly or as frequently as necessary to discuss and
        resolve issues that may, from time to time, arise and to review Sanyo
        performance. Sanyo also agrees to provide Xicor with such data

                                       4
<PAGE>   5
                                                CONFIDENTIAL TREATMENT REQUESTED

        and/or reports required by Xicor to enable Xicor to maintain their
        qualification to ISO9001 and QS 9000 quality standards. Sanyo shall
        ensure that the computer system is Y2K compliant.

        2.11   Order Cancellation.

               2.11.1 If Xicor fails to make any payment hereunder when due or
               fails to accept any material quantity of Wafers and/or Devices
               properly furnished hereunder, and such default is not cured
               within thirty (30) days after Sanyo gives Xicor written notice
               thereof, Sanyo may decline to make further shipments and/or may
               terminate Xicor's Orders without affecting any other rights or
               remedies available to Sanyo. If Sanyo continues to make shipments
               after such default, Sanyo's actions shall not constitute a waiver
               nor affect Sanyo's remedies for such default.

               2.11.2 If Xicor cancels an Order that is firm pursuant to Section
               2.3.2, Xicor shall pay in full and complete satisfaction of any
               claim arising therefrom, a cancellation charge per Wafer equal
               to:

                          (number of mask steps completed)
                          ------------------------------------  x  (Wafer price)
                          (total number of mask steps)

               Notwithstanding the above, if the parties mutually agree to
               reschedule the Order, no claim shall arise unless the Order as
               rescheduled is canceled. Claims for the canceling of rescheduled
               Orders shall also be governed as set forth above on the date of
               cancellation.

               2.11.3 Xicor may cancel any Order in whole or in part if Sanyo
               fails to deliver Wafers and/or Devices as covered by such Order
               placed hereunder by Xicor, which failure is not corrected within
               sixty (60) days after written notice thereof. If such failure is
               not corrected within the above sixty-day period and is not
               excused pursuant to Paragraph 19.0, Xicor shall have the right to
               procure substitute goods ("cover") as provided by the California
               Uniform Commercial Code, Section 2712. The foregoing shall not
               affect any other right or remedy available to Xicor. If Xicor
               continues to maintain or place Orders after such default, Xicor's
               actions shall not constitute a waiver nor affect Xicor's remedies
               for such default.

3.0     PROCESS TECHNOLOGY:

        3.1 Xicor will provide to Sanyo the Xicor C5 and C7 process flows,
        process parameters, design rules and other relevant information to
        enable Wafers and Devices to be manufactured by Sanyo. It is understood
        that the information listed above is the Proprietary Information of
        Xicor and will remain the sole property of Xicor. Nothing in

                                       5
<PAGE>   6
                                                CONFIDENTIAL TREATMENT REQUESTED

        this Agreement grants or authorizes Sanyo to use this Proprietary
        Information for any other purpose other than those specifically
        authorized by this Agreement.

        3.2 Sanyo will run the Sanyo Process pursuant to this Agreement, or any
        process which is based on the Sanyo Process, for the purpose of
        manufacturing Wafers and/or Devices exclusively for Xicor. All Wafers
        and Devices produced by Sanyo shall meet the Specifications as per
        Appendix C.

        3.3 Sanyo will either (i) provide Xicor with a list of Sanyo's
        acceptable mask vendors, to which, Xicor will select and provide one
        mask vendors, as mutually agreed, with Device database tapes in GDS II
        format, or (ii) Xicor will provide Sanyo with Device database tapes in
        GDS II format and Sanyo may procure masks locally All such database
        tapes, whether or not marked as confidential as per paragraph 1.7,
        constitute confidential Proprietary Information of the highest level. No
        such database tapes will be provided to any third party mask vendor or
        to Sanyo unless and until a written agreement by the mask vendor is
        executed protecting Xicor Proprietary Information from unauthorized
        disclosure. Sanyo will provide the mask vendor with mask alignment and
        test structure database, and oversee merging of device and mask
        alignment databases by the mask vendor. Xicor will bear the cost of
        original mask sets, subject to its advance approval of the cost. The
        cost of subsequent mask layers or sets that are required due to use,
        abuse or other damage by Sanyo will be the responsibility of Sanyo. The
        cost of reticle changes required due to process or design changes
        requested by Xicor will be the responsibility of Xicor. The cost for
        reticle changes requested by Sanyo for process improvement or yield
        enhancements shall be the responsibility of Sanyo. Upon termination of
        this Agreement all mask sets shall be destroyed.

