INTERSIL HOLDING CO, S-4, 2000-04-18

INTERSIL HOLDING CO
S-4, 2000-04-18
SEMICONDUCTORS & RELATED DEVICES

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AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON APRIL 18, 2000.

REGISTRATION NO. 333-
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------

FORM S-4
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------------

INTERSIL HOLDING CORPORATION
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

<TABLE>
<S> <C> <C>
DELAWARE 3674 59-3590018
(STATE OR OTHER JURISDICTION OF (PRIMARY STANDARD INDUSTRIAL (IRS EMPLOYER
INCORPORATION OR ORGANIZATION) CLASSIFICATION CODE NUMBER) IDENTIFICATION NO.)
</TABLE>

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

2401 PALM BAY ROAD NE
PALM BAY, FLORIDA 32905
(321) 724-7000
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF
REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
------------------------

STEPHEN M. MORAN, ESQ.
VICE PRESIDENT, GENERAL COUNSEL AND SECRETARY
2401 PALM BAY ROAD NE
PALM BAY, FLORIDA 32905
(321) 724-7000
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
OF AGENT FOR SERVICE)
------------------------

With a Copy to:

CHRISTOPHER G. KARRAS, ESQ.
DECHERT PRICE & RHOADS
4000 BELL ATLANTIC TOWER
1717 ARCH STREET
PHILADELPHIA, PENNSYLVANIA 19103
(215) 994-4000
------------------------

APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From time
to time after the effective date of this Registration Statement.

If any of the securities being registered on this form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, check the following box. /x/

If this form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, check the following box and
list the Securities Act registration number of the earlier effective
registration statement for the same offering. / / ______

If this form is a post-effective amendment filed pursuant to Rule 462(d)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. / / ______

CALCULATION OF REGISTRATION FEE

<TABLE>
<CAPTION>
====================================================================================================================
PROPOSED MAXIMUM
PROPOSED MAXIMUM AGGREGATE
TITLE OF EACH CLASS OF AMOUNT TO BE OFFERING PRICE OFFERING AMOUNT OF
SECURITIES TO BE REGISTERED REGISTERED(1) PER SHARE PRICE(1) REGISTRATION FEE
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class A Common Stock, par value $.01 per
share.................................... 4,000,000 shares $41.31 $165,240,000 $43,624(2)
=====================================================================================================================
</TABLE>

(1) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457(a) under the Securities Act of 1933, based on the
average of the high and low selling prices of the Class A Common Stock on
April 12, 2000.
(2) Previously paid by Intersil Holding Corporation on April 14, 2000 in the
amount of $65,436 which is in excess of the required fee.
------------------------

THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THIS REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.

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<PAGE>

SUBJECT TO COMPLETION, DATED APRIL 18, 2000

[LOGO]

4,000,000 SHARES

INTERSIL HOLDING CORPORATION

CLASS A COMMON STOCK

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

This prospectus relates to 4,000,000 shares of our Class A Common Stock
that we may issue and offer for sale from time to time in connection with
business combination transactions or acquisitions in amounts, at prices and on
terms as we may determine at the time of offering. We have not fixed a period of
time during which the Class A Common Stock offered by this prospectus may be
offered or sold.

We will pay all expenses of this offering. No underwriting discounts or
commissions will be paid in connection with the issuance of Class A Common Stock
in business combination transactions or acquisitions, although finder's fee may
be paid with respect to specific acquisitions. Any person receiving a finder's
fee may be deemed to be an underwriter within the meaning of Section 2(11) of
the Securities Act of 1933.

Our Class A Common Stock is listed on The Nasdaq Stock Market's National
Market under the symbol "ISIL." The Nasdaq last reported sale price of our Class
A Common Stock on April 13, 2000 was $36 7/8 per share.

INVESTING IN OUR CLASS A COMMON STOCK INVOLVES RISKS. SEE "RISK FACTORS" ON
PAGE 6.

Neither the Securities and Exchange Commission nor any State Securities
Commission has approved or disapproved of these Securities or passed upon the
adequacy or accuracy of this prospectus. Any representation to the contrary is a
criminal offense.

The date of this prospectus is April 18, 2000.

THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. WE MAY
NOT SELL THESE SECURITIES UNTIL THE REGISTRATION STATEMENT FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS PROPECTUS IS NOT AN
OFFER TO SELL THESE SECURITIES AND IT IS NOT SOLICITING AN OFFER TO BUY THESE
SECURITIES IN ANY STATE WHERE THE OFFER OR SALE IS NOT PERMITTED.

<PAGE>
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TABLE OF CONTENTS

Page
----
INDUSTRY DATA......................... i
SUMMARY............................... 1
RISK FACTORS.......................... 6
FORWARD-LOOKING STATEMENTS............ 13
USE OF PROCEEDS....................... 13
DIVIDEND POLICY....................... 13
PRICE RANGE OF COMMON STOCK........... 13
CAPITALIZATION........................ 14
UNAUDITED PRO FORMA COMBINED CONDENSED
FINANCIAL STATEMENTS................ 15
SELECTED HISTORICAL FINANCIAL DATA AND
OTHER DATA.......................... 20
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS....................... 21
INDUSTRY OVERVIEW..................... 30

Page
----
BUSINESS.............................. 32
MANAGEMENT............................ 41
CERTAIN RELATIONSHIPS AND RELATED
TRANSACTIONS........................ 46
OWNERSHIP OF CAPITAL STOCK............ 47
DESCRIPTION OF CAPITAL STOCK.......... 49
DESCRIPTION OF CERTAIN INDEBTEDNESS... 52
SHARES ELIGIBLE FOR FUTURE SALE....... 55
OTHER RESTRICTIONS ON RESALE.......... 57
PLAN OF DISTRIBUTION.................. 57
LEGAL MATTERS......................... 57
EXPERTS............................... 57
WHERE YOU CAN FIND MORE
INFORMATION......................... 58
INDEX TO FINANCIAL STATEMENTS......... F-1

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

You should rely only on the information contained in this document or to
which we have referred you in this prospectus. We have not authorized anyone to
provide you with information that is different. This prospectus may only be used
where it is legal to sell these securities. The information in this prospectus
may only be accurate on the date of this document.

INDUSTRY DATA

In this prospectus, we rely on and refer to information regarding the
semiconductor market and its segments and competitors from Dataquest,
International Data Corporation, Semiconductor Industry Association, Worldwide
Semiconductor Trade Statistics, Venture Development Corporation, Johari
Associates, market research reports, analyst reports and other publicly
available sources. The listed market research firms are not aware of and have
not consented to being named in this prospectus. Although we believe that this
information is reliable, we have not independently verified the accuracy and
completeness of the information.

i
<PAGE>
SUMMARY

This summary may not contain all of the information that may be important
to you. You should read this entire prospectus, including the financial data and
related notes, before making an investment decision.

WHO WE ARE

We are a systems oriented designer and manufacturer of analog and digital
integrated circuits, which we refer to as integrated circuits or semiconductors,
and discrete semiconductors for the communications and power management end-user
markets.

o Wireless--We are the industry leader in providing wireless local area
networking semiconductor sets, which we refer to as our PRISM(R) chip
set, based upon data published by Dataquest and International Data
Corporation. The PRISM(R) chip set is our fastest growing product, which
has applications in wireless networking for the business or home and in
transmitting data to and from broadband home data gateways to multiple
end-user applications.

o Analog & Mixed-Signal--Our analog products include communications, analog
and mixed-signal semiconductors that are used in wireless and wired data
and voice communications products, power integrated circuits that perform
multiple power management tasks, industry standard signal processing
products that convert analog signals into digital format and digital
signals into analog format and products that are used in communications
satellites and military applications.

o Discrete Power--Our discrete semiconductors perform single power
management functions such as switching electricity on or off and are used
in computing, communications and automotive applications.

Business Strategy

Our business strategy is to utilize our core strengths to focus on high
growth, higher margin end-markets through partnerships with industry leaders
among our strategic customer base to quickly take our engineering and design
capabilities to commercial levels. To achieve these goals, we develop systems
level solutions that enhance the value of our products as they are designed and
incorporated into our customers' products and we leverage our high quality of
customer service as a means of differentiation from our competitors. We will
continue to invest in products designed for high-growth communications
applications. For calendar year 1999, approximately 88% of our research and
development investment was related to integrated communications products.

Sales and Manufacturing

We currently sell to many industry leaders in our targeted markets
including Asustek, Bosch, Cisco, Compaq, Emerson, Dell, Intel, Nokia, Siemens,
Sony and 3Com. We have been doing business with many of these industry leaders
for over ten years. We are also an analog and discrete power semiconductor
supplier to some of the world's largest semiconductor distributors, such as
Avnet and Arrow Electronics, which allows us to expand our global reach to
include the middle market and emerging technology companies. Our products are
sold worldwide with about 53.5%, 24.6% and 21.9% of our revenues for fiscal year
1999 being derived from North America, Europe and Asia/Pacific, respectively. We
service our customers through a dedicated sales force, about half of whom are
domiciled outside North America. We own fabrication facilities, which we refer
to as fabs, in Florida, Ohio and Pennsylvania, including our state-of-the-art
8-inch discrete power wafer fab in Mountaintop, Pennsylvania. We also have
assembly and test facilities in Malaysia and Florida.

Our principal executive office is located at 2401 Palm Bay Road NE, Palm
Bay, Florida 32905, and our telephone number is (321) 724-7000.
<PAGE>
THE OFFERING

The offering information provided below excludes:

o shares of common stock reserved for issuance under our 1999 Equity
Compensation Plan, under which options to purchase 2,775,670 shares were
outstanding as of March 31, 2000 at a weighted average exercise price of
$12.06 per share.

o warrants outstanding to purchase 5,925,931 shares at an exercise price of
$0.0015 per share.

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Class A Common Stock offered...... 4,000,000 shares to be issued in connection with
---------- business combination transactions or
acquisitions by us or one or more of
our subsidiaries

Common stock to be outstanding
after this offering............. 45,635,439 shares of Class A Common Stock
----------
49,746,481 shares of Class B Common Stock
----------

Total............................. 95,381,920 shares of common stock
==========

Voting rights..................... Holders of Class A Common Stock are entitled to one vote
per share on all matters submitted to a vote of the
stockholders. Our Restated Certificate of Incorporation
provides for cumulative voting in elections of directors.
Holders of Class B Common Stock have no voting rights.

Other rights...................... Except as to voting and conversion rights, each class of
common stock has the same rights. Shares of each class of
common stock are convertible on a one-to-one basis into
shares of the other class of common stock at the option of
the holder.

Use of proceeds................... We will not receive any cash proceeds from this offering.
See "Use of Proceeds."

Nasdaq National Market symbol..... ISIL
</TABLE>

RISK FACTORS

Investing in the Class A Common Stock involves substantial risks. See
the "Risk Factors" section of this prospectus for a description of some of the
risks you should carefully consider before investing in the Class A Common
Stock.

2
<PAGE>
SUMMARY HISTORICAL, PRO FORMA AND OTHER DATA

The following summary historical financial data for the fiscal years ended
June 27, 1997, July 3, 1998 and July 2, 1999 for Intersil Holding were derived
from our predecessor's audited consolidated financial statements included
elsewhere in this prospectus, except for revenue categorized by product line
(Analog & Mixed-Signal, Discrete Power and Wireless), which were derived from
our books and records. The balance sheet data as of December 31, 1999
(Successor) have been derived from our unaudited consolidated financial
statements included elsewhere in this prospectus, and include, in the opinion of
management, all adjustments necessary to present fairly the balance sheet data
at the time. The summary pro forma financial information for the fiscal year
1999 (predecessor), six months ended January 1, 1999 (predecessor) and combined
six months ended December 31, 1999 (6 weeks ended August 13, 1999 (predecessor)
and 20 weeks ended December 31, 1999 (successor)) were derived from our pro
forma unaudited consolidated financial statements included elsewhere in this
prospectus.

During the period covered by our consolidated financial statements, our
activities were conducted as part of Harris' overall operations. Accordingly,
our consolidated financial statements contain various allocations for costs and
expenses attributable to services provided by Harris. Therefore, the
Consolidated Statement of Operations may not be indicative of the results of
operations that would have resulted if we had operated on a stand-alone basis.

Since the information in the tables below is a summary, you should read the
following tables in conjunction with other information contained under the
captions "Unaudited Pro Forma Combined Condensed Financial Statements,"
"Capitalization," "Selected Historical Financial Data," "Forward Looking
Statements," "Risk Factors--Risks Related to Use of Estimates in Pro Forma
Information," "Management's Discussion and Analysis of Financial Condition and
Results of Operations," and with our financial statements and related notes and
other financial information contained elsewhere in this prospectus.

3
<PAGE>

<TABLE>
<CAPTION>
PRO FORMA
AS ADJUSTED (1)
----------------------------------
HISTORICAL SIX MONTHS ENDED
------------------------- -------------------------
COMBINED
FISCAL FISCAL FISCAL FISCAL JANUARY 1, DECEMBER 31,
1997 1998 1999 1999 1999 1999
------- ------ ------ ------ ---------- ------------
(PREDECESSOR) (PREDECESSOR)
(IN MILLIONS, EXCEPT PER SHARE AMOUNTS)
<S> <C> <C> <C> <C> <C> <C>
STATEMENT OF OPERATIONS DATA:
Revenue:
Analog & Mixed-Signal............... $ 384.4 $390.4 $352.8 $352.8 $166.0 $176.8
Discrete Power...................... 154.5 176.4 161.6 161.6 73.3 99.7
Wireless............................ 6.4 10.0 18.3 18.3 7.3 15.5
------- ------ ------ ------ ------ ------
Total revenue......................... $ 545.3 $576.8 $532.7 $532.7 $246.6 $292.0
======= ====== ====== ====== ====== ======

Gross margin(2)....................... $ 199.3 $207.5 $182.9 $197.3 $ 88.2 $111.7
Research and development.............. 75.2 75.1 67.0 67.0 29.7 34.5
Selling, administrative and general... 99.3 98.2 84.0 87.0 42.9 49.5
Harris corporate expense allocation... 10.0 10.0 9.3 -- -- --
Intangible amortization............... 2.3 2.3 2.4 12.7 6.2 5.4
In-process research and development... -- -- -- -- -- 20.2
------- ------ ------ ------ ------ ------
Operating income (loss)............... 12.5 21.9 20.2 30.6 9.4 2.1
Interest, net......................... (0.6) (0.9) (1.2) 17.1 8.9 8.9
------- ------ ------ ------ ------ ------
Income (loss) before income taxes..... 13.1 22.8 21.4 13.5 0.5 (6.8)
Income taxes (benefit)................ 1.9 9.9 (6.0) (9.1) (3.1) 7.8
------- ------ ------ ------ ------ ------
Net income (loss)..................... $ 11.2 $ 12.9 $ 27.4 $ 22.6 $ 3.6 $(14.6)
======= ====== ====== ====== ====== ======

NET INCOME (LOSS) PER COMMON SHARE:
Basic........................................................... $ 0.24 $ 0.04 $(0.16)
Diluted......................................................... 0.23 0.04 (0.16)

WEIGHTED AVERAGE COMMON SHARES
OUTSTANDING:
Basic........................................................... 92.5 92.5 92.5
Diluted......................................................... 99.3 99.3 92.5

SUPPLEMENTAL DATA:
Depreciation.......................... $ 50.2 $ 65.0 $ 78.2 $ 63.8 $ 30.9 $ 29.4
Capital expenditures.................. $ 173.3 $ 90.2 $ 38.6 $ 38.6 $ 18.1 $ 14.5
</TABLE>

4
<PAGE>

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<CAPTION>
AS OF
DECEMBER 31, 1999
-----------------
AS
ACTUAL ADJUSTED
------ --------
(IN MILLIONS)
<S> <C> <C>
BALANCE SHEET DATA:
Cash........................................................ $ 40.1 $142.7
Total assets(3)............................................. 717.0 796.3
Long-term debt, including current portion................... 534.3 134.1
Mandatorily redeemable preferred stock(4)................... 87.9 --
Total shareholders' equity (deficit)(5)..................... (18.8) 562.0
</TABLE>

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(1) The pro forma as adjusted information presented is a summary only and
should be read in conjunction with "Unaudited Pro Forma Combined Condensed
Financial Statements" included elsewhere in the prospectus.

(2) Gross margin includes foreign exchange losses with respect to the Malaysian
Ringgit of $11.4 million for the pro forma as adjusted fiscal year 1999 and
$4.3 million for the pro forma as adjusted six months ended January 1,
1999. These foreign exchange losses with respect to the Malaysian Ringgit
represent losses under contracts entered into by Harris and subsequently
terminated. See "Management's Discussion and Analysis of Financial
Condition and Results of Operations -- Market Risk Management".

(3) Total assets as adjusted have been reduced by $9.9 million for the one-time
write-off of unamortized debt issuance costs associated with the debt being
repaid.

(4) As adjusted reflects the coversion of all of the outstanding shares of the
12% Series A Cumulative Compounding Preferred Stock into common stock at
$1,000 per share plus accumulated and unpaid dividends, based on the per
share amount we received in our initial public offering.

(5) Shareholders' equity as adjusted has been reduced by $9.9 million for the
one-time write-off of unamortized debt issuance costs associated with the
debt being repaid, $13.4 million for prepayment premiums on the portions of
the 13 1/4% Senior Subordinated Notes due 2009 and the Tranche B Senior
Term Facility and $0.3 million for the written-off related to the value
ascribed to the warrants issued on the 13.5% Subordinated Holding PIK Note
due 2010 upon completion of our initial public offering.

5
<PAGE>
RISK FACTORS

You should carefully consider the risks described below before making an
investment decision. The risks described below are not the only ones facing our
company. Additional risks not now known to us or that we currently deem
immaterial may also impair our business operations.

FLUCTUATION OF OPERATING RESULTS--OUR FUTURE OPERATING RESULTS ARE LIKELY TO
FLUCTUATE AND THEREFORE MAY FAIL TO MEET EXPECTATIONS WHICH COULD CAUSE THE
PRICE OF THE CLASS A COMMON STOCK TO DECLINE.

Our operating results have varied widely in the past and are likely to do
so in the future. In addition, our operating results may not follow any past
trends. Our future operating results will depend on many factors and may fail to
meet our expectations for a number of reasons, including those set forth in
these risk factors. Any failure to meet expectations could cause the price of
the Class A Common Stock to significantly fluctuate or decline.

Factors that could cause our operating results to fluctuate that relate to
our internal operations include:

o the need for continual, rapid new product introductions;

o changes in our product mix;

o our inability to adjust our fixed costs in the face of any declines in
sales; and

o the availability of production capacity and fluctuations in the
manufacturing yields at our facilities.

Factors that could cause our operating results to fluctuate that depend on
our suppliers and customers include:

o the timing of significant product orders, order cancellations and
reschedulings;

o the availability of production capacity and fluctuations in the
manufacturing yields at third parties' facilities that manufacture our
devices; and

o the cost of raw materials and manufacturing services from our suppliers.

Factors that could cause our operating results to fluctuate that are
industry risks include:

o the cyclical nature of the semiconductor industry;

o the new and evolving nature of the wireless LAN market and the
possibility that wireless LAN technology may not be adopted on a
widespread basis or may be replaced by a competing technology; and

o intense competitive pricing pressures.

CYCLICAL INDUSTRY--DOWNTURNS IN THE BUSINESS CYCLE COULD REDUCE THE REVENUES AND
PROFITABILITY OF OUR BUSINESS.

The semiconductor industry is highly cyclical. In 1998, the semiconductor
industry experienced a downturn. Our markets may experience other, possibly more
severe and prolonged, downturns in the future. We may also experience
significant changes in our operating profit margins as a result of variations in
sales, changes in product mix, price competition for orders and costs associated
with the introduction of new products.

The markets for our products depend on continued demand for personal
computer, industrial, telecommunications, consumer electronics and automotive
goods. There can be no assurance that these end-user markets will not experience
changes in demand that will adversely affect our prospects.

6
<PAGE>

NEW PRODUCT DEVELOPMENT AND TECHNOLOGICAL CHANGE--OUR INABILITY TO INTRODUCE NEW
PRODUCTS COULD RESULT IN DECREASED REVENUES AND LOSS OF MARKET SHARE TO
COMPETITORS; NEW TECHNOLOGIES COULD ALSO REDUCE THE DEMAND FOR OUR PRODUCTS.

Rapidly changing technology and industry standards, along with frequent new
product introductions, characterize the semiconductor industry. Our success in
these markets depends on our ability to design, develop, manufacture, assemble,
test, market and support new products and enhancements on a timely and
cost-effective basis. There can be no assurance that we will successfully
identify new product opportunities and develop and bring new products to market
in a timely and cost-effective manner or that products or technologies developed
by others will not render our products or technologies obsolete or
noncompetitive. A fundamental shift in technology in our product markets could
have a material adverse effect on us.

COMPETITION--OUR BUSINESS IS VERY COMPETITIVE AND INCREASED COMPETITION COULD
REDUCE GROSS PROFIT MARGINS AND THE VALUE OF AN INVESTMENT IN OUR COMPANY.

The semiconductor industry, and the semiconductor product markets
specifically, are highly competitive. Competition is based on price, product
performance, quality, reliability and customer service. The gross profit margins
realizable in our markets can differ across regions, depending on the economic
strength of end-product markets in those regions. Even in strong markets, price
pressures may emerge as competitors attempt to gain more share by lowering
prices. Competition in the various markets in which we participate comes from
companies of various sizes, many of which are larger and have greater financial
and other resources than we have and thus can better withstand adverse economic
or market conditions. In addition, companies not currently in direct competition
with us may introduce competing products in the future.

ADDITIONAL BORROWINGS AVAILABLE--WE AND OUR SUBSIDIARIES WILL BE ABLE TO INCUR
SUBSTANTIALLY MORE DEBT. THIS COULD FURTHER EXACERBATE THE RISKS DESCRIBED
BELOW.

We and our subsidiaries may be able to incur substantial additional
indebtedness in the future. Although the indenture governing the notes contains
restrictions on the incurrence of additional indebtedness, these restrictions
are subject to a number of qualifications and exceptions; and the indebtedness
incurred in compliance with these restrictions could be substantial. Also, these
restrictions do not prevent us from incurring obligations that do not constitute
indebtedness. As of December 31, 1999, Intersil's senior credit facilities
provided for additional borrowings of up to about $70.0 million. To the extent
new debt is added to our and our subsidiaries' currently anticipated debt
levels, it could:

o require us to dedicate a substantial portion of our cash flow from
operations to payments on our indebtedness, thereby reducing the
availability of our cash flow to fund working capital, capital
expenditures, research and development efforts and other general
corporate purposes;

o increase our vulnerability to adverse general economic or industry
conditions;

o limit our flexibility in planning for, or reacting to, changes in our
business or the industry in which we operate;

o prevent us from raising the funds necessary to repurchase all 13 1/4%
Senior Subordinated Notes due 2009 tendered to us upon the occurrence of
certain changes of control in our ownership, which would constitute a
default under the indenture governing those notes; and

o place us at a competitive disadvantage compared to our competitors that
have less debt.

See "Capitalization," "Selected Historical Consolidated Financial Data" and
"Description of Certain Indebtedness."

RESTRICTIONS AND COVENANTS IN OUR DEBT INSTRUMENTS--RESTRICTIONS IMPOSED BY OUR
SENIOR CREDIT FACILITIES AND THE INDENTURE GOVERNING THE NOTES LIMIT INTERSIL'S
ABILITY TO ENGAGE IN OR ENTER INTO BUSINESS, OPERATING AND FINANCING
ARRANGEMENTS, WHICH COULD ADVERSELY AFFECT OUR ABILITY TO TAKE ADVANTAGE OF
POTENTIALLY PROFITABLE BUSINESS OPPORTUNITIES.

7
<PAGE>

We cannot assure you that the operating and financial restrictions and
covenants in our debt instruments, including the senior credit facilities and
the notes, will not adversely affect our ability to finance our future
operations or capital needs or engage in other business activities that may be
in our interest.

Intersil's senior credit facilities require it to maintain certain
financial ratios which become more restrictive over time. Intersil's ability to
comply with these ratios may be affected by events beyond our control. A breach
of any of these covenants or Intersil's inability to comply with the required
financial ratios could result in a default under Intersil's senior credit
facilities. In the event of any of these defaults, the lenders under Intersil's
senior credit facilities could elect to declare all borrowings outstanding,
together with accrued interest and other fees, to be due and payable, to require
us to apply all of Intersil's available cash to repay these borrowings or to
prevent Intersil from making debt service payments on the notes, any of which
would be an event of default under the notes. See "Description of Certain
Indebtedness."

HOLDING COMPANY STRUCTURE--AS A HOLDING COMPANY, WE ARE TOTALLY DEPENDENT ON
DIVIDENDS FROM OUR OPERATING SUBSIDIARIES TO MEET OUR DEBT OBLIGATIONS OR,
SHOULD WE SO CHOOSE, PAY DIVIDENDS. TO THE EXTENT WE DO NOT RECEIVE DIVIDENDS
FROM INTERSIL, WE COULD HAVE DIFFICULTY SATISFYING OUR OBLIGATIONS.

We are a holding company whose only material asset is the capital stock of
Intersil. We conduct no business (other than in connection with our ownership of
the capital stock of Intersil and certain other administrative obligations), and
depend on distributions from Intersil to meet our obligations. Because of
Intersil's ability to incur substantial indebtedness and our dependence upon the
operating performance of Intersil to generate distributions to us, there can be
no assurance that any these distributions will be adequate to fund our
obligations when due. In addition, the senior credit facilities, the notes and
applicable Federal and state law impose restrictions on the payment of dividends
and the making of loans by Intersil to us. As a result of the foregoing
restrictions, we may be required to:

o refinance our indebtedness,

o seek additional debt or equity financing,

o cause Intersil to refinance all or a portion of its indebtedness with
indebtedness containing covenants allowing us to gain access to
Intersil's cash flow or assets,

o cause Intersil to obtain modifications of the covenants restricting our
access to cash flow or assets of Intersil contained in Intersil's
financing documents (including, without limitation, the senior credit
facilities and the notes),

o merge Intersil with us, which merger would be subject to compliance with
applicable debt covenants and the consents of certain lenders, or

o pursue a combination of the foregoing actions.

The measures we may undertake to gain access to sufficient cash flow to
meet our future debt service requirements will depend on general economic and
financial market conditions, as well as our financial condition and the
financial condition of Intersil and other relevant factors existing at the time.
No assurance can be given that any of the foregoing measures can be
accomplished, and the failure to do so could have a material adverse effect on
the value of the Class A Common Stock.

RISKS RELATED TO USE OF ESTIMATES IN PRO FORMA FINANCIAL INFORMATION--IF ACTUAL
RESULTS DIFFER FROM THE ESTIMATES UNDERLYING SOME OF THE PRO FORMA FINANCIAL
INFORMATION, OUR RESULTS MAY REFLECT HIGHER EXPENSES AND LOWER OPERATING
RESULTS.

The pro forma financial information contained herein assumes that we would
have incurred annual expenses of $3.0 million to obtain general and
administrative services, either from Harris, under the Transition Services
Agreement, or otherwise. Charges under the Transition Services Agreement may
exceed historical charges or upon termination of the agreement we might not be
able to obtain similar facilities and services on comparable terms. See "The
Transactions--Transition Services Agreement." If our actual expenses exceed the
estimates, our operating results will be less favorable than those set forth in
the pro forma financial statements. See "Unaudited Pro Forma Combined Condensed
Financial Statements."

8
<PAGE>

CURRENCY EXCHANGE RATE FLUCTUATIONS--FLUCTUATIONS IN THE EXCHANGE RATE OF THE
U.S. DOLLAR AND OTHER FOREIGN CURRENCIES COULD INCREASE OPERATING EXPENSES AND
NEGATIVELY IMPACT OUR FINANCIAL PERFORMANCE AND RESULTS OF OPERATIONS.

While we and our subsidiaries transact business primarily in U.S. dollars
and most of our revenues are denominated in U.S. dollars, a portion of our costs
and revenues is denominated in other currencies, such as the Euro, the Malaysian
Ringgit and the Japanese Yen. As a result, changes in the exchange rates of
these currencies or any other applicable currencies to the U.S. dollar will
affect our costs of goods sold and operating margins and could result in
exchange losses. The impact of future exchange rate fluctuations on our results
of operations cannot be accurately predicted. From time to time, we have engaged
in, and may continue to engage in, exchange rate hedging activities in an effort
to mitigate the impact of exchange rate fluctuations. However, any hedging
technique that we may implement may not be effective or may result in foreign
exchange hedging losses. In the past, we have incurred foreign exchange hedging
losses, including $13.3 million during fiscal year 1998 and $11.4 million during
fiscal year 1999.

RISKS ASSOCIATED WITH INTERNATIONAL OPERATIONS--OUR INTERNATIONAL OPERATIONS
SUBJECT US TO RISKS NOT FACED BY DOMESTIC COMPETITORS WHICH INCLUDE UNFAVORABLE
POLITICAL, REGULATORY, LABOR AND TAX CONDITIONS IN OTHER COUNTRIES.

We cannot be certain to what extent our future operations and earnings may
be adversely affected by the risks related to, or any other problems arising
from, operating in international markets. We have significant operations in
Kuala Lumpur, Malaysia and additionally generate approximately one-half of our
revenue from outside the United States. Risks inherent in doing business on an
international level include:

o unexpected changes in the laws and policies of the United States and of
the countries in which we manufacture and sell our products;

o economic and political instability;

o trade restrictions; and

o foreign currency fluctuations.

DEPENDENCE ON SOURCES OF SUPPLY--PRODUCTION TIME AND THE OVERALL COST OF OUR
PRODUCTS COULD INCREASE IF WE WERE TO LOSE ONE OF OUR LIMITED NUMBER OF
SUPPLIERS OR IF ONE OF THOSE SUPPLIERS INCREASED THE PRICES OF RAW MATERIALS.

Our results of operations could be adversely affected if we were unable to
obtain adequate supplies of raw materials in a timely manner or if the costs of
raw materials increased significantly. Our manufacturing operations depend upon
obtaining adequate supplies of raw materials on a timely basis. We purchase raw
materials, such as silicon wafers, lead frames, mold compound, ceramic packages
and chemicals and gases, from a limited number of suppliers on a just-in-time
basis. From time to time, suppliers may extend lead times, limit supplies or
increase prices due to capacity constraints or other factors.

MANUFACTURING RISKS--DUE TO OUR COMPLEX MANUFACTURING PROCESSES, DELAYS IN
PRODUCTION AT NEW FACILITIES, IMPLEMENTING NEW PRODUCTION TECHNIQUES OR IN
CURING PROBLEMS ASSOCIATED WITH TECHNICAL EQUIPMENT MALFUNCTIONS MAY LOWER
YIELDS AND REDUCE OUR REVENUES.

Our manufacturing processes are highly complex, require advanced and costly
equipment and are continuously being modified in an effort to improve yields and
product performance. Impurities or other difficulties in the manufacturing
process can lower yields. Our manufacturing efficiency will be an important
factor in our future profitability, and we cannot assure you that we will be
able to maintain our manufacturing efficiency or increase manufacturing
efficiency to the same extent as our competitors.

In addition, as is common in the semiconductor industry, we have from time
to time experienced difficulty in beginning production at new facilities or in
effecting transitions to new manufacturing processes. As a consequence, we have
suffered delays in product deliveries or reduced yields. We may experience
manufacturing problems in achieving acceptable yields or experience product
delivery delays in the future as

9
<PAGE>

a result of, among other things, capacity constraints, construction delays,
upgrading or expanding existing facilities or changing our process technologies,
any of which could result in a loss of future revenues. Our operating results
could also be adversely affected by the increase in fixed costs and operating
expenses related to increases in production capacity if revenues do not increase
proportionately.

CONTROLLING SHAREHOLDERS--A LIMITED NUMBER OF PERSONS INDIRECTLY CONTROL OUR
COMPANY AND MAY EXERCISE THEIR CONTROL IN A MANNER ADVERSE TO YOUR INTERESTS.

As of March 31, 2000, Sterling and some key employees of our company owned
17,259,652 shares, or approximately 41.5%, of the outstanding Class A Common
Stock, our only class of voting stock, and 45,214,898 shares of Class B Common
Stock which are convertible into shares of Class A Common Stock on a one-to-one
basis. By virtue of this stock ownership, they have the power to direct our
affairs and will be able to determine the outcome of all matters required to be
submitted to shareholders for approval, including the election of a majority of
our directors, any merger, consolidation or sale of all or substantially all of
our assets, and amendment of our Restated Certificate of Incorporation. Sterling
also has a significant equity investment in Fairchild Semiconductor, one of our
competitors. Because a limited number of persons control us, transactions could
be difficult or impossible to complete without the support of those persons. It
is possible that these persons will exercise control over us in a manner adverse
to your interests. See "Ownership of Capital Stock."

DEPENDENCE ON INTELLECTUAL PROPERTY--WE USE A SIGNIFICANT AMOUNT OF INTELLECTUAL
PROPERTY IN OUR BUSINESS. IF WE ARE UNABLE TO PROTECT THIS INTELLECTUAL
PROPERTY, WE COULD LOSE OUR RIGHT TO EXCLUSIVE USE OF KEY TECHNOLOGY, RESULTING
IN DECREASED REVENUES.

Our future success and competitive position depend in part upon our ability
to obtain and maintain proprietary technology used in our principal products. We
rely on intellectual property rights, including, but not limited to, rights
existing under patent, trade secret, trademark, maskwork and copyright law, to
protect this technology. Some of our technology is not covered by any patent or
patent application, and there is risk that:

o some of the approximately 1,400 patents that we own and other numerous
patents that we license from Harris may be invalidated, circumvented,
challenged or licensed to others;

o the license rights granted by Harris, or the patents that we own, will
not provide competitive advantages to us; or

o some of our pending or future patent applications will not be issued
within the scope of the claims sought by us, if at all.

Further, others may develop technologies that are similar or superior to our
technology, duplicate our technology or design around our patents. In addition,
effective patent, trademark, copyright, maskwork and trade secret protection may
be unavailable, limited or not applied for in certain foreign countries.

We also seek to protect our proprietary technology, including technology
that may not be patented or patentable, in part by confidentiality agreements
and, if applicable, inventors' rights agreements with our collaborators,
advisors, employees and consultants. There can be no assurance that these
agreements will not be breached, that we will have adequate remedies for any
breach or that these persons or institutions will not assert rights to
intellectual property arising out of this research.

Some of our current licenses to use others' technology will expire during
the next several years, unless extended. In particular, we currently have access
to a portfolio of patents under cross-license agreements that expire in the year
2000. We will then need to negotiate renewals of these agreements or obtain the
technology from alternative sources. There is no guarantee that we will be able
to obtain renewals on substantially similar terms as those that currently exist.

10
<PAGE>

DEPENDENCE ON INTELLECTUAL PROPERTY ACQUIRED FROM HARRIS--WE HAVE ACQUIRED
SUBSTANTIALLY ALL OF OUR INTELLECTUAL PROPERTY FROM HARRIS. TO THE EXTENT OUR
USE OF THIS INTELLECTUAL PROPERTY INFRINGES THE INTELLECTUAL PROPERTY RIGHTS OF
OTHERS, WE MAY BE REQUIRED TO CEASE OUR USE OR SALE OF AFFECTED PRODUCTS.

Under our intellectual property agreement with Harris, Harris has limited,
royalty-free, worldwide, nonexclusive license rights (without right to
sublicense) to some of our technology. Under our patent assignment and services
agreements with Harris, Harris retained the ownership and rights to certain
patents for a period of three years after which time the patents will be
assigned to us, provided the patents are not the subject of litigation at that
time, and with the proviso that any binding obligations on third parties to make
royalty or other payments respecting the patents will be retained by Harris.
Furthermore, the license agreements under which third parties are licensed to
our intellectual property (or intellectual property that is assigned to us) and
under which Harris was cross-licensed to the third party's intellectual
property, may not be assignable to us. For this situation, Harris agreed to
partially indemnify us for limited periods in limited situations against claims
that may be made that our activities infringe the intellectual property rights
of others. The extent and duration of this indemnification may be insufficient
to shield us from the need to make monetary payments to third parties or to
facilitate the continued manufacture, use or sale of some affected products.

INTELLECTUAL PROPERTY UPON WHICH WE RELY MAY INFRINGE ON OTHER PARTIES'
INTELLECTUAL PROPERTY RIGHTS--WE MAY HAVE TO PAY OTHERS FOR INFRINGING THEIR
INTELLECTUAL PROPERTY RIGHTS OR DEFEND OURSELVES IN A LITIGATION, RESULTING IN
SIGNIFICANT EXPENSE TO US.

Vigorous protection and pursuit of intellectual property rights or
positions characterize the semiconductor industry. This vigor and pursuit have
resulted in significant and often protracted and expensive litigation. We may
from time to time be notified of claims that we may be infringing third party
patents or other intellectual property rights. A countersuit has been brought
against Harris by Ericsson, one of its competitors, alleging infringement of
four of its patents relating to telephone subscriber line interface circuits and
we have been joined as a party. We believe our liability from this litigation,
if any, that arises out of the conduct of the semiconductor business prior to
closing is covered by Harris' agreement to provide limited indemnities. We do
not believe that the litigation will have a material adverse effect on our
business, financial condition or results of operations. It is possible, however,
that the litigation will be resolved in a manner that is materially adverse to
us. If necessary or desirable, we may, from time to time, seek licenses to
patents or other intellectual property rights. However, we cannot be certain
that we will obtain these licenses or that the terms of any offered licenses
will be acceptable to us, and any acquisition or license could require
expenditure of substantial time and other resources. Furthermore, some licenses
or other rights to intellectual property of third parties that we use, such as
software, may not be freely assignable by Harris to us. Our failure to obtain a
license from a third party for technology we use could cause us to incur
substantial liabilities and to suspend the manufacture or shipment of products
or our use of processes requiring the technology. Litigation could result in
significant expense to us, adversely affecting sales of the challenged product
or technology and diverting the efforts of our technical and management
personnel, whether or not the litigation is determined in our favor. In the
event of an adverse outcome in any litigation, we may be required to:

o pay substantial damages and incur significant attorneys' fees;

o cease the manufacture, use, sale or importation of infringing products;

o expend significant resources to develop or acquire non-infringing
technology;

o discontinue the use of some processes; or

o obtain licenses to intellectual property covering the infringing
technology.

11
<PAGE>

RISKS RELATING TO FUTURE ACQUISITIONS--WE MAY NOT BE ABLE TO CONSUMMATE FUTURE
ACQUISITIONS, AND THOSE ACQUISITIONS WHICH WE DO COMPLETE MAY BE DIFFICULT TO
INTEGRATE AND RESULT IN INCREASED DEBT AND LIABILITIES.

We plan to pursue acquisitions of related businesses. We might not be able
to consummate acquisitions, or, if we complete any acquisition, we may not
realize any of the benefits anticipated from these acquisitions. Financing for
acquisitions may not be available; and, depending on the terms of these
acquisitions, financing could be restricted by the terms of our senior credit
facilities and the indenture governing the 13 1/4% Senior Subordinated Notes due
2009. The process of integrating acquired operations into our existing
operations may result in unforeseen operating difficulties and may require
significant financial resources that would otherwise be available for the
ongoing development or expansion of our existing operations. Possible future
acquisitions could result in the incurrence of additional debt, contingent
liabilities and amortization expenses related to goodwill and other intangible
assets, all of which could materially adversely affect our financial condition
and operating results.

ENVIRONMENTAL LIABILITIES AND OTHER GOVERNMENTAL REGULATIONS--REGULATORY MATTERS
COULD FORCE US TO INCUR SIGNIFICANT CAPITAL AND OPERATIONAL COSTS.

