OMNIVISION TECHNOLOGIES INC, S-1/A, 2000-04-14

OMNIVISION TECHNOLOGIES INC
S-1/A, 2000-04-14
SEMICONDUCTORS & RELATED DEVICES

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<PAGE>

As filed with the Securities and Exchange Commission on April 14, 2000

Registration No. 333-31926
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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AMENDMENT NO. 1

TO
FORM S-1
REGISTRATION STATEMENT
Under
The Securities Act Of 1933

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OMNIVISION TECHNOLOGIES, INC.
(Exact name of Registrant as specified in its charter)
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<TABLE>
<S> <C> <C>
Delaware 3673 77-0401990
(State or other jurisdiction (Primary Standard Industrial (I.R.S. Employer
of incorporation or organization) Classification Code Number) Identification Number)
</TABLE>

OmniVision Technologies, Inc.
930 Thompson Place
Sunnyvale, California 94086
(408) 733-3030
(Address, including zip code, and telephone number, including area code, of
Registrant's principal executive offices)
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Shaw Hong
Chief Executive Officer
OmniVision Technologies, Inc.
930 Thompson Place
Sunnyvale, California 94086
(408) 733-3030
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
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Copies to:
<TABLE>
<S> <C>
Robert P. Latta, Esq. Nora L. Gibson, Esq.
Wilson Sonsini Goodrich & Rosati Brobeck Phleger & Harrison LLP
Professional Corporation Spear Street Tower
650 Page Mill Road One Market
Palo Alto, CA 94304 San Francisco, California 94105
(650) 493-9300 (415) 442-0900
</TABLE>
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Approximate date of commencement of proposed sale to the public: As soon as
practicable 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. [_]

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

If this form is a post-effective amendment filed pursuant to Rule 462(c)
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. [_]

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. [_]

If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [_]
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CALCULATION OF REGISTRATION FEE
<TABLE>
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<CAPTION>
Proposed
Proposed Maximum
Title of Each Class of Maximum Aggregate
Securities to be Amount to be Offering Price Offering Amount of
Registered Registered Per Share Price(1) Registration Fee(2)
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<S> <C> <C> <C> <C>
Common stock, $.001 par
value................. 5,750,000 $11.00 $63,250,000 $16,698
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</TABLE>

(1) Estimated solely for the purpose of computing the amount of the
registration fee pursuant to Rule 457(a) under the Securities Act of 1933.

(2) Previously paid.
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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 the 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>

++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
+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 prospectus is not an +
+offer to sell securities, and we are not soliciting offers to buy these +
+securities, in any state where the offer or sale is not permitted. +
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++

SUBJECT TO COMPLETION, DATED APRIL 14, 2000
[LOGO OF OMNIVISION APPEARS HERE]

5,000,000 Shares

Common Stock

OmniVision Technologies, Inc. is offering 5,000,000 shares of its common
stock. This is our initial public offering and no public market currently
exists for our shares. We have applied to have the shares we are offering
approved for quotation on the Nasdaq National Market under the symbol "OVTI."
We anticipate that the initial public offering price will be between $9.00 and
$11.00 per share.

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Investing in our common stock involves risks.
See "Risk Factors" beginning on page 8.

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<TABLE>
<CAPTION>
Per
Share Total
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<S> <C> <C>
Public Offering Price.............................................. $ $
Underwriting Discounts and Commissions............................. $ $
Proceeds to OmniVision Technologies, Inc........................... $ $
</TABLE>

The Securities and Exchange Commission and state securities regulators have
not approved or disapproved these securities, or determined if this prospectus
is truthful or complete. Any representation to the contrary is a criminal
offense.

We have granted the underwriters a 30 day option to purchase up to an
additional 750,000 shares of common stock to cover over allotments.

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

Robertson Stephens

Prudential Volpe Technology
a unit of Prudential Securities

Needham & Company, Inc.

The date of this prospectus is , 2000
<PAGE>

[Company logo. Title in Bold and Underlined, "Freedom to Envision New Video
Applications". Subtitled "Single Chip Image Sensors". In the center of the
pages is a picture of our Single Chip Image Sensor next to a quarter, a Single
Chip Image Sensor mounted on a circuit board and a circuit board with a lens
attached over the Single Chip Image Sensor. Above the picture is the following
text, "OmniVision's Single Chip Image Sensors". The picture and accompanying
text are surrounded by images of products which incorporate our Single Chip
Image Sensors, along with text describing such products. These products are
divided into two groups. The upper group is entitled "Current Applications for
OmniVision's Sensors" and includes the following products: Personal Digital
Assistants, Mobile Phones, CCTVs, Security and Surveillance, PC Video Cameras,
Digital Still Cameras and Toys. The lower group is entitled "Emerging
Applications in Development", and includes the following products: Personal
Identification Systems, Medical Instruments, Automotive, Video Phones and Bar
Code Readers.

Below the product images is text describing how OmniVision's Single Chip
Image Sensors are incorporated into the illustrated products and the difference
between Current Applications for OmniVision's Sensors and Emerging Applications
in Development.]
<PAGE>

You should rely only on the information contained in this prospectus. We
have not authorized anyone to provide you with information different from that
contained in this prospectus. We are offering to sell, and seeking offers to
buy, shares of common stock only in jurisdictions where offers and sales are
permitted. The information contained in this prospectus is accurate only as of
the date of this prospectus, regardless of the time of delivery of this
prospectus or of any sale of the common stock.

Until , 2000, all dealers that buy, sell or trade our common stock,
whether or not participating in this offering, may be required to deliver a
prospectus. This requirement is in addition to the dealers' obligation to
deliver a prospectus when acting as underwriters and with respect to their
unsold allotments or subscriptions.

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TABLE OF CONTENTS

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Page
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Prospectus Summary ...................................................... 4
Risk Factors ............................................................ 8
Forward Looking Statements .............................................. 19
Use Of Proceeds.......................................................... 20
Dividend Policy.......................................................... 20
Capitalization........................................................... 21
Dilution ................................................................ 22
Selected Financial Data ................................................. 23
Management's Discussion And Analysis Of Financial Condition And Results
Of Operations ......................................................... 25
Business ................................................................ 35
Management .............................................................. 50
Certain Transactions .................................................... 58
Principal Stockholders................................................... 61
Description Of Capital Stock ............................................ 63
Shares Eligible For Future Sale ......................................... 67
Underwriting ............................................................ 69
Legal Matters ........................................................... 71
Experts ................................................................. 71
Where You Can Find Additional Information ............................... 71
Index to Financial Statements............................................ F-1
</TABLE>

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"OmniVision" is our trademark and service mark. Other service marks,
trademarks and trade names referred to in this prospectus are the property of
their respective owners.

3
<PAGE>

PROSPECTUS SUMMARY

Because this is only a summary, it does not contain all the information
that may be important to you. You should read the entire prospectus, especially
"Risk Factors" and the Financial Statements and notes to those statements
appearing elsewhere in this prospectus, before deciding to invest in our common
stock.

Our Business

OmniVision Technologies, Inc. designs, develops and markets high
performance, high quality and cost efficient semiconductor imaging devices for
computing, communications and consumer electronics applications. Our main
product, an image sensor, is used to capture an image in cameras and camera
related products such as personal computer cameras, digital still cameras,
personal digital assistant cameras and mobile phone cameras. We have developed
our image sensors using the standard semiconductor manufacturing process used
for approximately ninety percent of modern integrated circuits. As a result,
unlike competitive image sensors which require multiple chips to achieve the
same functions, we are able to integrate nearly all camera functions into a
single chip. This leads us to believe that we supply the most highly
integrated, single chip image sensor. Our single chip design offers competitive
advantages that can allow our customers to design cameras that are lower in
cost, smaller, lighter in weight, consume less power, are more reliable and
more easily integrated with other circuits than cameras using multiple chip
image sensors.

