Delaware		95-4333817
(State of incorporation)		(I.R.S. Employer Identification No.)
990 Almanor Avenue, Sunnyvale, CA		94085
(Address of principal executive offices)		(Zip code)

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PART I.		FINANCIAL INFORMATION
Item 1.		Financial Statements		3
		Condensed Balance Sheets as of June 30, 2002 (unaudited) and December 31, 2001		3
		Unaudited Condensed Statements of Operations for the three and six months ended June 30, 2002 and 2001		4
		Unaudited Condensed Statements of Cash Flows for the six months ended June 30, 2002 and 2001		5
		Notes to Condensed Financial Statements		6
Item 2.		Management’s Discussion and Analysis of Financial Condition and Results of Operations		9
Item 3.		Qualitative and Quantitative Disclosure about Market Risk		13
PART II.		OTHER INFORMATION
Item 4.		Submission of Matters to a Vote of Security Holders		14
Item 6.		Exhibits and Reports on Form 8-K		14
SIGNATURE				15

		June 30, 2002				December 31, 2001
ASSETS		(unaudited)				(1)
		(In thousands, except share amounts)
Current assets:
Cash and cash equivalents		$	12,808			$	21,303
Short-term investments			29,571				35,860
Accounts receivable, net			3,660				2,794
Inventories			15,750				17,166
Other current assets			542				413
Total current assets			62,331				77,536
Property, plant and equipment, net			14,243				20,366
Other assets, net			1,757				1,135
		$	78,331			$	99,037
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable		$	565			$	2,807
Accounts payable to related parties			2,619				3,076
Accrued liabilities			8,020				8,817
Capital lease obligations, current			2,516				2,712
Other current liabilities			839				655
Total current liabilities			14,559				18,067
Capital lease obligations, less current portion			1,870				2,882
Other long-term liabilities			218				959
Commitments and contingencies
Stockholders’ equity:
Common stock, $0.001 par value per share; 100,000,000 authorized, 8,944,981 and 8,904,377 issued and outstanding, respectively			9				9
Additional paid-in capital			304,932				304,815
Deferred stock compensation			(3,470	)			(5,516	)
Accumulated deficit			(239,725	)			(222,179	)
Treasury stock, at cost, 19,950 shares held at June 30, 2002			(62	)			—
Total stockholders’ equity			61,684				77,129
		$	78,331			$	99,037

		Three Months Ended June 30,								Six Months Ended June 30,
		2002				2001				2002				2001
						(As restated)(1)								(As restated)(1)
		(In thousands, except share and per share amounts)
Revenues:
Product revenues ($147, $543, $606 and $1,259 from related parties, respectively)		$	6,245			$	7,257			$	10,623			$	19,711
Development fees			—				540				—				619
Total revenues			6,245				7,797				10,623				20,330
Costs and expenses:
Cost of product revenues ($47, $591, $178 and $1,632 from related parties, respectively)			7,479				11,612				14,014				37,629
Research and development			2,621				3,945				5,764				6,633
Selling, general and administrative			2,524				3,255				4,700				6,235
Impairment of long-lived assets			—				—				—				90,411
Restructuring charge			(3	)			2,160				3,033				5,875
Amortization of goodwill and other intangible assets			—				396				—				5,277
Amortization of deferred stock compensation			901				1,928				2,046				4,417
Total costs and expenses			13,522				23,296				29,557				156,477
Loss from operations			(7,277	)			(15,499	)			(18,934	)			(136,147	)
Other income, net			1,177				601				1,388				1,792
Net loss		$	(6,100	)		$	(14,898	)		$	(17,546	)		$	(134,355	)
Basic and diluted net loss per share(1)		$	(0.68	)		$	(1.70	)		$	(1.97	)		$	(15.54	)
Shares used in computing of basic and diluted net loss per share(1)			8,918,499				8,754,116				8,911,200				8,646,417
*Amortization of deferred stock compensation:
Cost of product revenues		$	242			$	541			$	589			$	1,341
Research and development			282				457				613				1,114
Selling, general and administrative			377				930				844				1,962
		$	901			$	1,928			$	2,046			$	4,417

		Six Months Ended June 30,
		2002				2001
						(As restated)
		(In thousands)
Operating activities:
Net loss		$	(17,546	)		$	(134,355	)
Adjustments to reconcile net loss to net cash used by operating activities:
Depreciation			2,428				3,660
Amortization of goodwill and other intangible assets			—				5,277
Amortization of deferred stock compensation			2,046				4,417
Impairment of long-lived assets			—				90,411
Restructuring charge			3,033				5,875
Non-cash charge			—				109
Changes in operating assets and liabilities:
Accounts receivable, net			(866	)			5,799
Inventories			1,416				6,298
Other assets			932				(3,001	)
Accounts payable			(2,242	)			(1,747	)
Accounts payable, related parties			(457	)			(3,609	)
Accrued liabilities			(2,332	)			(948	) <