We are subject to various environmental laws and regulations relating to
the management, disposal and, under some circumstances, remediation of hazardous
materials and wastes and the discharge of pollutants into the air and water. We
are also subject to laws and regulations relating to workplace safety and worker
health which, among other things, regulate employee exposure to hazardous
substances. Under the Master Transaction Agreement, Harris agreed to indemnify
us for substantially all environmental liabilities related to events or
activities occurring prior to the closing of the transactions contemplated by
the Master Transaction Agreement. The nature of our ongoing operations exposes
us to the risk of liabilities or claims with respect to environmental matters,
including those relating to the on- and off-site disposal and release of
hazardous materials, and there can be no assurance that material costs will not
be incurred in connection with these liabilities or claims.

Based on our experience, we believe that the future cost of compliance with
existing environmental and health and safety laws and regulations (and liability
for known environmental conditions even without the Harris indemnity) will not
have a material adverse effect on our business, financial condition or results
of operations. However, we cannot predict:

o what environmental or health and safety legislation or regulations will
be enacted in the future;

o how existing or future laws or regulations will be enforced, administered
or interpreted; or

o the amount of future expenditures which may be required to comply with
these environmental or health and safety laws or regulations or to
respond to future cleanup matters or other environmental claims.

See "Business--Environmental Matters."

12
<PAGE>
FORWARD-LOOKING STATEMENTS

This prospectus includes forward-looking statements. These statements
relate to analyses and other information which are based on forecasts of future
results and estimates of amounts not yet determinable. These statements also
relate to our future prospects, developments and business strategies.

These forward-looking statements are identified by their use of terms and
phrases such as "anticipate," "believe," "could," "estimate," "expect,"
"intend," "may," "plan," "predict," "project," "will" and similar terms and
phrases, including references to assumptions. These statements are contained in
sections entitled "Summary," "Risk Factors," "Management's Discussion and
Analysis of Financial Condition and Results of Operations," "Business" and other
sections of this prospectus.

These forward-looking statements involve known and unknown risks,
uncertainties and other factors that may cause actual results to be materially
different. These factors include, but are not limited to, the following: changes
in general economic and business conditions; changes in current pricing levels;
changes in political, social and economic conditions and local regulations;
changes in technology and the development of new technology; foreign currency
fluctuations; reductions in sales to any significant customers; changes in sales
mix; industry capacity; competition; disruptions of established supply channels;
manufacturing capacity constraints; and the availability, terms and deployment
of capital. Our risks are more specifically described in the "Risk Factors"
section of this prospectus. If one or more of these risks or uncertainties
materialize, or if underlying assumptions prove incorrect, our actual results
may vary materially from those expected, estimated or projected.

We do not undertake to update our forward-looking statements or risk
factors to reflect future events or circumstances.

USE OF PROCEEDS

We will not receive any proceeds of this offering other than the value of
the businesses or properties we or our subsidiaries acquire in the proposed
acquisitions.

DIVIDEND POLICY

We have never paid a cash dividend and do not anticipate declaring or
paying any cash dividends on shares of our common stock in the foreseeable
future. In addition, any determination to declare and pay dividends will be made
by our board of directors in light of our earnings, financial position, capital
requirements, contractual limitations contained in our debt instruments and such
other factors as the board of directors deems relevant. See "Description of
Indebtedness" and "Description of Capital Stock."

PRICE RANGE OF COMMON STOCK

Our Class A Common Stock has been traded on the Nasdaq Stock Market's
National Market since February 23, 2000 under the symbol "ISIL." Prior to that
time, there was no public market for our common stock, and there is currently no
public market for our Class B Common Stock. The following table sets forth, for
the periods indicated, the high and low prices per share of our Class A Common
Stock as reported in composite Nasdaq Stock Market trading.

<TABLE>
<CAPTION>
HIGH LOW
------ ------
<S> <C> <C>
First quarter of Fiscal 2000 (from February 23 to March 31,
2000)..................................................... $85.25 $37.00

Second quarter of Fiscal 2000 (through April 13, 2000)...... $59.75 $33.75
</TABLE>

On April 13, 2000, the last reported sale price for our Class A Common
Stock was $36.875 per share. As of April 13, 2000, there were approximately 54
holders of record of our Class A Common Stock.

13
<PAGE>
CAPITALIZATION

The following table sets forth our capitalization as of December 31, 1999
on an actual and as adjusted basis. This table should be read in conjunction
with "Unaudited Pro Forma Combined Condensed Financial Statements,"
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" and our Consolidated Financial Statements included elsewhere in this
prospectus.

DECEMBER 31, 1999
--------------------
ACTUAL AS ADJUSTED
------ -----------
(IN MILLIONS)
Cash.................................................. $ 40.1 $142.7
====== ======
Long-term debt, including current portion:
Senior Credit Facilities:
Revolving Credit Facility......................... -- --
Tranche B Senior Term Facility(1)................. 205.0 --
13 1/4% Senior Subordinated Notes due 2009(2)....... 199.7 129.7
13.5% Subordinated Holding PIK Note due 2010(3)..... 31.3 --
11.13% Seller Holding PIK Note due 2010(4).......... 93.9 --
Other............................................. 4.4 4.4
------ ------
Total long-term debt......................... 534.3 134.1
------ ------
12% Series A Cumulative Compounding Preferred Stock(5) 87.9 --
Shareholders' equity:
Common stock........................................ 0.7 0.9
Additional paid-in capital(2)(3).................... 2.6 606.8
Retained deficit.................................... (21.8) (46.0)
Unearned compensation............................... (0.6) --
Accumulated other comprehensive income.............. 0.3 0.3
------ ------
Total shareholders' equity(6)................ (18.8) 562.0
------ ------
Total capitalization..................... $603.4 $696.1
====== ======
- ------------------
(1) The Tranche B Senior Term Facility will mature in 2005 and will require 1%
of the original principal amount to be repaid in each of the first five
years.

(2) The notes were issued as part of the units, which consisted of $200.0
million principal amount of 13 1/4% Senior Subordinated Notes due 2009 and
warrants to purchase 3,703,707 shares of Class A Common Stock. Reflects the
gross proceeds from the units offering of $200.0 million net of $0.3 million
ascribed to the warrants. The $0.3 million associated with the sale of the
warrants is reflected as an increase to additional paid-in capital of
Intersil.

(3) Citicorp Mezzanine Partners, L.P. contributed $30.0 million in cash in
exchange for the 13.5% Subordinated Holding PIK Note due 2010 and warrants
to purchase 3,703,707 shares of Class A Common Stock. Reflects the gross
proceeds of $30.0 million net of $0.3 million ascribed to the warrants. The
$0.3 million associated with the sale of the warrants is reflected as an
increase to additional paid-in capital.

(4) The 11.13% Seller Holding PIK Note issued to Harris will mature in 2010 and
does not require payment of cash interest until then.

(5) As adjusted reflects the conversion of all of the outstanding shares of the
12% Series A Cumulative Compounding Preferred Stock into common stock at
$1,000 per share plus accumulated and unpaid dividends, based on the per
share amount we received in our initial public offering.

(6) Shareholders' equity as adjusted has been reduced by $9.9 million for the
one-time write-off of unamortized debt issuance costs associated with the
debt being repaid, $13.4 million for prepayment premiums on the portions of
the 13 1/4% Senior Subordinated Notes due 2009 and the Tranche B Senior Term
Facility and $0.3 million for the write-off related to the value ascribed to
the warrants issued on the 13.5% Subordinated Holding PIK Note due 2010
repaid.

14
<PAGE>
UNAUDITED PRO FORMA COMBINED CONDENSED FINANCIAL STATEMENTS

The following unaudited pro forma financial statements for Intersil Holding
are based on or derived from our historical predecessor Consolidated Financial
Statements included elsewhere in this prospectus. The acquisition of the
semiconductor business was consummated on August 13, 1999.

The Unaudited Pro Forma Combined Statements of Operations of Intersil
Corporation and Intersil Holding give effect to the transactions as if they had
occurred as of July 4, 1998. The transactions and the related adjustments are
described in the accompanying notes. The pro forma financial statements do not
purport to represent what Intersil's or Intersil Holding's results of operations
or financial position would actually have been had the transactions in fact
occurred on the dates specified nor do they purport to project the results of
operations or financial position for any future period or at any future date.

The acquisition of the semiconductor business has been accounted for using
the purchase method of accounting. After the acquisition of the semiconductor
business, the total purchase cost of the acquisition was allocated to the
tangible and intangible assets and liabilities of the semiconductor business
based upon their respective fair values. In the opinion of our management, all
adjustments that are necessary to present fairly the pro forma data have been
made.

The Pro Forma Combined Condensed Financial Statements should be read in
conjunction with our Consolidated Financial Statements and notes thereto as of
December 31, 1999 and July 2, 1999 and for the fiscal year ended July 2, 1999,
the 6 weeks ended August 13, 1999, and the unaudited 26 weeks ended January 1,
1999 and the unaudited 20 weeks ended December 31, 1999, included elsewhere in
this registration statement. See "Forward Looking Statements," "Management's
Discussion and Analysis of Financial Condition and Results of Operations" and
"Risk Factors--Risks Related to Use of Estimates in Pro Forma Information."

UNAUDITED PRO FORMA COMBINED CONDENSED STATEMENT OF OPERATIONS

<TABLE>
<CAPTION>
FISCAL YEAR ENDED JULY 2, 1999
-------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
INTERSIL CORPORATION INTERSIL HOLDING
--------------------------------------- -------------------------------------------------------
HISTORICAL CONSOLIDATED OFFERING PRO FORMA
(PREDECESSOR) ADJUSTMENTS PRO FORMA ADJUSTMENTS PRO FORMA ADJUSTMENTS AS ADJUSTED
------------- ----------- --------- ----------- ------------ ----------- ------------
(IN MILLIONS)
Sales:
Product sales............. $532.7 $532.7 $532.7 $532.7
Costs and Expenses:
Cost of product sales..... 349.8 $(14.4)(a) 335.4 335.4 335.4
Research and
development............. 67.0 67.0 67.0 67.0
Selling, administrative
and general............. 84.0 3.0 (b) 87.0 87.0 87.0
Harris corporate expense
allocation.............. 9.3 (9.3)(b) --
Intangible amortization... 2.4 10.3 (d) 12.7 12.7 12.7
------ ------ ------ ------ ------
Operating income.............. 20.2 10.4 30.6 30.6 30.6
Interest, net............. (1.2) 49.9 (c) 48.7 $ 14.1 (f) 62.8 $(45.7)(h)(i) 17.1
------ ------ ------ ------ ------ ------ ------
Income (loss) before income
taxes....................... 21.4 (39.5) (18.1) (14.1) (32.2) 45.7 13.5
Income taxes (benefit)........ (6.0) (15.4)(e) (21.4) (5.5)(e) (26.9) 17.8 (j) (9.1)
------ ------ ------ ------ ------ ------ ------
Net income (loss)............. 27.4 (24.1) 3.3 (8.6) (5.3) 27.9 22.6
Preferred dividends........... -- -- -- (10.0)(g) (10.0) 10.0 (k) --
------ ------ ------ ------ ------ ------ ------
Net income (loss) to common
shareholders................ $ 27.4 $(24.1) $ 3.3 $(18.6) $(15.3) $ 37.9 $ 22.6
====== ====== ====== ====== ====== ====== ======
Net income (loss) per common
share(1):
Basic........................................................................................................... $ 0.24
Diluted......................................................................................................... 0.23
Weighted average common shares
outstanding(1):
Basic........................................................................................................... 92.5
Diluted......................................................................................................... 99.3
</TABLE>

See Accompanying Notes to Unaudited Pro Forma Combined Condensed Statement of
Operations.

15
<PAGE>

UNAUDITED PRO FORMA COMBINED CONDENSED STATEMENT OF OPERATIONS

<TABLE>
<CAPTION>
26 WEEKS ENDED JANUARY 1, 1999
------------------------------------------------------------------------------------------------
INTERSIL CORPORATION INTERSIL HOLDING
--------------------------------------- ------------------------------------------------------
HISTORICAL CONSOLIDATED OFFERING PRO FORMA
(PREDECESSOR) ADJUSTMENTS PRO FORMA ADJUSTMENTS PRO FORMA ADJUSTMENTS AS ADJUSTED
------------- ----------- --------- ----------- ------------ ----------- -----------
(IN MILLIONS)
<S> <C> <C> <C> <C> <C> <C> <C>
Sales:
Product sales.............. $246.6 $246.6 $246.6 $246.6
Costs and Expenses:
Cost of product sales...... 165.6 $ (7.2)(a) 158.4 158.4 158.4
Research and development... 29.7 29.7 29.7 29.7
Administrative and
general.................. 41.3 1.6 (b) 42.9 42.9 42.9
Harris corporate expense
allocation............... 4.3 (4.3)(b) --
Intangible amortization.... 1.2 5.0 (d) 6.2 6.2 6.2
------ ------ ------ ------ ------
Operating income............... 4.5 4.9 9.4 9.4 9.4
Interest, net.............. (0.4) 25.0 (c) 24.6 $ 7.1 (f) 31.7 $(22.8)(h)(i) 8.9
------ ------ ------ ------ ------ ------ ------
Income (loss) before income
taxes........................ 4.9 (20.1) (15.2) (7.1) (22.3) 22.8 0.5
Income taxes (benefit)......... (1.4) (7.8)(e) (9.2) (2.8)(e) (12.0) 8.9 (j) (3.1)
------ ------ ------ ------ ------ ------ ------
Net income (loss).............. 6.3 (12.3) (6.0) (4.3) (10.3) 13.9 3.6
Preferred dividends............ -- -- -- (5.0)(g) (5.0) 5.0 (k) --
------ ------ ------ ------ ------ ------ ------
Net income (loss) to common
shareholders................. $ 6.3 $(12.3) $ (6.0) $ (9.3) $(15.3) $ 18.9 $ 3.6
====== ====== ====== ====== ====== ====== ======
Net income (loss) per common
share(1):
Basic............................................................................................................ $ 0.04
Diluted.......................................................................................................... 0.04
Weighted average common shares
outstanding(1):
Basic............................................................................................................ 92.5
Diluted.......................................................................................................... 99.3
</TABLE>

UNAUDITED PRO FORMA COMBINED CONDENSED STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
26 WEEKS ENDED DECEMBER 31, 1999
--------------------------------------------------------------------------------
6 WEEKS ENDED AUGUST 13, 1999
----------------------------------------------------- 20 WEEKS ENDED
DECEMBER 31, 1999
PRO FORMA ------------------------
INTERSIL ADJUSTMENTS
CORPORATION ---------------------- INTERSIL INTERSIL
HISTORICAL INTERSIL INTERSIL CONSOLIDATED CORPORATION HOLDING
(PREDECESSOR) CORPORATION HOLDING PRO FORMA HISTORICAL HISTORICAL
------------- ----------- -------- ------------ ----------- ----------
(IN MILLIONS)
<S> <C> <C> <C> <C> <C> <C>
Sales:
Product sales.................. $57.3 $57.3 $234.7
Costs and Expenses:
Cost of product sales.......... 39.6 $(1.7)(a) 37.9 142.4
Research and development....... 8.5 8.5 26.0
Selling, administrative and
general...................... 10.9 0.3 (b) 11.2 38.3
Harris corporate expense
allocation................... 1.2 (1.2)(b) -- --
Intangible amortization........ 0.3 1.2 (d) 1.5 3.9
In-process R&D charge.......... -- -- 20.2
----- ----- ----- ------
Operating income (loss)............ (3.2) 1.4 (1.8) 3.9
Interest, net.................. (0.1) 5.9 (c) $ 1.6 (f) 7.4 18.8 $ 5.5
----- ----- ----- ----- ------ ------
Income (loss) before income
taxes............................ (3.1) (4.5) (1.6) (9.2) (14.9) (5.5)
Income taxes (benefit)............. (0.1) (1.8)(e) (0.6)(e) (2.5) 1.4 --
----- ----- ----- ----- ------ ------
Net income (loss).................. (3.0) (2.7) (1.0) (6.7) (16.3) (5.5)
Preferred dividends................ -- -- (1.2)(g) (1.2) -- (3.8)
----- ----- ----- ----- ------ ------
Net income (loss) to common
shareholders..................... $(3.0) $(2.7) $(2.2) $(7.9) $(16.3) $ (9.3)
===== ===== ===== ===== ====== ======
Net income (loss) per common
share(1):
Basic.................................................................................................... $(0.16)
Diluted.................................................................................................. $(0.16)
Weighted average common shares
outstanding(1):
Basic.................................................................................................... 92.5
Diluted.................................................................................................. 92.5

<CAPTION>
26 WEEKS ENDED DECEMBER 31, 1999
-------------------------------------------

INTERSIL
HOLDING
CONSOLIDATED OFFERING PRO FORMA
PRO FORMA ADJUSTMENTS AS ADJUSTED
------------ ----------- -----------
(IN MILLIONS)
<S> <C> <C> <C>
Sales:
Product sales.................. $292.0 $292.0
Costs and Expenses:
Cost of product sales.......... 180.3 180.3
Research and development....... 34.5 34.5
Selling, administrative and
general...................... 49.5 49.5
Harris corporate expense
allocation................... -- --
Intangible amortization........ 5.4 5.4
In-process R&D charge.......... 20.2 20.2
------ ------
Operating income (loss)............ 2.1 2.1
Interest, net.................. 31.7 $(22.8)(h)(i) 8.9
------ ------ ------
Income (loss) before income
taxes............................ (29.6) 22.8 (6.8)
Income taxes (benefit)............. (1.1) 8.9 (j) 7.8
------ ------ ------
Net income (loss).................. (28.5) 13.9 (14.6)
Preferred dividends................ (5.0) 5.0 (k) --
------ ------ ------
Net income (loss) to common
shareholders..................... $(33.5) $ 18.9 $(14.6)
====== ====== ======
Net income (loss) per common
share(1):
Basic.............................................................. $(0.16)
Diluted............................................................ (0.16)
Weighted average common shares
outstanding(1):
Basic.............................................................. 92.5
Diluted............................................................ 92.5
</TABLE>

See Accompanying Notes to Unaudited Pro Forma Combined Condensed
Statement of Operations.

16
<PAGE>

NOTES TO UNAUDITED PRO FORMA COMBINED CONDENSED STATEMENTS OF OPERATIONS

The unaudited pro forma consolidated statements of operations give effect
to the following adjustments:

(a) The total purchase price of $614.3 million was allocated to the assets and
liabilities of the semiconductor business based upon their approximate fair
value. The fair value of the net assets acquired exceeded the purchase
price resulting in negative goodwill. This negative goodwill was allocated
to property and equipment and identified intangible assets based on their
relative fair value as follows:

<TABLE>
<CAPTION>
ALLOCATION
FAIR VALUE OF OF EXCESS ADJUSTED
ASSETS ACQUIRED FAIR VALUE FAIR VALUE
--------------- ---------- ----------
<S> <C> <C> <C>
Net current assets............................. $160.6 -- $160.6
Other amounts.................................. 17.2 -- 17.2
Property & equipment........................... 481.0 $(153.2) 327.8
Developed technology........................... 80.0 (23.9) 56.1
Customer base.................................. 33.0 (10.0) 23.0
In-process research and development............ 29.0 (8.8) 20.2
Assembled workforce............................ 13.5 (4.1) 9.4
------ ------- ------
814.3 $(200.0) $614.3
======= ======
Purchase price................................. 614.3
------
Excess fair value.............................. $200.0
======
</TABLE>

As a result of the allocation of negative goodwill to property, plant and
equipment, the net book carrying value at August 13, 1999 of $403.7 million
was reduced by $75.9 million to the fair value of $327.8 million. Therefore,
for pro forma purposes, depreciation expense was reduced by $14.4 million,
$7.2 million and $1.7 million for the fiscal year ended July 2, 1999, the 26
weeks ended January 1, 1999 and the 6 weeks ended August 13, 1999,
respectively.

(b) Historically, Harris allocated corporate headquarters expenses to the
semiconductor business based on the semiconductor business' net sales as a
percentage of Harris' net sales. This pro forma adjustment represents the
elimination of this allocation and our estimate of the cost of replacing
these services as a stand-alone company, calculated as follows:

<TABLE>
<CAPTION>
26 WEEKS
FISCAL YEAR ENDED ENDED 6 WEEKS ENDED
JULY 2, 1999 JANUARY 1, 1999 AUGUST 13, 1999
----------------- --------------- ---------------
(IN MILLIONS)
<S> <C> <C> <C>
Harris corporate expenses allocation..... $ 9.3 $ 4.3 $ 1.2
----- ----- -----
Company's anticipated expenses:
Finance, legal and professional........ 2.0 1.0 0.20
Human resources/benefits............... 0.5 0.3 0.05
Other.................................. 0.5 0.3 0.05
----- ----- -----
Total anticipated expenses.......... 3.0 1.6 0.3
----- ----- -----
Net reduction............................ $ 6.3 $ 2.7 $ 0.9
===== ===== =====
</TABLE>

(c) Represents interest expense associated with the indebtedness incurred in
connection with the acquisition of the semiconductor business, calculated
as follows:

<TABLE>
<CAPTION>
26 WEEKS
FISCAL YEAR ENDED ENDED 6 WEEKS ENDED
JULY 2, 1999 JANUARY 1, 1999 AUGUST 13, 1999
----------------- --------------- ---------------
(IN MILLIONS)
<S> <C> <C> <C>
Interest on Notes (13.25% on $200.0 $26.5 $13.3 $ 3.1
million)................................
Estimated interest on Senior Term
Facility (9.94% on $205.0 million)..... 20.4 10.2 2.4
Estimated interest on Revolving Credit
Facility
(9.19% on $15.0 million)............... 1.4 0.7 0.2
----- ----- -----
Total cash interest expense......... 48.3 24.2 5.7
Deferred financing fees.................. 1.6 0.8 0.2
----- ----- -----
Total interest expense.............. $49.9 $25.0 $ 5.9
===== ===== =====
</TABLE>

A change in the interest rate on the Senior Term Facility and the Revolving
Credit Facility of one-eighth of one percent (0.125%) would change interest
expense by $0.28 million for the fiscal year ended July 2, 1999, $0.14
million for the 26 weeks ended January 1, 1999 and $0.03 million for the 6
weeks ended August 13, 1999.

17
<PAGE>

Financing fees are composed of $6.0 million on the notes (amortized over 10
years) and $6.2 million on the Senior Term Facility and Revolving Credit
Facility (amortized over 6 years).

(d) Represents the adjustment to reflect additional amortization expense for
the identified intangible assets. The appraisal of the acquired business,
after adjustment for negative goodwill, included $108.7 million of
identified intangible assets including, $56.1 million of developed
technology, $23.0 million to customer base, $9.4 million to assembled
workforce and $20.2 million of purchased in-process research and
development. The purchased in-process research and development related to
various products under development that had not yet reached technological
feasibility and had no future alternative uses. Pursuant to Regulation S-X,
the in-process research and development has been written off against
retained earnings and has not been reflected in the pro forma consolidated
statement of operations for the unaudited pro forma combined statement of
operations for the fiscal year ended July 2, 1999. The remaining identified
intangibles are being amortized over the following lives:

<TABLE>
<CAPTION>
26 WEEKS
FISCAL YEAR ENDED ENDED 6 WEEKS ENDED
IDENTIFIED INTANGIBLE AMOUNT LIFE JULY 2, 1999 JANUARY 1, 1999 AUGUST 13, 1999
- --------------------- ------ -------- ----------------- --------------- ---------------
(IN MILLIONS)
<S> <C> <C> <C> <C> <C>
Developed $56.1 11 years $ 5.1 $ 2.5 $0.6
technology.........
Customer base........ 23.0 7 years 3.3 1.6 0.4
Assembled
workforce.......... 9.4 5 years 1.9 0.9 0.2
----- ----- ----
$10.3 $ 5.0 $1.2
===== ===== ====
</TABLE>

(e) Represents the adjustment of the pro forma income tax provision related to
the pro forma pretax adjustments for Intersil and Intersil Holding computed
on a stand-alone basis at the effective domestic tax rate of 39%.

(f) Represents interest expense associated with Intersil Holding's indebtedness
incurred in connection with the acquisition of the semiconductor business,
calculated as follows:

<TABLE>
<CAPTION>
26 WEEKS
FISCAL YEAR ENDED ENDED 6 WEEKS ENDED
JULY 2, 1999 JANUARY 1, 1999 AUGUST 13, 1999
----------------- --------------- ---------------
(IN MILLIONS)
<S> <C> <C> <C>
Interest on Subordinated Holding PIK
Note
(13.50% on $30.0 million)............. $ 4.1 $ 2.1 $0.5
Interest on Seller Holding PIK Note
(11.13% on $90.0 million)............. 10.0 5.0 1.1
----- ----- ----
$14.1 $ 7.1 $1.6
===== ===== ====
</TABLE>

(g) Represents the adjustment for the accretion of the 12% cumulative dividends
on the 83,434 shares of the mandatorily redeemable 12% Series A Cumulative
Compounding Preferred Stock, with a stated value of $1,000 per share.

(h) Represents the elimination of interest expense associated with debt to be
repaid with the proceeds of the initial public offering. Such amounts were
$44.5 million for the fiscal year ended July 2, 1999 and $22.2 million for
the 26 weeks ended January 1, 1999 and the 26 weeks ended December 31,
1999.

(i) Represents the elimination of the amortization of deferred financing and
debt issuance costs associated with the debt being repaid. Such amounts
were $1.2 million for the fiscal year ended July 2, 1999 and $0.6 million
for the 26 weeks ended January 1, 1999 and the 26 weeks ended December 31,
1999. In connection with the initial public offering, we are required to
write-off unamortized debt issuance costs associated with debt being
repaid. Approximately $9.9 million will be written off concurrent with the
initial public offering. This non-recurring charge has been excluded from
the pro forma combined condensed statements of operations.

(j) Represents the pro forma adjustment for income tax expense related to the
pro forma adjustments made to give effect to the initial public offering at
the effective domestic tax rate of 39%.

(k) Assumes all of the outstanding shares of the 12% Series A Cumulative
Compounding Preferred Stock were converted into common stock at $1,000 per
share plus accumulated and unpaid dividends, based on the per share amount
we received in the initial public offering.

18
<PAGE>

(l) The following table sets forth the computation of pro forma as adjusted
basic and diluted net income (loss) per common share and weighted average
common shares outstanding as follows:

<TABLE>
<CAPTION>
26 WEEKS
FISCAL YEAR ENDED ENDED 26 WEEKS ENDED
JULY 2, 1999 JANUARY 1, 1999 DECEMBER 31, 1999
----------------- --------------- -----------------
(IN MILLIONS, EXCEPT PER SHARE AMOUNTS)
<S> <C> <C> <C>
Numerator
Net income (loss) to common
shareholders (basic and
diluted)......................... $22.6 $ 3.6 $(14.6)
===== ===== ======
Denominator:
Basic:
Shares outstanding at December
31, 1999....................... 66.7 66.7 66.7
Conversion of Preferred Stock.... 3.8 3.8 3.8
Class A Common Stock offering.... 22.0 22.0 22.0
----- ----- ------
Total Basic...................... 92.5 92.5 92.5
Diluted:
Warrants............................ 5.9 5.9 --
Common stock options................ 0.9 0.9 --
----- ----- ------
Total diluted....................... 6.8 6.8 --
----- ----- ------
Total denominator..................... 99.3 99.3 92.5
===== ===== ======
Net income (loss) per common share:
Basic............................... $0.24 $0.04 $(0.16)
Diluted............................. 0.23 0.04 (0.16)
</TABLE>

The effect of dilutive securities is not included in the computation for
the 26 weeks ended December 31, 1999 because to do so would be antidilutive.

19
<PAGE>

SELECTED HISTORICAL FINANCIAL DATA AND OTHER DATA

The following table sets forth selected historical financial data and
supplemental data for Intersil Holding and its predecessor. The historical
financial data as of and for fiscal years 1997, 1998, 1999 and the 6 weeks ended
August 13, 1999 are derived directly from our predecessor's audited Consolidated
Financial Statements included elsewhere in this prospectus, except for revenue
categorized by business unit, which is derived from our predecessor's books and
records. The historical financial data as of and for fiscal years ended 1995 and
1996, which are not included in this prospectus, and the 26 weeks ended January
1, 1999 included elsewhere in this prospectus, are derived directly from our
predecessor's unaudited Consolidated Financial Statements. The historical
financial data as of and for the 20 weeks ended December 31, 1999 are derived
directly from our unaudited Consolidated Financial Statements included elsewhere
in this prospectus. The unaudited Consolidated Financial Statements include all
adjustments necessary for the fair presentation of the financial condition and
the results of operations for these periods and as of these dates. This
information should be read in conjunction with the Consolidated Financial
Statements included elsewhere in this prospectus and "Management's Discussion
and Analysis of Financial Condition and Results of Operations."

<TABLE>
<CAPTION>
PREDECESSOR PREDECESSOR
------------------------------------------ --------------------------------
FISCAL YEARS 26 WEEKS ENDED 6 WEEKS ENDED
------------------------------------------ -------------- ---------------
1995 1996 1997 1998 1999 JANUARY 1, 1999 AUGUST 13, 1999
------ ------ ------ ------ ------ --------------- ---------------
(DOLLARS IN MILLIONS, EXCEPT PER SHARE AMOUNTS)
<S> <C> <C> <C> <C> <C> <C> <C>
STATEMENT OF OPERATIONS DATA:
Revenue:
Analog & Mixed-Signal................ $379.2 $393.6 $384.4 $390.4 $352.8 $166.0 $ 36.3
Discrete Power....................... 128.2 176.6 154.5 176.4 161.6 73.3 18.0
Wireless............................. 0.0 0.0 6.4 10.0 18.3 7.3 3.0
------ ------ ------ ------ ------ ------ ------
Total revenue............................ $507.4 $570.2 $545.3 $576.8 $532.7 $246.6 $ 57.3
====== ====== ====== ====== ====== ====== ======
Gross profit............................. $178.5 $227.1 $199.3 $207.5 $182.9 $ 81.0 $ 17.7
Research and development................. 50.6 69.4 75.2 75.1 67.0 29.7 8.5
Selling, general and administrative...... 94.6 103.6 99.3 98.2 84.0 41.3 10.9
Harris corporate expense allocation...... 9.1 10.3 10.0 10.0 9.3 4.3 1.2
Intangible amortization.................. 2.3 2.3 2.3 2.3 2.4 1.2 0.3
In-process R&D charge.................... -- -- -- -- -- -- --
------ ------ ------ ------ ------ ------ ------
Operating income (loss).................. 21.9 41.5 12.5 21.9 20.2 4.5 (3.2)
Interest, net............................ 0.6 (1.0) (0.6) (0.9) (1.2) (0.4) (0.1)
------ ------ ------ ------ ------ ------ ------
Income (loss) before income taxes........ 21.3 42.5 13.1 22.8 21.4 4.9 (3.1)
Income taxes (benefit)................... (4.3) 2.6 1.9 9.9 (6.0) (1.4) (0.1)
------ ------ ------ ------ ------ ------ ------
Net income (loss)........................ 25.6 39.9 11.2 12.9 27.4 6.3 (3.0)
Preferred dividends...................... -- -- -- -- -- -- --
------ ------ ------ ------ ------ ------ ------
Net income (loss) to common
shareholders........................... $ 25.6 $ 39.9 $ 11.2 $ 12.9 $ 27.4 $ 6.3 $ (3.0)
====== ====== ====== ====== ====== ====== ======
LOSS PER SHARE:
Basic and diluted........................
WEIGHTED AVERAGE COMMON SHARES
OUTSTANDING:
Basic and diluted........................
BALANCE SHEET DATA (END OF PERIOD):
Cash..................................... $ -- $ -- $ -- $ -- $ -- $ -- $ 1.4
Total assets............................. 546.2 647.0 773.3 810.3 761.2 766.0 736.1
Long-term debt, including current
portion................................ -- -- 1.4 4.1 4.6 4.7 4.5
Mandatorily redeemable preferred stock... -- -- -- -- -- -- --
Total shareholders' equity (deficit)..... 456.2 520.9 646.2 699.1 658.9 684.0 657.3

SUCCESSOR
-----------------
20 WEEKS ENDED
-----------------
DECEMBER 31, 1999
-----------------
<S> <C>
STATEMENT OF OPERATIONS DATA:
Revenue:
Analog & Mixed-Signal................ $140.5
Discrete Power....................... 81.7
Wireless............................. 12.5
------
Total revenue............................ $234.7
======
Gross profit............................. $ 92.3
Research and development................. 26.0
Selling, general and administrative...... 38.3
Harris corporate expense allocation...... --
Intangible amortization.................. 3.9
In-process R&D charge.................... 20.2
------
Operating income (loss).................. 3.9
Interest, net............................ 24.3
------
Income (loss) before income taxes........ (20.4)
Income taxes (benefit)................... 1.4
------
Net income (loss)........................ (21.8)
Preferred dividends...................... 3.9
------
Net income (loss) to common
shareholders........................... $(25.7)
======
LOSS PER SHARE:
Basic and diluted........................ $(0.39)
WEIGHTED AVERAGE COMMON SHARES
OUTSTANDING:
Basic and diluted........................ 66.7
BALANCE SHEET DATA (END OF PERIOD):
Cash..................................... $ 40.1
Total assets............................. 717.0
Long-term debt, including current
portion................................ 534.3
Mandatorily redeemable preferred stock... 87.9
Total shareholders' equity (deficit)..... (18.8)
</TABLE>

- ------------------
(1) Earnings consist of income before income taxes plus fixed charges. Fixed
charges consist of interest expense on debt and amortization of deferred
debt issuance costs and the portion (about one-third) of rental expense that
we believe is representative of the interest component of rental expense.

(2) Earnings as defined above, fixed charges as defined above plus preferred
stock dividends, whether paid or accreted.

(3) The deficiency of earnings available to cover fixed charges for the six
weeks ended August 13, 1999 and for the twenty weeks ended December 31, 1999
is $3.1 million and $20.4 million, respectively.

(4) The deficiency of earnings available to cover fixed charges and preferred
stock dividends for the six weeks ended August 13, 1999 and for the twenty
weeks ended December 31, 1999 is $3.1 million and $24.3 million,
respectively.

20
<PAGE>

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS

The following discussion should be read in conjunction with, and is
qualified in its entirety by reference to our Consolidated Financial Statements,
including the notes thereto appearing elsewhere in this prospectus. Except for
historical information, the discussions in this section of the prospectus
contain forward-looking statements that involve risks and uncertainties. Actual
results could differ materially from those discussed below.

OVERVIEW

We are a systems level designer and manufacturer of analog, mixed signal,
discrete power and wireless communications semiconductors. We use our
proprietary technologies and design capabilities to provide systems solutions
for the communications power management and wireless markets. We sell over 4,500
products to more than 28,000 customers worldwide.

BASIS OF PRESENTATION

We were formed on August 13, 1999 through a series of transactions, in
which we and our wholly-owned subsidiary, Intersil, acquired the semiconductor
business of Harris. Intersil and its wholly-owned domestic and foreign
subsidiaries include the operations of the Predecessor. Our fiscal year 2000
began on July 3, 1999 and our second fiscal quarter ended December 31, 1999.

The total purchase price of the semiconductor business acquisition was
$614.3 million, which included transaction costs of approximately $7.8 million
and deferred financing costs of $12.2 million. The consideration paid by
Intersil Holding was $504.3 million in cash of which $420.0 million was financed
through borrowings from the senior credit facilities, the 13 1/4% Senior
Subordinated Notes due 2009 and 13.5% Subordinated Holding "Pay-In-Kind" (PIK)
Note and the issuance of a $90.0 million 11.13% PIK Note to Harris.

The acquisition was accounted for using the purchase method of accounting
and accordingly, the operating results of the semiconductor business have been
included in Intersil's consolidated financial statements since the date of
acquisition. The total purchase price was allocated to the assets and
liabilities of the semiconductor business based upon their approximate fair
value. The fair value of the net assets acquired exceeded the purchase price
resulting in negative goodwill of $200.0 million. This negative goodwill was
allocated to the identified intangibles and property and equipment based on
their relative fair values. The most significant effects were to decrease
property, plant and equipment and to increase certain intangibles and
liabilities. Accordingly, certain financial information for the periods prior to
August 13, 1999 is not comparable to periods subsequent to August 13, 1999. All
income statement information for the first six months ending December 31, 1999
of the fiscal year 2000 represents the combined results of the semiconductor
business from July 3, 1999 through August 13, 1999 and Intersil Holding from
August 14, 1999 through December 31, 1999.

21
<PAGE>

QUARTERLY RESULTS

The following table sets forth the unaudited historical quarterly revenue
and gross margin of our product groups:

<TABLE>
<CAPTION>
COMBINED
FISCAL YEAR 1998 FISCAL YEAR 1999 FISCAL YEAR 2000
--------------------------------- --------------------------------- -----------------
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2
------ ------ ------ ------ ------ ------ ------ ------ ------- -------
(IN MILLIONS, EXCEPT FOR PERCENTAGES)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
REVENUE
Analog & Mixed-Signal.... $ 96.3 $ 93.9 $ 95.2 $105.0 $ 79.8 $ 86.2 $ 88.5 $ 98.3 $ 82.8 $ 94.0
Discrete Power........... 44.7 45.2 45.7 40.8 38.5 34.8 42.3 46.0 44.9 54.8
Wireless................. 2.9 2.2 2.6 2.3 4.2 3.1 4.6 6.4 6.2 9.3
------ ------ ------ ------ ------ ------ ------ ------ ------ ------
Total................ $143.9 $141.3 $143.5 $148.1 $122.5 $124.1 $135.4 $150.7 $133.9 $158.1
====== ====== ====== ====== ====== ====== ====== ====== ====== ======

GROSS MARGIN
Analog & Mixed-Signal.... $ 34.2 $ 39.4 $ 39.9 $ 46.5 $ 33.0 $ 33.2 $ 38.3 $ 42.1 $ 35.1 $ 42.5
Discrete Power........... 10.8 12.4 10.6 10.3 8.1 5.0 7.2 9.5 11.0 15.5
Wireless................. 0.9 0.1 1.1 1.3 0.9 0.8 1.6 3.2 2.2 3.6
------ ------ ------ ------ ------ ------ ------ ------ ------ ------
Total................ $ 45.9 $ 51.9 $ 51.6 $ 58.1 $ 42.0 $ 39.0 $ 47.1 $ 54.8 $ 48.3 $ 61.6
====== ====== ====== ====== ====== ====== ====== ====== ====== ======

GROSS MARGIN PERCENTAGE
Analog & Mixed-Signal.... 36% 42% 42% 44% 41% 39% 43% 43% 42% 45%
Discrete Power........... 24 27 23 25 21 14 17 21 24 28
Wireless................. 31 5 42 57 21 26 35 50 35 39
Total................ 32 37 36 39 34 31 35 36 36 39
</TABLE>

Our first fiscal quarter is generally the weakest due to slow demand from
government customers, model year changeovers in the automotive industry and
summer holiday seasons, primarily in Europe. Our fourth fiscal quarter is
generally the strongest due to strong demand from government customers.

The semiconductor industry has historically experienced declining selling
prices over the past 15 years, and we expect that trend to continue in the
future. We expect to realize productivity gains which will offset the decline in
average selling prices and therefore we do not anticipate a significant adverse
effect on our financial condition.

Industry demand weakened significantly in the first half of fiscal 1999 due
to widespread inventory adjustments which led to excess manufacturing capacity
and steep declines in product prices. This trend impacted all three product
groups. Our results, and the industry as a whole, began to strengthen in the
third fiscal quarter of 1999, with an increase in sales of 9.1% from the second
quarter to the third quarter and 11.3% from the third quarter to the fourth
quarter. For the six months ended December 31, 1999, industry conditions have
continued to improve. Additionally, the introduction of our new PRISM II
wireless product has accelerated growth in the Wireless product group.