Our image sensors are currently used to capture images in digital still
cameras, personal computer cameras, personal digital assistant cameras, mobile
phone cameras, security and surveillance systems, closed circuit TVs and toys
and games. We provide sales and engineering support to current and prospective
customers to help them use our current image sensors. We also assist our
customers in developing emerging applications that use our image sensors to
capture images such as personal identification systems, medical imaging
devices, machine control systems, automotive applications and videophones.

We have shipped over 2.6 million image sensors in the first nine months of
the fiscal year ended April 30, 2000. Our customers include industry leading
original equipment manufacturers such as Alaris, Creative Technology and
Viewquest (a customer who is currently manufacturing the IntelPlay Me2Cam,
which is a personal computer video camera for an Intel and Mattel joint
venture, has recently commenced manufacturing a personal computer video camera
for Microsoft and plans to manufacture a personal digital assistant camera for
Kodak).

Our objective is to be the leading supplier of image sensors for camera
manufacturers by:

. focusing on capturing mass market applications;

. targeting camera manufacturers by assisting them in the design and
development of their products;

. maintaining our technology leadership by continuing to develop our core
technology;

. continuing to develop new products aimed at new and existing markets;
and

. continuing to establish both formal and informal strategic relationships
with key suppliers and customers.

Corporate Information

We were incorporated in California in May 1995. In March 2000, we
reincorporated in Delaware. Our principal executive offices are located at 930
Thompson Place, Sunnyvale, California 94086. Our telephone number at this
location is (408) 733-3030. Our corporate Internet address is www.ovt.com. The
information contained on our website is not a part of this prospectus.

4
<PAGE>

The Offering

<TABLE>
<S> <C>
Common stock offered.................... 5,000,000 shares
Common stock to be outstanding after
this offering......................... 21,241,551 shares
Use of proceeds......................... For capital expenditures and general
corporate purposes, including working
capital. See "Use of Proceeds."
Proposed Nasdaq National Market symbol.. OVTI
</TABLE>

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The common stock outstanding after the offering is based on the number of
shares outstanding as of January 31, 2000, and excludes:

. 844,450 shares issuable upon exercise of outstanding options under our
1995 stock option plan at a weighted average exercise price of $0.97 per
share;

. a total of 4,750,000 shares available for future issuance under our
various stock plans excluding the annual increase in the number of
shares authorized under each of our plans beginning May 1, 2002. See
"Management--Stock Plans" for a description of how these annual
increases are determined.

Except as described in the financial statements or as otherwise specified
in this prospectus, all information in this prospectus:

. assumes no exercise of the underwriters' over allotment option;

. reflects our reincorporation into Delaware; and

. reflects the conversion of all of our outstanding preferred stock into
common stock upon the closing of this offering.

5
<PAGE>

Summary Financial Data
(in thousands, except per share data)

<TABLE>
<CAPTION>
Nine Months
Year Ended Ended
April 30, January 31,
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1997 1998 1999 1999 2000
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<S> <C> <C> <C> <C> <C>
Statement of Operations:
Revenues.......................... $ 59 $ 1,476 $ 5,243 $ 2,147 $25,111
Cost of revenues.................. 557 2,652 4,086 1,595 17,698
Reserve for purchase commitments.. -- -- 3,473 -- (3,235)
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Gross profit (loss)............... (498) (1,176) (2,316) 552 10,648
------- ------- ------- ------- -------
Operating expenses:
Research and development......... 1,698 3,440 3,290 2,260 2,453
Selling, general and
administrative................. 706 1,323 1,853 1,378 2,126
Stock compensation charge........ 44 206 459 331 1,159
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Total operating expenses........ 2,448 4,969 5,602 3,969 5,738
------- ------- ------- ------- -------
Income (loss) from operations..... (2,946) (6,145) (7,918) (3,417) 4,910
Interest income (expense) net..... 108 106 396 267 138
------- ------- ------- ------- -------
Net income (loss)................. $(2,838) $(6,039) $(7,522) $(3,150) $ 5,048
======= ======= ======= ======= =======
Net income (loss) per share:
Basic............................ $(16.89) $(12.71) $(10.39) $ (4.51) $ 1.75
======= ======= ======= ======= =======
Diluted.......................... $(16.89) $(12.71) $(10.39) $ (4.51) $ 0.31
======= ======= ======= ======= =======
Shares used in computing net
income (loss) per share:
Basic............................ 168 475 724 699 2,879
======= ======= ======= ======= =======
Diluted.......................... 168 475 724 699 16,418
======= ======= ======= ======= =======
Pro forma net income (loss) per
share:
Basic............................ $ (0.58) $ 0.33
======= =======
Diluted.......................... $ (0.58) $ 0.31
======= =======
Shares used in computing pro forma
net income (loss) per share
(unaudited):
Basic............................ 12,951 15,184
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Diluted.......................... 12,951 16,418
======= =======
</TABLE>

The reserve for purchase commitments is described in Note 4 of our Notes to
Financial Statements included in this prospectus. Research and development
expenses and selling, general and administrative expenses exclude stock
compensation charges; see Note 8 of our Notes to Financial Statements. The pro
forma net income (loss) per share is calculated assuming that all outstanding
shares of convertible preferred stock are converted into common stock at the
beginning of the periods presented or on the date of issuance of the preferred
stock, whichever is later.

6
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<TABLE>
<CAPTION>
January 31, 2000
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Pro Forma
Actual as adjusted
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<S> <C> <C>
Balance Sheet Data:
Cash and cash equivalents................................... $6,370 $51,570
Working capital............................................. 9,289 54,489
Total assets................................................ 19,716 64,916
Total current liabilities................................... 8,270 8,270
Total redeemable convertible preferred stock................ 21,082 0
Total stockholders' equity.................................. (9,636) 56,646
</TABLE>

The balance sheet data appearing above at January 31, 2000, pro forma as
adjusted, gives effect to

. the conversion of all outstanding shares of preferred stock into
12,305,001 shares of common stock and

. the sale in this offering of 5,000,000 shares of common stock at an
estimated initial public offering price of $10.00 per share after
deducting the estimated underwriting discounts and commissions and the
estimated offering expenses.

7
<PAGE>

RISK FACTORS

You should carefully consider these risk factors, together with all of the
other information included in this prospectus, before you decide to purchase
shares of our common stock. The risks and uncertainties described below are not
the only ones we face. Additional risks and uncertainties not presently known
to us or that we currently deem immaterial may also harm our business.

Risks Related to our Operations and the Complementary Metal Oxide
Semiconductor,

or CMOS, Image Sensor Industry

Our limited operating history makes it difficult to evaluate our future
prospects and your investment.

We were incorporated in May 1995 and have only recently begun selling our
products. We introduced our first black and white image sensor for the security
and surveillance and toy and game markets in 1996 and our first color image
sensor for the PC video camera and toy and game markets in October 1997. We are
still in the process of developing and producing new products for the digital
still camera and PC video camera markets which we intend to introduce this
year. Thus, we have a limited operating history, which makes an evaluation of
our future prospects and your investment difficult. Accordingly, we face risks
and difficulties frequently encountered by early stage companies in new and
rapidly evolving markets.

We have a history of losses, we only recently became profitable and we may not
subsequently sustain profitability.