        3.4 After Sanyo has provided Xicor with sufficient Wafers and Devices
        for qualification, but prior to completion of full qualification, Xicor
        may request that Sanyo provide a mutually agreed quantity of Risk
        Starts. Sanyo will provide these Risk Starts to Xicor at the prices
        determined pursuant to Appendix B.

        3.5 During the production of Risk Starts per Paragraph 3.4, Xicor may
        stop production of Wafers and/or Devices by giving notice to Sanyo. Upon
        receipt of such notice, Sanyo will stop production following completion
        of the process steps at which Wafers and/or Devices reside at the time
        of notification. Xicor agrees to pay Sanyo for all Wafers and/or Devices
        started prior to Sanyo receiving such notice. Prices for such Wafers or
        Devices will be equitably prorated based on the last stage of production
        completed as per Paragraph 2.11.2.

        3.6 For Sanyo to become qualified, Wafers and/or Devices delivered for
        qualification must meet all agreed Specifications per Appendix C. When
        Wafers and/or Devices made by Sanyo successfully complete qualification,
        then upon written notice from Xicor of successful completion, Sanyo will
        proceed, as soon as possible after receipt of such notice, to
        manufacture and deliver Wafers and/or Devices ordered by Xicor in
        accordance with Paragraph 2.3.

                                       6
<PAGE>   7
                                                CONFIDENTIAL TREATMENT REQUESTED

        3.7 Prior to qualification, Sanyo and Xicor must agree upon
        Specifications to be contained in Appendix C. If, in the reasonable
        opinion of Xicor, such agreement on Specifications can not be reached,
        Xicor may cancel or terminated this Agreement without any further
        obligation to Sanyo whatsoever. Sanyo specifically agrees that it will
        not modify Specifications in any way without the prior written consent
        of Xicor.

        3.8 Xicor shall conduct the qualification as per Appendix D and report
        the result of such testing to Sanyo.

        3.9    Process Change shall be handled in the following manner:

               3.9.1 Prior to any Process Change which Sanyo desires to make in
               the manufacturing process, Sanyo agrees to notify Xicor in
               writing of each such proposed Process Change, and to get Xicor's
               approval in advance of the desired implementation of such Process
               Change. Such notice shall contain the following:

                      3.9.1.1 intent of the proposed Process Change.

                      3.9.1.2 detailed description of the proposed Process
                      Change.

                      3.9.1.3 the reason for the proposed Process Change.

                      3.9.1.4 the results of controlled experiments done to
                      support the proposed Process Change.

                      3.9.1.5 detailed and comprehensive analysis of potential
                      failure modes and their effects.

                      3.9.1.6 monitoring in place to verify the intended
                      improvements and to identify, as early as possible, any
                      unintended consequences of the proposed Process Change.

                      3.9.1.7 containment plan in case the proposed Process
                      Change produces undesired effects.

                      3.9.1.8 detailed plan for the implementation of the
                      proposed Process Change and labeling of affected Wafers
                      and/or Devices.

               3.9.2 Xicor reserves the right to approve or reject any proposed
               Process Change that, in Xicor's sole opinion, will materially
               affect the form, fit, or function of the Device or Wafer or
               reduce the yield, reliability, or quality thereof. Xicor agrees
               to provide written notification of approval or disapproval of any
               proposed Process Change within sixty (60) days of receipt of such
               proposed Process Change request from Sanyo. In no case will Sanyo
               implement a Process Change without Xicor's

                                       7
<PAGE>   8
                                                CONFIDENTIAL TREATMENT REQUESTED

               prior written approval. Notwithstanding the foregoing, the
               process changes in ion implantation dose and energy, oxide,
               thickness of film except the tunneling oxide less than +/- 5% of
               default values does not require Xicor's approval, prior to
               implementing the changes.