As Wireless is an emerging business, gross margins have fluctuated during
the start-up period due to timing of sales and variability of yield performance.

22
<PAGE>

RESULTS OF OPERATIONS

The following table sets forth income statement data for the periods
indicated as a percentage of revenue:

<TABLE>
<CAPTION>
FISCAL YEAR 26 WEEKS ENDED
----------------------------- ----------------------------
COMBINED
JANUARY 1, DECEMBER 31,
1997 1998 1999 1999 1999
----- ----- ----- ---------- ------------
<S> <C> <C> <C> <C> <C>
Revenue:
Analog & Mixed-Signal.......... 70.5% 67.7% 66.2% 67.3% 60.6%
Discrete Power................. 28.3 30.6 30.4 29.7 34.1
Wireless....................... 1.2 1.7 3.4 3.0 5.3
----- ----- ----- ------ ------
Total....................... 100.0 100.0 100.0 100.0 100.0
----- ----- ----- ------ ------
Cost and Expenses:
Cost of goods sold............. 63.5 64.0 65.6 67.3 62.4
Research and development....... 13.8 13.0 12.6 12.0 11.8
Selling, administrative and
general..................... 20.0 18.8 17.5 18.5 17.2
Intangible amortization........ 0.4 0.4 0.5 0.4 1.5
In-process research and
development................. -- -- -- -- 6.9
----- ----- ----- ------ ------
Operating income............ 2.3 3.8 3.8 1.8 0.2
Interest, net.................. (0.1) (0.2) (0.2) (0.2) 8.3
----- ----- ----- ------ ------
Income (loss) before income
taxes.......................... 2.4 4.0 4.0 2.0 (8.1)
Income taxes (benefit)........... 0.3 1.8 (1.1) (0.6) 0.4
----- ----- ----- ------ ------
Net income (loss)................ 2.1% 2.2% 5.1% 2.6% (8.5)%
===== ===== ===== ====== ======
</TABLE>

SIX MONTHS ENDED DECEMBER 31, 1999 COMPARED WITH SIX MONTHS ENDED JANUARY 1,
1999

Revenue

Revenue for the six months ended December 31, 1999 increased 18.4% to
$292.0 million from $246.6 million during the six months ended January 1, 1999.
This growth is the result of improved demand across all business units,
primarily as a result of improved market conditions. Wireless sales growth of
112% was driven by increased market acceptance of our PRISM(R) products.

Geographically, 48.9%, 22.9% and 28.2% of product sales were derived in
North America, Europe and Asia, respectively, during the six months ended
December 31, 1999, compared to 54.1%, 24.9% and 21.0% during the six months
ended January 1, 1999.

Gross Margin

Cost of goods sold consists primarily of purchased materials, labor and
overhead (including depreciation) associated with product manufacturing, plus
royalty, warranty and sustaining engineering expenses pertaining to products
sold. Gross margin on product sales increased 35.7% to $109.9 million in the six
months ended December 31, 1999 from $81.0 million in the six months ended
January 1, 1999. As a percent of sales, gross margin was 37.6% during the six
months ended December 31, 1999 and 32.8% during the six months ended January 1,
1999. This increase was substantially due to a decrease in depreciation expense
resulting from a revaluation of our property, plant and equipment due to
purchase accounting, greater capacity utilization, from 62% during the six
months ended January 1, 1999 to 80% during the six months ended December 31,
1999, and increased manufacturing efficiencies resulting from cost reductions
related to headcount reductions.

Operating Expenses

R&D expenses consist primarily of salaries and selected costs of employees
engaged in product/process research, design and development activities, as well
as related subcontracting activities, prototype development, cost of design
tools and technology license agreement expenses. R&D expenses increased

23
<PAGE>

16.2% to $34.5 million during the six months ended December 31, 1999 from $29.7
million during the first half of fiscal 1999. As a percent of sales, R&D
expenses remained relatively flat at 11.8% for the six months ended December 31,
1999 from 12.0% for the six months ended January 1, 1999. R&D expense included
continued investment in the PRISM(R) chip sets and in the power management
integrated circuits area, focusing in the categories of communications and
computing, which led our growth of new product revenue during fiscal 1999.

In connection with the acquisition, we allocated $20.2 million of the
purchase price to in-process R&D projects. This allocation represents the
estimated fair value based on risk-adjusted cash flows related to the incomplete
products. At the date of acquisition, the development of these projects had not
yet reached technological feasibility and the in-process R&D had no alternative
future uses. Accordingly, these costs were expensed as a one-time charge to
earnings in the combined six months ended December 31, 1999.

In making the purchase price allocation, we relied on present value
calculations of income, an analysis of project accomplishments and completion
costs and an assessment of overall contribution and project risk. The amounts
assigned to the in-process R&D were determined by identifying significant
research projects for which technological feasibility had not been established.

The amounts assigned to the in-process R&D were determined by identifying
significant research projects for which technological feasibility had not been
established. The fair values assigned prior to allocation of negative goodwill
to each of the significant projects and the stage of completion are reported
below.

<TABLE>
<CAPTION>
FAIR VALUE STAGE OF
PRODUCT (IN MILLIONS) COMPLETION
------- ------------- ----------
<S> <C> <C>
SMPS IGBT................................................... $ 2.4 60%
PRISM II.................................................... 2.4 90
HIP 6601/2/3................................................ 1.5 75
HC 1540..................................................... 0.4 80
HC 7581..................................................... 3.4 60
HIP 6210/6220............................................... 2.4 50
DC to DC Power Converters................................... 2.2 35
Gen III Radiation Hardened MOSFETs.......................... 8.0 60
Other....................................................... 6.3 38
-----
Total..................................................... $29.0
=====
</TABLE>

A discussion of the most significant projects follows:

SMPS IGBT

SMPS IGBT refers to a project researched and in development in our discrete
power product line area. AC to DC power supplies are designed to use high
voltage power metal oxide semiconductor field effect transistors, or MOSFETs, to
convert an AC voltage into a DC voltage. The new switch mode power supply, or
SMPS, family of insulated gate bipolar transistors, or IGBTs, will combine the
fast speed, unclamped inductive switching and low gate charge speed of the power
MOSFET with the high current density and low forward voltage drop of the IGBT.
The result will be a lower cost and more efficient product than currently
available high voltage MOSFET products.

PRISM II

PRISM II refers to a project researched and in development in our wireless
product line area. PRISM II will be a complete silicon solution for the design
of Wireless Local Area Networks, or WLANs. Comprised of five highly integrated
chips incorporating advanced silicon germanium technology, PRISM II will deliver
all required analog and digital circuitry for the physical and medium access
controller layers, while providing a complete "antenna-to-computer" solution for
high data rate WLANs. The product will provide end-users in the computer market
with a low cost, small and lightweight medium for WLAN connection.

24
<PAGE>

HIP6601/2/3

HIP6601/2/3 refers to another chipset family researched and in development
in our analog and mixed signal product line area. HIP6601/2/33 will be designed
to support the next generation Intel and AMD processors that will be used in
file servers, desktops, and workstations. The HIP6601, HIP6602 and HIP6603 will
be a family of similar controllers and drivers designed to support various high
performance CPU power supply conversion requirements.

HC1540

HC1540 refers to an integrated circuit and relay researched and in
development in our analog and mixed signal product line area. HC1540 will be a
high voltage, switch for use in the telecom industry.

HC7581

HC7581 refers to a new subscriber line interface circuit, or SLIC,
researched and in development in our analog and mixed signal product line area.
SLICs are required in all telecom exchange systems to interface with signals
entering into telecommunication systems.

HIP6210/6220

HIP6210/6220 refer to a chipset researched and in development in our analog
and mixed signal product line area. HIP6210/6220 are designed to support the
personal computer market by saving energy. These chips will sense different
power requirement levels and regulate the flow of the power based on essential
needs.

DC to DC Power Converters

DC to DC power converters refer to a project researched and in development
in our space and defense group. The DC to DC power converter will be the first
in a series of radiation-hardened, high reliability power supplies. This power
supply source will be smaller in size, of less weight and more efficient than
currently available technology. The initial market will be for usage in
satellites. However, a variety of other commercial and military space
applications are envisioned.

Gen III Radiation Hardened MOSFETs

Gen III radiation hardened metal oxide semiconductor field effect
transistors, or MOSFETs, refer to a project researched and in development in our
discrete power product line area. This technology will reduce the die size used
in commercial satellites by 50% while maintaining a high degree of radiation
hardness. Launch costs of commercial satellites are directly proportional to a
satellite's size and weight. The die size reduction will enable us to place our
silicon in packages that are smaller and lighter thereby providing the end-user
with a more economical printed circuit board.

The value assigned to purchased in-process R&D was determined by estimating
the costs to develop the purchased in-process R&D into commercially viable
products and discounting the net cash flows to their present value.

Remaining development efforts for these in-process R&D projects include
various phases of design, development and testing. The anticipated completion
dates for the in-process R&D projects will occur within the next one and one
half years, after which we expect to begin generating economic benefits from the
technologies. Expenditures to complete these projects are expected to total
approximately $12.1 million in fiscal year 2000, and $1.3 million in fiscal year
2001.

These estimates are subject to change, given the uncertainties of the
development process, and no assurance can be given that deviations from these
estimates will not occur. We expect to continue these development efforts and
believe we have a reasonable chance of successfully completing the R&D programs.
However, there is risk associated with the completion of the projects and there
is no assurance that any will meet with either technological or commercial
success.

SG&A costs, which include marketing, selling, administrative and general
expenses, and Harris corporate expense allocation, increased to $50.2 million
during the six months ended December 31, 1999 from $45.7 million during the six
months ended January 1, 1999. This increase was due to additional selling costs
resulting from higher sales in fiscal 2000 and additional marketing costs
associated with the new company branding initiative. Operating expenses include
allocated charges by Harris to us for legal, financial and other

25
<PAGE>

administrative expenses of $1.2 million for the six weeks ended August 13, 1999
and $4.3 million for the six months ended January 1, 1999.

Certain intangible assets were recorded on the opening balance sheet of
Intersil as part of purchase accounting. These assets are being amortized over
their useful lives ranging from five to eleven years.

Interest Expense

In connection with the acquisition of the semiconductor business, we
entered into new credit facilities. See "--Liquidity and Capital Resources."
Interest expense related to this debt for Intersil Holding during the six months
ended December 31, 1999 was $24.8 million, excluding interest income of $0.6
million.

Tax Expense

The tax benefit for the combined six months ended December 31, 1999 is not
comparable to the six months ended January 1, 1999, due to the different tax
structures of the semiconductor business and Intersil Holding.

Backlog

We had backlog at December 31, 1999 of $192.4 million compared to $174.0
million at July 2, 1999.

FISCAL 1999 COMPARED WITH 1998

Revenue

Revenue for fiscal year 1999 decreased 7.6% to $532.7 million from $576.8
million in fiscal year 1998. This decrease is the result of continued soft
market conditions and resulting adverse effects on semiconductor demand. This
trend continued through the second quarter of fiscal 1999. We believe that the
principal causes for the decline were initially high inventory levels of our
products at our distributors, which decreased 17% from fiscal year 1998 to
fiscal year 1999, as well as high levels of inventory at customers. This was
followed by an overall drop in global semiconductor demand of 8.5% in calendar
year 1998. Particularly hard hit were our Discrete Power products where prices
of power metal oxide semiconductor field effect transistors, or MOSFETs,
declined by nearly 15%. Additionally, distributors and major OEMs reduced the
amount of pipeline inventory in the channel, taking advantage of the shorter
lead-times and lower prices. During the third fiscal quarter of 1999, we began
to experience an increase in new orders, which resulted in a 9.1% increase in
sales in the third quarter versus the preceding quarter. The positive trend
continued into the fourth quarter with an increase in sales of 11.3% from the
third quarter.

Geographically, 53.5%, 24.6% and 21.9% of product sales were derived in
North America, Europe and Asia, respectively, during fiscal year 1999, compared
to 53.8%, 28.0%, and 18.2% in fiscal year 1998.

Gross Margin

Gross margin on product sales declined 11.9% to $182.9 million in fiscal
year 1999 from $207.5 million in fiscal year 1998. As a percent of sales, gross
margin was 34.3% in fiscal year 1999 and 36.0% in fiscal year 1998. This
decrease was substantially due to price pressure worldwide for our Discrete
Power products and a $13.2 million increase in our depreciation expense
resulting from the additional capital expenditures that went into our 8-inch
wafer fab in Mountaintop, Pennsylvania. Our gross margin decline was partially
offset by a series of cost reduction initiatives which resulted in lower
operating costs and improved pricing and terms with our suppliers of raw
materials.

Operating Expenses

R&D expenses decreased 10.8% to $67.0 million in fiscal year 1999 from
$75.1 million in fiscal year 1998. During fiscal year 1999, we focused our
resources on targeted applications and reduced programs that did not support our
emphasis. Major investment continued on the PRISM(R) chip set which addresses
the wireless local area network market. R&D for products designed for the power
management market was principally focused on computing and communications which
led our growth of new product revenue during fiscal year 1999.

SG&A costs decreased 13.7% to $93.3 million in fiscal year 1999 from $108.1
million in fiscal year 1998. The decrease in SG&A was primarily due to increased
efficiencies resulting from a reorganization of

26
<PAGE>

the internal sales force and external sales representative firms and reduction
of administrative expenses including headcount reductions. Operating expenses
include allocated charges by Harris to us for legal, financial and other
administrative expenses of $9.3 million for fiscal year 1999 and $10.0 million
for fiscal year 1998.

Tax Expenses

The tax benefit of $6.0 million in fiscal year 1999 was primarily driven by
changes in the Malaysian tax system, resulting in fiscal year 1999 income not
being subject to tax.

Backlog

We had backlog at July 2, 1999 of $174.0 million compared to backlog of
about $188.5 million at July 3, 1998. The decrease in backlog was primarily due
to shorter industry lead-times.

FISCAL 1998 COMPARED WITH 1997

Revenue

Revenue for fiscal year 1998 increased 5.8% to $576.8 million from $545.3
million in fiscal year 1997. The increase was principally due to a 14% increase
in Discrete Power sales over the prior year primarily due to increased output
from our new 8-inch wafer fab in Mountaintop, Pennsylvania.

Geographically, 53.8%, 28.0%, and 18.2% of product sales were derived in
North America, Europe and Asia/Pacific, respectively, in fiscal year 1998,
compared to 55.4%, 26.6%, and 18.0% in fiscal year 1997.

Gross Margin

Gross margin in fiscal year 1998 increased 4.1% to $207.5 million from
$199.3 million in fiscal year 1997. The increase in gross margin was primarily
due to higher revenue and improved manufacturing efficiencies offset partially
by a $14.8 million increase in depreciation expense resulting from the expansion
of the Mountaintop, Pennsylvania 8-inch wafer fab. As a percentage of revenue,
our gross margin decreased to 36.0% in fiscal year 1998 compared to 36.5% for
fiscal year 1997 due primarily to the increased depreciation.

Operating Expenses

R&D expenses were $75.1 million, or 13.0% of sales in fiscal year 1998,
compared to $75.2 million, or 13.8% of sales in fiscal year 1997. During fiscal
year 1998, we continued to direct about two-thirds of our R&D investment to our
wireless and analog products.

SG&A expenses in fiscal year 1998 decreased 1.1% to $108.1 million,
compared to $109.3 million in fiscal year 1997. The decrease in SG&A as a
percent of sales from 20.0% to 18.7% was primarily due to our increased
operating efficiency and efforts to reduce selling and administrative expenses.
Operating expenses include charges by Harris for our share of legal, financial
and other administrative expenses of $10.0 million for fiscal year 1998 and
$10.0 million for fiscal year 1997.

Tax Expenses

The favorable tax rate in fiscal year 1997 was primarily due to
fluctuations in foreign income and a reinvestment allowance on capital
expenditures in Malaysia.

Backlog

We had backlog at July 3, 1998 of about $188.5 million compared to backlog
of about $223.2 million at June 27, 1997. The decline in backlog was primarily
due to shorter industry lead times.

LIQUIDITY AND CAPITAL RESOURCES

In connection with the acquisition of the semiconductor business, we
entered into new credit facilities, which provided for a Senior Term Facility of
$205.0 million and a Revolving Credit Facility in an aggregate amount up to
$70.0 million.

27
<PAGE>

The Senior Term Facility was subject to amortization payments which
required 1.0% of the original principal amount to be repaid in each of the first
five years. The Revolving Credit Facility is available until 2005 unless sooner
terminated. As of December 31, 1999, the Revolving Credit Facility was undrawn.

Our principal capital requirements are to fund working capital needs, to
meet required debt payments and to complete planned maintenance and expansion.
We anticipate that our operating cash flow, together with available borrowings
under the Revolving Credit Facility, will be sufficient to meet our working
capital, capital expenditure and interest requirements on our debt obligations
for the foreseeable future. We used the proceeds of our initial public offering
to repay the entire 13.5% Senior Subordinated PIK Note due 2010, the 11.13%
Seller Holding PIK Note due 2010 and the Senior Term Facility and a substantial
portion of the 13 1/4% Senior Subordinated Notes due 2009. As of December 31,
1999 our total debt and stockholders' equity as adjusted for the initial public
offering would have been $134.1 million and $562.0 million, respectively.

Because our business was operated as a subsidiary of Harris during fiscal
year 1997 through fiscal year 1999, we do not believe our prior years' cash
flows are indicative of our business on a stand-alone basis. Net cash generated
by operating activities for the six months ended December 31, 1999 was $65.3
million. Net cash used in investing activities for the six months ended December
31, 1999 was $14.5 million for capital expenditures to support our expanded
operations. Net cash used to repay debt for the six months ended December 31,
1999 was $15.2 million. Our cash balance at December 31, 1999 was $40.1 million.

Our senior credit facility contains financial covenants and restrictions
including restrictions on our ability to pay cash dividends or to effect mergers
or acquisitions, incur certain indebtedness or to make certain investments
without the bank's prior approval. We are currently in compliance with such
financial covenants and restrictions.

Receivables and Inventories

Trade accounts and the current portion of notes receivable less the
allowance for collection losses totaled $91.7 million at December 31, 1999
compared to $100.7 million at July 2, 1999. This decrease was due to continued
emphasis on improving the receivable collection cycle. Inventories remained
relatively flat at December 31, 1999, increasing from $153.8 million at July 2,
1999 to $154.0 million at December 31, 1999. The inventory decrease from the end
of fiscal year 1998 of $26.2 million was a result of a management initiative to
reduce our inventory through portfolio management and streamlining of processes,
resulting in less excess and obsolete inventory.

Distributor reserves have fluctuated from year to year based on the level
of inventory of distributions. In late fiscal year 1998, inventories at
distributors declined and the reserve was reduced accordingly. From fiscal year
1998 to fiscal year 1999, the reserve has remained relatively flat.

Capital Expenditures

Capital expenditures for the six months ended December 31, 1999 were $14.5
million. During fiscal year 1999, capital expenditures were $38.6 million
compared to $90.2 million in fiscal year 1998. This decrease was due primarily
to the completion of our expansion of the Mountaintop, Pennsylvania 8-inch wafer
fab during fiscal year 1998. Our previous owner invested approximately $303.9
million in capital expenditures since the beginning of fiscal year 1997 for
upgrading our existing facilities with state-of-the-art manufacturing equipment
and for the building and equipping of the world's first 8-inch wafer fab for
discrete power semiconductors. As a result, we do not anticipate substantial
capital expenditures in the foreseeable future. During the fiscal year 2000, we
intend to spend about $45.0 million in capital expenditures.

RECENT ACCOUNTING PRONOUNCEMENTS

In June 1998, the Financial Accounting Standards Board issued FAS No. 133,
"Accounting for Derivative Instruments and Hedging Activities." The statement
establishes standards for recording derivative financial instruments and the
recognition of gains or losses resulting from changes in the fair values of
those instruments. We plan to adopt the new standard no later than the first
quarter of fiscal year 2001. However, we have not yet determined the anticipated
impact of FAS No. 133.

28
<PAGE>

MARKET RISK MANAGEMENT

We, in the normal course of doing business, are exposed to the risks
associated with foreign currency exchange rates and changes in interest rates.
We employ established policies and procedures governing the use of financial
instruments to manage our exposure to these risks.

We use foreign exchange contracts and options to hedge both balance sheet
and off-balance sheet foreign currency commitments. Specifically, these foreign
exchange contracts offset foreign currency denominated inventory and purchase
commitments from suppliers, and accounts receivable from, and future committed
sales to customers and intercompany loans. We believe the use of foreign
currency financial instruments should reduce the risks that arise from doing
business in international markets. Our policy, effective August 1999, is to
hedge firm foreign currency exposure up to six months of anticipated
requirements. At December 31, 1999, we had open foreign exchange contracts with
a notional amount of $27.6 million, all of which were to hedge off-balance-sheet
commitments. At August 13, 1999 we had open foreign exchange contracts with a
notional amount of $6.1 million, all of which were to hedge off-balance-sheet
commitments. At July 2, 1999, we had open foreign exchange contracts with a
notional amount of $22.0 million, all of which were to hedge off-balance-sheet
commitments. At July 3, 1998, we had open foreign exchange contracts with a
notional amount of $166.4 million, all of which were to hedge off-balance-sheet
commitments. Additionally, for the fiscal year ended July 2, 1999, we purchased
and sold $120.7 million of foreign exchange forward and option contracts,
compared to $139.4 million for the prior year. See Note O "Financial
Instruments" in the Notes to Financial Statements for further information with
respect to commitments to buy or sell foreign currencies. Our hedging activities
provide only limited protection against currency exchange risks. Factors that
could impact the effectiveness of our hedging programs include accuracy of sales
estimates, volatility of currency markets, and the cost and availability of
hedging instruments. A 10% adverse change in currency exchange rates for our
foreign currency derivatives held at December 31, 1999, would have an impact of
approximately $1.3 million on the fair value of these instruments. This
qualification of exposure to the market risk associated with foreign exchange
financial instruments does not take into account the offsetting impact of
changes in the fair value of our foreign denominated assets, liabilities, and
firm commitments.

Additionally, we use foreign exchange contracts to hedge anticipated
foreign cash flow commitments up to 6 months. Hedges on anticipated foreign cash
flow commitments do not qualify for deferral and therefore, gains and losses on
changes in the fair market value of the foreign exchange contract are recognized
in income. We are exposed to market risks related to fluctuations in interest
rates on our variable rate debt, which consists of borrowings at December 31,
1999, of $205.0 million under our Tranche B Senior Term Facility. As of December
31, 1999, we also had fixed rate debt of approximately $329.3 million comprised
primarily of the 13 1/4% Senior Subordinated Notes due 2009, the 13.5% Senior
Subordinated PIK Note due 2010 and the 11.13% Seller Holding PIK Note due 2010.
We are not currently utilizing any type of derivative financial instrument to
control our interest rate risk.

For fixed rate debt, changes in interest rates generally affect the fair
market value, but not earnings or cash flows. Conversely, for variable rate
debt, changes in interest rates generally do not influence fair market value,
but do affect future earnings and cash flows. We manage our interest exposure by
using a combination of fixed and variable rate debt. Holding the variable rate
debt balance constant, each one percentage point increase in interest rates
occurring on the first day of the year would result in an increase in interest
expense for fiscal year 2000 of approximately $2.2 million.

29
<PAGE>
INDUSTRY OVERVIEW

Semiconductors, which consist of integrated circuits and discrete
semiconductors, are the critical components used to create an increasing variety
of electronic products and systems. Integrated circuits operate at low power
levels and perform multiple functions to process and convey information in
electronic signal form. Integrated circuit capability is largely defined by
circuit density, which increases as its components are miniaturized. In contrast
to integrated circuits, discrete semiconductors perform a single function and
often have multiple uses in many different end-user applications.

Worldwide Semiconductor Trade Statistics, or WSTS, forecasts strong growth
of approximately 15.5% for the semiconductor industry over the next three years.
We sell our semiconductors into high-growth segments of the market including the
communications analog & mixed-signal market, which is forecast by the
Semiconductor Industry Association, or SIA, to grow 18.4% in calendar year 2000
from calendar year 1999, the power management market, which is forecast by WSTS
to grow at 20.2% in calendar year 2000 from calendar year 1999, and the wireless
LAN market, which is forecast by Intex Management Services to grow 39.0% in
calendar year 2000 from calendar year 1999.

SEMICONDUCTOR CLASSIFICATIONS

The following table sets forth the worldwide semiconductor total available
market, or TAM, for each of five product functions of the semiconductor industry
according to WSTS. Our products fit within the Analog and Discrete Power
classifications listed in the table.

WORLDWIDE SEMICONDUCTOR TAM

<TABLE>
<CAPTION>
1990 1991 1992 1993 1994 1995 1996 1997 1998 CAGR
----- ----- ----- ----- ------ ------ ------ ------ ------ ----
(DOLLARS IN BILLIONS)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Analog............... $ 7.8 $ 8.3 $ 8.7 $10.7 $ 13.6 $ 16.6 $ 17.0 $ 19.8 $ 19.1 11.8%
Discrete Power....... 4.3 4.4 4.5 5.2 6.3 8.2 7.8 8.1 7.4 7.0
Microcomponents...... 9.2 11.4 13.9 19.1 23.8 33.4 39.8 47.8 47.3 22.8
Memory............... 11.8 12.2 14.8 21.3 32.5 53.5 36.0 29.3 23.0 8.7
Other................ 17.5 18.2 17.9 21.1 25.7 32.7 31.3 32.2 28.8 6.4
----- ----- ----- ----- ------ ------ ------ ------ ------
Total................ $50.6 $54.5 $59.8 $77.4 $101.9 $144.4 $131.9 $137.2 $125.6 12.1
===== ===== ===== ===== ====== ====== ====== ====== ======
</TABLE>

Analog integrated circuits are used to shape or condition electrical
signals, to amplify electrical signal strengths, to convert electrical signals
to and from digital "one or zero" levels, to regulate voltage levels and to
provide interfaces between other products within an electrical system. Power
semiconductors can be either discrete power devices or analog integrated
circuits. Discrete devices perform a single function, such as switching
electricity on and off. Analog integrated circuits perform multiple functions
such as controlling and regulating currents. Microcomponents include
microprocessors and microcontrollers that process data according to instructions
embedded within the semiconductors themselves. These are considered the "brains"
of the electronic system and are at the center of the system architecture.
Memory are devices that store data and instructions. The "other" category
includes all electronic devices whose functions do not include one of the four
previously mentioned product functions.

ANALOG

Analog signals are not discrete binary numerical values, but rather
continuously variable electrical signals that represent continuous data
variables or wave signals, such as sound waves. The analog market is split into
two major segments: standard linear and mixed signal. The standard linear market
is comprised of building block products such as amplifiers, voltage regulators,
data conversion, interface circuits and comparators. These products are used in
all end systems, from computers and telecommunications, to industrial,
automotive and consumer applications. The mixed signal market consists of more
complex analog products, which also contain some digital circuitry for timing,
information control and data flow. Mixed signal products are often developed for
specific applications, such as video encoding, hard disk drive control, data
transmission, motor control and power management.

DISCRETE POWER

Discrete power semiconductors, such as a transistor or diode (a device that
allows current to flow in only one direction), typically contain one active
element. These devices perform a single function such as efficiently switching
electricity on and off. Examples of discrete power semiconductors include power
metal oxide semiconductor field effect transistors, or MOSFETs, and insulated
gate bipolar transistors, or IGBTs.

30
<PAGE>

MOSFETs are semiconductors that convert, switch or otherwise shape or condition
electricity. IGBTs typically serve the switch function in power conversion
applications that require higher current and voltage than power MOSFETs can
handle efficiently. IGBTs combine the ease of voltage-driven power MOSFET
technology with the conduction efficiency of bipolar transistor technology.

INDUSTRY TRENDS

As the performance of semiconductor devices has increased and size and cost
have decreased, demand for semiconductors has expanded beyond their original
primary applications in computer systems to applications in telecommunications
systems, automotive products, consumer products and industrial automation and
control systems. In addition, system users and designers have driven the demand
for systems with increased functionality, higher levels of performance, greater
reliability and shorter design cycle times, all in smaller packages at lower
costs. These demands have resulted in increased semiconductor dollar content of
electronic products. The demand for electronic systems has also expanded
geographically with the emergence of new markets, particularly in the
Asia/Pacific region. We believe that future demand for semiconductors will be
driven by the growing trend towards use of the Internet and portable
electronics, including consumer electronics, computers and cellular telephones,
and the resulting need for semiconductors that can manage connectivity and power
for longer periods of use and that require less space.

Today, nearly every form of communication is being revolutionized by the
growing use of digital communications to move all types of data, voice and video
around the world. Different technologies, protocols and media have evolved which
are uniquely suited to particular applications in this rapidly evolving
environment. Advances in broadband communications are accelerating the reach of
cost effective, fast data highways to both homes and offices. Communications
semiconductors will be used extensively in broadband communication
networks/facilities, portable communications devices, and in servers and
infrastructure supporting the Internet. Each of these technologies requires
specific transport and access hardware devices, including handsets and base
stations for wireless telephony, switches and routers for telecommunications and
data networking, set-top boxes for cable and satellite communications, and
digital cable and digital subscriber line, or xDSL, modems for Internet access.

The advent of the Internet as a communications medium has dramatically
increased business and consumer demand for high-speed access to multimedia and
entertainment content. As business and consumers increasingly rely on the
Internet and intranets, many existing networks are under significant stress. A
bandwidth constraint has emerged, particularly at the "last mile" of network
infrastructures, challenging users and industry participants in a number of
communications segments. In response to growing network demands,
telecommunications, data communications and cable network operators are making
significant investments to alleviate congestion and support emerging high
bandwidth, integrated data, voice and video services. Specific technologies
addressing bandwidth capacity constraints include cable modems and xDSL,
including asymmetric digital subscriber line, or ADSL, for residential
applications, high speed digital subscriber line, or HDSL, symmetric digital
subscriber line, or SDSL, and T1/E1 for high speed network access in commercial
applications, and ATM and SONET, for network backbone transmission. The
importance of the Internet as a communications medium and the increased ability
to deliver access to content available through the Internet will increase the
demand for home and small business networking solutions, provided these
networking solutions are cost-effective.

In addition, these solutions depend on enhanced performance capabilities of
advanced electronic systems. As electronic systems continue to increase in
performance and sophistication, they demand more complex power management
solutions. The latest generation personal computers rely on advances in power
conversion to operate at ever-lower voltages in order to reduce power
consumption, increase efficiency and, in notebook personal computers, prolong
battery life. Further, advanced electronic systems outside of communications
applications also have greater power management requirements. All of these
systems, including efficient power supplies for communications and computing
networks and engine and chassis management in automobiles, require advanced
power management semiconductors for more complex digital signal processors and
microcontrollers and for efficient power inverters.

The growth in Internet infrastructure, portable battery-powered computing
and communication devices and continually faster microprocessors are driving the
development of, and demand for, successively more efficient power management
integrated circuits and discrete power semiconductors. As a result of these
industry trends, we have strategically focused on designing and manufacturing
high performance analog and mixed-signal and discrete power semiconductors for
solving communications, data conversion, wireless data and power management
problems.

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<PAGE>
BUSINESS

GENERAL

We design, manufacture and market analog, mixed-signal and wireless LAN
integrated circuits and power management semiconductors for rapidly growing
communications markets. The majority of our revenue is derived from sales of our
analog and mixed-signal products developed primarily for the communications and
power management markets. Additionally, we use our proprietary technologies and
design capabilities to provide systems solutions for rapidly growing wireless
applications. We own about 1,400 patents and have substantial expertise in the
design and manufacturing of components that perform many of the essential
functions relating to the supply, distribution and regulation of electric power
in electronic products. Our core competencies include analog mixed signal,
digital signal processor, radio frequency, discrete power and radiation
hardening technologies. Our products include components performing complex
communications functions, such as our PRISM(R) chip sets for wireless data
communications, digital radios and high speed converters in cellular base
stations and power management integrated circuits and discrete semiconductors
used in Internet servers and computers.

OUR BUSINESS STRATEGY

Our business strategy emphasizes the following key elements:

o Focus on High Growth, Integrated Communications Markets. In light of the
rapid expansion of communication applications and the increased
requirement for power management in electronic systems, we focus our
investments in these areas. We believe these markets have attractive
growth characteristics and enable us to draw on our core competencies.
Accordingly, we are pursuing opportunities in communications, wireless
and power management. In addition, while we will continue to offer base
products such as certain automotive integrated circuits, defense and
other legacy products, we do not intend to focus investment in the
development of new products in these areas.

o Focus on Partnering with Industry Leaders. We partner with industry
leaders in each of our target end-user markets to take our strong
engineering and design capabilities to commercial levels. Our customer
base of industry leaders illustrates the acceptance of our products to
date, and we continue to partner with these customers and others to
develop and market our next generation products. Our applications and
design engineers support our customers' end product development.

o Provide Systems Level Solutions to Our Customers. We design and develop
our semiconductors with a systems level approach that we believe enhances
the value of our products as they are designed into and incorporated in
our customers' electronic systems. This approach yields early integration
of our products into our customers' products, provides opportunities for
current design wins, and ultimately increases revenue as our solutions
are incorporated within a targeted end application.

o Maintain High Quality Customer Service. Quality customer service is
critical to our customer retention and sales growth. Through our customer
relations initiatives, we believe we distinguish ourselves from our
competitors. Additionally, our sales force and authorized representatives
and distributors are expanding customer information programs and
augmenting our comprehensive customer support efforts.

o Maintain Technology Leadership. We focus our research and development
investments on integrated communications. Of our over 620 engineers, 220
are working on innovative wireless and power management architectures. We
also have significant experience in analog and mixed-signal process
technology and high volume manufacturing. In conjunction with these
efforts, we will continue to expand our strong intellectual property
position by seeking to increase our existing portfolio of over 1,400
patents.

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<PAGE>

PRODUCTS AND TECHNOLOGY

We design, develop and manufacture a broad range of products used in a wide
variety of microelectronic applications in the communications, wireless and
power management end-user markets. Our products are organized into three
principal product groups: Analog & Mixed-Signal, Discrete Power and Wireless.

<TABLE>
<CAPTION>
ANALOG & DISCRETE
MIXED-SIGNAL POWER WIRELESS
------------------------- ------------------------ ----------------------
<S> <C> <C> <C>
FISCAL YEAR 1999 REVENUES.... $352.8 million $161.6 million $18.3 million

PERCENTAGE OF REVENUES....... 66.2% 30.3% 3.5%

KEY CUSTOMERS................ Siemens Asustek Nokia
Compaq Emerson Sony
Dell Compaq Siemens
Intel Bosch 3Com
Cisco
</TABLE>

ANALOG & MIXED-SIGNAL

Our Analog & Mixed-Signal portfolio represented 66.2% of our fiscal year
1999 revenue. We deliver leading-edge analog, mixed signal, digital signal
processors and groups of semiconductors that are designed to work together, also
known as chip set solutions, for today's fastest-growing communications markets.
Our design focus targets such opportunities as wired networks, subscriber line
interface circuits, or SLICs, which interface analog and digital signals for
telecom systems, and high-speed digital radios for cellular basestations. The
three analog product lines include the following:

Signal Processing Products. We have a portfolio of linear, mixed-signal
and digital signal processor integrated circuits optimized for high-speed
communications applications. We also have a limited portfolio of legacy base
products for industrial markets.

Communications Analog & Mixed-Signal integrated circuits are primarily
targeted at wired and wireless voice and data communications infrastructure
applications. We have developed a complete portfolio of digital radio signal
processing products and a line of 8-, 12- and 14-bit high speed data acquisition
converter integrated circuits for cellular basestations, wireless data links,
wireless local loop and broadband wireless access, which we refer to as the
wireless infrastructure market. These products, designated CommLink(TM), enable
our customers to increase the amount of data that can be transmitted, enabling
the addition of high speed data transmission to cellular communications
networks. These integrated circuits enable faster wireless data links between
remote basestations and also enable more efficient cable "headends"--the ground
station for the satellite links and broadband wireless access--which is
sometimes called Wireless Cable or LMDS. Our products support cellular standards
including Generation 2 Digital such as IS-95 CDMA and GSM, Generation 2.5 such
as Edge and IS-95+, and Generation 3 Wideband CDMA. We utilize both systems
level engineering and integrated circuit expertise to offer superior products
for wireless communications systems. This combination of expertise enabled us to
introduce the industry's first digital signal processing-based single chip, the
HSP50016, which provided the technology base used to separate telephone calls
for cellular basestations. We continue that leadership with the recently
announced HSP50216 Quad programmable down converter for use in Generation 2.5
cellular basestation designs.

New generations of high performance digital signal processing
communications integrated circuits require ever increasing performance from the
analog-to-digital and digital-to-analog converters that convert digital signals
to analog radio frequency signals for wireless applications. We currently market
a broad family of 6- to 14-bit, CMOS analog-to-digital and digital-to-analog
converters in multiple speed ranges and functional combinations in order to
complement our digital radio wireless infrastructure solutions.

With more than 15 years of experience in the design and development of
SLICs, we continue to expand our family portfolio of SLICs. SLICs, which are
used in many telephone applications, serve two primary functions. First, they
interface analog voice signals with digital processors. Second, they serve the
simple, yet essential, function of ringing a telephone to signal an incoming
call. Recently, we introduced an advanced

33
<PAGE>

ringing SLIC, which combined both functions into a single SLIC. Thus, the
ringing SLIC acts as both an interface into the telephone and also rings the
telephone. Our newest ringing SLIC product, a voice over internet protocol or
VoIP product, enables the use of analog phones in the emerging Internet
telephony market. Our SLIC family portfolio of advanced telecom linecard
solutions are ideal for today's universal telecom exchange systems, including
Plain Old Telephone Service, or POTS, Private Branch Exchanges, Central Office,
Loop Carrier, Fiber in the Loop and Wireless Local Loop.

Included in our legacy base product portfolio are operational amplifiers,
which are referred to as op amps, interface integrated circuits and industrial
and video integrated circuits. These include the industry standard BiCMOS high
speed op amp and the low power instrumentation converter. This portfolio is sold
to a broad range of customers in industrial, medical, computer, avionics and
test and measurement instrumentation markets, primarily through distribution
partners. These products typically have long life cycles and are designed into
our customers' products thereby ensuring us long-term sales. Our end-user
markets include wireless communications, video and image processing, high-speed
satellite communications, test/measurement equipment and medical
instrumentation.

Power Management Integrated Circuits. We develop power system
architectures and provide a portfolio of computer products, file server/storage
system products, networking and VoIP products. Our power management products for
computing applications operate in a voltage range of 1 to 30 volts and are
designed into desktop personal computers, file servers and workstations. We have
also developed new power management circuits for 24x7 server networks supporting
e-commerce on the Internet.

Our highly successful HIP6000 family of pulse width modulator controller
integrated circuits are used in about 30% of all personal computers that use
Pentium, Pentium II and Pentium III class processors.

We recently introduced an advanced architecture which delivers multiphase
power to next generation, high speed microprocessors. This is a requirement for
Intel and AMD microprocessors above 800 MHz. This new platform of products
consists of three controllers (HIP6301, HIP6302 and HIP6303) and three gate
drivers (HIP6601, HIP6602 and HIP6603). We also offer a complete advanced
configuration power interface solution for instant on and sleep mode capability
used to save energy in personal computers.

We provide complete power solutions for the file server and redundant array
of independent disks, or RAID, market. Internet growth, especially e-commerce,
is driving the need for high reliability/availability in these applications. Our
family of hot plug products allows repair and maintenance of a file server and
RAID without a complete shutdown of the file server.