We incurred net losses of approximately $6.0 million in fiscal year 1998
and approximately $7.5 million in fiscal year 1999. For the nine months ended
January 31, 2000, the first period in which we became profitable, our net
income was approximately $5.0 million. In the future, as we develop new
products, we expect research and development expenses to increase. Also, as we
hire additional personnel and possibly engage in larger business transactions,
we expect selling, general and administrative expenses to increase. We will
also incur substantial noncash charges relating to the amortization of unearned
compensation. If these expenses increase and our revenues do not increase, we
may not subsequently sustain profitability. See "Selected Financial Data" and
"Management's Discussion and Analysis of Financial Condition and Results of
Operations."

Fluctuations in our quarterly operating results make it difficult to predict
our future performance and may result in volatility in the market price of our
common stock.

Our quarterly operating results have varied significantly from quarter to
quarter in the past and are likely to vary significantly in the future based on
a number of factors related to how we manage our business. These factors, many
of which are more fully discussed in other risk factors, include:

. our ability to manage our product transitions;

. the mix of the products we sell and the distribution channels through
which they are sold; and

. the availability of production capacities at the semiconductor
foundries that manufacture our products or components of our products.

In the past, our introduction of new products and our product mix have
affected our quarterly operating results. We also anticipate that the rate of
orders from our customers may vary significantly from quarter to quarter. Our
expenses and inventory levels are based on our expectations of future revenues
and our expenses are relatively fixed in the short term. Consequently, if
revenues in any quarter do not occur when expected, expenses and inventory
levels could be disproportionately high and our operating results for that
quarter and, potentially future quarters, may be harmed.

8
<PAGE>

Certain other factors have in the past caused and are likely in the future
to cause fluctuations in our quarterly operating results. These factors are
industry risks over which we have little or no control. These factors include:

. the growth of the market for products and applications using
complementary metal oxide semiconductor image sensors;

. the timing and amount of orders from our camera manufacturers and
distributor customers;

. the deferral of customer orders in anticipation of new products,
designs or enhancements by us or our competitors; and

. the announcement and introduction of products and technologies by our
competitors.

Any one or more of these factors is difficult to forecast and could result in
fluctuations in our quarterly operating results. Fluctuations in our quarterly
operating results could adversely affect the price of our common stock in a
manner unrelated to our long term operating performance. Due to the potential
volatility of our stock price, you should not rely on the results of any one
quarter as an indication of our future performance. It is likely that at some
point our quarterly operating results will fall below the expectations of
security analysts and investors. In this event, the price of our common stock
would likely decrease. See "Management's Discussion and Analysis of Financial
Condition and Results of Operations."

We depend on the acceptance of complementary metal oxide semiconductor
technology for mass market image sensor applications, and any delay in the
widespread acceptance of this technology could adversely affect our ability to
increase our revenues and improve our earnings.

Our business strategy depends on the rapid and widespread adoption of the
complementary metal oxide semiconductor fabrication process and the acceptance
of our single chip technology. The image sensor market has been dominated by
charged couple device, or CCD, technology for over 25 years. Although
complementary metal oxide semiconductor technology has been available for over
20 years, complementary metal oxide semiconductor technology has only recently
been used in image sensors. Along with the other risk factors described in this
section, the following factors may delay the widespread adoption of the
complementary metal oxide semiconductor fabrication process and our single chip
technology, the occurrence of any of which could adversely affect our ability
to increase our revenues and earnings:

. the failure of the emergence of a universal platform for imaging
solutions for computers and the Internet;

. the limited availability of bandwidth to run complementary metal oxide
semiconductor image sensor applications;

. the uncertainty of emerging markets for products incorporating
complementary metal oxide semiconductor technology;

. the failure of development of user friendly and affordable products;
and

. improvements or cost reductions to charged couple device image sensors,
which could slow the adoption of CMOS image sensors in markets already
dominated by charged couple device image sensors, such as the security
and surveillance market.

9
<PAGE>

We depend on a limited number of third party wafer foundries to manufacture all
of our products, which reduces our ability to control the manufacturing
process.

We do not own or operate a semiconductor fabrication facility. We rely on
Taiwan Semiconductor Manufacturing Company, or TSMC, Powerchip Semiconductor
Company, or PSC, Shanghai HuaHong NEC Electronics Co. Ltd., or HuaHong-NEC, and
Samsung Electronics Co. Ltd., or Samsung, to produce all of our wafers and
final products. Our reliance on these third party foundries involves a number
of significant risks, including:

. reduced control over delivery schedules, quality assurance,
manufacturing yields and production costs;

. lack of guaranteed production capacity or product supply; and

. unavailability of, or delayed access to, next generation or key process
technologies.

We do not have long term supply agreements with any of our foundries and
instead secure manufacturing availability on a purchase order basis. These
foundries have no obligation to supply products to us for any specific period,
in any specific quantity or at any specific price, except as set forth in a
particular purchase order. Our requirements represent a small portion of the
total production capacities of these foundries and TSMC, PSC, HuaHong-NEC or
Samsung may reallocate capacity to other customers, even during periods of high
demand for our products. If any of our foundries were to become unable or
unwilling to continue manufacturing our wafers in the required volumes, at
acceptable quality, yields and costs and in a timely manner, our business would
be seriously harmed. As a result, we would have to identify and qualify
substitute foundries, which would be time consuming and difficult and could
result in unforeseen manufacturing and operations problems. In addition, if
competition for foundry capacity increases, our product costs may increase, and
we may be required to pay or invest significant amounts to secure access to
manufacturing services. We are also exposed to additional risks if we decide to
transfer our production of semiconductors from one foundry to another. We may
qualify additional foundries in the future. If we do not qualify additional
foundries, we may be exposed to increased risk of capacity shortages due to our
complete dependence on our foundries.

We may not adequately forecast the number of wafers we need, and therefore we
may not be able to react to fluctuations in demand for our products, which
could result in higher operating expenses and lower revenues.

We must forecast the number of wafers we need from each of our foundries.
We hold weekly sales meetings, constantly monitor backlog and frequently review
the status of customer orders. However, if customer demand falls below our
forecast and we are unable to reschedule or cancel our wafer orders, we may
retain excess wafer inventories, which could result in higher operating
expenses and reduced gross margins. Conversely, if customer demand exceeds our
forecasts, we may be unable to obtain an adequate supply of wafers to fill
customer orders, which could result in lower revenues.

If we do not achieve acceptable wafer manufacturing yields, our costs could
increase, and our products may not be deliverable which could lead to higher
operating expenses and lower revenues and damage to our customer relationships.

The fabrication of our products requires wafers to be produced in a highly
controlled and clean environment. Semiconductor companies that supply our
wafers sometimes have experienced problems achieving acceptable wafer
manufacturing yields. Semiconductor manufacturing yields are a function of both
our design technology and the particular foundry's manufacturing process
technology. Low yields may result from design errors or manufacturing failures.
Yield problems may not be determined or improved until an actual image sensor
is made and can be tested. As a result, yield problems may not be identified
until the wafers are well into the production process. We only test our
products after they are assembled, as their optical nature makes earlier
testing difficult and expensive. The risks associated with yields are even
greater because

10
<PAGE>

we rely on third party offshore foundries for our wafers which increases the
effort and time required to identify, communicate and resolve manufacturing
yield problems. If the foundries cannot achieve the planned yields, this will
result in higher costs and reduced product availability.

We depend on third party vendors for color filter processing and assembly,
which reduces our control over delivery schedules, product quality and cost.