               3.9.3 Notwithstanding the provisions of Paragraph 3.9.2 above, if
               an emergency situation warrants a temporary Process Change, Sanyo
               hereby agrees to notify Xicor within twenty-four (24) hours of
               identification of the emergency situation. Sanyo shall provide to
               Xicor, via fax, details relating to the emergency situation
               including problem identification, proposed emergency Process
               Change, expected results, expected duration of effectivity and
               probable ramifications if said emergency Process Change is not
               approved. Xicor shall provide approval/disapproval, via fax,
               within forty-eight (48) hours of receipt of Sanyo notification.
               Unless said emergency Process Change is approved by Xicor as a
               permanent Process Change, the process will, within the specified
               time authorization in the emergency process change notification,
               but in no case greater than one (1) week, revert back to the
               original process which was in effect prior to the emergency
               Process Change.

4.0     FORECAST AND COMMITMENT:

        4.1 On the twentieth (20th) day of each calendar month, Xicor shall
        provide to Sanyo a Forecast per Paragraph 2.3.2. The Forecast shall be
        used by Xicor to advise Sanyo of the Wafer and/or Device volumes
        required by Xicor. The first two months of the each Forecast will be
        detailed by week. The remaining months will be detailed by month. Sanyo
        will provide Xicor with a response in the form of a confirmation in
        writing to each Forecast by the last working day of each calendar month.
        The response shall contain a commitment schedule for all Wafers and/or
        Devices for the first two month periods.

        4.2 Upon receipt of the commitment schedule, Xicor shall either accept
        or reject the response within three (3) working days. If the committed
        Wafer and/or Device quantities are acceptable to Xicor, Xicor will
        provide Sanyo with Orders to support the agreed upon Wafers and/or
        Devices. If the committed Wafer and/or Device quantities are
        unacceptable to Xicor, both parties agree to negotiate in good faith
        until an acceptable resolution is reached. The production schedule
        agreed to by the parties, based on the Forecast and Sanyo's response,
        shall be dated, in written form, signed by the parties and shall
        represent a binding commitment for all firm Orders. Signature by
        facsimile is acceptable as proof of execution.

        4.3 Each Order shall obligate Xicor to purchase the Wafers and/or
        Devices per Order. Xicor also agrees to limit the extent of change to
        each subsequent Forecast for future months based on the parties previous
        month's Orders as follows: not more than 30% for the third month, 50%
        for the fourth month, 75% for the fifth month and 90% for the sixth
        month.

                                       8
<PAGE>   9
                                                CONFIDENTIAL TREATMENT REQUESTED

        4.4 Sanyo will provide Xicor with actual weekly Wafer and/or Device
        completion's and weekly Wafer and/or Device shipment reports to be
        received at Xicor no later than 12:00 noon on the Monday for the
        previous weeks Wafer and/or Device activity.

        4.5 In case Yields drop below the minimum Yield rate as per Appendix C,
        Sanyo will use all reasonable efforts to expeditiously make up for the
        missing Wafer and/or Device deliveries.

5.0     YIELD, RELIABILITY AND QUALITY:

        5.1 Xicor shall have the right to test, monitor or sample any and all
        Wafers and Devices to ensure adherence to the Specifications contained
        in Appendix C. Any Wafer or Device failing to meet such Specifications
        may be returned to Sanyo in accordance with the procedure outlined below
        in Paragraph 5.2. In addition, and in the sole discretion of Xicor,
        Xicor may stop any or all further shipments of Wafer and/or Devices
        until such time as Sanyo can successfully demonstrated to Xicor, and in
        Xicor's sole determination, the root cause creating the non-adherence
        has been eliminated and all further Wafers and/or Devices shipped will
        meet the Specifications.

        5.2 Xicor shall conduct an analysis of any Wafers and/or Devices that
        fail to meet the Specifications contained in Appendix C. If the results
        of the failure analysis indicate to Xicor that the cause of such failure
        was the responsibility of Sanyo, then Xicor shall provide Sanyo with
        written notification of the failure and a copy of the failure analysis
        report. Upon completion of Sanyo's internal investigation, but no later
        than thirty (30) days after receipt of written notification, Sanyo shall
        provide Xicor with a Return Material Authorization (RMA) and Xicor may
        return the failed Wafers and/or Devices to Sanyo. All costs associated
        with the return of such defective Wafers or Devices, including but not
        limited to transportation, customs, duties or any other such cost, shall
        be the sole responsibility of Sanyo. Failure to return or give written
        notice of rejection of the Wafers or Devices within one (1) year after
        receipt of the Wafers or Devices by Xicor shall be considered to be an
        acceptance of the Wafers or Devices by Xicor. If Xicor does not follow
        the above outlined procedure, then the return period of failed Wafers
        and/or Devises is limited to three (3) months from the date of receipt
        of the Wafers and/or Devises by Xicor.