We are currently expanding our space-qualified portfolio by offering our
Starpower(TM) family of radiation hardened power management products for
commercial satellite applications. We are developing what we believe will be an
industry-leading radiation hardened DC/DC Converter power module line to provide
highly reliable power management in communications satellites.

Our power management integrated circuits are also used in industrial
control and automotive engine management systems.

Defense. Our radiation hardened integrated circuit product portfolio
includes logic, memories, signal processing components, microprocessors and
custom devices, providing system designers with a full complement of products
for radiation hardened systems used in commercial space and defense
applications. We also have a set of legacy digital product lines which serve
both defense and commercial systems, with microprocessor, memory and data
communications products. These products typically have long life cycles and are
designed into our customers' products.

34
<PAGE>

DISCRETE POWER

Our power portfolio represented 30.3% of our revenue for fiscal year 1999.
Discrete power products coupled with our power management integrated circuits
provide unique power management solutions for the integrated communications
market. Our MOSFETs have been designed in conjunction with our multiphase power
integrated circuits for faster, next generation computers. We also manufacture
efficient power MOSFETs used in servers supporting the Internet. We are
investing in new, efficient power devices for cellular phones and portable
information appliances.

In 1980, we invented IGBTs, or insulated gate bipolar transistors, and hold
some of the fundamental patents that cover their production. We continue to
develop next-generation IGBTs and recently introduced our new 600V SMPS, or
switch mode power supply Series IGBT family of high-speed, high efficiency IGBTs
specifically tailored for operation in today's switched mode power supplies. Our
portfolio also includes radiation hardened N- and P-channel metal oxide
semiconductor field effect transistors, or MOSFETs, for high-reliability
applications such as communications satellites.

In addition, we have a base legacy business with IGBTs, MOSFETs and
rectifiers used in automotive and industrial applications. These include motor
management, automotive ignition, welding, instrumentation and other industrial
applications. Like our base analog and mixed-signal products, our base power
MOSFETs are designed into our customers' products with life cycles spanning
several years.

We supply our discrete power products to Asustek, Bosch, Compaq, Emerson
and Siemens and other customers who use our products for personal computer
motherboard power, diesel fuel injection, body and chassis controls and
industrial power supplies.

WIRELESS

Our Wireless portfolio represented 3.5% of our revenue for fiscal year
1999. We are the leading developer of semiconductor solutions for the emerging
wireless local area networking market. Our PRISM(R) family of chip sets address
the growing demand for wireless networking for use in both the home and business
providing cost effective, wireless access to high data rate broadband
communications networks. We believe we are the only supplier of an integrated
wireless networking product solution, including reference designs, software and
all integrated circuits necessary for wireless data communications at data rates
of 11 megabits-per-second.

The PRISM II chip set is comprised of five highly integrated
semiconductors. They are the 2.4GHz power amplifier, RF/IF up and down
converter, quadrature modulator/demodulator, baseband processor and the medium
access controller. These integrated circuits represent design and manufacturing
competence in radio frequency, or RF, mixed signal and digital technologies. The
2.4GHz power amplifier, RF/IF up and down converter, and the quadrature
modular/demodulator are designed and manufactured using a high performance RF
silicon germanium process technology. The baseband processor and medium access
controller are designed and manufactured using mixed signal and digital process
technologies.

Because we design all components of our wireless chip set, including
reference designs and software, we believe we provide our customers with the
best available performance and value. Providing our customers with a turnkey
wireless data radio solution enables them to have the fastest time to market for
their systems which we believe is a critical competitive advantage in this
emerging market. More than 40 companies, including Nokia, Compaq, Samsung,
Aironet and Sony, have adopted use of the PRISM(R) chip set in their products.
We recently announced our PRISM II chip set, our second-generation chip set
capable of delivering high-speed wireless networking at data rates of 11
megabits-per-second. The PRISM II chip set incorporates advanced integrated
circuit design with silicon germanium process technology which makes the PRISM
II chip set five times faster while reducing power consumption by 50% compared
to the original the PRISM(R) chip set. Since the introduction of the PRISM II
chip set, we are developing relationships with original equipment manufacturers,
including among others, Aironet, Compaq, Zoom, Nokia, Nortel, Siemens and 3Com,
for use of the PRISM II chip set in a variety of wireless local area network
applications for home and business.

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<PAGE>

CUSTOMERS AND APPLICATIONS

We seek to capitalize on our core competencies by focusing on the
integrated communications market. Within the integrated communications market,
our products include communication integrated circuits, power management and
PRISM(R) wireless LAN chip sets.

<TABLE>
<CAPTION>
END MARKETS APPLICATIONS KEY CUSTOMERS
------------------------ ------------------------------ -------------------
<S> <C> <C> <C>
Communications Signal processing, Video (cable television Cisco, Lucent,
wireless communications, systems, digital video), Dell, IBM, Siemens
telecommunications telephony (central office
switching solutions, digital
cellular basestations, PBX
systems), home gateways,
networking, satellites

Power Management Networking and computing File servers, PC motherboards, Asustek, Compaq,
printers, workstations Dell, IBM, Intel

Wireless Wireless local area Wireless local area networks 3Com, Compaq,
networks providing network wireless Nokia, Northern
access to broadband (cable, Telecom, Samsung,
ethernet, xDSL, ISDN) networks Siemens, Sony
</TABLE>

Outside of our targeted end markets, our remaining category includes
automotive integrated circuits, industrial and defense products. Applications in
this category include automotive applications including fuel injection and
ignition circuits, industrial applications including power supplies and defense
applications including smart munitions and tactical and strategic missiles. We
sell to, among others, DaimlerChrysler, Siemens, Boeing, Lockheed Martin and
Emerson.

SALES, MARKETING AND DISTRIBUTION

In fiscal 1999, we derived about 66% of our sales from original equipment
manufacturer, or OEM, customers through our global sales organizations and 34%
of our sales through distributors. We operate sales organizations in the
Americas, Europe and the Asia/Pacific region with about 240 employed
salespersons. Our sales organizations are supported by logistics organizations.
Product orders flow to our manufacturing facilities, where the product is made.
Products are then shipped to the customer either directly or indirectly via our
warehouses in the United States and Europe.

We have dedicated direct sales organizations operating in the Americas,
Europe and Asia/Pacific regions that serve our major OEM customers. We have
strategically located our sales offices near these major OEM customers. We also
have a large network of distributors and manufacturers' representatives to
distribute our products around the world. We believe that maintaining a small,
highly focused, direct sales force selling products for each of our targeted
product areas, combined with an extensive network of distributors and
manufacturer's representatives, is the most efficient way to serve our customer
base. Our sales force is segmented by end-user markets, thereby ensuring each
salesperson has an end-user market expertise and focus. We also maintain a
dedicated marketing organization, which supports each product area on a regional
basis.

Typically, distributors handle a wide variety of products, including
products that compete with our products, and fill orders for many customers.
Some of our sales to distributors are made under agreements allowing for market
price fluctuations and/or the right of return on some unsold merchandise.
Virtually all distribution agreements contain an industry standard stock
rotation provision allowing for minimum levels of inventory returns. In our
experience, these inventory returns can usually be resold. Manufacturers'
representatives generally do not offer products that compete directly with our
products, but may carry complementary items manufactured by others.
Manufacturers' representatives do not maintain a product inventory; instead,
their customers place large quantity orders directly with us and are referred to
distributors for smaller orders.

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<PAGE>

RESEARCH AND DEVELOPMENT

Manufacturing technology is a key determinant in the improvement of
semiconductor products. Each new generation of process technology has resulted
in products with higher speed, greater performance and lower costs of
production. Infrastructure investments made in recent years will enable us to
continue to achieve high volume, high-reliability and low-cost production using
leading edge process technology. Our research and development efforts are
focused on new product development and improvements in process technology in our
growth areas which include communications, power management and wireless.

Our expenditures for research and development in fiscal years 1997, 1998
and 1999 were $75.2 million, $75.1 million and $67.0 million, respectively. Each
of our product areas maintain independent research and development
organizations. We work closely with our major customers in many research and
development situations to increase the likelihood that our products will be
designed directly into the customers' products and achieve rapid and lasting
market acceptance.

MANUFACTURING

We fabricate wafers at three locations in the United States--Mountaintop,
Pennsylvania, Palm Bay, Florida, and Findlay, Ohio. We also use a number of
outside wafer fabrication foundries for the manufacture of device types where we
do not have the necessary technologies resident in house. We also utilize
advanced manufacturing processes of outside foundries for many of our PRISM(R)
products.

Our principal assembly and test facility is located in Kuala Lumpur,
Malaysia. Established in 1974, this facility has 524,000 square feet on 22 acres
of land. It has the capacity to assemble and test 350 million units of plastic
integrated circuits, 25 million hermetically sealed ceramic packaged integrated
circuit units and 500 million power semiconductor units each year. We also have
limited assembly and test capability in Palm Bay, Florida. We use a number of
assembly and test subcontractors for device types and packages that cannot be
assembled and tested in Kuala Lumpur.

Our previous owner made significant capital expenditures to increase
capacity and improve our manufacturing efficiency. As a result, our wafer fabs
and assembly and test facilities are among the most productive and efficient in
the industry. We believe we can continue to maintain competitive cost, further
increase productivity and enhance our process efficiency by investing in people
and assets, where necessary.

We utilize an extensive set of manufacturing processes to fabricate our
products, including technologies such as: ULTRAFET(R), IGBT, BiCMOS, Power
BiCMOS, High Frequency Bipolar, CMOS and Rad Hard Processes. The table below
sets forth some information regarding our manufacturing facilities, products,
wafer diameter and annual wafer capacity:

MANUFACTURING FACILITIES

<TABLE>
<CAPTION>
ANNUAL CAPACITY
LOCATION PRODUCTS/FUNCTIONS WAFER DIAMETER (6" EQUIVALENT WAFERS)
-------- ------------------ -------------- ---------------------------
<S> <C> <C> <C>
FABRICATION
FACILITIES:
Mountaintop, MOSFETs, IGBTs, rectifiers 6", 8" 420,000
Pennsylvania

Findlay, Ohio Standard linear/interface integrated 5" 120,000
circuits, power integrated circuits

Palm Bay, Florida Power integrated circuits, telecom 4", 6" 175,000
SLICs, rad hard integrated circuits
ASSEMBLY AND TEST
FACILITIES:
Kuala Lumpur, Assembly and testing of most of our
Malaysia products
Palm Bay, Florida Assembly and testing of most of our
products used in military applications
</TABLE>

37
<PAGE>

Our manufacturing processes use many raw materials, including silicon
wafers, copper lead frames, mold compound, ceramic packages and various
chemicals and gases. We obtain our raw materials and supplies from a large
number of sources on a just-in-time basis. Although supplies for the raw
materials used by us are currently adequate, shortages could occur in various
essential materials due to interruption of supply or increased demand in the
industry.

BACKLOG

Our sales are made pursuant to purchase orders that are generally booked
from one to six months in advance of delivery. Backlog is influenced by several
factors including market demand, pricing and customer order patterns in reaction
to product lead times. Although quantities actually purchased by customers may
vary between booking and delivery to the extent customer needs or industry
conditions change, our backlog has historically been a reliable indicator of our
future revenues. Our backlog was about $223.2 million at June 27, 1997, about
$188.5 million at July 3, 1998, $174.0 million at July 2, 1999 and $192.4
million at December 31, 1999. We expect to ship the backlog at December 31, 1999
within twelve months of that date.

Approximately 30% of our revenue is generated under annual, fixed-price
contracts with key customers. These contracts allow us to schedule production
capacity in advance and allow our customers to manage their inventory levels
consistent with just-in-time principles while shortening the cycle times
required to produce ordered products. However, quantity and price agreements
under these contracts are, as a matter of industry practice, difficult to
maintain and implement.

SEASONALITY

A lower percentage of our products is sold to the computer end-user or into
the computer market than the percentage of products sold by other semiconductor
manufacturers to the computer end-user or into the computer market. Sales in the
computer market fluctuate more than in other semiconductor markets. As a result,
we experience less seasonal fluctuation than the semiconductor industry as a
whole. We typically experience lower revenue in the first fiscal quarter,
primarily due in large part to slow demand from government customers,
changeovers in automotive models and customer demand adjustments as a result of
summer and holiday seasons around the world, particularly Europe. Revenue
usually has a seasonal peak in our fourth fiscal quarter due to our customers'
need to meet government delivery requirements.

COMPETITION

Markets for our products are highly competitive. Although only a few
companies compete with us in all of our product lines, we face significant
competition within each of our product lines from major international
semiconductor companies. Some of our competitors may have substantially greater
financial and other resources with which to pursue engineering, manufacturing,
marketing and distribution of their products. Competitors include manufacturers
of standard semiconductors, application specific integrated circuits and fully
customized integrated circuits, as well as customers who develop their own
integrated circuit products.

We compete in different product lines to various degrees on the basis of
price, technical performance, product features, product system compatibility,
customized design, availability, quality and sales and technical support. Our
ability to compete successfully depends on elements both within and outside of
our control, including successful and timely development of new products and
manufacturing processes, product performance and quality, manufacturing yields
and product availability, intellectual property protection obtained by us and
our competitors, customer service, pricing, industry trends and general economic
trends.

The following chart sets forth our principal competitors by business unit:

BUSINESS UNIT PRINCIPAL COMPETITORS
- ------------- ---------------------

Analog & Mixed-Signal Analog Devices, Burr Brown, Linear Technology, Maxim,
Semtech

Discrete Power International Rectifier, ON Semiconductor, Siliconix,
STMicroelectronics

Wireless Lucent, Philips, Proxim

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<PAGE>

TRADEMARKS AND PATENTS

We own rights to a number of trademarks and patents that are important to
our business. Among others, we consider Intersil, PRISM(R), ULTRAFET(R) and
CommLink to be trademarks that are material to our operations.

Our corporate policy is to protect proprietary products by obtaining
patents for these products when practicable. We currently possess about 1,400
patents.

EMPLOYEES

Our worldwide workforce consisted of 5,693 employees (full- and part-time)
as of December 31, 1999 of whom 733 were represented by collective bargaining
arrangements. Of our employees, 4,650 were engaged in manufacturing, 516 were
engaged in engineering, 333 were engaged in marketing and sales, 98 were engaged
in administration and 96 were engaged in management information systems. Of our
employees, 3,389 were employed in the Analog & Mixed-Signal area; 1,968 were
employed in the Discrete Power area; and 336 were employed in the Wireless area.
We believe that our relations with our employees are satisfactory.

PROPERTIES

In the United States, our corporate headquarters as well as some
manufacturing and warehouse operations are located in about 846,000 square feet
of space in properties owned by us in Palm Bay, Florida. Additional
manufacturing, warehouse and office facilities are housed in about 445,000
square feet and 270,000 square feet of space in properties owned by us in
Mountaintop, Pennsylvania and Findlay, Ohio, respectively.

In Kuala Lumpur, Malaysia, we own about 524,000 square feet of
manufacturing and warehouse space located upon land leased by us under three
long-term ground leases. The initial term of these leases will expire in 2086.
The improvements located upon the leased land are owned by us.

Our primary engineering activity takes place in Palm Bay, Florida and at
our other manufacturing facilities. In addition to this, we have engineering
activities taking place in leased facilities in Durham, North Carolina (Research
Triangle Park), Branchburg, New Jersey and San Antonio, Texas.

We maintain regional sales offices in Orange County, California, Palm Bay,
Florida; Burlington, Massachusetts; Dallas, Texas; San Jose, California; Munich,
Germany; Milan, Italy; Camberly, United Kingdom; and Taipei, Taiwan and other
sales offices around the world. All our offices are leased generally under short
term leases, except our offices in Palm Bay, Florida.

We believe that our facilities around the world, whether owned or leased,
are well-maintained. Our manufacturing facilities contain sufficient production
capacity to meet our needs for the foreseeable future.

ENVIRONMENTAL MATTERS

Our operations are subject to environmental laws and regulations in the
countries in which we operate that regulate, among other things, air and water
emissions and discharges at our manufacturing facilities; the management and
disposal of hazardous substances and wastes; the investigation and remediation
of environmental contamination; and the release of contaminants into the
environment at or from properties operated by us and at other sites. As with
other companies engaged in like businesses, the nature of our operations exposes
us to the risk of environmental liabilities or claims. We believe, however, that
our operations are in substantial compliance with applicable environmental laws
and regulations. Our costs to comply with environmental regulations were about
$4.5 million, $6.3 million and $7.4 million in each of fiscal years 1997, 1998
and 1999, respectively.

Our facilities in Findlay, Ohio have ongoing remediation projects to
respond to some releases of hazardous substances that occurred prior to the
consummation of the acquisition of Harris' semiconductor business. Our
facilities in Mountaintop, Pennsylvania have groundwater and subsurface soil
contamination from past operations, some of which occurred prior to Harris'
acquisition of those facilities, for which

39
<PAGE>

remediation has been conducted, and additional remediation may be required. In
addition, Harris' facilities in Palm Bay, Florida, a portion of which includes
our business, are listed on the National Priorities List under the Comprehensive
Environmental Response, Compensation and Liability Act. Remediation activities
are ongoing in Palm Bay in accordance with Consent Decrees entered into by
Harris with the United States Environmental Protection Agency. Under the Master
Transaction Agreement, Harris has agreed to indemnify us for the cost of these
projects at all of our facilities, including at Findlay, Ohio, Mountaintop,
Pennsylvania, Kuala Lumpur, Malaysia and Palm Bay, Florida to the extent these
costs are not currently allocated in the current balance sheet for the
Semiconductor Business. Based on the historical costs of these projects and
because the remediation projects are in advance stages, we do not believe that
the future cleanup costs will be material, even without the indemnity.

Future laws or regulations and changes in existing environmental laws or
regulations may subject our operations to different, additional or more
stringent standards. While historically the cost of compliance with
environmental laws has not had a material adverse effect on our results of
operations, business or financial condition, we cannot predict with certainty
our future costs of compliance because of changing standards and requirements.
We cannot assure you that material costs will not be incurred in connection with
the future compliance with environmental laws or with future cleanup costs
related to currently unknown contamination.

LEGAL PROCEEDINGS

From time to time we are involved in legal proceedings arising in the
ordinary course of business. A countersuit brought against Harris by Ericsson, a
competitor of Harris, in which patent infringement claims have been asserted is
currently pending in the Sherman Division of the United States District Court
for the Eastern District of Texas. The action was initially instituted by Harris
against Ericsson on August 17, 1998 in Dallas, Texas. Ericsson countersued
Harris, claiming infringement by Harris of four of its patents relating to
telephone subscriber line interface circuits. On September 1, 1999, Ericsson
joined us in this action. Ericsson seeks an injunction plus damages, including
lost profits and/or a reasonable royalty, costs of suit, treble damages,
prejudgment interest and attorneys' fees. However, to the extent our liability
from this litigation, if any, arises out of the conduct of the semiconductor
business by Harris prior to closing, this liability will be covered by Harris'
agreement in connection with the acquisition of the semiconductor business to
provide us with certain indemnities. We believe that there is no litigation
pending that could have, individually or in the aggregate, a material adverse
effect on our business, financial condition, results of operations or cash
flows.

40
<PAGE>
MANAGEMENT

DIRECTORS AND EXECUTIVE OFFICERS

The following table sets forth certain information regarding the persons
who are members of our Board of Directors, key employees or executive officers.
Each of our directors has served as director since our formation on June 2, 1999
and will continue to hold office until the next annual meeting of shareholders
or until a successor has been elected and qualified. With one exception, each of
our officers has served as officer since our formation, and each of our officers
will hold office until the first meeting of directors after its next annual
meeting of shareholders.

<TABLE>
<CAPTION>
NAME AGE TITLE
- ---- --- -----
<S> <C> <C>
Gregory L. Williams....................... 46 Chief Executive Officer, Director
W. Russell Morcom......................... 53 Vice President, General Manager, Discrete Power
George L. Gidzinski....................... 44 Vice President, General Manager, Analog and Mixed
Signal Business Unit
Daniel J. Heneghan........................ 44 Vice President, Chief Financial Officer and
Assistant Secretary
Larry W. Sims............................. 42 Vice President, Marketing and Sales
Lawrence J. Ciaccia....................... 41 Vice President, General Manager, PRISM(R) Wireless
Stephen M. Moran.......................... 43 Vice President, General Counsel and Secretary
James A. Urry............................. 45 Director
Gary E. Gist.............................. 53 Director
</TABLE>

Gregory L. Williams, Chief Executive Officer, Director. Mr. Williams is
our Chief Executive Officer. From October, 1998, to August, 1999, Mr. Williams
was President of the semiconductor business at Harris. From January to October
1998, Mr. Williams was Vice President and General Manager of the Power Products
Division at Harris. From 1984 to 1998, Mr. Williams also served as Vice
President and Assistant General Manager of the Semiconductor Components Group,
Vice President and General Manager of the Power Products Division, and Vice
President and Director of Automotive World Marketing at Motorola Semiconductor,
and from 1977 to 1984, Mr. Williams served with General Electric Company.

W. Russell Morcom, Vice President, General Manager, Discrete Power. Mr.
Morcom is our Vice President and General Manager, Discrete Power. From 1997 to
August, 1999, Mr. Morcom was Vice President and General Manager, Operations and
Quality of the semiconductor business at Harris. From 1991 to 1997, Mr. Morcom
was Vice President and General Manager, Semiconductor Products Division of the
semiconductor business of Harris.

George L. Gidzinski, Vice President, General Manager, Analog and Mixed
Signal Business Unit. Mr. Gidzinski is our Vice President and General Manager,
Analog and Mixed Signal Business Unit. From 1998 until August, 1999, Mr.
Gidzinski was Vice President and General Manager of the Power Products Business
of the semiconductor business at Harris. From 1995 to 1998, Mr. Gidzinski served
as Vice President of Intelligent Power Products of the semiconductor business at
Harris and from 1991 to 1995, Mr. Gidzinski served as Vice President of
Worldwide Marketing of the semiconductor business at Harris.

Daniel J. Heneghan, Vice President, Assistant Secretary and Chief Financial
Officer. Mr. Heneghan is our Vice President, Assistant Secretary and Chief
Financial Officer. From 1996 to August, 1999, Mr. Heneghan was Vice President
and Controller of the semiconductor business at Harris. From 1994 to 1996, Mr.
Heneghan was Vice President of Digital Products of the semiconductor business at
Harris. Mr. Heneghan also served at various times as Division Controller of the
semiconductor business at Harris, Director of Planning at Harris, Director of
Finance at Harris and Senior Financial Analyst with Royal Crown Cola.

Larry W. Sims, Vice President, Marketing and Sales. Mr. Sims is our Vice
President, Marketing and Sales. From August, 1998 to August, 1999, Mr. Sims was
Vice President, Sales of the semiconductor business at Harris. Prior to joining
Harris, Mr. Sims served in various sales management positions at Motorola
Semiconductor.

41
<PAGE>

Lawrence J. Ciaccia, Vice President, General Manager, PRISM(R) Wireless.
Mr. Ciaccia is our Vice President and General Manager, PRISM(R) Wireless
Products Business Unit. From February 1998 to December 1999, Mr. Ciaccia was
Vice President and Director of Engineering for the PRISM(R) Wireless Products
business at Harris. From 1997 to 1998 Mr. Ciaccia was Director of Strategic and
Product Marketing for the Multimedia Products business at Harris. Mr. Ciaccia
also served at various times from 1993 to 1997 as Director of Engineering for
several different semiconductor businesses at Harris.

Stephen M. Moran, Vice President, General Counsel and Secretary. Mr. Moran
joined our company as Vice President, General Counsel, and Secretary in January
of 2000. Prior to joining Intersil, Mr. Moran served with Toshiba America, Inc.
from September 1996 until January 2000 and served as the Vice President and
General Counsel for Toshiba America Electronic Components, Inc. (Toshiba
America's Semiconductor Company) from January 1998 to January 2000. From March
1992 until September 1996, Mr. Moran was the General Counsel of ITT Cannon,
Inc., an ITT Industries corporation.

James A. Urry, Director. Mr. Urry is one of our directors. Mr. Urry has
been with Citibank, N.A. since 1981 serving as a Vice President since 1986. He
has been a Vice President of Citicorp Venture Capital Ltd., which is an
affiliate of ours, since 1989. He is also a Director of Airxcel, Inc., CORT
Business Services, CLARK Material Handling Corporation, Hancor Holding
Corporation, IKS Corporation, Palomar Technological Companies and York
International Corporation.

Gary E. Gist, Director. Mr. Gist is one of our directors. Mr. Gist is the
President and Chief Executive Officer of, and has been with, Palomar
Technological Companies since 1995, a corporation made up of a diverse group of
companies that focus on designing and manufacturing electronic products
including the following companies: HID Corporation, AML Wireless Systems, Inc.,
Palomar Display Products, Inc., Palomar Products, Inc. and Palomar Technologies,
Inc. Prior to 1995, he was Division Manager of the Technology Products Division
of Hughes Industrial Electronics Company.

Our Board of Directors currently consists of three directors. We expect
that two additional individuals will be elected to the Board within ninety days
of the initial public offering. Our Board of Directors will then consist of five
directors, determined as follows: our chief executive officer, one individual
designated by Sterling, up to two independent directors designated by Sterling
(to the extent permitted by applicable law as determined in Sterling's sole
discretion) and, in the event the Board includes two independent directors
designated by Sterling, one additional individual designated by Sterling. The
holders of a majority of the outstanding shares of Class A Common Stock
(including any shares of Class A Common Stock held by Sterling) have the right
to veto the election of any independent directors designated by Sterling. Under
our Stockholders' Agreement, each of our stockholders prior to the initial
public offering (representing in the aggregate 100% of the ownership of the
Class A Common Stock) agrees to take all action necessary (including voting his,
her or its shares, calling special meetings and executing and delivering written
consents) to ensure our Board of Directors will be composed at all times as
described in this paragraph.

DIRECTOR COMPENSATION AND ARRANGEMENTS

Those directors who are employed by us or by Citicorp Venture Capital Ltd.
do not receive compensation for their services as directors. Compensation for
other directors has not yet been determined. Members of the Board of Directors
are elected according to the voting agreements outlined in the Stockholders'
Agreement.

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

James A. Urry and Gary E. Gist are the members of our Compensation
Committee.

42
<PAGE>

EXECUTIVE COMPENSATION

The following table sets forth certain information concerning the
compensation received by our five most highly compensated officers for services
rendered in fiscal year 1999.

SUMMARY COMPENSATION TABLE
FISCAL YEAR 1999

<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
-----------------------
AWARDS PAYOUTS
---------- ----------
ANNUAL COMPENSATION SECURITIES
-------------------------------------------- UNDERLYING ALL OTHER
NAME AND OTHER ANNUAL OPTIONS LTIP COMPENSATION
PRINCIPAL POSITION SALARY($) BONUS($)(1) COMPENSATION($)(2) (#)(3) PAYOUTS($) ($)(4)
------------------ --------- ----------- ------------------ ---------- ---------- ------------
<S> <C> <C> <C> <C> <C> <C>
Gregory L. Williams ......... 318,615 20,531 6,925 25,000 0 12,207
Chief Executive Officer

W. Russell Morcom ........... 170,000 113,623 10,798 6,000 70,875 57,114
Vice President--General
Manager--Discrete Power

George L. Gidzinski ......... 133,269 46,683 3,264 5,000 28,350 15,128
Vice President--General
Manager--Analog and Mixed
Signal

Daniel J. Heneghan .......... 121,980 44,121 1,920 3,500 24,924 23,774
Vice President--Chief
Financial
Officer--Assistant
Secretary

Larry W. Sims ............... 185,769 117,953 47,174 0 0 1,889
Vice President--Marketing
and Sales
</TABLE>

- ------------------
(1) This category includes Annual Incentive Plan bonus for all officers and a
sales incentive compensation bonus for Mr. Sims. It also includes awards for
Mr. Williams and for Mr. Heneghan of $50 each, a bonus of $7,108 for Mr.
Heneghan and disruption and signing bonuses, totaling $65,000, for Mr. Sims.

(2) Except for Mr. Sims, none of the executive officers named in the Summary
Compensation Table received personal benefits in excess of the lesser of
$50,000 or 10% of annual salary and bonus for fiscal year 1999. Mr. Sims'
personal benefits for fiscal year 1999 included relocation expenses and
applicable taxes. The other amounts reported represent dividend equivalent
payments on outstanding performance shares granted under Harris' Stock
Incentive Plan for which the performance period had not expired.

(3) All options granted were for Harris common stock under Harris' Stock
Incentive Plan. We did not assume Harris' obligations under the Stock
Incentive Plan.

(4) Amounts reported include:

(A) Contributions to the Harris Retirement Plan for fiscal 1999: Mr.
Williams--$3,959; Mr. Heneghan--$19,659; Mr. Gidzinski--$14,984; Mr.
Sims--$1,293; and Mr. Morcom--$17,703.

(B) Contributions to Harris' Supplemental Executive Retirement Plan for
fiscal 1999: Mr. Williams--$5,943; Mr. Heneghan--$3,700; Mr.
Gidzinski--$0; Mr. Sims--$0; and Mr. Morcom--$38,677.

(C) The taxable portion of premiums on life insurance provided by Harris for
fiscal 1999: Mr. Williams--$2,305; Mr. Heneghan--$415; Mr.
Gidzinski--$144; Mr. Sims--$596; and Mr. Morcom--$734.

43
<PAGE>

The following table provides information with respect to individual grants
made by Harris of options for shares of Harris common stock to the named
executive officers during fiscal year 1999.

<TABLE>
<CAPTION>
INDIVIDUAL GRANTS POTENTIAL REALIZABLE
---------------------------------------------------------- VALUE AT
PERCENT OF ASSUMED ANNUAL
TOTAL RATE OF STOCK
NUMBER OF OPTIONS PRICE APPRECIATION
SECURITIES GRANTED EXERCISE FOR OPTION
UNDERLYING TO EMPLOYEES OR TERM (4)
OPTIONS IN FISCAL BASE PRICE EXPIRATION --------------------
NAME GRANTED (#) (1) YEAR (%) (2) ($/SH) DATE (3) 5% ($) 10% ($)
---- --------------- -------------- ---------- ---------- -------- ---------
<S> <C> <C> <C> <C> <C> <C>
Gregory L. Williams..................... 25,000 3.17 34.0625 11/11/99 51,788 104,405
W. Russell Morcom....................... 6,000 .76 34.0625 11/11/99 12,429 25,057
George L. Gidzinski..................... 5,000 .63 34.0625 11/11/99 10,358 20,881
Daniel J. Heneghan...................... 3,500 .44 34.0625 11/11/99 7,250 14,617
Larry W. Sims........................... 0 0 0 0 0 0
</TABLE>

- ------------------
(1) All options granted were for Harris common stock pursuant to the Harris
Stock Incentive Plan. We did not assume Harris' obligations under the Stock
Incentive Plan.

(2) A total of 789,340 options were granted to Harris employees under the Harris
Stock Incentive Plan in fiscal year 1999.

(3) Under the terms of the Harris Stock Incentive Plan, the options expire 10
years after they are granted; however, in the event a grantee ceases to be
an employee of Harris, the options expire 90 days after the date the grantee
ceases to be an employee of Harris.

(4) Represents the potential realizable value of the underlying shares of Harris
common stock at the expiration date based on an assumed annual appreciation
rate of 5% and 10%, each compounded annually. The actual value, if any, that
may be realized will depend on the excess of the stock price over the
exercise price on the date the options exercised, so there can be no
assurance that the actual value realized will be at or near the value
estimated in the table.

The following table provides information with respect to the named
executive officers concerning the exercise of Harris options during fiscal year
1999, and unexercised Harris options held as of the end of fiscal year 1999.

<TABLE>
<CAPTION>
NUMBER OF
SECURITIES VALUE OF
UNDERLYING UNEXERCISED
UNEXERCISED IN-THE-MONEY
OPTIONS OPTIONS
AT FISCAL YEAR-END AT FISCAL YEAR-
SHARES VALUE (#) (3) END ($) (4)
AQUIRED ON REALIZED EXERCISABLE/ EXERCISABLE/
NAME EXERCISE (#) (1) ($) (2) UNEXERCISABLE UNEXERCISABLE
---- ---------------- -------- ------------------ ---------------
<S> <C> <C> <C> <C>
Gregory L. Williams.................... 0 0 0/25,000 0/132,813
W. Russell Morcom...................... 3,186 45,201 19,500/10,500 231,469/44,906
George L. Gidzinski.................... 1,200 12,300 2,846/6,800 0/31,775
Daniel J. Heneghan..................... 2,000 12,799 2,500/5,000 13,031/22,938
Larry W. Sims.......................... 0 0 0 0
</TABLE>

- ------------------
(1) Options exercised were for Harris common stock.

(2) Represents the difference between the market price per share of Harris
common stock on the date of exercise and the exercise price.

(3) All unexercised options were for Harris common stock.

(4) Represents the difference between the market price per share of Harris
common stock at fiscal year end and the exercise price.

EMPLOYMENT AGREEMENTS

In connection with the Transactions, we and Intersil entered into an
employment agreement with Mr. Williams for him to serve as our Chief Executive
Officer and a member of our Board of Directors. His employment agreement
provides for an annual base salary of $425,000, subject to increases and annual

44
<PAGE>

performance bonuses at the discretion of the Board of Directors. The agreement
also provides for Mr. Williams to receive our standard benefits. The term of the
agreement is 60 months, subject to automatic renewal for successive one year
terms, unless either we give or Mr. Williams gives prior notice of non-renewal.
Mr. Williams is subject to a noncompetition covenant during the term of his
agreement and for a period of one year following termination or expiration of
the agreement.

RETIREMENT AND SAVINGS PROGRAM

We provide retirement benefits to substantially all employees primarily
through a retirement plan having profit-sharing and savings elements.
Contributions by us to the retirement plan are based on profits and employees'
savings with no other funding requirements. We are able to make additional
contributions to the fund at our discretion. We also have non-contributory
defined benefit pension plans which are fully funded.

Retirement benefits also include an unfunded limited healthcare plan for
U.S.-based retirees and employees on long-term disability. We accrue the
estimated cost of these medical benefits, which are not material, during an
employee's active service life.

1999 EQUITY COMPENSATION PLAN

We adopted the 1999 Equity Compensation Plan, effective August 13, 1999,
which we refer to as the Plan. Under the Plan, we may grant to our salaried
officers and key employees options for up to 7,500,000 shares of Class A Common
Stock. Options to acquire 2,775,670 shares of Class A Common Stock are the only
options granted under the Plan as of March 31, 2000. The Plan authorizes us to
grant either (1) options intended to constitute incentive stock options under
the Internal Revenue Code of 1986, as amended, (2) non-qualified stock options,
(3) shares of restricted stock, (4) stock appreciation rights or (5) phantom
share awards. Under the Plan, a committee of the Board of Directors will
determine the exercise price of each option granted, provided that the minimum
exercise price is equal to the fair market value of the underlying stock on the
date the option is granted. The maximum term of any option will be ten years
from the date of grant for incentive stock options and ten years and one day
from the date of grant for non-qualified stock options. Options granted will be
exercisable at the determination of the Board of Directors, and the options
will vest ratably over about five years. Within any one-year period, an
employee may not receive options to purchase more than 666,667 shares of Class
A Common Stock.

In addition to options, the committee may award restricted stock, stock
appreciation rights and phantom share awards under the Plan.

A grant of restricted stock represents the right to become the owner of
that stock upon the lapse of restrictions, which will usually require the
performance of substantial additional services to Intersil Holding by the
recipient of the grant. If the restrictions are not satisfied, the restricted
stock is forfeited. If the restrictions are satisfied, the individual in
question becomes the owner of those shares. In the interim, the individual is
entitled to any dividends that may be paid on the restricted shares and is
allowed to vote them. The individual cannot, however, sell, assign or otherwise
transfer the subject shares.

A stock appreciation right entitles the recipient to a payment, in cash or
in shares of Intersil Holding Class A Common Stock of an amount equal to the
excess of the fair market value of Intersil Holding Class A Common Stock on the
date the stock appreciation right is exercised over the "exercise price" of the
stock appreciation right, which will usually be the fair market value of the
subject Intersil Holding Class A Common Stock on the date the stock appreciation
right is granted.

A phantom stock award entitles the recipient to a payment in cash or in
shares of Intersil Holding Class A Common Stock of an amount equal to the
appreciation in the value of the underlying Intersil Holding Class A Common
Stock over the period from the grant of the phantom share award to the date of
settlement specified in the award.

The terms and conditions of grants of restricted stock, stock appreciation
rights and phantom stock awards will be governed by the Plan and by the terms of
the agreement making the grant or award, as determined by the committee of the
Board of Directors.

45
<PAGE>

Any Intersil Holding Class A Common Stock awarded as restricted stock,
awarded upon exercise of a stock appreciation right or awarded in settlement of
a phantom stock award will count against the 7,500,000 share overall limit under
the Plan and against the 666,667 individual annual limit.

EMPLOYEE STOCK PURCHASE PLAN

In connection with our initial public offering, we adopted the Intersil
Holding Corporation Employee Stock Purchase Plan, which we refer to as the
Employee Stock Purchase Plan. Pursuant to the Employee Stock Purchase Plan, our
employees will have an opportunity to purchase up to 1,333,333 shares of our
Class A Common Stock at up to a 15% discount to the current market price. All of
our employees who render more than 20 hours of service per week for more than
five months per calendar year, other than those who own 5% or more of our
outstanding securities, are eligible to participate in the Employee Stock
Purchase Plan. The Employee Stock Purchase Plan will expire 10 years from its
effective date. The Employee Stock Purchase Plan is intended to comply with the
provisions of Section 423 of the Internal Revenue Code of 1986.

Employees purchase shares pursuant to the Employee Stock Purchase Plan by
electing to have a percentage of their base compensation withheld from their
paychecks for the duration of a six month purchase period. We hold such
compensation in notional accounts for the benefit of the participating
employees. At the end of each purchase period, the money that has accumulated in
each employee's notional account will be used to buy shares of our Class A
Common Stock at a price equal to no less than 85% of the lesser of the fair
market value of the stock on the first day of the purchase period and the fair
market value of the stock on the last day of the purchase period. Within any one
calendar year, an employee may not purchase more than $25,000 worth of our Class
A Common Stock under the Employee Stock Purchase Plan.

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

Citicorp Mezzanine Partners, L.P. contributed $30.0 million in cash to us
in exchange for the 13.5% Subordinated PIK Note due 2010 and warrants to
purchase 3,703,707 shares of our Class A Common Stock. The 13.5% Subordinated
PIK Note due 2010 was repaid in full with the proceeds of our initial public
offering and the warrants are exercisable for only 2,222,224 shares. We
contributed the $30.0 million from Citicorp Mezzanine Partners, L.P. to Intersil
as a capital contribution. The general partner of Citicorp Mezzanine Partners,
L.P. is an affiliate of Citicorp Venture Capital Ltd. Citicorp Venture Capital
Ltd. owns an interest in Sterling, one of our stockholders.

Under the Master Transaction Agreement, our shareholders entered into a
Stockholders' Agreement containing certain agreements among the shareholders
regarding our capital stock and corporate governance. We exercised our option
under the Stockholders' Agreement to repurchase from Sterling Holding Company,
LLC a total of 1,833,333 shares of Class A Common Stock for an aggregate
purchase price of $137,500 to reissue to our employees. See "Description of
Capital Stock--Stockholders' Agreement."

We purchased from Harris selected portions of the semiconductor business.
Harris entered into with us various agreements, including the Intellectual
Property Agreement, the Patent Assignment, the Secondary Trademark Assignment
and License Agreement, the Transition Services Agreement, the Registration
Rights Agreement and the Royalty Agreement.

