Delaware (State or other jurisdiction of incorporation or organization)

77-0191793 (I.R.S. Employer Identification No.)

140 Caspian Court, Sunnyvale, California (Address of principal executive offices)

94089 (Zip code)

Common Stock, $0.001 par value		68,737,378
Class		Number of shares

				Page No.
		PART I.    FINANCIAL INFORMATION
Item 1.		Condensed Consolidated Financial Statements:
		Condensed Consolidated Balance Sheets June 30, 2002 and December 31, 2001		3
		Condensed Consolidated Statements of Operations Three and six months ended June 30, 2002 and 2001		4
		Condensed Consolidated Statements of Cash Flows Three and six months ended June 30, 2002 and 2001		5
		Notes to Condensed Consolidated Financial Statements		6
Item 2.		Management’s Discussion and Analysis of Financial Condition and Results of Operations		14
Item 3.		Quantitative and Qualitative Disclosures About Market Risk		42
		PART II.    OTHER INFORMATION
Item 1.		Legal Proceedings		43
Item 2.		Changes in Securities		44
Item 3.		Defaults upon Senior Securities		44
Item 4.		Submission of Matters to a Vote of Security Holders		44
Item 5.		Other Information		45
Item 6.		Exhibits and Reports on Form 8-K		45
		Signatures		48

		June 30, 2002			December 31, 2001 *
		(unaudited)
ASSETS
Current Assets:
Cash and cash equivalents		$	255,814		$	189,499
Short-term investments			134,659			105,501
Investment in foundries			164,420			105,364
Accounts receivable, net			70,345			45,223
Inventories			61,283			55,968
Tax refund receivable			28,955			28,473
Prepaid expenses and other current assets			7,015			12,129
Total current assets			722,491			542,157
Restricted cash and cash equivalents			—			64,734
Property and equipment, net			33,629			33,730
Investment in foundries			32,717			41,380
Restricted investment in UMC			—			64,734
Investment in FlashVision			144,876			153,168
Deferred tax asset			18,842			18,842
Deposits and other non-current assets			15,612			13,603
Total Assets		$	968,167		$	932,348
LIABILITIES AND STOCKHOLDERS’ EQUITY:
Current Liabilities:
Accounts payable		$	26,125		$	19,938
Accounts payable to related parties			23,909			24,008
Accrued payroll and related expenses			5,768			5,279
Income taxes payable			7,149			7,361
Deferred tax liability			18,842			18,842
Research & development liability, related party			22,143			15,256
Other accrued liabilities			26,073			20,571
Deferred income on shipments to distributors and retailers and deferred revenue			28,886			15,806
Total current liabilities			158,895			127,061
Convertible subordinated notes payable			150,000			125,000
Deferred taxes and other liabilities			8,171			4,908
Total Liabilities			317,066			256,969
Commitments and contingencies
Stockholders’ Equity:
Common stock			582,708			580,431
Retained earnings			53,831			48,525
Accumulated other comprehensive income			14,562			46,423
Total stockholders’ equity			651,101			675,379
Total Liabilities and Stockholders’ Equity		$	968,167		$	932,348

		Three Months Ended June 30,								Six Months Ended June 30,
		2002				2001				2002				2001
Revenues:
Product		$	115,677			$	88,115			$	202,136			$	176,198
License and royalty			12,021				19,033				18,181				32,277
Total revenue			127,698				107,148				220,317				208,475
Cost of product revenues			84,384				106,752				165,783				225,532
Gross profit (loss)			43,314				396				54,534				(17,057	)
Operating expenses:
Research and development			17,273				14,218				31,823				30,571
Sales and marketing			8,817				10,533				17,865				20,751
General and administrative			6,591				4,295				11,257				8,574
Total operating expenses			32,681				29,046				60,945				59,896
Operating income (loss)			10,633				(28,650	)			(6,411	)			(76,953	)
Equity in income (loss) of joint ventures			1,740				(127	)			1,247				507
Interest income			2,183				3,079				4,497				7,154
Interest expense			(1,707	)			—				(3,363	)			—
Loss on investment in foundries			—				—				—				(179,981	)
Other expense, net			(1,929	)			(219	)			(1,983	)			(2,002	)
Income (loss) before taxes			10,920				(25,917	)			(6,013	)			(251,275	)
Provision for (benefit from) income taxes			1,880				(15,923	)			(11,319	)			(98,179	)
Net income (loss)		$	9,040			$	(9,994	)		$	5,306			$	(153,096	)
Net income (loss) per share
Basic		$	0.13			$	(0.15	)		$	0.08			$	(2.25	)
Diluted		$	0.13			$	(0.15	)		$	0.07			$	(2.25	)
Shares used in computing net income (loss) per share
Basic			68,711				68,088				68,654				67,950
Diluted			70,977				68,088				70,991				67,950

		Six months ended June 30,
		2002				2001
Cash flows from operating activities:
Net income (loss)		$	5,306			$	(153,096	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization			9,701				9,297
Deferred taxes			(11,151	)			(105,107	)
Loss (gain) on investment in foundry			—				179,981
Equity in income of joint ventures			(1,247	)			(761	)
(Gain) loss on disposal of fixed assets			(1,286	)			8,907
Changes in operating assets and liabilities:
Accounts receivable, net			(25,122	)			43,936
Inventory			(5,315	)			40,713
Prepaids expenses and other assets			7,281				6,459
Investment in FlashVision			6,190				—
Accounts payable			6,187