        5.3 The parties agree that the prices identified in Appendix B are
        specifically predicated upon (i) if Wafers are procured, then by the
        expected average Wafer/Device Yield by Device type contained in Appendix
        C, and (ii) if Devices are procured, then by the quantity of Good
        Devices delivered to Xicor.

               5.3.1 The price per Wafer (Appendix B) is based on an agreed upon
               Yield per Device type contained in Appendix C. Should the actual
               average Yield, as reported for all Wafers of the same Device type
               and delivered during any

                                       9
<PAGE>   10
                                                CONFIDENTIAL TREATMENT REQUESTED

               particular Xicor accounting period exceed 5% or drop below 5% of
               the Yield per Appendix C, the price per Wafer will be adjusted
               upward or downward as per the formula in Appendix B.

               5.3.2 The price per Device (Appendix B) are based solely on a per
               Good Device basis.

6.0     PRICES, PAYMENTS AND TAXES:

        6.1 All prices, payments or charges pursuant to this Agreement shall be
        made in US dollars. Prices will be negotiated annually and will take
        into consideration any material fluctuations in the currency exchange
        rate that may have occurred. Agreed upon prices for Wafers and/or
        Devices, and any other items requiring payment, shall be listed in
        Appendix B.

        6.2 All prices are FCA San Francisco Airport. Sanyo shall be responsible
        for transportation charge from Sanyo Semiconductor to San Francisco
        Airport and for Japanese Customs clearance. Title to Wafers and/or
        Devices shall transfer to Xicor upon release from Japanese Customs to
        the Xicor designated freight forwarder in Japan. Sanyo shall be
        responsible for all freight charges prior to transfer of title. Xicor
        agrees to supply Sanyo with an appropriate tax exemption certificate if
        appropriate.

        6.3 Payment terms shall be net sixty (60) days from receipt of a valid
        invoice by Xicor. Sanyo shall not send such invoices until Sanyo has
        shipped to Xicor the associated Wafers and/or Devices.

        6.4 Xicor shall have the right to either; (a) offset the cost on any
        future invoice, or (b) obtain a credit from Sanyo for any Wafer and/or
        Device returned to Sanyo under Paragraph 5.1 which has previously been
        invoiced and paid by Xicor.

        6.5 Each party shall be solely responsible for any and all taxes, levies
        or any other type of charges imposed upon them by their respective
        sovereign governments.

        6.6 During the course of this Agreement each party shall bear its own
        costs and expenses. Expenses shall mean such expenses as engineering
        materials, Fab costs, transportation and hotel expenses associated with
        travel and any other expenses required by the parties to meet their
        obligations under this Agreement.

7.0 ON-SITE INSPECTION: Xicor representatives shall be allowed to visit and tour
Sanyo's fabrication and electrical test facilities during normal working hours
upon reasonable notice to Sanyo. Sanyo shall keep electrical test records,
process run cards, equipment usage

                                       10
<PAGE>   11
                                                CONFIDENTIAL TREATMENT REQUESTED

status and Q/A results concerning the Wafers and Devices for three (3) years
after such data is issued, and Xicor representatives shall be entitled to review
such materials during such visits.

8.0     PROPRIETARY INFORMATION:

        8.1 Both Sanyo and Xicor agree that Proprietary Information of the other
        will remain the property of the disclosing party and will be used by
        them solely for the purpose of manufacturing Wafers and/or Devices
        hereunder. Such Proprietary Information shall be maintained by each
        party in confidence and to a degree equal to or higher than the parties
        maintain their own proprietary information of a similar nature. The
        parties agree that they will not disclose any Propriety Information to
        any third party without the prior written permission of the disclosing
        party and further agree that such Propriety Information will not be
        maintained on any internal computer network that is unsecured and can be
        accessed via the internet or any other outside computing system. The
        parties agree that all of their respective employees and consultants
        shall be subject to non-disclosure agreements no less protective of
        Proprietary Information than the provisions of this Agreement prior to
        such employees and consultants being allowed access to Proprietary
        Information.