The terms of the agreements listed above were the result of arms-length
negotiations and in our opinion are no less favorable to us than those that
could be obtained from non-affiliated parties.

46
<PAGE>
OWNERSHIP OF CAPITAL STOCK

The following table sets forth information regarding the beneficial
ownership of each holder of 5% or more of the outstanding shares of Intersil
Holding Class A Common Stock (the only voting class of stock) and Class B Common
Stock, each director and each executive officer named in the Summary
Compensation Table, and all directors and officers as a group, as of March 31,
2000. The table does not include shares of Intersil Holding Class A Common Stock
issuable upon conversion of the warrants and the warrants issued in connection
with the 13.5% Subordinated Holding PIK Note due 2010.

<TABLE>
<CAPTION>
NUMBER AND PERCENT OF SHARES OF INTERSIL HOLDING
--------------------------------------------------
CLASS A STOCK (1) CLASS B STOCK (2)
---------------------- ---------------------- PERCENT OF ALL
NAME OF BENEFICIARY NUMBER PERCENT NUMBER PERCENT COMMON STOCK (3)
- ------------------- ----------- -------- ----------- -------- ----------------
<S> <C> <C> <C> <C> <C>
Sterling Holding Company, LLC 10,738,026 25.84% 45,214,898 90.89% 61.28%
(4)(5) ...............................
c/o Intersil Corporation
2401 Palm Bay Road NE
Palm Bay, FL 32905
Harris Corporation (6) ............... 892,806 2.15% 4,531,584 9.11% 5.94%
1025 W. NASA Boulevard
Melbourne, Florida 32919
Gregory L. Williams .................. 2,090,056 5.03% -- -- 2.29%
W. Russell Morcom .................... 573,570 1.38% -- -- .63%
George L. Gidzinski .................. 461,098 1.11% -- -- .51%
Daniel J. Heneghan ................... 392,685 .94% -- -- .43%
Larry W. Sims ........................ 568,418 1.37% -- -- .62%
James A. Urry (7) .................... 32,024 .08% -- -- .04%
Gary E. Gist (8) ..................... 4,708 .01% 33,478 .07% .04%
All directors, officers and other 6,558,358 15.78% 33,478 .07% 7.22%
management investors as a group (18
persons) (7)(8) ......................
</TABLE>

- ------------------
(1) Does not include shares of Class A Common Stock issuable upon conversion of
Class B Common Stock. A holder of Class B Common Stock may convert any or
all of his shares into an equal number of shares of Class A Common Stock,
provided that such conversion would be permitted only to the extent that the
holder of shares to be converted would be permitted under applicable law to
hold the total number of shares of Class A Common Stock which would be held
after giving effect to the conversion.

(2) Does not include shares of Class B Common Stock issuable upon conversion of
Class A Common Stock. A holder of Class A Common Stock may convert any or
all of his shares into an equal number of shares of Class B Common Stock.

(3) Represents the percentage of the total number of shares of Class A Common
Stock and Class B Common Stock combined.

(4) An affiliate of Credit Suisse First Boston Corporation owns an interest in
Sterling and could have the right to acquire up to 1,070,733 shares of Class
A Common Stock.

(5) Citicorp Venture Capital Ltd. owns an interest in Sterling and could have
the right to acquire up to 42,055,184 shares of Intersil Holding common
stock. Citicorp Mezzanine Partners, L.P., the general partner of which is an
affiliate of Citicorp Venture Capital, contributed $30.0 million in cash to
our company in exchange for the 13.5% Subordinated Holding PIK Note due 2010
and warrants to purchase 3,703,707 shares of our Class A Common Stock. We
contributed the $30.0 million to Intersil as a capital contribution. Upon
repayment of the 13.5% Subordinated PIK Note due 2010, the warrants became
exercisable for 2,222,224 shares of our Class A Common Stock.

47
<PAGE>

(Footnotes continued from previous page)

(6) The shares reported by Harris are owned by Manatee Investment Corporation, a
wholly owned subsidary of Harris. Harris may be deemed to beneficially own
these shares.

(7) James A. Urry, who is one of our directors, is affiliated with Sterling in
the capacities described under "Management--Directors and Executive
Officers" and footnote (5) above. All shares reported for Mr. Urry are held
by Sterling, but do not include all shares held by Sterling, which Mr. Urry
may be deemed to beneficially own as a result of his affiliation with
Sterling. Mr. Urry disclaims beneficial ownership of all shares held by
Sterling, except for those shares reported for Mr. Urry, which Mr. Urry has
the right to acquire in exchange for an ownership interest in Sterling.

(8) Gary E. Gist owns an interest in Sterling and could have the right to
exchange that interest for up to 38,186 shares of our common stock.

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

Sterling, one of our principal stockholders, also owns 7.1% of Class A
Common Stock and 100% of Class B Common Stock of Fairchild Semiconductor
International, Inc., one of our competitors. Fairchild Semiconductor Corporation
is a wholly owned subsidiary of Fairchild Semiconductor International, Inc.

48
<PAGE>
DESCRIPTION OF CAPITAL STOCK

Our capital stock consists of 600,000,000 authorized shares of common
stock, par value $.01 per share, divided into two classes consisting of (a)
300,000,000 shares of Class A Common Stock, of which 41,554,703 shares are
outstanding and (b) 300,000,000 shares of Class B Common Stock, of which
49,746,482 shares are outstanding. Our capital stock also consists of 100,000
authorized shares of preferred stock, par value $.01 per share, none of which is
issued or outstanding.

The following description of the terms and provisions of our capital stock
is not complete, and you should read our Bylaws and Restated Certificate of
Incorporation, which have been filed as exhibits to the Registration Statement
of which this prospectus is a part.

CLASS A COMMON STOCK

The holders of Class A Common Stock are entitled to one vote for each share
held of record on all matters submitted to a vote of the stockholders other than
elections of directors. Our Restated Certificate of Incorporation provides for
cumulative voting for directors. With cumulative voting, at each election for
directors, each holder of Class A Common Stock is entitled to as many votes as
would equal the number of shares he or she holds multiplied by the number of
directors to be elected. The holder may cast all of his or her votes for a
single candidate or may distribute them among any number of candidates. Under
cumulative voting, a minority holder has a greater possibility of influencing
the election of directors because, for example, the minority holder can increase
the number of votes such holder may cast for an individual director. The holders
of Class A Common Stock will be entitled to such dividends as may be declared at
the discretion of our Board of Directors out of funds legally available for that
purpose. The holders of Class A Common Stock will be entitled to share ratably
with holders of Class B Common Stock in the net assets of our company upon
liquidation after payment or provision for all liabilities. A holder of Class A
Common Stock may convert any or all of his shares into an equal number of shares
of Class B Common Stock. We have never paid and we do not anticipate declaring
or paying any cash dividends on shares of our Class A Common Stock in the
foreseeable future. As of December 31, 1999, there were 19 holders of record of
our Class A Common Stock.

CLASS B COMMON STOCK

Except as required by law, the holders of Class B Common Stock have no
voting rights. The holders of Class B Common Stock will be entitled to such
dividends as may be declared at the discretion of our Board of Directors out of
funds legally available for that purpose. The holders of Class B Common Stock
will be entitled to share ratably with holders of Class A Common Stock in the
net assets of our company upon liquidation after payment or provision for all
liabilities. A holder of Class B Common Stock may convert any or all of his
shares into an equal number of shares of Class A Common Stock, provided that
such conversion would be permitted only to the extent that the holder of such
shares to be converted certifies to us in writing that the holder would be
permitted under applicable law to hold the total number of shares of Class A
Common Stock which would be held after giving effect to the conversion. We have
never paid and we do not anticipate declaring or paying any cash dividends on
shares of our Class B Common Stock in the foreseeable future. As of December 31,
1999, there were 2 holders of record of our Class B Common Stock.

PREFERRED STOCK

Under our Restated Certificate of Incorporation, our Board of Directors has
the authority to issue up to 100,000 shares of preferred stock, but only in
connection with the adoption of a stockholder rights plan. A stockholder rights
plan may only be adopted by our Board of Directors with the approval of holders
of a majority of outstanding shares of Class A Common Stock or with the
unanimous consent of our Board of Directors, unless Sterling and its affiliates
hold less than 15% of our outstanding common stock, in which case approval by a
majority of our Board of Directors is required. See "--Other Provisions of Our
Restated Certificate of Incorporation." If our Board of Directors has such
requisite authority, it will be authorized to issue preferred stock in
connection with a stockholder rights plan in one or more series, and to fix the
voting powers, designations, preferences, and relative, participating, optional
or other special rights and qualifications, limitations and restrictions of each
series, including dividend rights, conversion rights, voting rights, terms of
redemption, liquidation preferences, and the number of shares constituting any
series. The ability of our Board of Directors to issue preferred stock could
have the effect of making it more difficult for a third party to acquire, or
discouraging a third party from acquiring, a majority of our outstanding Class A
Common Stock. Our Board of Directors' ability to establish the preferences and
rights of the shares of any

49
<PAGE>

series of preferred stock may also afford holders of any preferred stock
preferences, powers and rights (including voting rights) senior to the rights of
holders of our Class A Common Stock. We have no present plans to issue any
shares of preferred stock.

OTHER PROVISIONS OF OUR RESTATED CERTIFICATE OF INCORPORATION

Our Restated Certificate of Incorporation contains provisions affecting the
rights of our stockholders and the powers of our Board of Directors, including
the following:

o We are not subject to the provisions of Section 203 of the General
Corporation Law of Delaware regulating takeovers. Section 203 generally
makes it more difficult for a third party to take control of a company by
prohibiting a third party owning more than 15% of the company's stock
from entering into transactions with the company unless the board of
directors or stockholders unaffiliated with the third party approve
either the third party or the transaction at issue, before the third
party becomes a 15% owner or the third party acquires at least 85% of the
company's stock.

o A stockholder rights plan can be adopted only with the consent of holders
of a majority of outstanding Class A Common Stock or with the unanimous
consent of our Board of Directors, except that if Sterling's and its
affiliates' ownership is less than 15% of our outstanding common stock,
then a stockholder rights plan can be adopted with the consent of a
majority of our Board of Directors. A stockholder rights plan generally
makes it more difficult for a hostile bidder to take control of a company
by providing existing stockholders with special rights which would make
it uneconomical for the third party to acquire additional interests. If
our Board of Directors is authorized to and decides to implement a
stockholder rights plan, the plan adopted by the Board may deter
acquisitions which you might deem to be in your best interests.

o Our Board of Directors must have no fewer than three and no more than
seven members and may not be divided into classes. The term of each
member of the Board of Directors expires at each annual stockholders'
meeting. Having a minimum number of Directors ensures that cumulative
voting will operate to protect the interests of minority shareholders,
since with a smaller Board it would take a greater percentage of votes to
elect one director. Similarly, by prohibiting a classified Board, our
Restated Certificate of Incorporation ensures that stockholders may
replace the entire Board at each annual election.

o Stockholders may act by written consent, without a meeting and without
notice or a vote. This provision enables stockholders to act on matters
subject to a stockholder vote without waiting until the next annual or
special meeting of stockholders.

o Each of the provisions of our Restated Certificate of Incorporation
described above, and the provision described above under "Preferred
Stock" that limits the Board of Directors' ability to issue preferred
stock other than in connection with a stockholder rights plan, may be
amended only with the approval of holders of 75% of our outstanding Class
A Common Stock. Amending other provisions requires approval by holders of
a majority of our outstanding Class A Common Stock. The provision
requiring a supermajority vote also cannot be amended without the consent
of holders of 75% of the Class A Common Stock. If a third party--that is,
a person or entity other than our principal stockholders or members of
our management--acquires more than 40% of the Class A Common Stock, then
the holders of a majority of the Class A Common Stock could amend the
foregoing provisions. If, after any transfer by Sterling Holding Company,
LLC and its affiliates, Sterling and the affiliates together own less
than 15% of our outstanding common stock, then holders of a majority of
the Class A Common Stock could amend the supermajority provisions. The
effect of each supermajority provision is that holders of 25% of our
Class A Common Stock could block amendments to our Restated Certificate
of Incorporation affecting the provisions described above.

WARRANTS RELATING TO THE ISSUANCE OF THE UNITS

We originally issued and sold warrants, referred to as the Warrants, to
Credit Suisse First Boston Corporation, J.P. Morgan Securities, Inc. and Salomon
Smith Barney Inc. pursuant to a private placement by Intersil Holding and
Intersil of 200,000 units, each unit consisting of $1,000 principal amount of
13 1/4% Senior Subordinated Notes due 2009 and one Warrant to purchase 18.5185
shares of Class A Common Stock at an exercise price (the "Exercise Price") of
$0.0015. The Exercise Price and the number of shares of Common Stock issuable
upon exercise of a Warrant may be subject to adjustment. The Warrants initially
entitle the holders to acquire, in the aggregate 3,703,707 shares of Class A
Common Stock.

50
<PAGE>

The Warrants may be exercised at any time after August 13, 2000; provided,
however, that the holder of Warrants will be able to exercise the Warrants only
if a shelf registration statement relating to the Class A Common Stock
underlying the Warrants is effective or the exercise of those Warrants is exempt
from the registration requirements of the Securities Act, and such securities
are qualified for sale or exempt from qualification under the applicable
securities laws of the states or other jurisdictions in which such holders
reside. Intersil Holding has filed a shelf registration statement to cover the
Warrants for resale and in the issuance of the Class A Common Stock upon
exercise of the Warrants, and the Securities and Exchange Commission has
declared it effective. Unless earlier exercised, the Warrants will expire on
August 15, 2009 (the "Expiration Date"). We will give notice of expiration not
less than 90 nor more than 120 days prior to the Expiration Date to the
registered holders of the then outstanding Warrants. If we fail to give the
expiration notice, the Warrants will nevertheless expire and become void on the
Expiration Date.

WARRANTS RELATING TO THE 13.5% SUBORDINATED HOLDING PIK NOTE

Intersil Holding issued to Citicorp Mezzanine Partners, L.P. warrants to
purchase Intersil Holding Class A Common Stock. These warrants now entitle the
holder to purchase up to 2,222,224 shares of Class A Common Stock of Intersil
Holding upon exercise of the warrants beginning on August 13, 2001 and ending on
August 15, 2009 at an exercise price of $0.0015 per share, subject to
anti-dilution adjustments.

STOCKHOLDERS' AGREEMENT

Prior to our initial public offering, the then-existing stockholders of our
company entered into a Securities Purchase and Holders Agreement, which we refer
to as the Stockholders' Agreement, containing agreements among the stockholders
with respect to our capital stock and corporate governance.

The Stockholders' Agreement contains provisions which restrict our ability
to issue common stock. We cannot issue shares of common stock to Sterling,
Citicorp Venture Capital Ltd. or any of their respective affiliates without
offering the other parties to the Stockholders' Agreement an equal opportunity
to purchase our shares. In addition, Sterling and its affiliates have the right
to have observers present at meetings of our Board of Directors if they are not
represented on our Board of Directors as long as they own at least 5% of the
common stock then outstanding. The Stockholders' Agreement continues to subject
some of our executive officers' common stock to risk of forfeiture.

REGISTRATION RIGHTS AGREEMENT

In connection with their entry into the Stockholders' Agreement, Intersil
Holding, Sterling, the management investors, Harris and the other shareholders
of Intersil Holding entered into a Registration Rights Agreement (the
"Registration Rights Agreement"). According to the Registration Rights
Agreement, upon the written request of Sterling and subject to Intersil
Holding's option to defer action for 180 days, Intersil Holding will prepare and
file a registration statement with the Securities and Exchange Commission
concerning the distribution of all or part of the shares held by Sterling and
use its best efforts to cause such registration statement to become effective.
If at any time Intersil Holding files a registration statement for the Intersil
Holding common stock because of a request by Sterling or otherwise, Intersil
Holding will use its best efforts to allow the other parties to the Registration
Rights Agreement to have their shares of Intersil Holding common stock (or a
portion of their shares under circumstances set forth in the Registration Rights
Agreement) included in the registered offering of Intersil Holding common stock.
Intersil Holding is not bound by this requirement if it is filing a registration
statement on Form S-8, Form S-4 or any similar form filed in connection with an
exchange offer or an offering solely to Intersil Holding's employees or existing
shareholders, or a registration statement registering a unit offering consisting
of a public offering of debt and equity securities of Intersil Holding in which
(i) not more than twenty percent of the gross proceeds received from the sale of
those securities is attributed to the equity securities and (ii) after the
public offering, Intersil Holding does not have a class of equity securities
required to be registered under the Securities Exchange Act of 1934. Most
registration expenses of the selling shareholders will be paid by Intersil
Holding. Intersil Holding will not pay expenses relating to underwriting
commissions, brokerage fees and transfer taxes applicable to the shares sold by
the shareholders or in certain cases the fees and expenses of any accountants or
other representatives retained by a selling shareholder.

TRANSFER AGENT AND REGISTRANT

The Transfer Agent and Registrar for the Class A Common Stock is Equiserve
Trust Company.

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<PAGE>
DESCRIPTION OF CERTAIN INDEBTEDNESS

The following is a summary of certain indebtedness of Intersil and of
Intersil Holding. To the extent such summary contains descriptions of documents
relating to the notes, the senior credit facilities and other loan documents,
such descriptions do not purport to be complete and are qualified in their
entirety by reference to such documents, which are available upon request to us.

NOTES

On August 13, 1999, Intersil and Intersil Holding issued 200,000 units,
each unit consisting of $1,000 principal amount of 13 1/4% Senior Subordinated
Notes due 2009 of Intersil and one warrant to purchase 18.518535 shares of Class
A common stock of Intersil Holding, in connection with the unit offering for
gross proceeds of approximately $200.0 million. The notes were issued under an
indenture dated as of August 13, 1999 (the "Indenture") between Intersil and
United States Trust Company of New York, as Trustee. The warrants were issued
under the Warrant Agreement. The net proceeds of the unit offering, together
with the net proceeds of certain other funds, were used to pay the cash
consideration for the acquisition of the semiconductor business from Harris and
pay related fees and expenses. See "The Transactions."

The notes were initially in the principal amount of $200.0 million and
mature on August 15, 2009. Interest on the notes accrues at 13 1/4% per annum
and is payable semiannually in arrears on February 15 and August 15, commencing
February 15, 2000. Subject to certain covenants set forth in the Indenture,
Intersil may issue more notes under the Indenture in an unlimited principal
amount. Any additional notes that are actually issued will be treated as issued
and outstanding notes (and as the same class as the initial notes) for most
purposes. The notes are unsecured senior subordinated obligations of Intersil,
are subordinated in right of payment to all existing and future Senior
Indebtedness (as defined in the Indenture) of Intersil, and are senior in right
of payment to all future Subordinated Indebtedness (as defined in the Indenture)
of Intersil. The notes are guaranteed by Intersil Holding and each Subsidiary
Guarantor (as defined in the Indenture). The Guaranties are senior subordinated
obligations of Intersil Holding and the relevant Subsidiary Guarantor.

Under the terms of the notes, we were permitted, but were not required, to
redeem up to $70.0 million principal amount of the notes with the net cash
proceeds of our initial public offering at a price of 113 1/4% of the principal
amount of the notes, plus accrued and unpaid interest on the notes.

On or after August 15, 2004, the notes may be redeemed at the option of
Intersil, in whole or in part, at the following redemption prices (expressed as
percentages of principal amount at maturity), plus accrued and unpaid interest,
if redeemed during the 12 months beginning August 15 of the years indicated
below:

YEAR PERCENTAGE
- ---- ----------
2004........................................................ 106.625%
2005........................................................ 104.969
2006........................................................ 103.313
2007........................................................ 101.656
2008 and thereafter......................................... 100.000

Upon a Change of Control (as defined in the Indenture), each holder of
notes may require Intersil to repurchase all or any portion of the holder's
notes at a purchase price equal to 101% of the principal amount plus accrued and
unpaid interest to the date of purchase.

The Indenture contains certain covenants that, among other things, limit
(i) the incurrence of additional debt by Intersil and certain of its
subsidiaries, (ii) the payment of dividends on capital stock of Intersil and the
purchase, redemption or retirement of capital stock or subordinated
indebtedness, (iii) investments, (iv) certain transactions with affiliates, (v)
sales of assets, including capital stock of subsidiaries, and (vi) certain
consolidations, mergers and transfers of assets. The Indenture also prohibits
certain restrictions on distributions from certain subsidiaries. All of these
limitations and prohibitions, however, are subject to a number of important
qualifications.

52
<PAGE>

Under a registration rights agreement dated August 13, 1999 among Intersil
Holding, Intersil and the initial purchasers, Intersil exchanged the notes for
new notes in an exchange offer registered under the Securities Act.

SENIOR CREDIT FACILITIES

General. In connection with the transactions, Intersil entered into the
senior credit facilities with a syndicate of certain financial institutions, as
lenders, Credit Suisse First Boston, New York branch, as the Administrative
Agent, Salomon Smith Barney Inc., as Syndication Agent, and Morgan Guaranty
Trust Company of New York, as Documentation Agent. The description below is only
a summary of the principal terms of the senior credit facilities and related
loan documents.

The senior credit facilities provided for up to $275.0 million of aggregate
borrowing capacity, consisting of:

o a secured $205.0 million funded term loan (the "Tranche B Senior Term
Facility"); and

o a secured $70.0 million revolving line of credit, $15.0 million of which
was funded at closing of the acquisition of the semiconductor business
(the "Revolving Credit Facility").

Use of the Senior Credit Facilities. Intersil used the proceeds from the
senior credit facilities, together with $30.0 million of proceeds from the 13.5%
Subordinated Holding PIK Note due 2010, $90.0 million of proceeds from the
11.13% Seller Holding PIK Note due 2010, the proceeds of the unit offering and
the equity contribution from Intersil Holding, (i) to fund the acquisition of
the semiconductor business, (ii) to pay related fees and expenses and (iii) for
general corporate purposes.

Guaranties; Security. Intersil's obligations under the senior credit
facilities are unconditionally guaranteed, jointly and severally, by Intersil
Holding and each of Intersil's existing and subsequently acquired or organized
domestic subsidiaries. Intersil's obligations and those of the guarantors under
the senior credit facilities are secured by a pledge of all of Intersil's
capital stock and by substantially all of the assets of Intersil Holding,
Intersil and each of Intersil's existing and subsequently acquired or organized
domestic (and, to the extent no adverse tax consequences will result, foreign)
subsidiaries. No foreign subsidiary is required to guarantee the senior credit
facilities and less than two-thirds of the capital stock of certain foreign
subsidiaries is required to be pledged to secure the senior credit facilities.

Amortization; Interest; Fees; Maturity. The Senior Term Facility was
subject to certain specified amortization payments required to be made in
quarterly installments until final payment was made. The Revolving Credit
Facility is available until 2005 unless terminated earlier under the terms of
the senior credit facilities.

Borrowings under the senior credit facilities bear interest at a rate equal
to, at Intersil's option, either (i) the base rate (which is based on the prime
rate most recently announced by the Administrative Agent or the Federal Funds
rate plus one-half of 1%) or (ii) the applicable London interbank offered rate,
in each case plus the applicable margin. In addition, the senior credit
facilities are subject to a commitment fee of 0.50% per annum of the undrawn
portion of the Revolving Credit Facility, and letter of credit fees regarding
each letter of credit outstanding under the senior credit facilities equal to
(i) the applicable margin over the Adjusted LIBOR Rate (as defined in the Credit
Agreement) in effect for loans under the Revolving Credit Facility and (ii)
0.25% per annum on the face amount of all outstanding letters of credit.

Prepayments. The loans under the Senior Term Facility are required to be
prepaid with certain asset and capital stock sales and dispositions, certain
incurrences of indebtedness, certain offerings of common equity securities and
by certain percentages of our annual Excess Cash Flow (as defined in the Credit
Agreement). Voluntary prepayments may be made in whole or in part without
premium or penalty.

53
<PAGE>

Covenants and Events of Default. The senior credit facilities contain,
among other things, covenants restricting Intersil's ability and its
subsidiaries' ability to dispose of assets, merge, pay dividends, repurchase or
redeem capital stock and indebtedness (including the notes), incur indebtedness
or guaranties, create liens, enter into agreements with negative pledge clauses,
make certain investments or acquisitions, enter into sale and leaseback
transactions, enter into transactions with affiliates, change Intersil's
business or make fundamental changes, and otherwise restrict corporate actions.
The senior credit facilities also contain a number of financial maintenance
covenants.

The senior credit facilities also include events of default usual for these
types of credit facilities and transactions, including but not limited to
nonpayment of principal or interest, violation of covenants, incorrectness of
representations and warranties, cross defaults and cross acceleration,
bankruptcy, material judgments, ERISA, actual or asserted invalidity of the
guaranties or the security documents and certain changes of control of Intersil.
The occurrence of any event of default could result in the acceleration of
Intersil's and the guarantors' obligations under the senior credit facilities,
which could materially and adversely affect holders of Class A Common Stock.

54
<PAGE>
SHARES ELIGIBLE FOR FUTURE SALE

Future sales of substantial amounts of our common stock in the public
market could adversely affect prevailing market prices. Sales of substantial
amounts of our common stock in the public market after any restrictions on sale
lapse could adversely affect the prevailing market price of the common stock and
impair our ability to raise equity capital in the future.

We have 91,381,920 outstanding shares of common stock, outstanding options
to purchase 2,775,670 shares of common stock and outstanding warrants to
purchase 5,925,931 shares of common stock assuming no additional option or
warrant grants or exercises after March 31, 2000. The 23,000,000 shares sold in
our initial public offering are freely tradable without restriction under the
Securities Act, unless purchased by our "affiliates" as that term is defined in
Rule 144 under the Securities Act. In general, affiliates include officers,
directors and 10% or greater stockholders.

The remaining 68,381,920 shares outstanding and 5,925,931 shares subject to
outstanding options and warrants are "restricted securities" within the meaning
of Rule 144. Restricted securities may be sold in the public market only if the
sale is registered or if it qualifies for an exemption from registration, such
as under Rules 144 or 144(k) promulgated under the Securities Act, which are
summarized below. Sales of restricted securities in the public market, or the
availability of such shares for sale, could adversely affect the market price of
the common stock.

LOCK-UP AGREEMENTS

Our directors, officers, Harris and other stockholders, who together hold
substantially all of our securities, have entered into lock-up agreements in
connection with our initial public offering. These lock-up agreements generally
provide that these holders will not offer, sell, contract to sell, grant any
option to purchase or otherwise dispose of our common stock or any securities
exercisable for or convertible into our common stock owned by them until August
14, 2000 without the prior written consent of the representatives of the
underwriters of our initial public offering. The lock-up agreements executed by
our employees and directors also cover any shares they may acquire through our
directed share program or upon the exercise of options. Shares subject to
lock-up agreements may not sold until these agreements expire or are waived
Credit Suisse First Boston Corporation. Assuming that Credit Suisse First Boston
Corporation does not release any security holders from the lock-up agreements
and assuming no exercise of outstanding options or warrants, the following
shares will be eligible for sale in the public market at the following times:

o All of the 23,000,000 shares sold in our initial public offering are
immediately available for sale in the public market.

o Beginning on August 14, 2000, an additional 68,381,920 shares will be
eligible for sale pursuant to Rule 144.

RULE 144

In general, under Rule 144 as currently in effect, after the expiration of
the lock-up agreements, a person who has beneficially owned restricted
securities for at least one year would be entitled to sell within any
three-month period a number of shares of common stock then outstanding, which
will equal approximately 913,819 shares; and

o one percent of the number of shares of common stock then outstanding,
which will equal approximately 913,819 shares; and

o the average weekly trading volume of our common stock during the four
calendar weeks preceding the sale.

Sales under Rule 144 are also subject to requirements with respect to
manner of sale, notice and the availability of current public information about
us.

55
<PAGE>

RULE 144(K)

Under Rule 144(k), a person who is not deemed to have been our affiliate at
any time during the three months preceding a sale, and who has beneficially
owned the shares proposed to be sold for at least two years, may sell these
shares without complying with the manner of sale, public information, volume
limitation or notice requirements of Rule 144.

REGISTRATION RIGHTS

Beginning August 14, 2000, some of our stockholders have the right to cause
us to register the sale of their shares under the Securities Act and our other
current stockholders may have the right to have their shares covered by the
registration statement. See "Description of Capital Stock--Registration Rights
Agreement."

EMPLOYEE PLANS

We filed a registration statement under the Securities Act to register
shares to be issued pursuant to our employee benefit plans. As a result, any
options or rights exercised under the 1999 Equity Compensation Plan and the
Intersil Holding Corporation Employee Stock Purchase Plan will also be freely
tradable in the public market. However, shares held by affiliates will still be
subject to the volume limitation, manner of sale, notice and public information
requirements of Rule 144. As of March 31, 2000, we had granted options to
purchase 2,775,670 shares of common stock, none of which were exercisable. As of
March 31, 2000 we had reserved 5,950,667 additional shares for possible future
issuance under our 1999 Equity Compensation Plan and 1,333,333 shares for
possible future issuance under our Employee Stock Purchase Plan. See "Risk
Factors--Risks Relating to Future Sales," "Description of Capital Stock--1999
Equity Compensation Plan" and "Description of Capital Stock--Employee Stock
Purchase Plan."

56
<PAGE>
OTHER RESTRICTIONS ON RESALE

The Class A Common Stock offered by this prospectus is being registered
under the Securities Act of 1933, but this registration does not cover resale of
distribution by persons who receive Class A Common Stock issued by us in our
acquisitions. Affiliates (as that term is defined in Rule 144 under the
Securities Act of 1933) of entities acquired by us who do not become affiliates
of our company may not resell Class A Common Stock registered under the
registration statement to which this prospectus relates except pursuant to an
effective registration statement under the Securities Act covering such shares,
or in compliance with Rule 145 promulgated under the Securities Act or another
applicable exemption from the registration requirements of the Securities Act.
Generally, Rule 145 permits such affiliates to sell such shares immediately
following the acquisition in compliance with certain volume limitations and
manner of sale requirements. Under Rule 145, sales by such affiliates during any
three-month period cannot exceed the greater of (1) 1% of the shares of our
Class A Common Stock outstanding and (2) the average weekly reported volume of
trading of shares of our Class A Common Stock on all national securities
exchanges during the four calendar weeks preceding the proposed sale. These
restrictions will cease to apply under most other circumstances if the affiliate
has held the Class A Common Stock for at least two years, provided that the
person or entity is not then an affiliate of our company. Individuals who are
not affiliates of the entity being acquired and do not become affiliates of our
company will not be subject to resale restrictions under Rule 145 and, unless
otherwise contractually restricted, may resell shares of our Class A Common
Stock immediately following the acquisition without an effective registration
statement under the Securities Act. The ability of affiliates to resell shares
of our Class A Common Stock under Rule 145 will be subject to our company having
satisfied its reporting requirements under the Securities Exchange Act of 1934,
as amended, for specified periods prior to the time of sale.

PLAN OF DISTRIBUTION

Well will issue Class A Common Stock from time to time in connection with
acquisitions by us or our subsidiaries of other businesses, assets or
securities. We expect that the terms of the acquisitions involving the issuance
of securities covered by this prospectus will be determined by direct
negotiations with the owners or controlling persons of the businesses, assets or
securities to be acquired by us or our subsidiaries. No underwriting discounts
or commissions will be paid in connection with the issuance of our Class A
Common Stock, although finders' fees may be paid from time to time with respect
to specific mergers or acquisitions. Any person receiving such fees may be
deemed to be an underwriter within the meaning of the Securities Act of 1933.

LEGAL MATTERS

The validity of the Class A Common Stock will be passed upon for us by
Dechert Price & Rhoads, Philadelphia, Pennsylvania.

EXPERTS

Ernst & Young LLP, independent auditors, have audited the Intersil Holding
Corporation (Successor) consolidated balance sheet at August 14, 1999 and the
consolidated financial statements of the semiconductor business of Harris
(Predecessor) at July 3, 1998 and July 2, 1999, and for each of the three years
in the period ended July 2, 1999, as set forth in their report. We have included
our financial statements in the prospectus and elsewhere in the registration
statement in reliance on Ernst & Young LLP's report, given on their authority as
experts in accounting and auditing.

57
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WHERE YOU CAN FIND MORE INFORMATION

We file annual, quarterly and special reports and other information with
the Securities and Exchange Commission. You may read and copy any reports or
other information filed by us at the Securities and Exchange Commission's public
reference room at Room 1024, Judiciary Plaza, 450 Fifth Street, N.W.,
Washington, D.C. 20549 and at the SEC's regional offices located at Northwestern
Atrium Center, 500 West Madison Street, Suite 1400, Chicago, IL 60661 and Seven
World Trade Center, 13th Floor, New York, NY 10048. Copies of this material can
be obtained from the Public Reference Section of the SEC upon payment of fees
prescribed by the SEC. You may call the Securities and Exchange Commission at
1-800-SEC-0330 for further information contained in the public reference room.
Our filings with the Securities and Exchange Commission will also be available
to the public from commercial document retrieval services and at the Securities
and Exchange Commission's Web site at "http://www.sec.gov."

We have filed with the SEC a registration statement on Form S-4 under the
Securities Act of 1933, covering the shares of Class A Common Stock of Intersil
Holding Corporation. This prospectus, which is a part of the registration
statement, does not contain all of the information included in the registration
statement. Any statement made in this prospectus concerning the contents of any
contract, agreement or other document is not necessarily complete. For further
information regarding our company and the Class A Common Stock of Intersil
Holding Corporation, please reference the registration statement, including its
exhibits. If we have filed any contract, agreement or other document as an
exhibit to the registration statement, you should read the exhibit for a more
complete understanding of the documents or matter involved.

Copies of the registration statement, including all related exhibits and
schedules, may be inspected without charge at the public reference facilities
maintained by the SEC, or obtained at prescribed rates from the Public Reference
Section of the SEC at the address set forth above. In addition, you may request
a copy of any of these filings, at no cost, by writing or telephoning us at the
following address or phone number: Intersil Holding Corporation, 2401 Palm Bay
Road NE, Palm Bay, Florida 32905; the telephone number at that address is (321)
724-7000.

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INDEX TO FINANCIAL STATEMENTS
INTERSIL HOLDING CORPORATION

PAGE
----
Independent Certified Public Accountants' Report............ F-2

Consolidated Statement of Operations and Comprehensive
Income.................................................... F-3

Consolidated Balance Sheet.................................. F-4

Consolidated Statement of Cash Flows........................ F-5

Consolidated Statement of Shareholders' Equity.............. F-6

Notes to Consolidated Financial Statements.................. F-7

F-1
<PAGE>
INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS' REPORT

The Board of Directors
Intersil Holding Corporation

We have audited the accompanying consolidated balance sheet of Intersil Holding
Corporation (successor) as of August 14, 1999 (successor period) and the
consolidated balance sheets of the Harris Semiconductor Business ("Semiconductor
Business") (Predecessor), which is wholly owned by Harris Corporation, as of
July 2, 1999 and July 3, 1998 and the related consolidated statements of
operations, comprehensive income and cash flows for each of the three fiscal
years in the period ended July 2, 1999 and the six weeks ended August 13, 1999
(Predecessor period). Our audits also included the financial statement schedule
listed at Item 16. These financial statements and financial statement schedule
are the responsibility of the Company's management. Our responsibility is to
express an opinion on these financial statements and financial statement
schedule based on our audits.

We conducted our audits in accordance with auditing standards generally accepted
in the United States. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the statements. An audit also includes assessing
the accounting principles used and significant estimates made by management, as
well as evaluating the overall financial statement presentation. We believe that
our audits provide a reasonable basis for our opinion.

The accompanying Predecessor consolidated financial statements were prepared on
the basis of presentation as described in Note A. The results of operations are
not necessarily indicative of the results of operations that would be recorded
by Semiconductor Business on a stand-alone basis.

In our opinion, the successor consolidated balance sheet referred to above
presents fairly, in all material respects, the financial position of Intersil
Holding Corporation as of August 14, 1999. Further, in our opinion, the
Predecessor consolidated financial statements referred to above present fairly,
in all material respects, the consolidated financial position of Semiconductor
Business at July 2, 1999 and July 3, 1998 and the consolidated results of its
operations and its cash flows for each of the three years in the period ended
July 2, 1999 and for the six weeks ended August 13, 1999, on the basis described
in Note A, in conformity with accounting principles generally accepted in the
United States. Also, in our opinion, the related financial statement schedule,
when considered in relation to the basic financial statements taken as a whole,
present fairly in all material respects the information set forth therein.

Jacksonville, Florida Ernst & Young LLP
November 3, 1999, except as to
Note L as to which the date
is February 23, 2000

F-2
<PAGE>
INTERSIL HOLDING CORPORATION
CONSOLIDATED STATEMENT OF OPERATIONS

<TABLE>
<CAPTION>
PREDECESSOR PREDECESSOR | SUCCESSOR
------------------------------------------- -------------------------------- | -----------------
|
FISCAL YEAR ENDED 26 WEEKS ENDED 6 WEEKS ENDED | 20 WEEKS ENDED
------------------------------------------- --------------- --------------- | -----------------
JUNE 27, 1997 JULY 3, 1998 JULY 2, 1999 JANUARY 1, 1999 AUGUST 13, 1999 | DECEMBER 31, 1999
------------- ------------ ------------ --------------- --------------- | -----------------
|
(UNAUDITED) | (UNAUDITED)
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS) |
<S> <C> <C> <C> <C> <C> <C>
REVENUE |
Product sales.......... $545,321 $576,836 $532,718 $246,625 $ 57,336 | $234,745
COSTS AND EXPENSES |
Cost of product |
sales............... 346,073 369,332 349,776 165,619 39,681 | 142,494
Research and |
development......... 75,208 75,125 67,079 29,726 8,499 | 25,952
Selling, administrative |
and general......... 99,314 98,184 83,998 41,333 10,908 | 38,252
Harris corporate |
expense |
allocation.......... 9,960 9,962 9,303 4,314 1,164 | --
Intangible |
amortization........ 2,291 2,292 2,414 1,146 326 | 3,942
In-process R&D |
charge.............. -- -- -- -- -- | 20,239
-------- -------- -------- -------- -------- | --------
Operating income |
(loss)................. 12,475 21,941 20,148 4,487 (3,242) | 3,866
Interest, net.......... (595) (914) (1,231) (410) (111) | 24,314
-------- -------- -------- -------- -------- | --------
Income (loss) before |
income taxes........ 13,070 22,855 21,379 4,897 (3,131) | (20,448)
Income taxes |
(benefit)........... 1,845 9,944 (6,027) (1,380) (102) | 1,399
-------- -------- -------- -------- -------- | --------
NET INCOME (LOSS)...... 11,225 12,911 27,406 6,277 (3,029) | (21,847)
Preferred dividends...... -- -- -- -- -- | 3,851
-------- -------- -------- -------- -------- | --------
Net income (loss) to |
common shareholders.... $ 11,225 $ 12,911 $ 27,406 $ 6,277 $ (3,029) | $(25,698)
======== ======== ======== ======== ======== | ========
LOSS PER SHARE: |
Basic.................. | $ (0.39)
| ========
Diluted................ | $ (0.39)
| ========
WEIGHTED AVERAGE COMMON |
SHARES OUTSTANDING (IN |
MILLIONS): |
Basic.................. | 66.7
| ========
Diluted................ | 66.7
| ========
</TABLE>

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

See Notes to Consolidated Financial Statements.