After our wafers are produced, they are color filter processed and
assembled by five independent vendors: TSMC, PSC and Toppan Printing Co., Ltd.,
or Toppan for the color filtering process and Kyocera Corporation, or Kyocera,
and Taiwan Electronic Packaging Company, or TEPC, for additional processing and
assembly. We do not have long term agreements with any of these vendors and
typically obtain services from them on a purchase order basis. Our reliance on
these vendors involves risks such as reduced control over delivery schedules,
quality assurance and costs. These risks could result in product shortages or
could increase our costs of manufacturing, assembling or testing our products.
If these vendors are unable or unwilling to continue to provide color filter
processing and assembly services and deliver products of acceptable quality, at
acceptable costs and in a timely manner, our business would be seriously
harmed. We would also have to identify and qualify substitute vendors, which
could be time consuming and difficult and result in unforeseen operations
problems.

Our lengthy manufacturing, packaging and assembly cycle, in addition to our
customers' design cycle, may result in uncertainty and delays in generating
revenues.

A lengthy manufacturing, packaging and assembly process, typically lasting
four months or more, is required to manufacture our image sensors. It can take
additional time before a customer commences volume shipments of products that
incorporate our image sensors. Even when a manufacturer decides to design our
image sensors into its products, the manufacturer may never ship final products
incorporating ours. Given this lengthy cycle, we experience a delay between the
time we increase expenditures for research and development, sales and marketing
efforts and inventory and the time we generate revenues, if any, from these
expenditures. As a result, our revenues and profits could be seriously harmed
if a significant customer reduces or delays orders or chooses not to release
products incorporating our products.

If the demand for our products in current markets and emerging markets fails to
increase as we anticipate, our growth prospects would be diminished.

Our success depends in large part on the continued growth of various
markets that use our products and the emergence of new markets for our
products. The current markets that use our products include digital still
cameras, personal computer video cameras, personal digital assistant cameras,
mobile phone cameras, security and surveillance systems, closed circuit
television systems and toys and games. Emerging markets for our products
include personal identification systems, medical imaging devices, machine
control systems, videophones and automotive applications. If these markets do
not continue to grow and develop, the need for cameras which are lower in cost,
smaller, lighter in weight, consume less power and are more reliable might not
fully develop. In such case, it would be unlikely that our products would
achieve commercial success.

Failure to obtain design wins could cause our revenues to level off or decline.

Our future success will depend on camera manufacturers designing our image
sensors into their systems. To achieve design wins, which are decisions by
those manufacturers to design our products into their systems, we must define
and deliver cost effective, innovative and integrated semiconductor solutions.
Once a manufacturer has designed a supplier's products into its systems, the
manufacturer may be reluctant to change its source of components due to the
significant costs associated with qualifying a new supplier. Accordingly, the
failure to achieve design wins with key camera manufacturers could decrease our
market share or revenues.

11
<PAGE>

Continuing declines in our average sales prices may result in declines in our
gross margins.

Because the image sensor market is characterized by intense competition,
and price reductions for our products are necessary to meet consumer
pricepoints, we expect to experience market driven pricing pressures. This will
likely result in a decline in average sales prices for our products. We believe
that we can offset declining average sales prices by achieving manufacturing
cost efficiencies, developing new products that incorporate more advanced
technology and including more advanced features that can be sold at stable
average gross margins. However, if we are unable to achieve such cost
reductions and technological advances, or are unable to timely introduce new
products, we will lose revenues and gross margins will decline.

Seasonality in our business will cause our results of operations to fluctuate
from period to period and could cause our stock price to fluctuate or decline.

Sales of our image sensors are subject to seasonality. Some of the products
using our image sensors such as PC video cameras and digital still cameras are
consumer electronics goods. Typically, these goods are subject to seasonality
with generally increased sales in November and December due to the holidays. In
addition, we have experienced a decrease in orders in the quarter ended April
30 from our Chinese and Taiwanese customers primarily due to the Chinese New
Year. As a result, product sales are impacted by seasonal purchasing patterns
with higher sales generally occurring in the second half of each year. See
"Management's Discussion and Analysis of Financial Condition and Results of
Operations."

We depend on a few key customers, and the loss of any of them could
significantly reduce our revenues.

Historically, a relatively small number of customers and distributors has
accounted for a significant portion of our product revenues. For the nine
months ended January 31, 2000, approximately 33% of our revenues were generated
by two of our camera manufacturer customers, Creative Technology Ltd. and
Alaris, Inc. These two customers accounted for 17% and 16% of our total
revenues, respectively. In addition, one of our distributors, World Peace
Industrial Company, Ltd., accounted for 24% of our total revenues.

As a result of customer concentration, a significant reduction, delay or
cancellation of orders from one or more of our key camera manufacturers or
distributors, or a decision by our significant customers to select products
manufactured by a competitor for inclusion in future product generations could
seriously harm our business. For example, in 1999, we had to replace one of our
largest distributors with Wintek Electronics because that distributor decided
to distribute a competitor's products. We expect our operating results to
continue to depend on sales to or design decisions of a relatively small number
of distributors and camera manufacturers. See "Business--Customers."

We do not have long term commitments from our customers, and we allocate
resources based on our estimates of customer demand, which could lead to excess
inventory and lost revenue opportunities.

Our sales are generally made on the basis of purchase orders rather than
long term purchase commitments. In addition, our customers may cancel or defer
purchase orders. We manufacture our products according to our estimates of
customer demand. This process requires us to make multiple demand forecast
assumptions, each of which may introduce error into our estimates. If we
overestimate customer demand, we may allocate resources to manufacturing
products which we may not be able to sell or we may have to sell our products
to other customers for lower prices. As a result, we would have excess
inventory, which would have an adverse impact on our results of operations. For
example, customers such as Creative Technology and Alaris unexpectedly deferred
their purchase orders for two of our products in 1999 which resulted in our
shipping fewer quantities to them in the first quarter of fiscal year 2000 and
a higher than expected inventory position. Conversely, if we underestimate
customer demand or if sufficient manufacturing capacity is unavailable, we
would forego revenue opportunities, lose market share and damage our customer
relationships. See "Management's Discussion and Analysis of Financial Condition
and Results of Operations."

12
<PAGE>

We face foreign business, political and economic risks because a majority of
our products, and our customers' products are manufactured and sold outside of
the United States.

A substantial portion of our business, in particular, the manufacturing,
processing and assembly of our products, is conducted outside of the United
States, and as a result, we are subject to foreign business, political and
economic risks. All of our products are manufactured outside of the United
States. Many of our customers are camera manufacturers or are the manufacturers
or suppliers for camera manufacturers and are located in China, Japan, Korea,
Singapore and Taiwan. In addition, sales outside of the United States accounted
for approximately 71% of our revenues for the nine months ended January 31,
2000. We anticipate that sales outside of the United States will continue to
account for a substantial portion of our revenue in future periods.
Accordingly, we are subject to international risks, including:

. difficulties in managing distributors;

. difficulties in staffing and managing foreign operations;

. difficulties in managing foundries and third party manufacturers;

. political and economic instability, including the escalated political
tension between China and Taiwan due to the recent presidential
election in Taiwan, which may have an adverse impact on foreign
exchange rates in Asia;

. inadequacy of local infrastructure, in particular with respect to our
future expansion in China; and

. difficulties in accounts receivable collections.

In addition, camera manufacturers who design our solutions into their
products sell them outside of the United States. This exposes us indirectly to
foreign risks. Because sales of our products have been denominated to date
exclusively in United States dollars, increases in the value of the United
States dollar will increase the price of our products so that they become
relatively more expensive to customers in the local currency of a particular
country, leading to a reduction in revenues and profitability in that country.
A portion of our international revenues may be denominated in foreign
currencies in the future, which will subject us to risks associated with
fluctuations in those foreign currencies. See "Management's Discussion and
Analysis of Financial Condition and Results of Operations."

Our dependence on selling through distributors increases the complexity of our
business which may increase our operating costs and may reduce our ability to
forecast revenues.