        8.2 Upon termination or expiration of this Agreement for whatever
        reason, the receiving Party must (i) return to the other Party the
        original and all copies of any Proprietary Information of the disclosing
        Party, or (ii) destroy the originals and all copies of any Proprietary
        Information and provide certification of such destruction to the
        disclosing party, and (iii) at the disclosing Party's request, have one
        of its officers certify in writing that it will not make any further
        disclosure or use of such Proprietary Information and specifically will
        not manufacture or have manufactured for it any product incorporating
        such Proprietary Information.

        8.3 These confidentiality provisions as to any item of Proprietary
        Information shall survive the termination of this Agreement for a period
        of five (5) years from the date of termination of this Agreement.

        8.4 If Sanyo develops any process modifications or new processes as a
        result of this relationship with Xicor, and such process modifications
        or new processes are useable by Xicor, Xicor shall have the right to
        incorporate such process modifications or new processes in its C5 or C7
        processes. The parties further agree that if such process modifications
        or new processes developed by Sanyo or Xicor are patentable, and both
        parties wish to pursue such patent, the parties shall equally share the
        cost of filing such patent, whether in the United States or Japan, and
        the parties shall become co-owners of such patents. If only one parties
        wishes to pursue such patent, then the pursuing party shall bear all
        costs and the non-pursuing party shall be granted a non-exclusive,
        royalty free license for such patent.

                                       11
<PAGE>   12
                                                CONFIDENTIAL TREATMENT REQUESTED

9.0     WARRANTY and ACCEPTANCE:

        9.1 Sanyo warrants that Wafers and/or Devices delivered hereunder will
        meet the mutually agreed Specifications and shall be free from defects
        in material and workmanship under normal use and service for a period of
        one (1) year from the date of receipt from Sanyo's facility. If, during
        such one year period (i) Sanyo is notified with reasonable promptness in
        writing upon discovery of any defect in the Wafers and/or Devices,
        including a reasonably detailed description of such defect; (ii) and
        when physically available such Wafers and/or Devices are returned to
        Sanyo's facility, transportation prepaid; and (iii) Sanyo's reasonable
        examination of such Wafers and/or Devices discloses that such Wafers
        and/or Devices are defective and such defects are not caused by
        accident, abuse, misuse, neglect, improper installation, repair or
        alteration not authorized by Xicor, improper testing or use contrary to
        any reasonable instructions issued by Xicor, then within a reasonable
        time Sanyo shall, as mutually agreed, either repair, replace, or credit
        Xicor for such Wafers and/or Devices. Sanyo shall reimburse Xicor for
        the return transportation charges paid by Xicor for such Wafers and/or
        Devices. Sanyo shall return any Wafers and/or Devices repaired or
        replaced under this warranty to Xicor transportation prepaid. If
        replacement of any Wafer and/or Device is not practical, then Sanyo
        shall issue a credit to Xicor for the price paid by Xicor for the
        defective Wafers. The performance of this warranty does not extend the
        warranty period applicable to the Wafers and/or Devices originally
        delivered.

        9.2 Sanyo shall immediately advise Xicor whenever Sanyo has reason to
        believe that Wafer and/or Devices may not conform to the applicable
        Specifications.

        9.3 Both parties agree that the foregoing states the entire liability
        and obligations of Sanyo and the exclusive remedy of Xicor for breach of
        the provisions of this Article 9.

10.0 NON-COMPETITION: Sanyo agrees that Sanyo will not compete with Xicor with
products or semiconductor devices similar in nature to those sold by Xicor with
the exception of those products listed in Appendix E. Sanyo specifically agrees
that it will not at any time use for its own purposes, or any other purpose
other than those specified by this Agreement, any Xicor Proprietary Information,
know-how of Xicor's, or the Xicor C5 or C7 process technology unless
specifically evidenced by a separate technology licensing agreement properly
executed by Xicor.