F-3
<PAGE>
INTERSIL HOLDING CORPORATION
CONSOLIDATED BALANCE SHEET

<TABLE>
<CAPTION>
PREDECESSOR | SUCCESSOR
--------------------------- | -----------------------------------
JULY 3, 1998 JULY 2, 1999 | AUGUST 14, 1999 DECEMBER 31, 1999
------------ ------------ | --------------- -----------------
|
| (UNAUDITED)
(IN THOUSANDS)
<S> <C> <C> <C> <C>
ASSETS |
Current Assets |
Cash $ -- $ -- | $ 7,377 $ 40,122
Trade receivables, less allowances for collection loss |
($571 in 1998, $582 in 1999, $755 as of August 14, |
1999 and $823 as of December 31, 1999).............. 110,675 100,674 | 83,042 91,748
Inventories........................................... 180,232 153,822 | 153,044 154,016
Prepaid expenses...................................... 4,658 3,725 | 3,051 7,562
Income tax receivable................................. 643 1,527 | 573 --
Deferred income taxes................................. -- 3,476 | -- --
-------- ---- | -------- --------
Total Current Assets.............................. 296,208 263,224 | 247,087 293,448
Other Assets |
Property, plant and equipment, less allowance for |
depreciation ($567,031 in 1998, $582,616 in 1999, |
-0- as of August 14, 1999 and $22,402 as of December |
31, 1999)........................................... 450,084 410,530 | 348,514 318,147
Intangibles, less accumulated amortization ($17,760 in |
1998, $19,929 in 1999, -0- as of August 14, 1999 and |
3,942 as of December 31, 1999)...................... 44,219 45,368 | 90,715 84,652
Other................................................. 19,759 42,057 | 21,463 20,784
-------- ---- | -------- --------
Total Other Assets................................ 514,062 497,955 | 460,692 423,583
-------- ---- | -------- --------
Total Assets............................................ $810,270 $761,179 | $707,779 $717,031
======== ==== | ======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY/BUSINESS EQUITY |
Current Liabilities |
Trade account payables................................ $ 33,305 $ 31,068 | $ 29,365 $ 35,338
Retirement plan accruals.............................. 15,448 13,640 | 2,445 7,563
Accrued compensation.................................. 29,022 19,283 | 15,842 24,279
Accrued interest and sundry taxes..................... 4,257 3,193 | 3,877 14,530
Other accrued items................................... 13,403 16,418 | 27,222 24,986
Distributor reserves.................................. 6,189 6,542 | 6,512 6,356
Unearned service income............................... 248 567 | 567 129
Income taxes payable.................................. -- -- | -- 555
Deferred income taxes................................. 126 -- | -- --
Long-term debt--current portion....................... 167 360 | 2,410 2,415
-------- ---- | -------- --------
Total Current Liabilities......................... 102,165 91,071 | 88,240 116,151
Other Liabilities |
Deferred income taxes................................. 5,126 7,022 | 8,199 --
Long-term debt........................................ 3,902 4,207 | 541,525 531,836
Mandatorily Redeemable Preferred Stock--1,000,000 shares |
designated 12% Series A Cumulative Compounding |
preferred stock, $1,000 stated value; 2,000,000 shares |
authorized, 85,000 shares authorized, 83,434 shares |
issued and outstanding at August 14, 1999 and December |
31, 1999.............................................. -- -- | 84,009 87,860
Stockholders' Equity/Business Equity.................... |
Class A Common Stock, $.01 par value, voting; |
300,000,000 shares authorized, 15,764,794 shares |
issued and outstanding at August 14, 1999 and |
December 31, 1999................................... -- -- | 158 158
Class B Common Stock, $.01 par value, non-voting; |
300,000,000 shares authorized, 50,908,386 shares |
issued and outstanding at August 14, 1999 and |
December 31, 1999................................... -- -- | 509 509
Additional paid-in Capital............................ -- -- | 5,935 2,656
Business equity....................................... 701,012 661,388 | -- --
Retained deficit...................................... -- -- | (20,796) (21,847)
Unearned compensation................................. -- -- | -- (572)
Accumulated other comprehensive (loss) income......... (1,935) (2,509) | -- 280
-------- ---- | -------- --------
Total Stockholders' Equity/Business Equity........ 699,077 658,879 | (14,194) (18,816)
-------- ---- | -------- --------
Total Liabilities and Stockholders' |
Equity/Business Equity......................... $810,270 $761,179 | $707,779 $717,031
======== ==== | ======== ========
</TABLE>

See Notes to Consolidated Financial Statements.

F-4
<PAGE>
INTERSIL HOLDING CORPORATION
CONSOLIDATED STATEMENT OF CASH FLOWS

<TABLE>
<CAPTION>
PREDECESSOR PREDECESSOR | SUCCESSOR
------------------------------------------- -------------------------------- | -----------------
|
FISCAL YEAR ENDED 26 WEEKS ENDED 6 WEEKS ENDED | 20 WEEKS ENDED
------------------------------------------- -------------- --------------- | -----------------
JUNE 27, 1997 JULY 3, 1998 JULY 2, 1999 JANUARY 1, AUGUST 13, 1999 | DECEMBER 31, 1999
1999 |
------------- ------------ ------------ -------------- --------------- | -----------------
|
(UNAUDITED) | (UNAUDITED)
(IN THOUSANDS) |
<S> <C> <C> <C> <C> <C> <C>
OPERATING ACTIVITIES: |
Net Income (loss)........ $ 11,225 $12,911 $ 27,406 $ 6,277 $ (3,029) | $(21,847)
Adjustments to reconcile |
net income (loss) to net |
cash provided by |
operating activities |
Depreciation........... 50,218 65,036 78,217 38,068 8,747 | 22,402
Amortization........... 2,295 2,295 2,414 1,146 326 | 3,942
Write-off of in-process |
technology........... -- -- -- -- -- | 20,239
Non-current deferred |
income taxes......... (981) (461) 1,896 (815) (4,756) | --
Changes in assets and |
liabilities: |
Trade receivables...... 3,164 1,270 10,001 24,570 14,532 | (8,706)
Inventories............ (7,720) (9,859) 26,410 15,324 (1,649) | (973)
Prepaid expenses....... 1,746 506 933 724 674 | (4,511)
Trade payables and |
accrued |
liabilities.......... 24 (14,399) (13,950) (28,228) (18,705) | 33,245
Unearned service |
income............... 94 (32) 319 (163) -- | (438)
Income taxes........... (84) (3,866) (4,486) (101) 4,430 | 1,127
Other.................. (5,405) (5,070) (17,911) (15,520) 2,812 | 17,388
-------- ------- -------- -------- -------- | --------
Net cash provided by |
operating |
activities........ 54,576 48,331 111,249 41,282 3,382 | 61,868

INVESTING ACTIVITIES: |
Cash paid for acquired |
business................. -- -- (1,335) -- -- | --
Plant and equipment........ (173,304) (90,184) (38,563) (18,149) (1,887) | (12,634)
-------- ------- -------- -------- -------- | --------
Net cash used in |
investing |
activities........ (173,304) (90,184) (39,898) (18,149) (1,887) | (12,634)

FINANCING ACTIVITIES: |
Proceeds from |
borrowings............. 1,450 2,750 800 750 -- | --
Payments of borrowings... (48) (83) (302) (113) (32) | (15,144)
Net cash transfer and |
billings from (to) |
parent................. 116,105 41,844 (67,030) (23,078) (1,198) | --
-------- ------- -------- -------- -------- | --------
Net cash provided by |
(used in) |
financing |
activities........ 117,507 44,511 (66,532) (22,441) (1,230) | (15,144)
Effect of exchange rates on |
cash and cash |
equivalents.............. 1,221 (2,658) (4,819) (692) 1,177 | (1,345)
-------- ------- -------- -------- -------- | --------
Net increase in |
cash.............. -- -- -- -- 1,442 | 32,745
Cash at the beginning |
of the period..... -- -- -- -- -- | 7,377
-------- ------- -------- -------- -------- | --------
Cash at the end of |
the period........ $ -- $ -- $ -- $ -- $ 1,442 | $ 40,122
======== ======= ======== ======== ======== | ========
</TABLE>

See Notes to Consolidated Financial Statements.

F-5
<PAGE>
INTERSIL HOLDING CORPORATION

CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY

<TABLE>
<CAPTION>
ACCUMULATED
COMMON STOCK ADDITIONAL RETAINED OTHER
----------------- PAID-IN EARNINGS UNEARNED COMPREHENSIVE
CLASS A CLASS B CAPITAL (DEFICIT) COMPENSATION INCOME TOTAL
------- ------- ---------- --------- ------------ ------------- ---------
(IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C> <C>
Initial capitalization at
August 14, 1999.............. $158 $509 $5,935 $ -- $ -- $ -- $ 6,602
Net income (loss)
(unaudited).................. -- -- -- (21,847) -- -- (21,847)
Common stock sold to certain
executives................... -- -- 572 -- (572) -- --
Accretion of undeclared
dividends on preferred stock
(unaudited).................. -- -- (3,851) -- -- -- (3,851)
Foreign currency translation
(unaudited).................. -- -- -- -- -- 280 280
---- ---- ------ -------- ----- ---- ---------
Balances at December 31, 1999
(unaudited).................. $158 $509 $2,656 $(21,847) $(572) $280 $ (18,816)
==== ==== ====== ======== ===== ==== =========
</TABLE>

See Notes to Consolidated Financial Statements.

F-6
<PAGE>
INTERSIL HOLDING CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

YEARS ENDED JUNE 27, 1997, JULY 3, 1998, JULY 2, 1999,
6 WEEKS ENDED AUGUST 13, 1999,
UNAUDITED 26 WEEKS ENDED JANUARY 1, 1999 AND
THE UNAUDITED 20 WEEKS ENDED DECEMBER 31, 1999

NOTE A--ORGANIZATION AND BASIS OF PRESENTATION

ORGANIZATION

Intersil Holding Corporation (Intersil Holding) was formed on August 13,
1999 through a series of transactions, in which Intersil Holding and its
wholly-owned subsidiary, Intersil Corporation (Intersil), acquired the
Semiconductor Business (Semiconductor Business or Predecessor) of Harris
Corporation (Harris). Intersil Holding currently has no operations but holds
common stock related to its investment in Intersil and certain indebtedness
related to the Semiconductor Business acquisition (Harris acquisition). Intersil
and its wholly-owned domestic and foreign subsidiaries include the operations of
the Predecessor.

BASIS OF PRESENTATION

The Successor consolidated balance sheet as of August 14, 1999 reflects the
initial capitalization of Intersil Holding and the acquisition of the
Semiconductor Business. The consolidated balance sheets as of July 3, 1998 and
July 2, 1999 and the consolidated statements of operations, comprehensive income
and cash flows for the fiscal years ended June 27, 1997, July 3, 1998, July 2,
1999 and the 6 weeks ended August 13, 1999 include the accounts of Semiconductor
Business, the Predecessor company.

Accordingly, the consolidated financial statements include the power,
communications, space and defense product lines of Harris' Semiconductor
Business that were purchased in the transaction. The transaction did not include
Harris' semiconductor suppression business or photomask operations or certain
patents in the memory field that were retained by Harris. The Semiconductor
Business, which was wholly-owned by Harris, designs, manufactures and sells
discrete semiconductors and standard and custom integrated circuits to the
semiconductor markets. The Semiconductor Business' manufacturing facilities
perform manufacturing operations related to other Harris Semiconductor Product
Lines. The Semiconductor Business was not a separate legal entity and the assets
and liabilities associated with the Semiconductor Business were components of a
larger business.

The Predecessor's consolidated statements of operations include all
revenues and costs attributable to the Semiconductor Business. For cost of
sales, material costs are directly attributable to a product line and are
charged accordingly. Indirect costs are assigned using activity based costing.
Operating expenses (engineering, marketing, and administration & general) have
been allocated to the product lines based on sales or labor, as appropriate.
Harris Corporate expense allocations are based on a percentage of the
Semiconductor Business' net sales. Interest expense is provided on direct
borrowings of the Semiconductor Business. Interest expense of Harris has not
been allocated to the Semiconductor Business.

All of the allocations and estimates in the Predecessor's combined
statements of operations are based on assumptions that management believes are
reasonable under the circumstances. However, these allocations and estimates are
not necessarily indicative of the costs that would have resulted if the
Semiconductor Business had been operated on a stand alone basis.

The Semiconductor Business sells products to other affiliated operations of
Harris. Sales to these operations were not material.

The accompanying unaudited financial statements for the 26 weeks ended
January 1, 1999 and the 20 weeks ended December 31, 1999, reflect all
adjustments, all of which are of a normal recurring nature, necessary in the
opinion of management for a fair presentation of the results for these interim
periods and are not necessarily indicative of full-year results.

F-7
<PAGE>

INTERSIL HOLDING CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

YEARS ENDED JUNE 27, 1997, JULY 3, 1998, JULY 2, 1999,
6 WEEKS ENDED AUGUST 13, 1999,
UNAUDITED 26 WEEKS ENDED JANUARY 1, 1999 AND
THE UNAUDITED 20 WEEKS ENDED DECEMBER 31, 1999

NOTE A--ORGANIZATION AND BASIS OF PRESENTATION--(CONTINUED)

ACQUISITION OF HARRIS' SEMICONDUCTOR BUSINESS

The total purchase price of the Semiconductor Business acquisition was
$614.3 million, which included transaction costs of approximately $7.8 million
and deferred financing costs of $12.2 million (Note H). The consideration paid
by Intersil Holding was $504.3 million in cash of which $420.0 million was
financed through borrowings from the senior credit facilities, the 13 1/4%
Senior Subordinated Notes and 13.5% Subordinated Holding "Pay-In-Kind" (PIK)
Note and the issuance of a $90.0 million PIK Note note to Harris.

The acquisition was accounted for using the purchase method of accounting
and accordingly, the operating results of the Semiconductor Business have been
included in Intersil's consolidated financial statements since the date of
acquisition. The total purchase price was allocated to the assets and
liabilities of the Semiconductor Business based upon their approximate fair
value. The fair value of the net assets acquired exceeded the purchase price
resulting in negative goodwill. This negative goodwill was allocated to the
identified intangibles and property and equipment based on their relative fair
values as follows (in millions).

<TABLE>
<S> <C> <C> <C>
Purchase price:

Cash paid to Harris.................. $504.3
13.5% Subordinated PIK Note.......... 90.0
Transaction costs and fees........... 20.0
------
Total purchase price................... $614.3
======
</TABLE>

<TABLE>
<CAPTION>
ALLOCATION OF
FAIR VALUE OF EXCESS FAIR ADJUSTED
ACQUIRED ASSETS VALUE FAIR VALUE
--------------- ------------- -------------
<S> <C> <C> <C>
Net current assets..................... $160.6 -- $160.6
Other.................................. 17.2 -- 17.2
Property and equipment................. 481.0 $(153.2) 327.8
Developed Technology................... 80.0 (23.9) 56.1
Customer base.......................... 33.0 (10.0) 23.0
In-process research and development.... 29.0 (8.8) 20.2
Assembled workforce.................... 13.5 (4.1) 9.4
------ ------- ------
$814.3 $(200.0) $614.3
====== ======= ======
Excess fair value of net assets
acquired over purchase price......... $200.0
======
</TABLE>

The appraisal of the acquired business included $20.2 million of purchased
in-process research and development, which was related to various products under
development. This valuation represents the 10 years after-tax cash flow of this
in-process technology using a discount rate of 20%. The acquired technology had
not yet reached technological feasibility and had no future alternative uses.
Accordingly, it was written off at the time of the acquisition. The remaining
identified intangibles (developed technology, customer base and assembled
workforce) are being amortized over 5 to 11 years.

In connection with the acquisition of the Semiconductor Business, Intersil
formulated a restructuring plan and will involuntarily terminate the employment
of 372 employees of the Semiconductor Business. At

F-8
<PAGE>

INTERSIL HOLDING CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

YEARS ENDED JUNE 27, 1997, JULY 3, 1998, JULY 2, 1999,
6 WEEKS ENDED AUGUST 13, 1999,
UNAUDITED 26 WEEKS ENDED JANUARY 1, 1999 AND
THE UNAUDITED 20 WEEKS ENDED DECEMBER 31, 1999

NOTE A--ORGANIZATION AND BASIS OF PRESENTATION--(CONTINUED)

August 13, 1999, Intersil recorded $11.0 million in severance benefits and this
is included in the allocation of the acquisition cost. The severance includes
the following:

<TABLE>
<CAPTION>
LOCATION NO. OF EMPLOYEES AMOUNTS
-------- ---------------- -------------
(IN MILLIONS)
<S> <C> <C>
Europe............................................ 17 $ 5.6
Malaysia.......................................... 262 1.9
North America..................................... 93 3.5
--- -----
372 $11.0
=== =====
</TABLE>

For the twenty weeks ended December 31, 1999, approximately $5.0 million
of these restructuring costs had been paid out. As of December 31, 1999, the
restructuring liability was $6.0 million. Intersil Holding will complete the
restructing plan by the end of fiscal year 2000.

The following unaudited information presents pro forma financial
information, after giving effect to certain adjustments including amortization
of intangible assets acquired, as if the Acquisition of the Semiconductor
Business had occurred at July 3, 1998 for the 26 weeks ended January 1, 1999 and
July 2, 1999 for the 26 weeks ended December 31, 1999. These pro forma results
have been prepared for comparative purposes only and do not purport to represent
what Intersil Holding's results of operations would actually have been had the
transactions in fact occurred on the date specified, nor do they purport to
project the results of operations for any future period.

<TABLE>
<CAPTION>
PRO FORMA
----------------------------------------
26 WEEKS COMBINED
ENDED 26 WEEKS ENDED
JANUARY 1, 1999 DECEMBER 31, 1999
---------------- ------------------
(IN MILLIONS, EXCEPT PER SHARE AMOUNTS)
<S> <C> <C>
Product sales................................ $246.6 $292.0
Net loss..................................... $(10.3) $(28.5)
Net loss to common shareholders.............. $(15.3) $(33.5)
Loss per share:
Basic and diluted.......................... $(0.23) $(0.50)
</TABLE>

NOTE B--SIGNIFICANT ACCOUNTING POLICIES

FISCAL YEAR--The 1997 fiscal year includes the 52 weeks ended June 27,
1997; fiscal year 1998 includes the 53 weeks ended July 3, 1998; and fiscal year
1999 includes the 52 weeks ended July 2, 1999.

INVENTORIES--Inventories are carried at the lower of standard cost, which
approximates actual cost, determined by the First-In-First-Out (FIFO) method, or
market.

PLANT AND EQUIPMENT--Machinery and equipment are carried on the basis of
cost. The estimated useful lives of buildings range between 5 and 50 years. The
estimated useful lives of machinery and equipment range between 3 and 10 years.
Depreciation is computed by the straight-line method using the estimated useful
life of the asset.

REVENUE RECOGNITION--Revenue is recognized from sales to all customers,
including distributors, when a product is shipped. Sales to distributors are
made under distributor agreements which provide the distributors rights of
return and price protection on unsold merchandise held by the distributors.
Accordingly, sales are reduced for estimated returns from distributors and
estimated future price reductions of unsold merchandise

F-9
<PAGE>
INTERSIL HOLDING CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

YEARS ENDED JUNE 27, 1997, JULY 3, 1998, JULY 2, 1999,
6 WEEKS ENDED AUGUST 13, 1999,
UNAUDITED 26 WEEKS ENDED JANUARY 1, 1999 AND
THE UNAUDITED 20 WEEKS ENDED DECEMBER 31, 1999

NOTE B--SIGNIFICANT ACCOUNTING POLICIES--(CONTINUED)

held by distributors. Product sales to two distributors for the fiscal years
ended June 27, 1997, July 3, 1998, July 2, 1999, twenty-six weeks ended January
1, 1999, six weeks ended August 13, 1999 and twenty weeks ended December 31,
1999 amounted to 20.5%, 19.0%, 16.6%, 18.2%, 29.3% and 13.3%, respectively, of
total product sales.

RESEARCH AND DEVELOPMENT--Research and development costs, consisting of the
cost of designing, developing, and testing new or significantly enhanced
products, are expensed as incurred.

RETIREMENT BENEFITS--Intersil Holding provides retirement benefits to
substantially all employees primarily through a retirement plan having
profit-sharing and savings elements. Contributions by Intersil Holding to the
retirement plan are based on profits and employees' savings with no other
funding requirements. Intersil Holding may make additional contributions to the
fund at its discretion.

Retirement benefits also include an unfunded limited health-care plan for
U.S.-based retirees and employees on long-term disability. Intersil Holding
accrues the estimated cost of these medical benefits, which are not material,
during an employee's active service life.

Retirement plans expense was $17.4 million in 1997, $15.6 million in 1998,
$14.8 million in 1999, $6.2 million for the twenty-six weeks ended January 1,
1999, $1.4 million for the six weeks ended August 13, 1999 and $5.4 million for
the twenty weeks ended December 31, 1999.

INCOME TAXES--Intersil Holding follows the liability method of accounting
for income taxes and for the Predecessor financial statements was included with
its parent, Harris, in a consolidated federal income tax return. Harris required
each of its businesses to provide taxes on financial statement pre-tax income or
loss at applicable statutory tax rates. United States local amounts receivable
or payable for current and prior years' income taxes were treated as
intercompany transactions and were recorded in the Semiconductor Business
equity. International current income taxes payable and deferred income taxes
resulting from temporary differences between the financial statements and the
tax basis of assets and liabilities of the Intersil Holding's international
subsidiaries are separately classified on the balance sheets.

ASSET IMPAIRMENT--Intersil Holding accounts for long-lived asset impairment
under Statement of Financial Accounting Standards No. 121, "Accounting for the
Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of."
The Company recognizes impairment losses on long-lived assets used in operations
when indicators of impairment are present and the undiscounted cash flows
estimated to be generated by those assets are less than the assets' carrying
amounts. The impairment loss is measured by comparing the fair value of the
asset to its carrying amount. Fair value is estimated based on discounted future
cash flows. Long-lived assets to be disposed of are recorded at the lower of
their carrying amount or estimated fair value less cost to sell.

INTANGIBLES--Intangibles resulting from acquisitions are being amortized by
the straight-line method over 5 to 40 years. Recoverability of intangibles is
assessed using estimated undiscounted cash flows of related operations.
Intangibles that are not expected to be recovered through future undiscounted
cash flows are charged to expense when identified. Amounts charged to expense
are amounts in excess of the fair value of the intangible asset. Fair value is
determined by calculating the present value of estimated expected future cash
flows using a discount rate commensurate with the risks involved.

START-UP--In April 1998, the American Institute of Certified Public
Accountants issued Statement of Position 98-5 "Reporting on the Costs of
Start-Up Activities." The Company is required to adopt the provisions of this
Statement no later than its fiscal year 2000. This Statement provides guidance
on the financial reporting of start-up and organization costs and requires such
costs, as defined, to be expensed as

F-10
<PAGE>
INTERSIL HOLDING CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

YEARS ENDED JUNE 27, 1997, JULY 3, 1998, JULY 2, 1999,
6 WEEKS ENDED AUGUST 13, 1999,
UNAUDITED 26 WEEKS ENDED JANUARY 1, 1999 AND
THE UNAUDITED 20 WEEKS ENDED DECEMBER 31, 1999

NOTE B--SIGNIFICANT ACCOUNTING POLICIES--(CONTINUED)

incurred, as start-up costs are currently expensed as incurred, adoption of this
Statement is not expected to have a material impact on the Company's results of
operations or financial condition.

FUTURES AND FORWARD CONTRACTS--When Intersil Holding sells products outside
the United States or enters into purchase commitments, the transactions are
frequently denominated in currencies other than U.S. dollars. To minimize the
impact on revenue and cost from currency fluctuations, Intersil Holding enters
into currency exchange agreements that qualify for hedge accounting treatment.
It is Intersil Holding's policy not to speculate in foreign currencies. Currency
exchange agreements are designated as, and are effective as, hedges of foreign
currency commitments. In addition, these agreements are consistent with the
designated currency of the underlying transaction and mature on or before the
underlying transaction. Gains and losses on currency exchange agreements that
qualify as hedges are deferred and recognized as an adjustment of the carrying
amount of the hedged asset, liability or commitment. Gains and losses on
currency exchange agreements that do not qualify as hedges are recognized in
income based on changes in the fair market value of the currency exchange
agreement.

FOREIGN CURRENCY TRANSLATION--The functional currency for the Malaysian
subsidiary is the U.S. dollar, and for other international subsidiaries it is
the local currency. Assets and liabilities are translated at current rates of
exchange, and income and expense items are translated at the weighted average
exchange rate for the year. The resulting translation adjustments are recorded
as a separate component of Shareholder's equity (Business Equity in the
Predecessor's financial statements). Cumulative translation gains (losses) were
$(1.9) million, $(0.6) million, $2.5 and $0.3 million at July 3, 1998, July 2,
1999, August 13, 1999 and December 31, 1999, respectively.

LOSS PER SHARE--Loss per share is computed and presented in accordance with
SFAS No. 128, "Earnings per Share" and the Securities and Exchange Commission
Staff Accounting Bulletin No. 98. Net loss per common share is presented for the
twenty weeks ended December 31, 1999 only because it is not meaningful for
earlier periods since the Company did not have common stock outstanding for any
of the earlier periods.

USE OF ESTIMATES--These statements have been prepared in conformity with
generally accepted accounting principles and require management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those estimates.

NOTE C--ACCOUNTING PRONOUNCEMENTS

In June 1998, the Financial Accounting Standards Board issued FAS No. 133,
"Accounting for Derivative Instruments and Hedging Activities". The statement
establishes standards for recording derivative financial instruments and the
recognition of gains or losses resulting from changes in the fair values of
those instruments. Intersil Holding plans to adopt the new standard no later
than the first quarter of fiscal 2001. However, Intersil Holding has not
determined the anticipated impact of FAS No. 133.

F-11
<PAGE>
INTERSIL HOLDING CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

YEARS ENDED JUNE 27, 1997, JULY 3, 1998, JULY 2, 1999,
6 WEEKS ENDED AUGUST 13, 1999,
UNAUDITED 26 WEEKS ENDED JANUARY 1, 1999 AND
THE UNAUDITED 20 WEEKS ENDED DECEMBER 31, 1999

NOTE D--INVENTORIES

Inventories are summarized below (in thousands):

<TABLE>
<CAPTION>
(PREDECESSOR) (SUCCESSOR)
------------------- -------------------------
JULY 3, JULY 2, AUGUST 14, DECEMBER 31,
1998 1999 1999 1999
-------- -------- ---------- ------------
(UNAUDITED)
<S> <C> <C> <C> <C>
Finished products......................... $ 64,644 $ 58,041 $ 59,708 $ 61,221
Work in process........................... 125,647 102,457 104,262 106,208
Raw materials and supplies................ 14,423 11,441 9,137 8,769
-------- -------- -------- --------
204,714 171,939 173,107 176,198
Less inventory reserve.................... (24,482) (18,117) (20,063) (22,182)
-------- -------- -------- --------
$180,232 $153,822 $153,044 $154,016
======== ======== ======== ========
</TABLE>

At July 2, 1999, August 14, 1999 and December 31, 1999 Intersil Holding was
committed to purchase $22.5 million, $22.8 million and $19.7 million,
respectively of inventory from suppliers. Management believes the cost of this
inventory approximates current market value.

NOTE E--PLANT AND EQUIPMENT

Plant and equipment are summarized below (in thousands):

<TABLE>
<CAPTION>
(PREDECESSOR) (SUCCESSOR)
--------------------- -------------------------
JULY 3, JULY 2, AUGUST 14, DECEMBER 31,
1998 1999 1999 1999
---------- -------- ---------- ------------
(UNAUDITED)
<S> <C> <C> <C> <C>
Land..................................... $ 3,966 $ 3,966 $ 6,539 $ 4,138
Buildings................................ 262,490 266,364 100,511 81,103
Machinery and equipment.................. 750,659 722,816 241,464 255,308
---------- -------- -------- --------
1,017,115 993,146 348,514 340,549
Less allowances for depreciation......... 567,031 582,616 -- 22,402
---------- -------- -------- --------
$ 450,084 $410,530 $348,514 $318,147
========== ======== ======== ========
</TABLE>

NOTE F--INTANGIBLES

Intangibles are summarized below (in thousands):

<TABLE>
<CAPTION>
(PREDECESSOR) (SUCCESSOR)
----------------- -------------------------
PERIOD OF JULY 3, JULY 2, AUGUST 14, DECEMBER 31,
AMORTIZATION 1998 1999 1999 1999
------------- ------- ------- ---------- ------------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
Developed technology..................... 11 years $ -- $ -- $ 57,369 $56,141
Customer base............................ 7 years -- -- 23,665 23,031
Assembled workforce...................... 5 years -- -- 9,681 9,422
Goodwill................................. 40 years 61,979 65,297 -- --
------- ------- -------- -------
61,979 65,297 90,715 88,594
Less accumulated amortization............ 17,760 19,929 -- 3,942
------- ------- -------- -------
$44,219 $45,368 $ 90,715 $84,652
======= ======= ======== =======
</TABLE>

F-12
<PAGE>
INTERSIL HOLDING CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

YEARS ENDED JUNE 27, 1997, JULY 3, 1998, JULY 2, 1999,
6 WEEKS ENDED AUGUST 13, 1999,
UNAUDITED 26 WEEKS ENDED JANUARY 1, 1999 AND
THE UNAUDITED 20 WEEKS ENDED DECEMBER 31, 1999

NOTE G--LOSS PER SHARE

The following table sets forth the computation of basic and diluted loss
per share (in thousands, except per share amounts):

(SUCCESSOR)
-----------------
DECEMBER 31, 1999
-----------------
(UNAUDITED)
Numerator:
Net loss available to common shareholders (numerator for
basic and diluted earnings per share).................. $(25,698)
========
Denominator:
Denominator for basic earnings per share-weighted average
common shares.......................................... 66,673
Effect of dilutive securities:
Stock options.......................................... --
Warrants............................................... --
--------
Denominator for diluted earnings per share-adjusted
weighted average shares................................ 66,673
========
Basic loss per share........................................ $ (0.39)
========
Diluted loss per share...................................... $ (0.39)
========

The effect of dilutive securities is not included in the computation for
the twenty weeks ended December 31, 1999 because to do so would be antidilutive.

NOTE H--LONG-TERM DEBT

LONG-TERM DEBT

Long-term debt consists of the following (in thousands):

<TABLE>
<CAPTION>
(PREDECESSOR) (SUCCESSOR)
----------------------------- -----------------------------------
JULY 3, 1998 JULY 2, 1999 AUGUST 14, 1999 DECEMBER 31, 1999
------------- ------------- --------------- -----------------
(UNAUDITED)
<S> <C> <C> <C> <C>
13.25% Senior Subordinated $ -- $ -- $199,700 $199,712
Notes........................
Tranche B Senior Term
Facility..................... -- -- 205,000 205,000
11.13% Seller Holding PIK
Note......................... -- -- 90,000 93,869
13.5% Subordinated Holding PIK
Note......................... -- -- 29,700 31,286
Revolving Credit Facility...... -- -- 15,000 --
Other.......................... 4,069 4,567 4,535 4,384
------ ------ -------- --------
4,069 4,567 543,935 534,251
Less: current portion.......... 167 360 2,410 2,415
------ ------ -------- --------
$3,902 $4,207 $541,525 $531,836
====== ====== ======== ========
</TABLE>

F-13
<PAGE>
INTERSIL HOLDING CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

YEARS ENDED JUNE 27, 1997, JULY 3, 1998, JULY 2, 1999,
6 WEEKS ENDED AUGUST 13, 1999,
UNAUDITED 26 WEEKS ENDED JANUARY 1, 1999 AND
THE UNAUDITED 20 WEEKS ENDED DECEMBER 31, 1999

NOTE H--LONG-TERM DEBT--(CONTINUED)

Schedule future principal payments under Intersil Holding's and Intersil's
indebtedness are as follows:

2000...................................................... $ 2,415
2001...................................................... 2,454
2002...................................................... 2,466
2003...................................................... 2,479
2004...................................................... 2,438
Thereafter................................................ 521,999
--------
$534,251
========

13.25% Senior Subordinated Notes and Warrants

On August 13, 1999, in connection with the acquisition of the Semiconductor
Business, Intersil completed an offering of 200,000 units consisting of $200
million of its 13.25% Senior Subordinated Notes due 2009 and warrants to
purchase 3,703,707 shares of Class A Common Stock of Intersil Holding. Each unit
consisted of $1,000 principal amount of 13.25% Senior Subordinated Notes of
Intersil and one warrant to purchase 18.5185 shares of Class A Common Stock of
Intersil Holding. The total gross proceeds from the sale of the 13.25% Senior
Subordinated Notes were $194.0 million, net of $6.0 million of deferred
financing fees. The $6.0 million deferred financing fees will be treated as
additional interest related to the 13.25% Senior Subordinated Notes and
amortized over the life of the 13.25% Senior Subordinated Notes on an effective
yield method.

The 13.25% Senior Subordinated Notes are unsecured and are fully and
unconditionally guaranteed by Intersil Holding and all of Intersil's current and
future domestic subsidiaries. The 13.25% Senior Subordinated Notes are not
guaranteed by Intersil's foreign subsidiaries. The 13.25% Senior Subordinated
Notes require semi-annual interest payments beginning on February 15, 2000
through maturity on August 15, 2009. The 13.25% Senior Subordinated Notes may be
redeemed at the option of Intersil Holding after August 15, 2004 upon the
payment of certain redemption premiums, although up to 35% of the 13.25% Senior
Subordinated Notes can be redeemed prior to August 15, 2002 with the proceeds of
certain equity offerings and upon the payment of certain redemption premiums.
The 13.25% Senior Subordinated Notes contain various restrictive covenants,
including limitations on the incurrence of additional indebtedness, restrictions
and limitations on payment of dividends, making investments, engaging in
transactions with affiliates, consolidating, merging or transfering assets and
restrictions and limitations on the sales of certain assets, among others. The
13.25% Senior Subordinated Notes also require the maintenance of certain ratios.

Each warrant entitles the holder to purchase 18.5185 shares of Intersil
Holding Class A Common Stock at a price of $.001 per share. The warrants are
exercisable beginning on the first anniversary of their issue date (August 13,
1999) and expire on August 15, 2009. Warrant holders have no holding rights. The
warrants were preliminarily valued at $0.3 million and will be treated as
additional interest related to the 13.25% Senior Subordinated Notes and
amortized over the life of the 13.25% Senior Subordinated Notes on an effective
yield method.

Senior Credit Facilities

In connection with the Acquisition of the Semiconductor Business, Intersil
entered into senior credit facilities with a syndicate of financial
institutions. The senior credit facilities include a $205.0 million funded term
loan facility (the "Tranche B Senior Term Facility") and a revolving line of
credit (the "Revolving Credit Facility"). The Revolving Credit Facility has
maximum borrowings of up to $70.0 million, of which

F-14
<PAGE>
INTERSIL HOLDING CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

YEARS ENDED JUNE 27, 1997, JULY 3, 1998, JULY 2, 1999,
6 WEEKS ENDED AUGUST 13, 1999,
UNAUDITED 26 WEEKS ENDED JANUARY 1, 1999 AND
THE UNAUDITED 20 WEEKS ENDED DECEMBER 31, 1999

NOTE H--LONG-TERM DEBT--(CONTINUED)

$15.0 million was funded on August 13, 1999 in connection with the acquisition
of the Semiconductor Business. The total gross proceeds from the issuance of the
Tranche B Senior Term Facility and the Revolving Credit Facility were $212.9
million, net of $6.2 million of deferred financing fees and $0.9 million debt
issuance costs. The $6.2 million deferred financing fees will be treated as
additional interest related to the senior credit facilities and amortized over
the life of the senior credit facilities on an effective yield method. The $0.9
million debt issuance costs will be amortized over the life of the senior credit
facilities.

The Tranche B Senior Term Facility bears interest at LIBOR + 4%. The
Tranche B Senior Term Facility matures in 2005 and requires 1% of the original
principal amount to be repaid in each of the first five years in quarterly
installments. Beginning September 2004, 24% of the original principal amount
will be repaid each quarter, for four quarters. The senior credit facilities are
subject to an annual commitment fee of .50% of the undrawn portion of the
Revolving Credit Facility.

The Revolving Credit Facility bears interest ranging from LIBOR + 2.00% to
LIBOR + 3.25%, depending on the results of applicable ratios. The Revolving
Credit Facility matures in 2005.

The senior credit facilities are unconditionally guaranteed, jointly and
severally, by Intersil Holding, Intersil and existing and subsequently acquired
or organized domestic subsidiaries. The senior credit facilities contain various
restrictive covenants, including, incurrence of indebtedness, payment of
dividends, making certain investments and acquisitions, disposing of assets,
among others. The senior credit facilities also require the maintenance of
certain ratios.

Pay-In-Kind (PIK) Notes

On August 13, 1999, in connection with the Acquisition of the Semiconductor
Business, Intersil Holding issued to Harris a $90.0 million 11.13% Seller
Holding PIK Note which matures in 2010. The 11.13% Seller Holding PIK Note bears
interest at an annual rate equal to 11.13%. Intersil Holding may pay interest on
the 11.13% Seller Holding PIK Note by issuing additional 11.13% PIK notes.
Intersil Holding may redeem the 11.13% Seller Holding PIK Note at any time. In
addition, Intersil Holding will be required to redeem the 11.13% Seller Holding
PIK Note upon a change in control. The 11.13% Seller Holding PIK Note contains
various restrictive covenants and is subordinated to Intersil Holding's
guarantee of Intersil's 13.25% Senior Subordinated Notes and senior credit
facilities. Intersil and its subsidiaries are not a guarantor of the 11.13%
Seller Holding PIK Note.

Also, on August 13, 1999, Intersil Holding issued to Citicorp Mezzanine
Partners, L.P. a $30.0 million 13.5% Subordinated Holding PIK Note. The 13.5%
Subordinated Holding PIK Note matures on July 15, 2010 and bears interest at an
annual rate equal to 13.5%. To the extent Intersil Holding's senior debt
prohibits Intersil Holding from paying cash interest on the 13.5% Subordinated
Holding PIK Note, this interest shall be paid by adding the accrued interest to
the principal amount of the 13.5% Subordinated Holding PIK Note. Intersil
Holding may redeem the 13.5% Subordinated Holding PIK Note at any time in whole
or in part at 100% of the principal amount plus accrued and unpaid interest and
certain prepayment premiums. The 13.5% Subordinated Holding PIK Note contains
various restrictive covenants. The 13.5% Subordinated Holding PIK Note is
subordinated to Intersil Holding's guarantee of Intersil's Notes and senior
credit facilities. Intersil and its subsidiaries are not a guarantor of the
13.5% Subordinated Holding PIK Note.

F-15
<PAGE>
INTERSIL HOLDING CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

YEARS ENDED JUNE 27, 1997, JULY 3, 1998, JULY 2, 1999,
6 WEEKS ENDED AUGUST 13, 1999,
UNAUDITED 26 WEEKS ENDED JANUARY 1, 1999 AND
THE UNAUDITED 20 WEEKS ENDED DECEMBER 31, 1999

NOTE H--LONG-TERM DEBT--(CONTINUED)

The other debt consists of 5 loans made by agencies of the Commonwealth of
Pennsylvania with maturity dates ranging from 2003 to 2017 and are secured by
Intersil's manufacturing facility in Mountaintop, Pennsylvania, which has a net
carrying value of $4.5 million at August 13, 1999 and $4.4 million at December
31, 1999. The weighted average interest rate for this debt was 3.0% at July 3,
1998, July 2, 1999, August 13, 1999 and December 31, 1999.