Our revenues depend on design wins with new camera manufacturers which, in
turn, rely on third party manufacturers or distributors to provide inventory
management and purchasing functions. Selling through distributors reduces our
ability to forecast sales and increases the complexity of our business,
requiring us to:

. manage a more complex supply chain;

. manage the level of inventory at each distributor;

. provide for credits, return rights and price protection;

. estimate the impact of credits, return rights, price protection and
unsold inventory at distributors; and

. monitor the financial condition and credit worthiness of our
distributors.

Any failure to manage these challenges could reduce our revenues and damage our
relationships with our distributors.

13
<PAGE>

We face intense competition in our markets from more established charged couple
device image sensor manufacturers and complementary metal oxide semiconductor
image sensor manufacturers and if we are unable to compete successfully, we
will not achieve our financial objectives.

The image sensor market is intensely competitive. These markets are
characterized by rapid technological change, evolving standards, short product
life cycles and decreasing prices. Our current products face competition from a
number of sources including companies which sell charged couple device image
sensors as well as other companies which sell multiple chip complementary metal
oxide semiconductor image sensors. We expect competition in our markets to
increase.

Many of our competitors have longer operating histories and greater
presence in key markets, greater name recognition, access to large customer
bases and significantly greater financial, sales and marketing, manufacturing,
distribution, technical and other resources than we do. As a result, they may
be able to adapt more quickly to new or emerging technologies and customer
requirements or devote greater resources to the promotion and sale of their
product than we may. Our competition includes charged couple device image
sensor manufacturers, including Matsushita Electric Industrial, Sanyo Electric
Co. Ltd., Sharp Corporation, Sony Corporation, Toshiba Corporation and Victor
Company of Japan, as well as complementary metal oxide semiconductor image
sensor manufacturers such as Agilent Technologies, Inc., Conexant Systems,
Inc., Hyundai Electronics Industries Co. Ltd., Mitsubishi Electronic, Motorola,
Inc. and Toshiba Corporation. In addition, there are a large number of smaller
startup companies including Chrontel, Inc., ElecVision, Inc., Photobit
Corporation and VLSI Vision Ltd. (now a division of ST Microelectronics), which
may compete with us. In particular, Hyundai and Agilent Technologies have
introduced multiple chip complementary metal oxide semiconductor image sensors.
We cannot assure you that we can compete successfully against current or
potential competitors, or that competition will not seriously harm our business
by reducing sales of our products, reducing our profits and reducing our market
share. See "Business--Competition" for additional information about our
competitors and competition in our market.

Our success depends on the development and introduction of new products, which
we may not be able to do in a timely manner because the process of developing
products using complementary metal oxide semiconductor image sensors is complex
and costly.

The development of new products is highly complex, and we have experienced
delays in completing the development and introduction of new products on
several occasions in the past, some of which exceeded six months. Although we
plan to introduce additional three volt color image sensors this year,
unforeseeable circumstances may delay their introduction. As our products
integrate new and more advanced functions, they become more complex and
increasingly difficult to design and debug. Successful product development and
introduction depend on a number of factors, including:

. accurate prediction of market requirements and evolving standards,
including pixel resolution, output interface standards, power
requirements, optical lens size, input standards and operating systems
for personal computers and other platforms;

. development of advanced technologies and capabilities;

. definition of new products which satisfy customer requirements;

. timely completion and introduction of new product designs;

. use of leading edge foundry processes and achievement of high
manufacturing yields; and

. market acceptance of the new products.

Accomplishing all of this is extremely challenging, time consuming and
expensive. We cannot assure you that any new products or product enhancements
will be developed in time to capture market opportunities or achieve a
significant or sustainable level of acceptance in new and existing markets.

14
<PAGE>

The high level of complexity and integration of functions of our products
increases the risk of latent defects which could damage customer relationships
and increase our costs.

Because we integrate many functions on a single chip, our products are
complex. The greater integration of functions and complexity of operations of
our products, the greater the risk that latent defects or subtle faults could
be discovered by customers or end users after volumes of product have been
shipped. Although we test our products, they may contain defects and errors. In
the past we have encountered defects and errors in our products. Delivery of
products with defects or reliability, quality or compatibility problems may
damage our reputation and our ability to retain existing customers and attract
new customers. In addition, product defects and errors could result in
additional development costs, diversion of technical resources, delayed product
shipments, increased product returns, product warranty costs for recall and
replacement and product liability claims against us which may not be fully
covered by insurance.

We maintain a backlog of customer orders which is subject to cancellation or
delay in delivery schedules, and any cancellation or delay may result in lower
than anticipated revenues.

We manufacture and market primarily standard products. Our sales are
generally made pursuant to standard purchase orders. We include in our backlog
only those customer orders for which we have accepted purchase orders and
assigned shipment dates within the upcoming twelve months. As of January 31,
2000, we had a backlog of approximately $15.9 million. Although our backlog is
typically filled within two to four quarters, orders constituting our current
backlog are subject to cancellation or changes in delivery schedules, and
backlog may not necessarily be an indication of future revenue. In addition,
the current backlog will not necessarily lead to revenues in any future period.
Any cancellation or delay in orders which constitute our current or future
backlog may result in lower than expected revenues. Our bookings visibility
continues to be limited with a substantial majority of our quarterly product
revenues coming from orders that are received and fulfilled in the same
quarter.

We must attract and retain qualified personnel to be successful, and
competition for qualified personnel is intense in our market.

Our success depends to a significant extent upon the continued
contributions of our key management, technical and sales personnel, many of
whom would be difficult to replace. The loss of one or more of these employees
could seriously harm our business. We do not have key person life insurance on
any of our key personnel. We have no agreements which obligate our employees to
continue working for us. Our success also depends on our ability to identify,
attract and retain qualified technical (particularly analog or mixed signal
design engineers), sales, marketing, finance and management personnel.
Competition for qualified personnel is particularly intense in our industry and
in Silicon Valley, California. This is due to a number of factors, including
the high concentration of established and emerging growth technology companies.
This competition makes it difficult to retain our key personnel and to recruit
new qualified personnel. We have experienced, and may continue to experience,
difficulty in hiring and retaining candidates with appropriate qualifications.
If we do not succeed in hiring and retaining candidates with appropriate
qualifications, our revenues and product development efforts could be harmed.

We may be unable to adequately protect our intellectual property and therefore
we may lose some of our competitive advantage.

We rely on a combination of patent, copyright, trademark and trade secret
laws, as well as nondisclosure agreements and other methods to protect our
proprietary technologies. We have been issued patents and have a number of
pending United States and foreign patent applications. However, we cannot
assure you that any patent will issue as a result of any applications or, if
issued, that any claims allowed will be sufficiently broad to protect our
technology. In addition, it is possible that existing or future patents may be
challenged, invalidated or circumvented. It may be possible for a third party
to copy or otherwise obtain and use our products, or technology without
authorization, develop similar technology independently or design around our

15
<PAGE>

patents. Effective copyright, trademark and trade secret protection may be
unavailable or limited in foreign countries. These disputes may result in
costly and time consuming litigation or the license of additional elements of
our intellectual property for free.

We could become subject to litigation regarding intellectual property, which
could divert management attention, be costly to defend and prevent us from
using or selling the challenged technology.

In recent years, there has been significant litigation in the United States
involving patents and other intellectual property rights. This litigation is
widespread in the technology industry and is particularly prevalent in the
semiconductor industry, where a number of companies aggressively use their
patent portfolios by bringing numerous infringement claims. In addition, in
recent years, there has been an increase in the filing of nuisance suits
alleging infringement of intellectual property rights, which pressure
defendants into entering settlement arrangements to quickly dispose of such
suits, regardless of their merits.