11.0    INDEMNIFICATION:

        11.1 Each party (the "Indemnifying Party") agrees, at its own expense,
        to defend or at its option to settle, any claim, suit or proceeding
        brought against the other party (the "Indemnified Party") or its
        customers on the issue of infringement of any United States or other
        country patent, copyright, trade secret, trademark, or other
        intellectual property right with respect to Xicor, the design of the
        Wafer, Device or the C5 wafer process technology to the extent
        contributed by Xicor, or, as to Sanyo, the wafer process to the

                                       12
<PAGE>   13
                                                CONFIDENTIAL TREATMENT REQUESTED

        extent contributed by Sanyo, subject to the limitations hereinafter set
        forth. The Indemnifying Party shall have sole control of any such action
        or settlement negotiations, and the Indemnifying Party agrees to pay,
        subject to the limitations hereinafter set forth, any final judgment or
        settlement entered against the Indemnified Party or its customer on such
        issues in any such suit or proceeding defended by the Indemnifying
        Party. The Indemnified Party agrees that the Indemnifying Party shall be
        relieved of the foregoing obligations unless the Indemnified Party or
        its customers notify the Indemnifying Party promptly in writing of such
        claim, suit or proceeding and give the Indemnifying Party authority to
        proceed as contemplated herein, and, at the Indemnifying Party's expense
        (except for the value of the time of the Indemnified Party's employees),
        gives the Indemnifying Party proper and full information and assistance
        to settle and/or defend any such claim, suit or proceeding. The
        Indemnifying Party shall not be liable for any costs or expenses
        incurred by the Indemnified Party without its prior written
        authorization.

        11.2 The foregoing provisions of this Article state the entire liability
        and obligations of the Indemnifying Party and the exclusive remedy of
        the Indemnified Party, with respect to any alleged infringement of
        patent, copyright, trade secret, trademark or other intellectual
        property right by the Wafer, process, or any part thereof.

12.0    TERM:

        12.1 This Agreement shall come into force on the Effective Date and
        shall remain in force for a period of five (5) years from the Effective
        Date, unless terminated earlier in accordance with Paragraph 16 below.

        12.2 This Agreement may be renewed for an additional period under terms
        and conditions agreeable to both parties hereof.

13.0 EXPORT CONTROLS: Sanyo will not export, re-export, transship, or transmit,
directly or indirectly, (collectively "Export"), any data, designs, programs,
hardware, or technical information of any kind acquired hereunder, or any direct
product thereof to any country to which such Export is limited, or prohibited by
the United States Government or any law, regulation, agency or executive
thereof, including without limitation, the Export Administration Regulations of
the US Department of Commerce. This Agreement is subject to compliance with all
applicable export and import laws and regulations and the parties agree to
cooperate in complying therewith. Sanyo agrees to indemnify Xicor for any fees,
fines or penalties imposed on Xicor by the United States Government as a result
of Sanyo's breach or violation of this provision. Xicor shall provide Sanyo with
information regarding the Export Administration Regulations of the U.S.
Department of Commerce.

14.0 PUBLICITY: No public announcement concerning this Agreement shall be made
by either party hereto without the prior written consent of the other which
shall not be unreasonably

                                       13
<PAGE>   14
                                                CONFIDENTIAL TREATMENT REQUESTED

withheld. It is understood that Xicor may have obligations under financial and
United States Security and Exchange regulations to publicly announce this
Agreement.

15.0 NON-DISCLOSURE OF TERMS AND CONDITIONS: Neither party shall, without first
obtaining the written consent of the other party, disclose the terms, conditions
or subject matter of this Agreement, unless, in the good faith judgment of the
disclosing party, such disclosure is; (I) in response to a valid court order, in
which case the party making the disclosure pursuant to the valid court order
shall first have informed the other party and made reasonable efforts to obtain
a protective order requiring that the information or document so disclosed be
used only for the purpose for which the order was issued, or (ii) as may be
otherwise required by law, rules or government regulations or other governmental
body of the United States, Japan or any political subdivisions thereof; provided
that the disclosing party requests confidential treatment by the appropriate
governmental agency, or (iii) necessary to establish the parties rights under
this Agreement.

16.0    TERMINATION:

        16.1 Either party may terminate this Agreement for default of any of the
        terms and conditions of this Agreement by the other party, providing
        proper notice of default is given and the defaulting party is provided
        with sixty (60) days after receipt of the notice to correct the
        defaulting condition.

        16.2 The parties agree that each party shall have the right to terminate
        this Agreement by giving written notice of termination to the other
        party at any time on or after the filing by the other party of a
        petition in bankruptcy or insolvency.

17.0. SURVIVAL OF PROVISIONS: The provisions of Paragraphs 8, 9, 10, 11, 13, 14,
15, 17, 23, 24, 25, 26, 27, 28, and 29 shall survive the termination or
expiration of this Agreement.