NOTE I--PREFERRED STOCK

Intersil Holding has 2.0 million shares of preferred stock authorized,
stated value of $1,000 per share, 1.0 million of which may be designated as 12%
Series A Cumulative Compounding Preferred Stock. On August 13, 1999, Intersil
Holding sold 83,434 shares of its 12% Series A Cumulative Compounding Preferred
Stock to certain buyers including, Sterling Intersil Holding Company LLC, Harris
and certain members of management. The $83.4 million proceeds were used as a
cash equity contribution from Intersil Holding to Intersil for the Acquisition
of the Semiconductor Business.

The Series A Preferred Stock is (i) non-voting, (ii) entitled to cumulative
dividends whether or not declared or earned, at a rate of 12%, compounding
annually, (iii) to have approval rights of new issuances of any other class or
series of stock entitled to a preference ahead of Intersil Holding preferred
stock, (iv) able to amend Intersil Holding's certificate of incorporation if the
amendment adversely affects the rights and preferences of the preferred stock
holders, (v) entitled to $1,000 per share, plus accrued and unpaid dividends in
the event of liquidation before any distribution to holders of Intersil Holding
common stock, (vi) optionally redeemable by Intersil Holding in whole or in part
at a price per share of $1,000 plus accrued and unpaid dividends, and (vii)
mandatorily redeemable on June 30, 2011, at a price per share equal to $1,000
plus accrued and unpaid dividends.

The total mandatory redemption value of the shares outstanding at August
13, 1999 and December 31, 1999, in the amounts of $83.4 million and $87.3
million ($3.9 million accretion of undeclared dividends), respectively, is
classified in Intersil Holding's balance sheet as Mandatorily Redeemable
Preferred Stock.

On August 13, 1999, Intersil Holding granted to certain members of
management options to purchase 766.67 shares of Series A Preferred Stock at an
option price of $250 per share. Intersil Holding granted a sign-on bonus in the
aggregate amount of $575,025, representing the difference between the stated par
value and the option price. The preferred stock options vest immediately.
Intersil Holding recorded compensation expense for the $575,025 as of the grant
date.

NOTE J--LEASE COMMITMENTS

Total rental expense amounted to $6.7 million in 1997, $6.3 million in
1998, $6.3 million in 1999, $3.2 million for the twenty-six weeks ended January
1, 1999, $0.6 million for the 6 weeks ended August 13, 1999 and $2.1 million for
the twenty weeks ended December 31, 1999. Future minimum rental commitments
under leases, primarily used for land at Intersil's Malaysian facility and
office buildings at Intersil's International locations, amounted to
approximately $17.7 million at July 2, 1999. Intersil's Malaysian manufacturing
facility leases land under leases expiring from 2072 to 2081. The commitments
for the years following 1999 are: 2000--$4.0 million, 2001--$3.2 million,
2002--$1.4 million, 2003--$1.1 million, 2004--$0.9 million, and $7.1 million
thereafter.

F-16
<PAGE>
INTERSIL HOLDING CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

YEARS ENDED JUNE 27, 1997, JULY 3, 1998, JULY 2, 1999,
6 WEEKS ENDED AUGUST 13, 1999,
UNAUDITED 26 WEEKS ENDED JANUARY 1, 1999 AND
THE UNAUDITED 20 WEEKS ENDED DECEMBER 31, 1999

NOTE K--BUSINESS EQUITY

Changes in the business equity of the Predecessor's financial statements
are summarized as follows (in thousands):

<TABLE>
<CAPTION>
(PREDECESSOR) (PREDECESSOR)
------------------------------------------- ---------------------------------
26 WEEKS
FISCAL YEAR ENDED ENDED 6 WEEKS ENDED
------------------------------------------- --------------- ---------------
JUNE 27, 1997 JULY 3, 1998 JULY 2, 1999 JANUARY 1, 1999 AUGUST 13, 1999
------------- ------------ ------------ --------------- ---------------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
Balance at beginning of year........ $520,858 $646,173 $699,077 $699,077 $658,879
Net income (loss)................... 11,225 12,911 27,406 6,277 (3,029)
Foreign currency translation
adjustments....................... (2,015) (1,851) (574) 1,714 2,475
Net cash transfers and billings from
(to) Harris Corporation........... 116,105 41,844 (67,030) 23,078 (1,198)
Purchase price elimination.......... -- -- -- -- (657,127)
-------- -------- -------- -------- --------
Balance at end of period............ $646,173 $699,077 $658,879 $730,146 $ --
======== ======== ======== ======== ========
</TABLE>

NOTE L--COMMON STOCK

On January 21, 2000, Intersil Holding filed a registration statement (which
became effective on February 23, 2000) with the Securities and Exchange
Commission for a public offering of 22 million shares of its common stock. In
connection with the public offering, Intersil Holding effected a 1 for 1.5
reverse stock split of its Class A and Class B common shares as of February 23,
2000. All references to common shares in the accompanying financial statements
reflect Intersil Holding's reverse stock split, retroactively applied to all
periods presented.

Intersil Holding is authorized to issue 600.0 million shares of Intersil
Holding common stock, par value $0.01 per share, divided into two classes
consisting of 300.0 million shares of Intersil Holding Class A Common Stock and
300.0 million shares of Intersil Holding Class B Common Stock. Holders of Class
A Common Stock are entitled to one vote for each share held and holders of Class
B Common Stock have no voting rights. A holder of either class of Intersil
Holding common stock may convert any or all shares into an equal number of
shares of the other class of Intersil Holding common stock.

On August 13, 1999, Intersil Holding sold 15.76 million shares of Class A
Common Stock and 50.91 million shares of Class B Common Stock for approximately
$5.0 million. The $5.0 million proceeds, along with the $83.4 million proceeds
from the sale of Series A Preferred Stock was used as a cash equity contribution
from Intersil Holding to Intersil for the acquisition of the Semiconductor
Business.

On August 13, 1999, in connection with Intersil Holding's issuance of the
13.5% Subordinated Holding PIK Note, Intersil Holding issued to Citicorp
Mezzanine Partners, L.P. warrants to purchase 3,703,707 shares of Intersil
Holding Class A Common at an exercise price of $.001 per share, subject to
certain anti-dilution adjustments. If Intersil Holding's prepays in full the
13.5% Subordinated Holding PIK Note within 24 months after issuance, the
warrants will be exercisable for 2,222,224 shares of Intersil Holding Class A
Common Stock. The warrants were valued at $0.3 million and will be treated as
additional interest related to the 13.5% Subordinated Holding PIK Note and
amortized over the life of the 13.5% Subordinated Holding PIK Note on an
effective yield method.

During the unaudited 20 weeks ended December 31, 1999, Intersil Holding
recorded $0.6 million of unearned compensation for the excess of the fair value
of the Class A Common Stock over the grant price for stock sold to certain
executives by the majority shareholder of Intersil Holding. The compensation

F-17
<PAGE>
INTERSIL HOLDING CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

YEARS ENDED JUNE 27, 1997, JULY 3, 1998, JULY 2, 1999,
6 WEEKS ENDED AUGUST 13, 1999,
UNAUDITED 26 WEEKS ENDED JANUARY 1, 1999 AND
THE UNAUDITED 20 WEEKS ENDED DECEMBER 31, 1999

NOTE L--COMMON STOCK--(CONTINUED)

expense is being recognized over the stock vesting period of five years. Upon an
initial public offering, the shares sold become fully vested.

Intersil Holding had an option to purchase 1,161,905 shares from a majority
shareholder at $0.075 per share pursuant to an agreement executed at the initial
capitalization. Intersil Holding repurchased the 1,161,905 shares in January
2000.

NOTE M--INCOME TAXES

The provisions for income taxes are summarized below (Pro Forma for
predecessor financial statements) (in thousands):

<TABLE>
<CAPTION>
(PREDECESSOR) (PREDECESSOR) (SUCCESSOR)
------------------------------------------- --------------------------------- -----------------
FISCAL YEAR ENDED 26 WEEKS ENDED 6 WEEKS ENDED 20 WEEKS ENDED
------------------------------------------- --------------- --------------- -----------------
JUNE 27, 1997 JULY 3, 1998 JULY 2, 1999 JANUARY 1, 1999 AUGUST 13, 1999 DECEMBER 31, 1999
------------- ------------ ------------ --------------- --------------- -----------------
(UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C> <C> <C>
United States $(2,595) $4,221 $(6,626) $(1,518) $(399) $ --
(benefit)..........
International........ 4,768 4,910 1,605 368 352 1,399
State and local
(benefit).......... (328) 813 (1,006) (230) (55) --
------- ------ ------- ------- ----- ------
$ 1,845 $9,944 $(6,027) $(1,380) $(102) $1,399
======= ====== ======= ======= ===== ======
</TABLE>

In the year 2000, the Malaysian taxing authority will convert its income
tax system to a self-assessment system. The new self-assessment system will
require Malaysian corporate taxpayers to begin making estimated tax payments in
year 2000 based on year 2000 estimated taxable income. Currently, Malaysian
corporate taxpayers submit tax payments following the year of assessment. In
fiscal year 1999, the Semiconductor Business made Malaysian taxing payments
based on fiscal year 1998's taxable income. As a result of the change in the
Malaysian taxing system, the Semiconductor Business will not be required to make
tax payments on its fiscal year 1999 Malaysian taxable income, and therefore has
not provided a tax provision for Malaysian taxes for the fiscal year ended July
2, 1999, which would have amounted to approximately $15.1 million. The Malaysian
tax holiday is effective for Intersil's fiscal year ended July 2, 1999 only, and
does not impact the 6 weeks ended August 13, 1999 and the 20 weeks ended
December 31, 1999.

The components of deferred income tax assets (liabilities) are as follows
(in thousands):

<TABLE>
<CAPTION>
(PREDECESSOR) (SUCCESSOR)
--------------------------------------------- ---------------------------------------------
JULY 3, 1998 JULY 2, 1999 AUGUST 14, 1999 DECEMBER 31, 1999
--------------------- --------------------- --------------------- ---------------------
CURRENT NON-CURRENT CURRENT NON-CURRENT CURRENT NON-CURRENT CURRENT NON-CURRENT
------- ----------- ------- ----------- ------- ----------- ------- -----------
(UNAUDITED)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Receivables.......... $(663) $ -- $ -- $ -- $ -- $ -- $ -- $ --
Fixed Assets......... -- -- -- -- -- -- -- 4,599
NOL Carryforward..... -- -- -- -- -- -- -- 1,320
Credit Carryforward.. -- -- -- -- -- -- -- 4,700
Depreciation......... -- (5,126) -- (7,022) -- (12,953) -- (3,195)
All other--net....... 537 -- 3,476 -- -- 4,754 -- --
Valuation Allowance.. -- -- -- -- -- -- -- (7,424)
----- ------- ------ ------- ------ -------- ------ --------
$(126) $(5,126) $3,476 $(7,022) $ -- $ (8,199) $ -- $ --
===== ======= ====== ======= ====== ======== ====== ========
</TABLE>

F-18
<PAGE>
INTERSIL HOLDING CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

YEARS ENDED JUNE 27, 1997, JULY 3, 1998, JULY 2, 1999,
6 WEEKS ENDED AUGUST 13, 1999,
UNAUDITED 26 WEEKS ENDED JANUARY 1, 1999 AND
THE UNAUDITED 20 WEEKS ENDED DECEMBER 31, 1999

NOTE M--INCOME TAXES--(CONTINUED)

A reconciliation of the statutory United States income tax rate to the
effective income tax rate follows:

<TABLE>
<CAPTION>
(PREDECESSOR) (PREDECESSOR) (SUCCESSOR)
------------------------------------------- --------------------------------- -----------------
FISCAL YEAR ENDED 26 WEEKS ENDED 6 WEEKS ENDED 20 WEEKS ENDED
------------------------------------------- --------------- --------------- -----------------
JUNE 27, 1997 JULY 3, 1998 JULY 2, 1999 JANUARY 1, 1999 AUGUST 13, 1999 DECEMBER 31, 1999
------------- ------------ ------------ --------------- --------------- -----------------
(UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C> <C> <C>
Statutory U.S. income 35.0% 35.0% 35.0% 35.0% 35.0% 35.0%
tax rate...........
State taxes.......... (1.6) 2.3 (3.1) (3.1) 1.1 0.6
International
income............. (21.4) 5.2 (61.9) (61.9) (29.7) (0.7)
Research credits..... (4.8) (2.9) (2.7) (2.7) 2.2 1.3
In-Process R&D....... -- -- -- -- -- (34.5)
Subpart F............ -- -- -- -- -- (1.7)
Valuation Allowance.. -- -- -- -- -- (6.5)
Goodwill
amortization....... 6.1 3.5 4.0 4.0 (4.9) --
Other items.......... .8 .4 0.5 0.5 (0.5) (0.3)
----- ----- ----- ----- ----- -----
Effective income tax
rate............... 14.1% 43.5% (28.2)% (28.2)% 3.2% (6.8)%
===== ===== ===== ===== ===== =====
</TABLE>

United States income taxes have not been provided on undistributed earnings
of international subsidiaries because of Intersil Holding's intention to
reinvest these earnings. The determination of unrecognized deferred U.S. tax
liability for the undistributed earnings of international subsidiaries is not
practicable.

Pretax income (loss) of international subsidiaries was $21.1 million in
1997, $10.2 million in 1998, $41.9 million in 1999, $0.7 million for the 26
weeks ended January 1, 1999, $(1.6) million for the 6 weeks ended August 13,
1999 and $16.2 million for the 20 weeks ended December 31, 1999.

Income taxes paid (received) were $2.4 million in 1997, $14.8 million in
1998, $3.4 million in 1999, $(0.5) million for the 26 weeks ended January 1,
1999, $0.2 million for the 6 weeks ended August 13, 1999 and $0.3 million for
the 20 weeks ended December 31, 1999.

The change in the balance for deferred taxes is a result of purchase price
adjustments. These adjustments generated a net deferred tax asset in our
Malaysian subsidiary. A full valuation allowance was placed on this asset.

F-19
<PAGE>
INTERSIL HOLDING CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

YEARS ENDED JUNE 27, 1997, JULY 3, 1998, JULY 2, 1999,
6 WEEKS ENDED AUGUST 13, 1999,
UNAUDITED 26 WEEKS ENDED JANUARY 1, 1999 AND
THE UNAUDITED 20 WEEKS ENDED DECEMBER 31, 1999

NOTE N--GEOGRAPHIC INFORMATION

Intersil Holding operates exclusively in the semiconductor industry.
Substantially all revenues result from the sale of semiconductor products. All
intercompany revenues and balances have been eliminated.

A summary of the operations by geographic area is summarized below (in
thousands):

<TABLE>
<CAPTION>
(PREDECESSOR) (PREDECESSOR) (SUCCESSOR)
------------------------------------------- ---------------------------------- -----------------
FISCAL YEAR ENDED 26 WEEKS ENDED 6 WEEKS ENDED 20 WEEKS ENDED
------------------------------------------- ---------------- --------------- -----------------
JUNE 27, 1997 JULY 3, 1998 JULY 2, 1999 JANUARY 1, 1999 AUGUST 13, 1999 DECEMBER 31, 1999
------------- ------------ ------------ ---------------- --------------- -----------------
(UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C> <C> <C>
United States
operations
Net sales.......... $531,246 $563,180 $519,555 $242,507 $ 54,664 $227,976
Long-lived
assets.......... 380,143 386,333 371,448 351,836 366,386 333,513
International
Net sales.......... 14,075 13,656 13,163 4,118 2,672 6,769
Long-lived
assets.......... 102,683 122,397 121,330 153,093 118,277 97,672
</TABLE>

Export sales included in U.S. Operations were, $234.6 million in 1997,
$258.4 million in 1998, $254.8 million in 1999, $113.7 million for the 26 weeks
ended January 1, 1999, $30.4 million for the 6 weeks ended August 13, 1999 and
$149.0 million for the 20 weeks ended December 31, 1999.

NOTE O--FINANCIAL INSTRUMENTS

The carrying values of accounts receivable, notes receivable, accounts
payable, short-term debt and long-term debt approximates fair value.

Intersil Holding markets its products for sale to customers, including
distributors, primarily in the United States, Europe and Asia/Pacific. Credit is
extended based on an evaluation of the customer's financial condition, and
collateral is generally not required. Intersil Holding maintains an allowance
for losses based upon the expected collectibility of all accounts receivable.
Intersil Holding believes it is adequately reserved with regard to receivables
from its domestic and international customers.

Intersil Holding uses foreign exchange contracts and options to hedge
intercompany accounts and off-balance-sheet foreign currency commitments.
Specifically, these foreign exchange contracts offset foreign currency
denominated inventory and purchase commitments from suppliers, accounts
receivable from and future committed sales to customers and firm committed
operating expenses. Management believes the use of foreign currency financial
instruments should reduce the risks that arise from doing business in
international markets. Contracts are generally one year or less. At July 2,
1999, August 13, 1999 and December 31, 1999, open foreign exchange contracts
were $22.0 million, $6.1 million and $27.6 million, respectively (as described
below), all of which were to hedge off-balance-sheet commitments. Additionally,
for the year ended July 2, 1999, the Semiconductor Business purchased and sold
$120.7 million of foreign exchange forward contracts.

Deferred gains and losses are included on a net basis in the Consolidated
Balance Sheet as other assets and are recorded in income as part of the
underlying transaction when it is recognized. At July 2, 1999, Intersil Holding
had deferred foreign exchange contract losses on future commitments of
approximately $28.6 million. There were no deferred foreign exchange contract
losses at August 14, 1999.

F-20
<PAGE>
INTERSIL HOLDING CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

YEARS ENDED JUNE 27, 1997, JULY 3, 1998, JULY 2, 1999,
6 WEEKS ENDED AUGUST 13, 1999,
UNAUDITED 26 WEEKS ENDED JANUARY 1, 1999 AND
THE UNAUDITED 20 WEEKS ENDED DECEMBER 31, 1999

NOTE O--FINANCIAL INSTRUMENTS--(CONTINUED)

Total open foreign exchange contracts at July 2, 1999, August 14, 1999 and
December 31, 1999, are described in the table below:

JULY 2, 1999

COMMITMENTS TO BUY FOREIGN CURRENCIES

<TABLE>
<CAPTION>
CONTRACT AMOUNT
-------------------------- MATURITIES
CURRENCY FOREIGN CURRENCY U.S. DEFERRED GAINS (IN MONTHS)
- -------- ---------------- ------- -------------- -----------
(IN THOUSANDS)
<S> <C> <C> <C> <C>
Malaysian Ringgit........................... 80,589 $19,000 $2,208 1-2
</TABLE>

COMMITMENTS TO SELL FOREIGN CURRENCIES

<TABLE>
<CAPTION>
CONTRACT AMOUNT
-------------------------- MATURITIES
CURRENCY FOREIGN CURRENCY U.S. DEFERRED GAINS (IN MONTHS)
- -------- ---------------- ------- -------------- -----------
(IN THOUSANDS)
<S> <C> <C> <C> <C>
French Franc................................ 10,900 $ 1,857 $138 1-2
British Pound............................... 691 1,094 2 1
</TABLE>

AUGUST 14, 1999

COMMITMENTS TO BUY FOREIGN CURRENCIES

<TABLE>
<CAPTION>
CONTRACT AMOUNT
-------------------------- DEFERRED MATURITIES
CURRENCY FOREIGN CURRENCY U.S. GAINS (LOSSES) (IN MONTHS)
- -------- ---------------- ------- -------------- -----------
(IN THOUSANDS)
<S> <C> <C> <C> <C>
Euro......................................... 808 $ 865 $ (5) 1
French Franc................................. 5,300 865 (6) 1
British Pound................................ 202 327 (2) 1
Malaysian Ringgit............................ 8,504 2,000 238 1
</TABLE>

COMMITMENTS TO SELL FOREIGN CURRENCIES

<TABLE>
<CAPTION>
CONTRACT AMOUNT
-------------------------- DEFERRED MATURITIES
CURRENCY FOREIGN CURRENCY U.S. GAINS (LOSSES) (IN MONTHS)
- -------- ---------------- ------- -------------- -----------
(IN THOUSANDS)
<S> <C> <C> <C> <C>
Euro......................................... 808 $ 865 $(5) 1
French Franc................................. 5,300 860 -- 1
British Pound................................ 202 321 (4) 1
</TABLE>

DECEMBER 31, 1999 (UNAUDITED)

COMMITMENTS TO BUY FOREIGN CURRENCIES

F-21
<PAGE>
INTERSIL HOLDING CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

YEARS ENDED JUNE 27, 1997, JULY 3, 1998, JULY 2, 1999,
6 WEEKS ENDED AUGUST 13, 1999,
UNAUDITED 26 WEEKS ENDED JANUARY 1, 1999 AND
THE UNAUDITED 20 WEEKS ENDED DECEMBER 31, 1999

NOTE O--FINANCIAL INSTRUMENTS--(CONTINUED)

COMMITMENTS TO SELL FOREIGN CURRENCIES

<TABLE>
<CAPTION>
CONTRACT AMOUNT
-------------------------- DEFERRED MATURITIES
CURRENCY FOREIGN CURRENCY U.S. GAINS (LOSSES) (IN MONTHS)
- -------- ---------------- ------- -------------- -----------
(IN THOUSANDS)
<S> <C> <C> <C> <C>
Euro......................................... 8,804 $ 9,191 $324 1-5
French Franc................................. 14,646 2,335 87 3-5
Deutsche Mark................................ 4,000 2,163 103 3-4
British Pound................................ 2,846 4,654 69 1-5
Japanese Yen................................. 231,134 2,240 (32) 1-4
</TABLE>

NOTE P--EQUITY COMPENSATION PLAN (UNAUDITED)

On November 5, 1999, to be effective August 14, 1999, Intersil Holding
adopted the 1999 Equity Compensation Plan (the "Plan") for salaried officers and
key employees. The Plan authorizes the grant of options for up to 3.0 million
shares of Intersil Holding Class A Common Stock and can include (i) options
intended to constitute incentive stock options ("ISOs") under the Internal
Revenue Code, (ii) non-qualified stock options, (iii) restricted stock, (iv)
stock appreciation rights, and (v) phantom share awards. The exercise price of
each option granted under the Plan shall be as determined by a committee of the
Board of Directors (the "Board"). The maximum term of any option shall be ten
years from the date of grant for incentive stock options and ten years and one
day from the date of grant for non-qualified stock options. Options granted
under the Plan are exercisable at the determination of the Board, currently
vesting ratably over approximately 5 years. Employees receiving options under
the Plan may not receive in any one year period options to purchase more than
666,667 shares of common stock. During the 20 weeks ended December 31, 1999,
Intersil Holding granted 1,549,333 options to acquire Intersil Holding Class A
Common Stock at a price of $2.25 per share. The Company accounts for its Equity
Compensation Plan in accordance with Accounting Principles Board Opinion No. 25,
"Accounting for Stock Issued to Employees." As such, compensation expense is
recorded on the date of grant only if the current market price of the underlying
stock exceeds the exercise price. During the twenty weeks ended December 31,
1999, the Company recorded no deferred compensation. Had compensation cost for
the Company's stock option plan been determined consistent with SFAS Statement
No. 123, the Company would have reported a net loss of $21.9 million for the
twenty weeks ended December 31, 1999.

The Company estimates the fair value of each option as of the date of grant
using a Black-Scholes pricing model with the following weighted average
assumptions.

DECEMBER 31, 1999
-----------------
Expected volatility......................................... --
Dividend yield.............................................. --
Risk-free interest rate..................................... 8.17%
Expected life, in years..................................... 7

F-22
<PAGE>
INTERSIL HOLDING CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

YEARS ENDED JUNE 27, 1997, JULY 3, 1998, JULY 2, 1999,
6 WEEKS ENDED AUGUST 13, 1999,
UNAUDITED 26 WEEKS ENDED JANUARY 1, 1999 AND
THE UNAUDITED 20 WEEKS ENDED DECEMBER 31, 1999

NOTE P--EQUITY COMPENSATION PLAN (UNAUDITED)--(CONTINUED)

A summary of the status of the Company's stock option plan as of December
31, 1999, and changes during the twenty weeks then ended are presented in the
table below.

DECEMBER 31, 1999
-----------------
WEIGHTED
AVERAGE
EXERCISE
SHARES PRICE
------ --------
Outstanding at beginning of period.......................... -- $ --
Granted..................................................... 1,549 2.25
Exercised................................................... -- --
Canceled.................................................... -- --
----- -----
Outstanding at end of period................................ 1,549 $2.25
===== =====
Exercisable at end of period................................ -- --
Weighted average fair value of options granted.............. $0.98

Information with respect to stock options outstanding and stock options
exercisable at December 31, 1999, is as follows:

<TABLE>
<CAPTION>
OPTIONS OUTSTANDING
------------------------------------- OPTIONS EXERCISABLE
WEIGHTED- -----------------------
AVERAGE WEIGHTED- WEIGHTED-
REMAINING AVERAGE AVERAGE
NUMBER CONTRACTUAL EXERCISE NUMBER EXERCISE
EXERCISE PRICE OUTSTANDING LIFE PRICE EXERCISABLE PRICE
-------------- ----------- ----------- --------- ----------- ---------
(IN (IN
THOUSANDS) THOUSANDS)
<S> <C> <C> <C> <C> <C>
$2.25.................................... 1,549 9.69 $2.25 0 $ 2.25
===== =====
</TABLE>

NOTE Q-- FINANCIAL INFORMATION FOR GUARANTOR AND NON-GUARANTOR SUBSIDIARIES

Intersil Holding is a holding company for Intersil. All of the operations
are conducted through Intersil and its wholly-owned domestic and foreign
subsidiaries. On August 13, 1999, in connection with the Harris acquisition,
Intersil issued the Notes and Senior Credit Facilities (Note F), which are fully
and unconditionally guaranteed on a joint and several basis by Intersil Holding
(Parent), Intersil and all of Intersil's wholly-owned current and future
domestic subsidiaries (the "Guarantor Subsidiaries"). Intersil's wholly-owned
foreign subsidiaries are not guarantors (the "Non-Guarantor Subsidiaries"). In
management's opinion, separate financial statements of the Guarantor
Subsidiaries and the Non-Guarantor Subsidiaries are not material to investors.

The condensed consolidating financial information presented below includes
the predecessor consolidated balance sheets as of July 3, 1998 and July 2, 1999
and the predecessor consolidated statements of income and cash flows for the
fiscal years ended June 27, 1997, July 3, 1998, July 2, 1999, the 26 weeks ended
January 1, 1999 and the 6 weeks ended August 13, 1999 for the Predecessor
Guarantor and Non-Guarantor Subsidiaries. The condensed consolidated balance
sheets as of August 14, 1999 and December 31, 1999 and the condensed
consolidated statements of income and cash flows for the 20 weeks ended December
31, 1999 reflect the Parent, Guarantor Subsidiaries and Non-Guarantor
Subsidiaries.

F-23
<PAGE>
INTERSIL HOLDING CORPORATION

SUPPLEMENTAL CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS

YEAR ENDED JUNE 27, 1997

COSTS AND EXPENSES
Cost of product sales....................... 400,997 338,666 (393,590) 346,073
Research and development.................... 74,636 572 -- 75,208
Selling, administrative and general......... 79,065 20,249 -- 99,314
Harris corporate expense allocations........ 10,854 (894) -- 9,960
Goodwill amortization....................... 2,291 -- -- 2,291
-------- -------- --------- --------
Operating income (loss)....................... (12,733) 40,152 (14,944) 12,475
Interest, net............................... 26,693 (5,174) (22,114) (595)
-------- -------- --------- --------
Income (loss) before income taxes........... (39,426) 45,326 7,170 13,070
Income taxes (benefit)...................... (11,658) 6,298 7,205 1,845
-------- -------- --------- --------
NET INCOME (LOSS)........................... $(27,768) $ 39,028 $ (35) $ 11,225
======== ======== ========= ========
</TABLE>

INTERSIL HOLDING CORPORATION

SUPPLEMENTAL CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS

YEAR ENDED JULY 3, 1998

COSTS AND EXPENSES
Cost of product sales....................... 402,892 388,729 (422,289) 369,332
Research and development.................... 74,466 659 -- 75,125
Selling, administrative and general......... 79,547 18,637 -- 98,184
Harris corporate expense allocations........ 10,941 (979) -- 9,962
Goodwill amortization....................... 2,292 -- -- 2,292
-------- -------- --------- --------
Operating income (loss)....................... 38,998 11,675 (28,732) 21,941
Interest net................................ 40,793 (5,325) (36,382) (914)
-------- -------- --------- --------
Income (loss) before income taxes........... (1,795) 17,000 7,650 22,855
Income taxes (benefit)...................... (887) (1,418) 12,249 9,944
-------- -------- --------- --------
NET INCOME (LOSS)........................... $ (908) $ 18,418 $ (4,599) $ 12,911
======== ======== ========= ========
</TABLE>

F-24
<PAGE>
INTERSIL HOLDING CORPORATION

SUPPLEMENTAL CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS

YEAR ENDED JULY 2, 1999

COSTS AND EXPENSES
Cost of product sales....................... 379,282 337,287 (366,793) 349,776
Research and development.................... 67,316 (237) -- 67,079
Selling, administrative and general......... 65,866 18,132 -- 83,998
Harris corporate expense allocations........ 10,115 (812) -- 9,303
Goodwill amortization....................... 2,414 -- -- 2,414
-------- -------- --------- --------
Operating income (loss)....................... (851) 126,611 (105,612) 20,148
Interest, net............................... 33,894 (4,975) (30,150) (1,231)
-------- -------- --------- --------
Income (loss) before income taxes........... (34,745) 131,586 (75,462) 21,379
Income taxes (benefit)...................... (39,176) 10,313 22,836 (6,027)
-------- -------- --------- --------
NET INCOME (LOSS)........................... $ 4,431 $121,273 $ (98,298) $ 27,406
======== ======== ========= ========
</TABLE>

INTERSIL HOLDING CORPORATION

SUPPLEMENTAL CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS

TWENTY-SIX WEEKS ENDED JANUARY 1, 1999
(UNAUDITED)

COSTS AND EXPENSES
Cost of product sales....................... 212,307 209,083 (255,771) 165,619
Research and development.................... 33,811 (53) (4,032) 29,726
Selling, administrative and general......... 34,323 8,519 (1,509) 41,333
Harris corporate expense allocations........ 4,314 -- -- 4,314
Goodwill amortization....................... 1,146 -- -- 1,146
-------- -------- --------- --------
Operating income (loss)....................... (45,315) (12,361) 62,163 4,487
Interest, net............................... (423) (446) 459 (410)
-------- -------- --------- --------
Income (loss) before income taxes........... (44,892) (11,915) 61,704 4,897
Income taxes (benefit)...................... (22,725) 1,650 19,695 (1,380)
-------- -------- --------- --------
NET INCOME (LOSS)........................... $(22,167) $(13,565) $ 42,009 $ 6,277
======== ======== ========= ========
</TABLE>

F-25
<PAGE>
INTERSIL HOLDING CORPORATION

SUPPLEMENTAL CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS

SIX WEEKS ENDED AUGUST 13, 1999

INTERSIL HOLDING CORPORATION

SUPPLEMENTAL CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS

TWENTY WEEKS ENDED DECEMBER 31, 1999
(UNAUDITED)

<TABLE>
<CAPTION>
SUCCESSOR
--------------------------------------------------------------------
FOREIGN
GUARANTOR NON-GUARANTOR ELIMINATING
PARENT SUBSIDIARIES SUBSIDIARIES ENTRIES CONSOLIDATED
-------- ------------ ------------- ----------- ------------
(IN THOUSANDS)
<S> <C> <C> <C> <C> <C>
REVENUE
Product sales..................... $ -- $232,133 $212,234 $(209,622) $234,745
COSTS AND EXPENSES
Cost of product sales............. -- 163,851 186,792 (208,149) 142,494
Research and development.......... -- 25,952 -- -- 25,952
Selling, administrative and
general........................ -- 27,945 10,307 -- 38,252
Harris corporate expense
allocations.................... -- -- -- -- --
Intangible amortization........... -- 3,942 -- -- 3,942
In-process R&D charge............. -- 20,239 -- -- 20,239
-------- -------- -------- --------- --------
Operating income (loss)............. -- (9,796) 15,135 (1,473) 3,866
Interest, net..................... 5,455 18,859 -- -- 24,314
Equity in subsidiary (income)
loss).......................... 13,520 -- -- (13,520) --
-------- -------- -------- --------- --------
Income (loss) before income
taxes.......................... (18,975) (28,655) 15,135 12,047 (20,448)
Income taxes (benefit)............ -- -- 1,399 -- 1,399
-------- -------- -------- --------- --------
Net income (loss)................. (18,975) (28,655) 13,736 12,047 (21,847)
Preferred dividends............... 3,851 3,851 -- (3,851) 3,851
-------- -------- -------- --------- --------
Net income (loss) to common
shareholders................... $(22,826) $(32,506) $ 13,736 $ 15,898 $(25,698)
======== ======== ======== ========= ========
</TABLE>

F-26
<PAGE>
INTERSIL HOLDING CORPORATION

SUPPLEMENTAL CONDENSED CONSOLIDATING BALANCE SHEET

JULY 3, 1998

<TABLE>
<CAPTION>
PREDECESSOR
---------------------------------------------------------
FOREIGN
GUARANTOR NON-GUARANTOR ELIMINATING
SUBSIDIARIES SUBSIDIARIES ENTRIES CONSOLIDATED
------------ ------------- ----------- ------------
(IN THOUSANDS)
<S> <C> <C> <C> <C>
ASSETS
Trade receivables, net...................... $108,895 $ 1,780 -- $110,675
Intercompany balances....................... 51,685 (26,498) $ (25,187) --
Inventories................................. 60,370 158,702 (38,840) 180,232
Other current assets........................ 4,630 671 -- 5,301
Property, plant and equipment, net.......... 327,098 122,986 -- 450,084
Intangibles, net............................ 44,219 -- -- 44,219
Investment in subsidiaries.................. 21,383 65,881 (87,264) --
Other non-current assets.................... 10,350 9,409 -- 19,759
-------- -------- --------- --------
Total Assets............................. $628,630 $332,931 $(151,291) $810,270
======== ======== ========= ========
LIABILITIES AND BUSINESS EQUITY
Accounts payable............................ $ 21,362 $ 11,943 -- $ 33,305
Compensation and benefits................... 39,599 4,871 -- 44,470
Other current liabilities................... 35,701 2,310 $ (13,621) 24,390
Other non-current liabilities............... 9,028 -- -- 9,028
Business Equity............................. 522,940 313,807 (137,670) 699,077
-------- -------- --------- --------
Total Liabilities and Business Equity.... $628,630 $332,931 $(151,291) $810,270
======== ======== ========= ========
</TABLE>

INTERSIL HOLDING CORPORATION

SUPPLEMENTAL CONDENSED CONSOLIDATING BALANCE SHEET

JULY 2, 1999

<TABLE>
<CAPTION>
PREDECESSOR
---------------------------------------------------------
FOREIGN
GUARANTOR NON-GUARANTOR ELIMINATING
SUBSIDIARIES SUBSIDIARIES ENTRIES CONSOLIDATED
------------ ------------- ----------- ------------
(IN THOUSANDS)
<S> <C> <C> <C> <C>
ASSETS
Trade receivables, net...................... $ 97,043 $ 3,631 -- $100,674
Intercompany balances....................... (139,993) 19,554 $120,439 --
Inventories................................. 86,986 86,049 (19,213) 153,822
Other current assets........................ 7,782 946 -- 8,728
Property, plant and equipment, net.......... 291,645 118,885 -- 410,530
Intangibles, net............................ 45,368 -- -- 45,368
Investment in subsidiaries.................. 10,907 72,195 (83,102) --
Other non-current assets.................... 39,721 2,336 -- 42,057
-------- -------- -------- --------
Total Assets............................. $439,459 $303,596 $ 18,124 $761,179
======== ======== ======== ========
LIABILITIES AND BUSINESS EQUITY
Accounts payable............................ $ 21,503 $ 9,565 -- $ 31,068
Compensation and benefits................... 26,120 6,803 -- 32,923
Other current liabilities................... 42,778 (8,254) $ (7,444) 27,080
Other non-current liabilities............... 11,229 -- -- 11,229
Business Equity............................. 337,829 295,482 25,568 658,879
-------- -------- -------- --------
Total Liabilities and Business Equity.... $439,459 $303,596 $ 18,124 $761,179
======== ======== ======== ========
</TABLE>

F-27
<PAGE>
INTERSIL HOLDING CORPORATION

SUPPLEMENTAL CONDENSED CONSOLIDATING BALANCE SHEET

AUGUST 14, 1999

<TABLE>
<CAPTION>
SUCCESSOR
--------------------------------------------------------------------
FOREIGN
GUARANTOR NON-GUARANTOR ELIMINATING
PARENT SUBSIDIARIES SUBSIDIARIES ENTRIES CONSOLIDATED
-------- ------------ ------------- ----------- ------------
(IN THOUSANDS)
<S> <C> <C> <C> <C> <C>
ASSETS
Cash................................ $ -- $ 5,932 $ 1,445 $ -- $ 7,377
Trade receivables, net.............. -- 79,242 3,800 -- 83,042
Intercompany balances............... -- (155,306) (29,102) 184,408 --
Inventories......................... -- 147,441 5,643 (40) 153,044
Other current assets................ -- 9,898 (903) (5,371) 3,624
Property, plant and equipment,
net............................... -- 252,796 95,718 -- 348,514
Intangibles, net.................... -- 90,715 -- -- 90,715
Investment in subsidiaries.......... 210,011 23,240 68 (233,319) --
Other non-current assets............ -- 20,086 752 625 21,463
-------- -------- -------- --------- --------
Total Assets...................... $210,011 $474,044 $ 77,421 $ (53,697) $707,779
======== ======== ======== ========= ========
LIABILITIES AND BUSINESS EQUITY
Accounts payable.................... $ -- $ 16,532 $ 11,390 $ 1,443 $ 29,365
Compensation and benefits........... -- 13,164 5,186 (63) 18,287
Other current liabilities........... -- 41,774 (1,593) 407 40,588
Long-term debt...................... 119,700 421,825 -- -- 541,525
Other non-current liabilities....... -- (7,370) 5,933 9,636 8,199
Preferred stock..................... 84,009 -- -- -- 84,009
Common Stock........................ 667 -- -- -- 667
Additional paid in capital.......... 5,635 300 -- -- 5,935
Retained deficit.................... -- (12,181) 56,505 (65,120) (20,796)
-------- -------- -------- --------- --------
Total Liabilities and
Stockholders' Equity........... $210,011 $474,044 $ 77,421 $ (53,697) $707,779
======== ======== ======== ========= ========
</TABLE>

INTERSIL HOLDING CORPORATION

SUPPLEMENTAL CONDENSED CONSOLIDATING BALANCE SHEET

DECEMBER 31, 1999
(UNAUDITED)

<TABLE>
<CAPTION>
SUCCESSOR
--------------------------------------------------------------------
FOREIGN
GUARANTOR NON-GUARANTOR ELIMINATING
PARENT SUBSIDIARIES SUBSIDIARIES ENTRIES CONSOLIDATED
-------- ------------ ------------- ----------- ------------
(IN THOUSANDS)
<S> <C> <C> <C> <C> <C>
ASSETS
Cash................................ $ -- $ 34,083 $ 6,039 $ -- $ 40,122
Trade receivables, net.............. -- 87,325 4,423 -- 91,748
Intercompany balances............... -- 17,078 (16,079) (999) --
Inventories......................... -- 130,546 33,260 (9,790) 154,016
Other current assets................ -- 7,237 325 -- 7,562
Property, plant and equipment,
net............................... -- 230,986 87,161 -- 318,147
Intangibles, net.................... -- 84,343 309 -- 84,652
Investment in subsidiaries.......... 215,466 306,502 95,613 (617,581) --
Other non-current assets............ -- 18,184 2,600 -- 20,784
-------- -------- -------- --------- --------
Total Assets...................... $215,466 $916,284 $213,651 $(628,370) $717,031
======== ======== ======== ========= ========
LIABILITIES AND BUSINESS EQUITY
Accounts payable.................... $ -- $ 20,449 $ 14,889 $ -- $ 35,338
Compensation and benefits........... -- 26,460 5,382 -- 31,842
Other current liabilities........... -- 48,434 537 -- 48,971
Long-term debt...................... 125,155 406,681 -- -- 531,836
Preferred stock..................... 87,860 -- -- -- 87,860
Common stock........................ 667 -- -- -- 667
Additional paid in capital.......... 2,356 300 -- -- 2,656
Retained deficit.................... -- 413,960 192,843 (628,370) (21,567)
Unearned compensation............... (572) -- -- -- (572)
-------- -------- -------- --------- --------
Total Liabilities and
Stockholders' Equity........... $215,466 $916,284 $213,651 $(628,370) $717,031
======== ======== ======== ========= ========
</TABLE>