In this regard, in March of 1999, we received a written notice from
Photobit Corporation in which Photobit claimed to have patent rights in certain
technology. Photobit requested that we review our products in light of one of
their issued patents. We have reviewed Photobit's patent and based on an
opinion from our patent counsel, we do not believe there is a valid claim
against us under this patent. We shall vigorously defend ourselves against any
claim arising from this notice.

Photobit or other companies may pursue litigation with respect to these or
other claims. The results of any litigation are inherently uncertain. In the
event of an adverse result in any litigation with respect to intellectual
property rights relevant to our products that could arise in the future, we
could be required to obtain licenses to the infringing technology, pay
substantial damages under applicable law, including treble damages if we are
held to have willfully infringed, cease the manufacture, use and sale of
infringing products or to expend significant resources to develop noninfringing
technology. Licenses may not be available from third parties, including
Photobit, either on commercially reasonable terms or at all. In addition,
litigation frequently involves substantial expenditures and can require
significant management attention, even if we ultimately prevail.

Failure to effectively manage our growth could adversely affect our ability to
increase our revenues and improve our earnings.

We are experiencing a period of significant growth that will continue to
place a great strain on our management and other resources. We have grown from
44 employees on January 31, 1999 to 71 employees on January 31, 2000. To manage
our growth effectively, we must, among other things:

. implement and improve operational and financial systems;

. train and manage our employee base;

. attract and retain qualified personnel with relevant experience; and

. lease additional facilities within the next 12 months.

We must also manage multiple relationships with customers, business
partners and other third parties, such as our foundries and process and
assembly vendors. Moreover, our growth may significantly overburden our
management and financial systems and other resources. We also cannot assure you
that we have made adequate allowances for the costs and risks associated with
this expansion. In addition, our systems, procedures or controls may not be
adequate to support our operations, and we may not be able to expand quickly
enough to capitalize on potential market opportunities. Our future operating
results will also depend on expanding sales and marketing, research and
development and administrative support.

16
<PAGE>

Risks Related to this Offering

Management may apply the proceeds of this offering to uses that do not increase
our profits or market value and this may cause the market price of our stock to
decline.

Our management has broad discretion as to how to spend the net proceeds
from this offering and may spend those proceeds in ways which may not increase
our profitability or our market value. We cannot assure you that our
investments and use of the net proceeds of this offering will yield favorable
returns or results. You will not have the opportunity, as part of your
investment decision, to assess whether the proceeds are being used
appropriately. See "Use of Proceeds."

Provisions in our charter documents and Delaware law could prevent or delay a
change in control of OmniVision and may reduce the market price of our common
stock.

Provisions of our certificate of incorporation and bylaws may discourage,
delay or prevent a merger or acquisition that a stockholder may consider
favorable. These provisions include:

. adjusting the price, rights, preferences, privileges and restrictions
of preferred stock without stockholder approval;

. providing for a classified board of directors with staggered, three
year terms;

. requiring supermajority voting to amend some provisions in our
certificate of incorporation and bylaws;

. limiting the persons who may call special meetings of stockholders; and

. prohibiting stockholder actions by written consent.

Provisions of Delaware law also may discourage, delay or prevent another
company from acquiring or merging with us. See "Description of Capital Stock--
Preferred Stock" and "--Anti-Takeover Provisions."

Existing stockholders own a large percentage of our voting stock, which may
allow them to influence the election of directors and approval or disapproval
of significant corporate actions that may not be in the best interests of our
stockholders.

Immediately after the offering, our executive officers, directors and other
principal stockholders will beneficially own or control, directly or
indirectly, approximately 21.5% of the outstanding shares of common stock. As a
result, if these persons act together, they will significantly influence the
election of our directors and approval or disapproval of our significant
corporate actions. This influence over our affairs might be adverse to the
interests of other stockholders. In addition, the voting power of these
stockholders could have the effect of delaying or preventing a change in
control of OmniVision. This concentration of ownership could also adversely
affect our stock's market price or lessen any premium over market price that an
acquiror might otherwise pay. See "Principal Stockholders."

Our common stock has not been publicly traded, and we expect that the price of
our stock may fluctuate substantially which may make it difficult to resell
your shares at or above the initial public offering price.

Recently, the stock prices of technology companies similar to OmniVision
have been volatile. Moreover, prior to this offering, there has been no public
market for our common stock. The initial public offering price will be
determined through negotiations between the underwriters and us. You may not be
able to resell your shares at or above the initial public offering price. The
market price of our common stock may fluctuate significantly in response to a
number of factors, including:

. actual or anticipated fluctuations in our operating results;

17
<PAGE>

. changes in expectations as to our future financial performance;

. changes in financial estimates of securities analysts;

. changes in market valuations of other technology companies; and

. announcements by us or our competitors of significant technical
innovations, design wins, contracts, standards or acquisitions.

Due to these factors, the price of our stock may decline and the value of your
investment would be reduced. In addition, the stock market experiences extreme
volatility that often is unrelated to the performance of particular companies.
These market fluctuations may cause our stock price to decline regardless of
our performance.

Class action litigation due to stock price volatility could lead to substantial
costs and divert our management's attention and resources.

In the past, securities class action litigation often has been brought
against a company following periods of volatility in the market price of its
securities. Companies in the semiconductor industry and other technology
industries are particularly vulnerable to this kind of litigation due to the
high volatility of their stock prices. Accordingly, we may in the future be the
target of securities litigation. Securities litigation could result in
substantial costs and could divert our management's attention and resources.

Future sales of our common stock in the public market may depress our stock
price.

After this offering, we will have outstanding 21,241,551 shares of common
stock. Sales of a substantial number of shares of our common stock in the
public market following this offering could cause our stock price to decline.
All the shares sold in this offering will be freely tradeable, except for those
shares reserved by the underwriters for sale to employees, directors and other
persons associated with us, which will be subject to the restrictions on sale
described in "Underwriting." Of the remaining 16,241,551 shares of common stock
outstanding after this offering, approximately 15,410,809 of the shares will be
eligible for sale in the public market beginning 180 days after the effective
date of this offering and 830,742 of the shares will become freely tradeable at
various dates thereafter upon the lapse of rights of repurchase by the Company.
In addition, the sale of these shares could impair our ability to raise capital
through the sale of additional stock. See "Shares Eligible for Future Sale."

18
<PAGE>

FORWARD LOOKING STATEMENTS

This prospectus, including the sections entitled "Prospectus Summary,"
"Risk Factors," "Management's Discussion and Analysis of Financial Condition
and Results of Operations" and "Business," contains forward looking statements.
These statements relate to future events or our future financial performance
and involve known and unknown risks, uncertainties and other factors that may
cause our or our industry's actual results, levels of activity, performance or
achievements to be materially different from any future results, levels of
activity, performance or achievements expressed or implied by the forward
looking statements. These risks and other factors include those listed under
"Risk Factors" and elsewhere in this prospectus. In some cases, you can
identify forward looking statements by terminology such as "may", "will,"
"should," "expects," "plans," "anticipates," "believes," "estimates,"
"predicts," "potential," "continue" or the negative of these terms or other
comparable terminology. These statements are only predictions. Actual events or
results may differ materially. In evaluating these statements, you should
specifically consider various factors, including the risks outlined under "Risk
Factors." These factors may cause our actual results to differ materially from
any forward looking statement. Although we believe that the expectations
reflected in the forward looking statements are reasonable, we cannot guarantee
future results, levels of activity, performance or achievements. Moreover,
neither we nor any other person assumes responsibility for the accuracy and
completeness of these forward looking statements.