18.0. SEVERABILITY: If any provision of this Agreement, or the application
hereof to any situation or circumstance, shall be invalid or unenforceable, the
remainder of this Agreement or the application of such provision to situations
or circumstances other than those as to which it is invalid or unenforceable,
shall be intact; and each remaining provision of this Agreement shall be valid
and enforceable to the fullest extent permitted by applicable law. In the event
of such partial invalidity the parties shall seek in good faith to agree on
replacing any such legally invalid provisions with provisions, which, in effect,
will, from an economic viewpoint, most nearly and fairly approach the effect of
the invalid provision.

19.0. FORCE MAJEURE:Neither of the parties shall be liable in any manner for
failure or delay in the fulfillment of all or any part of this Agreement
directly or indirectly owing to Acts of God, governmental orders or
restrictions, war, threat of war, war-like conditions, hostilities, sanctions,
mobilization, blockade, embargo, detention, revolution, riot, looting, strike,
lockout, plague, fire, flood, earthquake or any other cause or other
circumstances beyond the affected

                                       14
<PAGE>   15
                                                CONFIDENTIAL TREATMENT REQUESTED

party's control. Each of the parties shall take all reasonable steps to minimize
the effect of force majeure upon it until such effect of force majeure has
abated. Notice of any occurrence of force majeure affecting either party shall
be given to the other party as soon as possible together with evidence thereof
and the expected duration of the period for which performance hereunder shall be
delayed.

20.0. ASSIGNMENT OR TRANSFER: This Agreement, and all rights and obligations
hereunder, shall not be assigned by a party hereto to any third party or parties
without a prior written consent of the others party hereto; provided, however,
that no such prior written consent shall be required for any assignment of this
Agreement in its entirety by one of the parties to a successor-in-interest of
such party as a result of any merger or consolidation involving such party or a
sale by such party of substantially all of its assets, provided, that such
successor shall promptly agree in writing to be bound by all of the terms and
conditions of this Agreement, or any modifications hereof.

21.0. RELATIONSHIP OF THE PARTIES:The parties to this Agreement have the
relationship of independent contractors. Nothing herein shall be construed to
create any form of agency relationship or to authorize either party to bind the
other in any matter.

22.0 NOTICES: Any notices hereunder shall be given in writing by registered or
certified mail at the respective addresses listed below or at another address
which is specified by written notice.

        If to Xicor:                        If to Sanyo:
        Xicor, Inc.                         Sanyo Corporation
        1511 Buckeye Drive                  __________________________________
        Milpitas, CA 95035, USA             __________________________________
        Attn:  Director of Contracts        Attn: ______________________________

23.0 LANGUAGE: This Agreement is in the English language only, which language
shall be controlling for all purposes. All proceedings related to the
performance, enforcement, interpretation, termination or breach of this
Agreement, and all evidence presented therein, shall be in English.

24.0 GOVERNING LAW:This Agreement shall be governed by the laws of the State of
California, except for the resolutions of disputes as provided in Paragraph 25.0
hereof.

25.0 DISPUTE RESOLUTION: In the event of any dispute, claim or question arising
out of this Agreement or breach hereof, the parties hereto shall use their best
efforts to settle such dispute, claim, question or difference. To this effect
they shall mutually consult and negotiate in good faith and understanding to
reach a just and equitable solution with sincerity. In the event that the
dispute, controversy or difference is not so settled in the above manner within
three (3) months, then the matter shall be finally settled by arbitration (i) if
Sanyo demands arbitration, it

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shall be in Santa Clara, California, in accordance with the Rules of
Conciliation and Arbitration of the International Chamber of Commerce and under
the laws of California, without reference to conflict of laws principles, or
(ii) if Xicor demands arbitration, it shall be in Tokyo, Japan, in accordance
with the Rules of Conciliation and Arbitration of the Japan Commercial
Arbitration Association and under the laws of Japan. In any such arbitration,
Xicor will appoint one arbitrator, Sanyo will appoint one arbitrator, and the
two arbitrators appointed will select a third arbitrator. Either party hereto
may object to any arbitrator who is an employee of or affiliated with any
competitor of either party hereto. The decision of the three arbitrators shall
be final and binding and may be entered as a judgment by a court of competent
jurisdiction. Each side shall bear half the cost of the arbitration.