F-28
<PAGE>
INTERSIL HOLDING CORPORATION

SUPPLEMENTAL CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS

YEAR ENDED JUNE 27, 1997

INVESTING ACTIVITIES:
Plant and equipment................................... (134,875) (38,429) -- (173,304)
-------- -------- ------- --------
Net cash used in investing activities............. (134,875) (38,429) -- (173,304)

FINANCING ACTIVITIES:
Proceeds from borrowings............................ 1,450 -- -- 1,450
Payments of borrowings.............................. (48) -- -- (48)
Net cash transfer and billings from (to) parent..... 92,450 (33,815) 57,470 116,105
-------- -------- ------- --------
Net cash provided by financing activities......... 93,852 (33,815) 57,470 117,507
Effect of exchange rates on cash and cash
equivalents......................................... -- 1,221 -- 1,221
-------- -------- ------- --------
Net increase in cash.............................. -- -- -- --
Cash at the beginning of the period............... -- -- -- --
-------- -------- ------- --------
Cash at the end of the period..................... $ -- $ -- $ -- $ --
======== ======== ======= ========
</TABLE>

INTERSIL HOLDING CORPORATION

SUPPLEMENTAL CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS

YEAR ENDED JULY 3, 1998

INVESTING ACTIVITIES:
Plant and equipment................................... (49,762) (40,422) -- (90,184)
-------- ------- --------- --------
Net cash used in investing activities............. (49,762) (40,422) -- (90,184)

FINANCING ACTIVITIES:
Proceeds from borrowings............................ 2,750 -- -- 2,750
Payments of borrowings.............................. (83) -- -- (83)
Net cash transfer and billings from (to) parent..... 151,523 (4,043) (105,636) 41,844
-------- ------- --------- --------
Net cash provided by financing activities......... 154,190 (4,043) (105,636) 44,511
Effect of exchange rates on cash and cash
equivalents......................................... -- (2,658) -- (2,658)
-------- ------- --------- --------
Net increase in cash.............................. -- -- -- --
Cash at the beginning of the period............... -- -- -- --
-------- ------- --------- --------
Cash at the end of the period..................... $ -- $ -- $ -- $ --
======== ======= ========= ========
</TABLE>

F-29
<PAGE>
INTERSIL HOLDING CORPORATION

SUPPLEMENTAL CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS

YEAR ENDED JULY 2, 1999

INVESTING ACTIVITIES:
Cash paid for acquired business....................... (1,335) -- -- (1,335)
Plant and equipment................................... (21,648) (16,915) -- (38,563)
--------- --------- -------- --------
Net cash used in investing activities............. (22,983) (16,915) -- (39,898)

FINANCING ACTIVITIES:
Proceeds from borrowings............................ 800 -- -- 800
Payments of borrowings.............................. (302) -- -- (302)
Net cash transfer and billings from (to) parent..... (189,542) (139,639) 262,151 (67,030)
--------- --------- -------- --------
Net cash provided by financing activities......... (189,044) (139,639) 262,151 (66,532)
Effect of exchange rates on cash and cash
equivalents......................................... -- (4,819) -- (4,819)
--------- --------- -------- --------
Net increase in cash.............................. -- -- -- --
Cash at the beginning of the period............... -- -- -- --
--------- --------- -------- --------
Cash at the end of the period..................... $ -- $ -- $ -- $ --
========= ========= ======== ========
</TABLE>

INTERSIL HOLDING CORPORATION

SUPPLEMENTAL CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS

TWENTY-SIX WEEKS ENDED JANUARY 1, 1999
(UNAUDITED)

INVESTING ACTIVITIES:
Plant and equipment................................... (10,602) (7,547) -- (18,149)
-------- -------- --------- -------
Net cash used in investing activities............. (10,602) (7,547) -- (18,149)

FINANCING ACTIVITIES:
Proceeds from borrowings............................ 750 -- -- 750
Payments of borrowings.............................. (4,818) -- 4,705 (113)
Net cash transfer and billings from (to) parent..... 204,161 69,541 (296,780) (23,078)
-------- -------- --------- -------
Net cash provided by (used in) financing
activities...................................... 200,093 69,541 (292,075) (22,441)
Effect of exchange rates on cash and cash
equivalents......................................... -- (692) -- (692)
-------- -------- --------- -------
Net increase in cash.................................. -- -- -- --
Cash at the beginning of the period................... -- -- -- --
-------- -------- --------- -------
Cash at the end of the period......................... $ -- $ -- $ -- $ --
======== ======== ========= =======
</TABLE>

F-30
<PAGE>
INTERSIL HOLDING CORPORATION

SUPPLEMENTAL CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS

SIX WEEKS ENDED AUGUST 13, 1999

<TABLE>
<CAPTION>
PREDECESSOR
---------------------------------------------------------
FOREIGN
GUARANTOR NON-GUARANTOR ELIMINATING
SUBSIDIARIES SUBSIDIARIES ENTRIES CONSOLIDATED
------------ ------------- ----------- ------------
(IN THOUSANDS)
<S> <C> <C> <C> <C>
OPERATING ACTIVITIES:
Net income (loss)............................. $ (11,462) $ (12,126) $ 20,559 $(3,029)
Adjustments to reconcile net income (loss) to
net cash provided by operating activities
Depreciation and amortization................. 2,380 6,693 -- 9,073
Non-current deferred income taxes............. -- 4,815 (9,571) (4,756)
Changes in working capital.................... 210,864 128,451 (337,221) 2,094
--------- --------- --------- -------
Net cash provided by (used in) operating
activities............................... 201,782 127,833 (326,233) 3,382
INVESTING ACTIVITIES:
Plant and equipment............................. (1,020) (867) -- (1,887)
--------- --------- --------- -------
Net cash used in investing activities....... (1,020) (867) -- (1,887)
FINANCING ACTIVITIES:
Payments of borrowings........................ -- 4,535 (4,567) (32)
Net cash transfer and billings from (to)
parent...................................... (200,497) (131,501) 330,800 (1,198)
--------- --------- --------- -------
Net cash provided by (used in) financing
activities............................... (200,497) (126,966) 326,233 (1,230)
Effect of exchange rates on cash and cash
equivalents................................... 1,177 -- -- 1,177
--------- --------- --------- -------
Net increase in cash............................ 1,442 -- -- 1,442
Cash at the beginning of the period............. -- -- -- --
--------- --------- --------- -------
Cash at the end of the period................... $ 1,442 $ -- $ -- $ 1,442
========= ========= ========= =======
</TABLE>

INTERSIL HOLDING CORPORATION

SUPPLEMENTAL CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS

TWENTY WEEKS ENDED DECEMBER 31, 1999
(UNAUDITED)

<TABLE>
<CAPTION>
SUCCESSOR
--------------------------------------------------------------------
FOREIGN
GUARANTOR NON-GUARANTOR ELIMINATING
PARENT SUBSIDIARIES SUBSIDIARIES ENTRIES CONSOLIDATED
-------- ------------ ------------- ----------- ------------
(IN THOUSANDS)
<S> <C> <C> <C> <C> <C>
OPERATING ACTIVITIES:
Net income (loss)................... $ (5,455) $(28,655) $13,736 $ (1,473) $(21,847)
Adjustments to reconcile net income
(loss) to net cash provided by
operating activities
Depreciation and amortization....... -- 20,665 5,679 -- 26,344
Changes in working capital.......... 5,455 58,599 (8,156) 1,473 57,371
-------- -------- ------- --------- --------
Net cash provided by (used in)
operating activities........... -- 50,609 11,259 -- 61,868
INVESTING ACTIVITIES:
Plant and equipment................... -- (7,314) (5,320) -- (12,634)
-------- -------- ------- --------- --------
Net cash used in investing
activities..................... -- (7,314) (5,320) -- (12,634)
FINANCING ACTIVITIES:
Payments of borrowings.............. -- (15,144) -- -- (15,144)
Net cash transfer and billings from
(to) parent....................... -- -- -- -- --
-------- -------- ------- --------- --------
Net cash used in financing
activities..................... -- (15,144) -- -- (15,144)
Effect of exchange rates on cash and
cash
equivalents......................... -- -- (1,345) -- (1,345)
-------- -------- ------- --------- --------
Net increase in cash.................. -- 28,151 4,594 -- 32,745
Cash at the beginning of the period... -- 5,932 1,445 -- 7,377
-------- -------- ------- --------- --------
Cash at the end of the period......... $ -- $ 34,083 $ 6,039 $ -- $ 40,122
======== ======== ======= ========= ========
</TABLE>

F-31
<PAGE>

[INTERSIL LOGO]

<PAGE>
PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

ITEM 20. INDEMNIFICATION OF DIRECTORS AND OFFICERS

As permitted by the Delaware General Corporation Law, the Restated
Certificate of Incorporation of the Issuer provides that directors of the Issuer
shall not be personally liable to the Issuer or its stockholders for monetary
damages for breach of fiduciary duty as a director, except for liability (i) for
any breach of the director's duty of loyalty to the Issuer or its stockholders,
(ii) for acts or omissions not in good faith or which involve intentional
misconduct or a knowing violation of law, (iii) under Section 174 of the
Delaware General Corporation Law, relating to prohibited dividends or
distributions or the repurchase or redemption of stock, or (iv) for any
transaction from which the director derives an improper personal benefit. In
addition, the By-laws of the Issuer provide for indemnification of the Issuer's
officers and directors to the fullest extent permitted under Delaware law.
Section 145 of the Delaware General Corporation Law provides that a corporation
may indemnify any persons, including officers and directors, who were or are, or
are threatened to be made, parties to any threatened, pending or completed legal
action, suit or proceeding, whether civil, criminal, administrative or
investigative (other than an action by or in the right of such corporation), by
reason of the fact that such person was an officer, director, employee or agent
of such corporation or is or was serving at the request of such corporation as
an officer, director, employee or agent of another corporation, partnership,
joint venture, trust or other enterprise. The indemnity may include expenses
(including attorneys' fees), judgments, fines and amounts paid in settlement
actually and reasonably incurred by such person in connection with such action,
suit or proceeding, provided such person acted in good faith and in a manner he
reasonably believed to be in or not opposed to the corporation's best interests
and, for criminal proceedings, had no reasonable cause to believe that his
conduct was unlawful. A Delaware corporation may indemnify officers and
directors in an action by or in the right of the corporation under the same
conditions, except that no indemnification is permitted without judicial
approval if the officer or director is adjudged to be liable to the corporation.
Where an officer or director is successful on the merits or otherwise in the
defense of any action referred to above, the corporation must indemnify him
against the expenses that such officer or director actually and reasonably
incurred. Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers or persons controlling an
Issuer pursuant to the foregoing provisions, the Issuer has been informed that
in the opinion of the Commission such indemnification is against public policy
as expressed in the Securities Act and is therefore unenforceable.

The directors and officers of the Issuer are insured against certain
liabilities under the Issuer's directors' and officers' liability insurance.

The foregoing summary of the Delaware General Corporation Law and of the
Certificate of Incorporation and By-laws of the Issuer is qualified in its
entirety by reference to the relevant provisions of the Delaware General
Corporation Law and of the Issuer's Certificate of Incorporation and By-laws,
which are filed as exhibits to this Registration Statement.

ITEM 21. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

(a) Exhibits:

Incorporated by reference to the Exhibit Index following page II-4 hereto.

(b) Financial Statement Schedules:

Schedule I Condensed Financial Information of Registrant

The information required by Schedule I is included in the notes to the
Financial Statements.

II-1
<PAGE>
SCHEDULE II
VALUATION AND QUALIFYING ACCOUNTS
(IN THOUSANDS $)

<TABLE>
<CAPTION>
ADDITIONS
CHARGED ADDITIONS
BALANCE AT TO COSTS CHARGED DEDUCTION BALANCE
BEGINNING AND TO OTHER FROM AT END OF
OF PERIOD EXPENSES ACCOUNTS RESERVES PERIOD
---------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C>
Valuation and qualifying accounts deducted
from the assets to which they apply:

ALLOWANCE FOR UNCOLLECTIBLE ACCOUNTS
1999....................................... $ 571 $ 487 $ -- $ 476 $ 582
1998....................................... $ 1,336 $ 324 $ -- $ 1,089 $ 571
1997....................................... $ 757 $ 336 $300 $ 57 $ 1,336

INVENTORY RESERVE
1999....................................... $24,482 $ 8,373 $257 $14,995 $18,117
1998....................................... $31,736 $ 9,846 $120 $17,220 $24,482
1997....................................... $25,385 $10,007 $ 46 $ 3,702 $31,736

DISTRIBUTOR RESERVES
1999....................................... $ 6,189 $52,965 $ -- $52,612 $ 6,542
1998....................................... $11,278 $66,062 $ -- $71,151 $ 6,189
1997....................................... $ 7,520 $65,374 $ -- $61,616 $11,278
</TABLE>

All other schedules for which provision is made in the applicable
accounting regulation of the Securities and Exchange Commission are not required
under the related instructions or are inapplicable and therefore have been
omitted.

ITEM 22. UNDERTAKINGS

Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
registrant pursuant to the foregoing provisions, or otherwise, the registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the registrant of expenses incurred
or paid by a director, officer or controlling person of the registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.

The undersigned registrant hereby undertakes:

(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement:

(i) to include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;

(ii) to reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information in the
registration statement. Notwithstanding the foregoing, any increase or
decrease in volume of securities offered (if the total dollar value of
securities offered would not exceed that which was registered) and any
deviation from the low or high end of the estimated maximum offering
range may be reflected in the form of prospectus filed with the
Commission pursuant to Rule 424(b) if, in the aggregate, the changes in
volume and price represent no more than a 20 percent change in the
maximum aggregate offering

II-2
<PAGE>
price set forth in the "Calculation of Registration Fee" table in the
effective registration statement; and

(iii) to include any material information with respect to the plan
of distribution not, previously disclosed in the registration statement
or any material change to such information in the registration
statement;

(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each post-effective amendment shall be deemed a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial
bona fide offering thereof;

(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.

(4) To respond to requests for information that is incorporated by
reference into the prospectus pursuant to Item 4, 10(b) 11 or 13 of this
form, within one business day of receipt of such request, and to send the
incorporated documents by first class mail or other equally prompt means.
This includes information contained in documents filed subsequent to the
effective date of the registration statement through the date of responding
to the request.

(5) To supply by means of a post-effective amendment all information
concerning a transaction, and the company being acquired involved therein,
that was not the subject of and included in the registration statement when
it became effective.

II-3
<PAGE>
SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, as amended, the
below-named Registrant has duly caused this Registration Statement to be signed
on its behalf by the undersigned, thereunto duly authorized, in the City of Palm
Bay, State of Florida, on the 18th day of April, 2000.

INTERSIL HOLDING CORPORATION

By: GREGORY L. WILLIAMS
------------------------------------
Gregory L. Williams
Chief Executive Officer and
Director

POWER OF ATTORNEY

KNOWN TO ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints Gregory L. Williams, Daniel J. Heneghan
and Stephen M. Moran, each his attorney-in-fact, with full power of substitution
and resubstitution, for him in any and all capacities, to sign any or all
amendments or post-effective amendments to this Registration Statement or any
Registration Statement for the same offering that is effective upon filing
pursuant to Rule 462(b) under the Securities Act of 1933, as amended, and to
file the same with exhibits thereto and other documents in connection therewith
or in connection with the registration of common stock under the Securities
Exchange Act of 1934, as amended, with the Securities and Exchange Commission,
granting unto such attorney-in-fact and agent full power and authority to do and
perform each and every act and thing requisite and necessary in connection with
such matters and hereby ratifying and confirming all that each attorney-in-fact,
or his agent or substitute, may do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement has been signed below by the following persons in
the capacities at the above-named Registrant on April 18, 2000.

<TABLE>
<CAPTION>
SIGNATURE TITLE
--------- -----
<S> <C>
GREGORY L. WILLIAMS Chief Executive Officer and Director
- --------------------------------------------- (principal executive officer)
Gregory L. Williams

DANIEL J. HENEGHAN Assistant Secretary, Chief Financial Officer
- --------------------------------------------- and Vice President (principal financial and
Daniel J. Heneghan accounting officer)

JAMES A. URRY Director
- ---------------------------------------------
James A. Urry

GARY E. GIST Director
- ---------------------------------------------
Gary E. Gist
</TABLE>

II-4
<PAGE>
EXHIBIT INDEX

<TABLE>
<CAPTION>
EXHIBIT
NO. DESCRIPTION
- ------- -----------
<S> <C>
2.01* Amended and Restated Master Transaction Agreement dated as
of June 2, 1999, by and among Intersil Holding Corporation
("Holding"), Intersil Corporation ("Intersil") and Harris
Corporation ("Harris").
2.02* Agreement Concerning Deferred Closings dated as of August
13, 1999, by and among Harris and Intersil.
2.03* Transition Services Agreement dated as of August 13, 1999,
by and among Intersil and Harris.
2.04* Share Sale Agreement dated August 13, 1999, between Harris
Airport Systems (Malaysia) Sdn. Bhd., Harris Solid State
(Malaysia) Sdn. Bhd. and Sapphire Worldwide Investments,
Inc.
2.05* Agreement for the Sale and Purchase of the Business and
Assets of Harris Semiconductor Limited dated as of August
13, 1999, between Harris Semiconductor Limited and Intersil
Limited.
2.06* Asset Purchase Agreement dated as of August 20, 1999,
between Harris Semiconductor Design & Sales Pte. Ltd. and
Intersil Pte. Ltd.
2.07* Purchase Agreement of Corporate Quotas of a Limited
Liability Company, dated as of August 13, 1999, between
Harris Semiconductor BV, Harris Semiconductor Limited and
Intersil.
2.08* Assignment of Shares, dated as of August 13, 1999, between
Intersil and Harris for the transfer by Harris of all of its
shares of Harris Semiconducteurs, Sarl to Intersil.
2.09* Share Transfer Agreement, dated as of August 1, 1999,
between Harris and Intersil for the transfer of stock of
Harris Semiconductor Y.H.
2.10* Equity Purchase Agreement, dated as of August 13, 1999,
between Harris Advanced Technology (Malaysia) Sdn. Bhd. and
Harris Airport Systems (M) Sdn. Bhd.
2.11* Agreement Re: China Subsidiaries, dated as of August 13,
1999, between Harris and Intersil.
2.12* Agreement Re: Anshan Joint Venture, dated as of August 13,
1999, between Harris Advanced Technology (Malaysia) Sdn.
Bhd. and Harris Airport Systems (M) Sdn. Bhd.
2.13* Agreement Re: Guangzhou Joint Venture, dated as of August
13, 1999, between Harris Advanced Technology (Malaysia) Sdn.
Bhd. and Harris Airport Systems (M) Sdn. Bhd.
2.14* Agreement Re: Suzhou Harris, dated as of August 13, 1999,
between Harris Advanced Technology (Malaysia) Sdn. Bhd. and
Harris Airport Systems (M) Sdn. Bhd.
2.15* Intellectual Property Agreement, dated as of August 13,
1999, among Harris, Harris Semiconductor Patents, Inc. and
Holding.
2.16* Patent Assignment and Services Agreement, dated as of August
13, 1999, among Harris, Harris Semiconductor Patents, Inc.
and Holding.
2.17* License Assignment Agreement, dated as of August 13, 1999,
among Harris, Harris Semiconductor Patents, Inc. and
Holding.
2.18* Harris Trademark License Agreement, dated as of August 13,
1999, among Harris, HAL Technologies, Inc. and Holding.
2.19* Secondary Trademark Assignment and License Agreement, dated
as of August 13, 1999, between Harris and Holding.
2.20 PRISM(R) Intellectual Property Assignment, dated August 13,
1999, between Holding and Intersil (incorporated by
reference to Exhibit 2.20 to the Post-Effective Amendment
No. 1 to the Registration Statement on Form S-1).
2.21* Tax Sharing Agreement, dated as of August 13, 1999, among
Holding, Intersil and Choice Microsystems, Inc.
2.22* Royalty Agreement, dated as of August 13, 1999, among Harris
and Intersil.
2.23* Option Agreement, dated as of August 13, 1999, among
Intersil and Intersil PRISM, LLC.
</TABLE>

<PAGE>

<TABLE>
<CAPTION>
EXHIBIT
NO. DESCRIPTION
- ------- -----------
<S> <C>
3.01 Restated Certificate of Incorporation of Holding
(incorporated by reference to Exhibit 3.01 to the
Post-Effective Amendment No. 1 to the Registration Statement
on Form S-1).
3.02* Bylaws of Holding.
4.01 Specimen Certificate of Holding's Class A Common Stock
(incorporated by reference to Exhibit 4.01 to Amendment No.
2 to the Registration Statement on Form S-1 (Registration
Number 333-95199)).
4.02 Amended and Restated Registration Rights Agreement, dated as
of January 21, 2000, by and among Holding, Sterling Holding
Company, L.L.C., Manatee Investment Corporation, Citicorp
Mezzanine Partners, L.P. and the management investors named
therein (incorporated by reference to Exhibit 4.02 to the
Registration Statement on Form 8-A previously filed by
Intersil Holding Corporation on February 18, 2000).
5.01 Opinion of Dechert Price & Rhoads.
10.01 Warrant Agreement, dated as of August 13, 1999, between
Holding and United States Trust Company of New York
(incorporated by reference to Exhibit 4.01 to the
Registration Statement on Form S-1).
10.02 Purchase Agreement, dated as of August 6, 1999, between
Intersil, Holding, Harris Semiconductor, LLC, Harris
Semiconductor (Ohio), LLC, Harris Semiconductor
(Pennsylvania), LLC, Choice Microsystems, Inc., Credit
Suisse First Boston Corporation, J. P. Morgan Securities
Inc. and Salomon Smith Barney Inc. (incorporated by
reference to Exhibit 4.02 to the Registration Statement on
Form S-1).
10.03 Registration Rights Agreement, dated as of August 6, 1999,
between Intersil, Holding, Harris Semiconductor, LLC, Harris
Semiconductor (Ohio), LLC, Harris Semiconductor
(Pennsylvania), LLC, Choice Microsystems, Inc., Credit
Suisse First Boston Corporation, J. P. Morgan Securities
Inc. and Salomon Smith Barney Inc. (incorporated by
reference to Exhibit 4.03 to the Registration Statement on
Form S-1).
10.04 Indenture, dated as of August 13, 1999, among Intersil,
Holding, Harris Semiconductor, LLC, Harris Semiconductor
(Ohio), LLC, Harris Semiconductor (Pennsylvania), LLC,
Choice Microsystems, Inc. and United States Trust Company of
New York for 13 1/4% Senior Subordinated Notes due 2009
(incorporated by reference to Exhibit 10.01 to the
Registration Statement on Form S-1).
10.05 Form of 13 1/4% Senior Subordinated Notes due 2009 (included
in Exhibit 10.01).
10.06 Credit Agreement, dated as of August 13, 1999, among
Intersil, the Lender Parties thereto, Credit Suisse First
Boston, as the Administrative Agent, Salomon Smith Barney,
as Syndication Agent, and Morgan Guaranty Trust Company of
New York, as Documentation Agent (incorporated by reference
to Exhibit 10.03 to the Registration Statement on Form S-1).
10.07 Amendment No. 1 an Waiver, dated as of January 28, 2000, to
the Credit Agreement, dated as of August 13, 1999, among
Intersil, Holding, Credit Suisse First Boston, as the
Administrative Agent, Salomon Smith Barney, Syndication
Agent, and Morgan Guaranty Trust Company of New York, as
Documentation Agent (incorporated by reference to Exhibit
10.07 to the Amendment No. 2 to the Registration Statement
on Form S-1).
10.08 Subordinated Credit Agreement, dated as of August 13, 1999,
among Holding and Citicorp Mezzanine Partners, L.P. for
13 1/2% Subordinated Pay-In-Kind Note due 2010 (incorporated
by reference to Exhibit 10.04 to the Registration Statement
on Form S-1).
10.09 Form of 13 1/2% Subordinated Pay-In-Kind Note due 2010
(included in Exhibit 10.04).
10.10 Indenture, dated as of August 13, 1999, among Holding and
United States Trust Company of New York for 11.13%
Subordinated Pay-In-Kind Notes due 2010 (incorporated by
reference to Exhibit 10.06 to the Registration Statement on
Form S-1).
10.11 Form of 11.13% Subordinated Pay-In-Kind Note due 2010
(included in Exhibit 10.06).
</TABLE>
<PAGE>

<TABLE>
<CAPTION>
EXHIBIT
NO. DESCRIPTION
- ------- -----------
<S> <C>
10.12 Securities Purchase and Holders Agreement, dated as of
August 13, 1999, among Holding, Sterling Holding Company,
LLC, Manatee Investment Corporation, Intersil Prism LLC,
Citicorp Mezzanine Partners, L.P., William N. Stout and the
management investors named therein (incorporated by
reference to Exhibit 10.09 to the Registration Statement on
Form S-1).
10.13 Option Award Agreement, dated as of August 13, 1999
(incorporated by reference to Exhibit 10.10 to the
Registration Statement on Form S-1).
10.14 Employment Agreement, dated as of August 9, between Intersil
and Gregory L. Williams (incorporated by reference to
Exhibit 10.11 to the Registration Statement on Form S-1).
10.15 Agreement between Harris and Local Union No. 1907
International Brotherhood of Electrical Workers, AFL-CIO
(Findlay, OH Facility), effective as of July 1, 1996
(incorporated by reference to Exhibit 10.12 to the
Registration Statement on Form S-1).
10.16 Agreement between Harris and Local Union 177 International
Union of Electronic, Electrical, Salaried, Machine and
Furniture Workers, AFL-CIO (Mountaintop, PA Facility),
effective December 1, 1998 (incorporated by reference to
Exhibit 10.13 to the Registration Statement on Form S-1).
10.17 Machinery and Equipment Loan Agreement, dated September 9,
1996, between Commonwealth of Pennsylvania, Department of
Community and Economic Development and Harris (incorporated
by reference to Exhibit 10.14 to the Registration Statement
on Form S-1).
10.18 Machinery and Equipment Loan Agreement, dated as of November
3, 1998, between Commonwealth of Pennsylvania, Department of
Community and Economic Development and Harris (incorporated
by reference to Exhibit 10.15 to the Registration Statement
on Form S-1).
10.19 Master Agreement, dated as of December 2, 1997, between
Harris Semiconductor and Optum Software (incorporated by
reference to Exhibit 10.16 to the Registration Statement on
Form S-1).
10.20 Purchase Agreement, dated as of March 14, 1997, between
Harris Semiconductor and Praxair, Inc. (incorporated by
reference to Exhibit 10.17 to the Registration Statement on
Form S-1).
10.21 Asset Purchase Agreement, dated as of July 2, 1999, by and
among Align-Rite International, Inc., Align-Rite, Inc. and
Harris (incorporated by reference to Exhibit 10.18 to the
Registration Statement on Form S-1).
10.22 Bill of Sale and Assignment, dated as of July 2, 1999, by
Harris in favor of Align-Rite International, Inc. and
Align-Rite, Inc. (incorporated by reference to Exhibit 10.19
to the Registration Statement on Form S-1).
10.23 Lease Agreement, dated as of July 2, 1999, by and among
Harris Corporation Semiconductor Business Unit and
Align-Rite, Inc. (incorporated by reference to Exhibit 10.20
to the Registration Statement on Form S-1).
10.24 Photomask Supply and Strategic Alliance Agreement, dated as
of July 2, 1999, by and among Harris, Align-Rite
International, Inc. and Align-Rite, Inc. (incorporated by
reference to Exhibit 10.21 to the Registration Statement on
Form S-1).
10.25 Site Services Agreement, dated as of July 2, 1999, by and
among Harris Corporation Semiconductor Business Unit and
Align-Rite, Inc. (incorporated by reference to Exhibit 10.22
to the Registration Statement on Form S-1).
10.26 Software License Agreement, dated as of July 31, 1984,
between Harris and Consilium Associates, Inc. (incorporated
by reference to Exhibit 10.23 to the Registration Statement
on Form S-1).
10.27 Addendum Software License and Maintenance Agreement, dated
as of October 27, 1995, between Harris and Consilium, Inc.
(incorporated by reference to Exhibit 10.24 to the
Registration Statement on Form S-1).
10.28 Specialty Gas Supply Agreement, dated as of October 15,
1996, between Air Products and Chemicals, Inc. and Harris
(incorporated by reference to Exhibit 10.25 to the
Registration Statement on Form S-1).
</TABLE>
<PAGE>

<TABLE>
<CAPTION>
EXHIBIT
NO. DESCRIPTION
- ------- -----------
<S> <C>
10.29 Silicon Wafer Purchase Agreement, dated as of January 1,
1997, between Mitsubishi Silicon America Corporation and
Harris (incorporated by reference to Exhibit 10.26 to the
Registration Statement on Form S-1).
10.30 Nitrogen Supply Agreement, dated as of September 22, 1992,
between Harris Corporation Semiconductor Sector and Liquid
Air Corporation Merchant Gases Division (incorporated by
reference to Exhibit 10.27 to the Registration Statement on
Form S-1).
10.31 Nitrogen Supply System Agreement, Amendment Number 1, dated
as of September 15, 1996, between Air Liquide America
Corporation and Harris Corporation Semiconductor Sector
(incorporated by reference to Exhibit 10.28 to the
Registration Statement on Form S-1).
10.32 Site Subscription Agreement, dated as of July 1, 1993,
between Harris Semiconductor Sector of Harris and Cadence
Design Systems, Inc. (incorporated by reference to Exhibit
10.29 to the Registration Statement on Form S-1).
10.33 Site Subscription Addendum, dated December 19, 1997, between
Harris Semiconductor Sector of Harris and Cadence Design
Systems, Inc. (incorporated by reference to Exhibit 10.30 to
the Registration Statement on Form S-1).
10.34 HMCD--HSS Memorandum of Agreement, dated March 26, 1999,
between Harris Microwave Communication Division and Harris
Semiconductor Sector (incorporated by reference to Exhibit
10.31 to the Registration Statement on Form S-1).
10.35 Investment Agency Appointment and Participation
Authorization, dated September 3, 1999, between Intersil,
Intersil Corporation Master Trust and T. Rowe Price Trust
Company (incorporated by reference to Exhibit 10.32 to the
Registration Statement on Form S-1).
10.36 Investment Agency Appointment and Participation Authority,
dated September 3, 1999, between Intersil Corporation Master
Trust and T. Rowe Price Trust Company (incorporated by
reference to Exhibit 10.33 to the Registration Statement on
Form S-1).
10.37 Investment Advisory Agreement (Equity Growth Fund), dated
September 3, 1999, between T. Rowe Price Associates, Inc.
and Intersil Corporation Retirement Committee (incorporated
by reference to Exhibit 10.34 to the Registration Statement
on Form S-1).
10.38 Investment Advisory Agreement (Equity Income Fund), dated
September 3, 1999, between T. Rowe Price Associates, Inc.
and Intersil Corporation Retirement Committee (incorporated
by reference to Exhibit 10.35 to the Registration Statement
on Form S-1).
10.39 Intersil Corporation Retirement Plan (Non-Union), dated
September 3, 1999 (incorporated by reference to Exhibit
10.36 to the Registration Statement on Form S-1).
10.40 Intersil Corporation Retirement Plan (Union), dated
September 3, 1999 (incorporated by reference to Exhibit
10.37 to the Registration Statement on Form S-1).
10.41 Commercial Supply Agreement, dated December 3, 1998, by and
between Texas Instruments Incorporated and Harris
(incorporated by reference to Exhibit 10.38 to the
Registration Statement on Form S-1).
10.42 Military Supply Agreement, dated December 3, 1998, by and
between Texas Instruments Incorporated and Harris
(incorporated by reference to Exhibit 10.39 to the
Registration Statement on Form S-1).
10.43 Intellectual Property Agreement, dated December 3, 1998, by
and between Texas Instruments Incorporated, Harris, Harris
Advanced Technology (Malaysia) Sdn. Bhd. and Harris
Southwest Properties, Inc. (incorporated by reference to
Exhibit 10.40 to the Registration Statement on Form S-1).
10.44 Asset Transfer Agreement, dated December 3, 1998, by and
between Texas Instruments Incorporated and Harris Advanced
Technology (Malaysia) Sdn. Bhd. (incorporated by reference
to Exhibit 10.41 to the Registration Statement on Form S-1).
</TABLE>
<PAGE>

<TABLE>
<CAPTION>
EXHIBIT
NO. DESCRIPTION
- ------- -----------
<S> <C>
10.45 Military Asset Purchase Agreement, dated October 23, 1998,
by and between Texas Instruments Incorporated, Harris,
Harris Advanced Technology (Malaysia) Sdn. Bhd. and Harris
Southwest Properties, Inc. (incorporated by reference to
Exhibit 10.42 to the Registration Statement on Form S-1).
10.46 Commercial Asset Purchase Agreement, dated October 23, 1998,
by and between Texas Instruments Incorporated, Harris,
Harris Advanced Technology (Malaysia) Sdn. Bhd. and Harris
Southwest Properties, Inc. (incorporated by reference to
Exhibit 10.43 to the Registration Statement on Form S-1).
10.47 Certificate of Leasehold Property for Land Office No. 7668
by Harris Advanced Technology (M) Sdn. Bhd. (incorporated by
reference to Exhibit 10.44 to the Registration Statement on
Form S-1).
10.48 State Lease for Lot No. 7716 by Harris Advanced Technology
(Malaysia) Sdn. Bhd. (incorporated by reference to Exhibit
10.45 to the Registration Statement on Form S-1).
10.49 Certificate of Leasehold Property for Land Office No. 7666
by Harris Advanced Technology (M) Sdn. Bhd. (incorporated by
reference to Exhibit 10.46 to the Registration Statement on
Form S-1).
21.01 Subsidiaries of Holding (incorporated by reference to
Exhibit 21.01 to the Registration Statement on Form S-1).
23.01 Consent of Deehert Price & Rhoads (included in Exhibit
5.01).
23.02 Consent of Ernst & Young LLP.
24.01 Power of Attorney (included on Signature Page).
27.01 Financial Data Schedule.
</TABLE>

- ------------------
* Incorporated by reference to the similarly numbered Exhibit to the
Registration Statement on Form S-1 previously filed by Intersil Holding
Corporation on November 10, 1999 (Registration No. 333-90857) ("Registration
Statement on Form S-1").

[LETTERHEAD OF DECHERT PRICE & RHOADS]

April 18, 2000

Intersil Holding Corporation
2401 Palm Bay Road NE
Palm Bay, Florida 32905

Re: Registration Statement on Form S-4
----------------------------------

Gentlemen and Ladies:

We have acted as counsel to Intersil Holding Corporation, a Delaware
corporation ("Intersil"), in connection with the preparation and filing of the
Registration Statement on Form S-4 filed April 18, 2000 (the "Registration
Statement"), with the Securities and Exchange Commission under the Securities
Act of 1933, as amended (the "Securities Act"), relating to the proposed
issuance of up to 4,000,000 shares (the "Shares") of Class A Common Stock, par
value $.01 per share, of Intersil ("Class A Stock"), may be issued from time to
time in connection with acquisitions by Intersil, or its subsidiaries, of other
businesses, assets or securities.

We have participated in the preparation of the Registration Statement and
have made such legal and factual examination and inquiry as we have deemed
necessary for the rendering of this opinion. In making our examination we have
assumed the genuineness of all signatures, the authenticity of all documents
submitted to us as originals and the conformity to all authentic original
documents of all documents submitted to us as copies.

Based upon and subject to the foregoing, we are of the opinion that when
(i) issued, delivered and paid for in accordance with the terms of the
definitive agreements governing the issuance of such shares (the "Acquisition
Agreements"), assuming: (a) that consideration equivalent to at least par value
will be received by Intersil upon issuance of the Shares, (b) that the execution
and delivery of the Acquisition Agreements and the issuance of the Shares
governed thereby are duly authorized and approved by the Board of Directors of
Intersil, and (c) the completion of all proceedings to be taken in order to
permit such issuances to be carried out in accordance with applicable securities
laws; and (ii) certificates representing the Shares in the form of the specimen
certificate examined by us have been manually signed by an authorized officer of
the transfer agent and registrar for the Class A Stock and registered by such
transfer agent and registrar, the issuance and sale of the Shares will have been
duly authorized, and the Shares will be validly issued, fully paid and
nonassessable.

We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and to the use of our name in the Prospectus contained
therein, under the caption "Legal Matters." In giving such consent we do not
thereby admit that we are in the category of persons whose consent is required
under Section 7 of the Securities Act.

Very truly yours,

DECHERT PRICE & RHOADS

EXHIBIT 23.02

CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS

We consent to the reference to our firm under the caption "Experts" and to
the use of our report dated November 3, 1999, (except Note L, as to which the
date is February 23, 2000) included in the Registration Statement (Form S-4) and
related Prospectus of Intersil Holding Corporation dated April 17, 2000.

ERNST & YOUNG LLP

Jacksonville, Florida
April 18, 2000

<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED
FROM THE COMPANY'S FINANCIAL STATEMENTS FOR THE PERIODS ENDED
JULY 2, 1999 AND OCTOBER 1, 1999, AND IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>

<S> <C> <C>
<PERIOD-TYPE> 12-MOS 3-MOS
<FISCAL-YEAR-END> JUL-02-1999 OCT-01-1999
<PERIOD-END> JUL-02-1999 JUN-30-2000
<CASH> 0 33,820
<SECURITIES> 0 0
<RECEIVABLES> 100,674 84,777
<ALLOWANCES> 582 780
<INVENTORY> 153,822 156,384
<CURRENT-ASSETS> 263,224 282,867
<PP&E> 410,530 342,198
<DEPRECIATION> 582,616 8,740
<TOTAL-ASSETS> 761,179 736,720
<CURRENT-LIABILITIES> 91,071 114,247
<BONDS> 4,207 543,349
0 86,369
0 0
<COMMON> 0 1,000
<OTHER-SE> 658,879 (16,444)
<TOTAL-LIABILITY-AND-EQUITY> 761,179 736,720
<SALES> 532,718 133,884
<TOTAL-REVENUES> 532,718 133,884
<CGS> 349,776 86,235
<TOTAL-COSTS> 349,776 86,235
<OTHER-EXPENSES> 162,794 62,116
<LOSS-PROVISION> 487 198
<INTEREST-EXPENSE> (1,231) 8,554
<INCOME-PRETAX> 21,379 (23,021)
<INCOME-TAX> (6,027) 120
<INCOME-CONTINUING> 27,406 (23,141)
<DISCONTINUED> 0 0
<EXTRAORDINARY> 0 0
<CHANGES> 0 0
<NET-INCOME> 27,406 (23,141)
<EPS-BASIC> 0 0
<EPS-DILUTED> 0 (.22)

</TABLE>