19
<PAGE>

USE OF PROCEEDS

Our proceeds from the sale of the 5,000,000 shares of common stock we are
offering are estimated to be $45.2 million ($52.2 million if the underwriters'
over allotment option is exercised in full) assuming a public offering price of
$10.00 per share and after deducting the underwriting discounts and commissions
and our estimated offering expenses.

Other than anticipated capital expenditures in the amount of approximately
$3.0 million in the next 12 months, we have no specific plan for the proceeds
from this offering. The primary purpose of the offering is to use the proceeds
for general corporate purposes, including working capital. We may also use some
of the proceeds to meet capacity commitments or to acquire other companies,
technology or products that complement our business, although we are not
currently planning any of these transactions. Pending these uses, the net
proceeds of this offering will be invested in interest bearing, investment
grade securities.

DIVIDEND POLICY

We have never declared or paid cash dividends on our capital stock. We
currently expect to retain our future earnings, if any, for use in the
operation and expansion of our business and do not anticipate paying any cash
dividends in the next 12 months.

20
<PAGE>

CAPITALIZATION

The following table sets forth:

. the actual capitalization of OmniVision at January 31, 2000, assuming
reincorporation into Delaware;

. the pro forma capitalization of OmniVision after giving effect to the
conversion of all outstanding shares of preferred stock into 12,305,001
shares of common stock immediately prior to the completion of this
offering; and

. the pro forma as adjusted capitalization, which gives effect to the
sale in this offering of 5,000,000 shares of common stock at an
estimated initial public offering price of $10.00 per share and after
deducting the estimated underwriting discounts and commissions and
estimated offering expenses.

<TABLE>
<CAPTION>
January 31, 2000
--------------------------------
Pro Forma
Actual Pro Forma As Adjusted
-------- --------- -----------
(in thousands, except share
data)
<S> <C> <C> <C>
Redeemable convertible preferred stock....... $ 21,082 -- --
<CAPTION>
Stockholders' Equity:
<S> <C> <C> <C>
Common stock, $0.001 par value; 100,000,000
shares authorized, actual;
3,936,550 shares issued and outstanding,
actual; 100,000,000 shares authorized, pro
forma; 16,241,551 shares issued and
outstanding, pro forma; 21,241,551 shares
issued and outstanding, pro forma as
adjusted................................... $ 4 16 21
Additional paid-in capital................... 5,816 26,886 72,081
Deferred compensation........................ (2,929) (2,929) (2,929)
Accumulated deficit.......................... (12,527) (12,527) (12,527)
-------- -------- -------
Total stockholders' equity................ (9,636) 11,446 56,646
-------- -------- -------
Total capitalization...................... $ 11,446 $ 11,446 56,646
======== ======== =======
</TABLE>

In addition to the shares of common stock to be outstanding after this
offering, we may issue additional shares of common stock under the following
plans and arrangements:

. 844,450 shares issuable upon exercise of outstanding options under our
1995 stock option plan at a weighted average exercise price of $0.97
per share as of January 31, 2000; and

. a total of 4,750,000 shares available for future issuance under our
various stock plans as of January 31, 2000 excluding the annual
increases in the number of shares authorized under each of our plans
beginning May 1, 2002. See "Management--Stock Plans" for a description
of how these annual increases are determined.

Please read the capitalization table together with the sections of this
prospectus entitled "Selected Financial Data" and "Management's Discussion and
Analysis of Financial Condition and Results of Operations" and with the
financial statements and related notes beginning on page F-1.

21
<PAGE>

DILUTION

Our pro forma net tangible book value at January 31, 2000 was approximately
$11,446,000, or $0.70 per share after giving effect to the conversion of all
outstanding shares of our preferred stock into shares of common stock upon
completion of this offering. Pro forma net tangible book value per share is
equal to our total tangible assets less our total liabilities, divided by the
total number of shares of our common stock outstanding. After giving effect to
the sale of the 5,000,000 shares of our common stock offered in this offering
at an assumed initial public offering price of $10.00 per share (after
deducting estimated underwriting discounts and commissions and estimated
offering expenses payable by us) our pro forma as adjusted net tangible book
value at January 31, 2000 would have been approximately $51,646,000 or $2.67
per share. This represents an immediate increase in net tangible book value of
$1.97 per share to existing stockholders and an immediate dilution of $7.33 per
share to new investors purchasing shares of our common stock in this offering.
The following table illustrates the per share dilution to the new investors:

<TABLE>
<S> <C> <C>
Assumed initial public offering price per share................... $10.00
Pro forma net tangible book value per share at January 31,
2000.......................................................... $0.70
Increase in pro forma net tangible book value per share
attributable to this offering................................. 1.97
-----
Pro forma net tangible book value per share as adjusted after the
offering........................................................ 2.67
------
Dilution per share to new investors in this offering.............. $ 7.33
======
</TABLE>

The following table summarizes, on a pro forma basis as of January 31,
2000, the total number of stockholders and new investors with respect to the
number of shares of common stock purchased from OmniVision, the total
consideration paid and the average price per share paid by the existing
stockholders and by the new investors in this offering before deducting the
underwriting discounts and commissions and estimated offering expenses payable
by us:

<TABLE>
<CAPTION>
Shares Purchased Total Consideration Average
------------------ ------------------- Price Per
Share Percent Amount Percent Share
---------- ------- ----------- ------- ---------
<S> <C> <C> <C> <C> <C>
Existing stockholders......... 16,241,551 77% $21,164,000 30% $ 1.30
New investors................. 5,000,000 23% 50,000,000 70% 10.00
---------- --- ----------- ---
Total....................... 21,241,551 100% $71,164,000 100%
========== === =========== ===
</TABLE>

The information in the table above excludes:

. 844,450 shares issuable upon exercise of outstanding options under our
1995 stock option plan at a weighted average exercise price of $0.97
per share as of January 31, 2000; and

If the 844,450 shares issuable upon exercise of outstanding options under
our 1995 stock option plan were exercised, the dilution to new investors would
be $7.40 per share.

Please read the capitalization table together with the sections of this
prospectus entitled "Capitalization," "Selected Financial Data" and
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" and with the financial statements and related notes beginning on
page F-1.

22
<PAGE>

SELECTED FINANCIAL DATA

The following selected financial data should be read in conjunction with
our financial statements, the notes thereto and "Management's Discussion and
Analysis of Financial Condition and Results of Operations" included elsewhere
in this prospectus. The statement of operations data for the fiscal year ended
April 30, 1996 and the balance sheet data at April 30, 1996 are derived from
our unaudited financial statements not included in this prospectus. The
statement of operations data for the fiscal years ended April 30, 1997, 1998
and 1999 and the balance sheet data at April 30, 1998 and 1999 are derived from
our audited financial statements included in this prospectus. The statement of
operations data for the nine months ended January 31, 1999 is derived from our
unaudited financial statements included in this prospectus. The statement of
operations data for the nine months ended January 31, 2000 and the balance
sheet data at January 31, 2000 are derived from our audited financial
statements included in this prospectus. Our unaudited financial statements have
been prepared by us on a basis consistent with our audited financial statements
and, in management's opinion, include all adjustments necessary for a fair
presentation of such information. The results of operations for the nine months
ended January 31, 2000 are not necessarily indicative of the results to be
expected for the entire fiscal year, for any other interim period or for any
future fiscal year.