26.0 TITLES:The titles of all Paragraphs contained in this Agreement are for
interpretation convenience and reference only and shall not in any way affect
the interpretation hereof.

27.0 ENTIRE AGREEMENT: This Agreement supersedes all documents or arrangements
in respect to the subject matter hereof, including any Letter of Intent
previously concluded by the parties, and evidences the entire Agreement of the
parties hereto. This Agreement cannot be changed, modified or supplemented
except in writing signed by the duly authorized officer or representative of
each of the parties hereto.

28.0 THIS AGREEMENT CONTROLS: The terms and conditions of this Agreement shall
control all sales of Wafers and/or Devices hereunder, and any additional or
different terms or conditions in either party's purchase order, Orders,
responses to Orders, acknowledgment, or similar document shall be of no effect.

29.0 GOVERNMENT APPROVALS: Sanyo represents and warrants that no consent or
approval of any governmental authority is required in connection with the valid
execution and performance of this Agreement except as set forth in Paragraph
1.10. Sanyo will be responsible for timely filings of this Agreement with all
necessary Japanese government agencies.

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
in duplicate, each of which shall be considered as an original, by their
respective duly authorized representatives as of the date first above written.

XICOR, INC.                                  SANYO CORPORATION

BY:  /s/ BRUCE GRAY                          BY: /s/ YUKINORI KUWANO

TITLE: PRESIDENT, CHIEF OPERATING            TITLE: PRESIDENT, SEMICONDUCTOR
       OFFICER                                      COMPANY

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                                                CONFIDENTIAL TREATMENT REQUESTED

DATE:  MAY 1, 1999                           DATE:  1 MAY 1999

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                                                CONFIDENTIAL TREATMENT REQUESTED

                                   APPENDIX A

                                   LEAD-TIMES

C5/C7 Cycle Time:

Total C5 Cycle Time = * + * Sigma must be less than or equal to * days.

Total C7 Cycle Time = * + * Sigma must be less than or equal to * days.

* Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to the
omitted portions.

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                                   APPENDIX B

                                     PRICING

B1: Wafer Pricing: (including raw wafer costs)

        C5 TECHNOLOGY:   = $  *  per unsorted wafer

        C7 TECHNOLOGY: =  (to be defined separately)

B2: WAFER PRICE CALCULATIONS:

        TIMING: Once every 6 months. These calculations are inspired by two
                things:

               1. *

               2. *

        CALCULATION: Every 6 months, Xicor will calculate the actual yield
        percentage and compare the actual yield percentage to the target as set
        forth in Table 1.

        Table 1: Starting "target" wafer sort yield percentages for Xicor
        products to be used for price calculations.

                      Density         Wafer Sort Yield Percentages
                      --------------------------------------------
                         64K                *  %
                         32K                *  %
                         16K                *  %
                        256K                *  %

               -  If the average wafer yield percentage of the total number of
                  wafers shipped in the previous 6 months is on target, the
                  wafer price for the next 6 months stay the same.

               -  If the actual wafer yield percentage is different than the
                  target values, the difference will be shared by Xicor and
                  Sanyo and a new wafer price will be established for the next 6
                  month period.

B3: Device Pricing: (to be defined separately in conjunction with wafer sort
costs)

* Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to the
omitted portions.

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                                   APPENDIX C

                                 SPECIFICATIONS

C1: Wafer Specifications: Xicor specification number 00-W-0007 (C5)

C2: Device Specifications: Xicor specification number 020512 (C5 E-test limits)

C3: Quality and Reliability Specifications: Xicor specification numbers:
06020110, 06020101, 06020311 and 06020324.

C4: Wafer Yield: Yield targets are established in Table 1, Appendix B. Any wafer
yielding less than minus 3 sigma from the demonstrated six month wafer sort
yield average will be scrapped.

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                                   APPENDIX D

          PROCESS, WAFER AND DEVICE QUALIFICATION & MONITORING CRITERIA

Xicor specification number 06020116.

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                                   APPENDIX E

                           NON-COMPETITION EXCLUSIONS

The following Sanyo Products/Product Families are specifically excluded from the
provisions of paragraph 10.0:

EEPROM/Flash Memories;

#1:LE28C*** series (512k, 1meg), parallel

#2:LE28F*** series (512k, 1meg), parallel

#3:LexxF*** series (512k, 1meg), serial

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