<TABLE>
<CAPTION>
Nine Months
Ended January
Year Ended April 30, 31,
---------------------------------- ----------------
1996 1997 1998 1999 1999 2000
------- ------- ------- ------- ------- -------
(in thousands, except per share)
<S> <C> <C> <C> <C> <C> <C>
Statement of Operations
Data:
Revenues................. $ 166 $ 59 $ 1,476 $ 5,243 $ 2,147 $25,111
Cost of revenues......... 438 557 2,652 4,086 1,595 17,698
Reserve for purchase
commitments............ -- -- -- 3,473 -- (3,235)
------- ------- ------- ------- ------- -------
Gross profit (loss)..... (272) (498) (1,176) (2,316) 552 10,648
------- ------- ------- ------- ------- -------
Operating expenses:
Research and
development........... 451 1,698 3,440 3,290 2,260 2,453
Selling, general and
administrative........ 464 706 1,323 1,853 1,378 2,126
Stock compensation
charge................ 28 44 206 459 331 1,159
------- ------- ------- ------- ------- -------
Total operating
expenses............. 943 2,448 4,969 5,602 3,969 5,738
------- ------- ------- ------- ------- -------
Income (loss) from
operations............. (1,215) (2,946) (6,145) (7,918) (3,417) 4,910
Interest income
(expense), net......... 39 108 106 396 267 138
------- ------- ------- ------- ------- -------
Net income (loss)........ $(1,176) $(2,838) $(6,039) $(7,522) $(3,150) $ 5,048
======= ======= ======= ======= ======= =======
Net income (loss) per
share:
Basic................... $(11.31) $(16.89) $(12.71) $(10.39) $ (4.51) $ 1.75
======= ======= ======= ======= ======= =======
Diluted................. $(11.31) $(16.89) $(12.71) $(10.39) $ (4.51) $ 0.31
======= ======= ======= ======= ======= =======
Shares used in computing
net income (loss) per
share:
Basic................... 104 168 475 724 699 2,879
======= ======= ======= ======= ======= =======
Diluted................. 104 168 475 724 699 16,418
======= ======= ======= ======= ======= =======
Pro forma net income
(loss) per share
(unaudited):
Basic................... $ (0.58) $ 0.33
======= =======
Diluted................. $ (0.58) $ 0.31
======= =======
Shares used in computing
pro forma net income
(loss) per share
(unaudited):
Basic................... 12,951 15,184
======= =======
Diluted................. 12,951 16,418
======= =======
</TABLE>

23
<PAGE>

<TABLE>
<CAPTION>
April 30, January 31,
------------------------------------ -----------
1996 1997 1998 1999 2000
------- ------- -------- -------- -----------
(in thousands)
<S> <C> <C> <C> <C> <C>
Balance Sheet Data:
Cash and cash equivalents... $ 1,329 $ 3,747 $ 2,686 $ 5,374 $ 6,370
Working capital............. 1,344 3,669 2,343 3,345 9,289
Total assets................ 1,682 4,516 3,721 10,536 19,716
Total current liabilities... 378 268 633 6,106 8,270
Total redeemable convertible
preferred stock........... 2,478 8,118 12,745 21,082 21,082
Accumulated deficit......... (1,176) (4,014) (10,053) (17,575) (12,527)
Total stockholders' equity.. (1,074) (3,870) (9,658) (16,652) (9,636)
</TABLE>

24
<PAGE>

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

You should read the following discussion in conjunction with our
consolidated financial statements and the notes thereto included in this
prospectus. The results described below are not necessarily indicative of the
results to be expected in any future period. Certain statements in this
discussion and analysis contain forward looking statements based upon current
expectations that involve risks and uncertainties. When used in this
prospectus, the words "may," "should," "expects," "plans," "anticipates,"
"believes," "estimates," "predicts," "potential," "continue,"and similar
expressions as they relate to us are included to identify forward looking
statements. Our actual results and the timing of certain events could differ
materially from those anticipated in these forward looking statements as a
result of certain factors, including those set forth under "Risk Factors" and
elsewhere in this prospectus.

Overview

We were incorporated in May 1995. We design, develop and market high
performance, high quality, highly integrated and cost efficient semiconductor
image sensor devices. Our single chip image sensors are used in a variety of
electronic cameras and camera related products for both still picture and live
video applications. Our image sensors are used in cameras and camera related
products such as personal computer cameras, digital still cameras, closed
circuit TVs, mobile phone cameras, personal digital assistant cameras, security
and surveillance cameras and toy cameras. Our image sensors are designed to use
the complementary metal oxide semiconductor fabrication process, a new, easier
to use semiconductor technology. Our single chip image sensors can allow our
customers to build cameras that are smaller, require fewer chips, consume less
power and cost less to build than cameras using traditional charged couple
device technology, or multiple chip complementary metal oxide semiconductor
image sensors. Unlike competitive image sensors, which require multiple chips
to achieve the same functions we are able to integrate nearly all camera
functions into a single chip. This leads us to believe that we supply the most
highly integrated single chip complementary metal oxide semiconductor image
sensor solution.

Image sensors are characterized by several important attributes such as
picture resolution, color, lens size, voltage requirements and type of video
output. We intend to continue developing new products aimed at new and existing
markets. We plan to expand the range of picture resolutions we offer, provide
additional products that require only three volts for portable applications and
further improve image quality and integrate additional functions into our image
sensor. In addition, we developed and market an interface chip that can easily
connect a camera to the universal serial bus on personal computers, and we plan
to make improvements to that product as well.

Our first image sensor was a low resolution, black and white sensor
introduced in 1996. We introduced an improved version of this sensor in early
1997. In addition, we introduced color and digital image sensors in 1997 and
higher resolution and higher quality image sensors in 1998 and 1999. For the
nine months ended January 31, 2000, the first period in which we generated
substantial revenues, the majority of our revenues were generated from the sale
of our five volt color image sensors. Given the growth of the Internet and
multimedia applications which allow for digital images to be captured, stored
and transported, we expect that the majority of our revenues in fiscal year
2001 will be generated from our five volt color image sensors, which are used
primarily in affordable and easy to use personal computer cameras.

We sell our products through a direct sales force and indirectly through
distributors and manufacturers' representatives. Our image sensors are sold to
camera manufacturers who market camera products under their own brand. We also
sell to large manufacturing companies that produce camera products for others
to market under different brand names.

We outsource all of our semiconductor manufacturing and assembly. This
approach allows us to focus our resources on the design, development and
marketing of our products and significantly reduces our capital

25
<PAGE>

requirements. We outsource the majority of our wafer manufacturing to Taiwan
Semiconductor Manufacturing Company, or TSMC, and have recently started
receiving wafers from Powerchip Semiconductor Company, or PSC. We have a signed
agreement with Shanghai HuaHong NEC, or HuaHong-NEC, for additional wafer
production capacity to provide for our future growth and for unexpected demand
for our products. In addition, we have a signed agreement with Samsung
Electronics Co., Ltd., or Samsung, who is our sole source supplier for our
universal serial bus interface chip that we sometimes sell along with our image
sensor. Approximately 80% of our sales of image sensors are color image
sensors. These require a color filter to be applied to the wafer before
packaging. We outsource the application of this color filter to Toppan Printing
Co., or Toppan, and TSMC, and we recently qualified PSC as an additional
source. We outsource the packaging of our image sensors to Kyocera Corporation,
or Kyocera and Alphatec Semiconductor Packaging Co., or Alphatec. Outside
testing services do not offer suitable tests for the key parameter of product
performance, image quality. Therefore, we design and produce our own automatic
testing equipment specifically for image sensor testing, and we do
substantially all of our testing in house. Our control over the testing process
helps us maintain consistent product quality and identify areas to improve
product quality and reduce costs.

We recognize revenues when our products are shipped to our customers or, in
the case of sales to distributors made under agreements permitting the return
of unsold products, when our distributors ship the products to their customers.
Our sales are generally made on a purchase order basis rather than by long term
purchase commitments. Our customers may cancel or defer purchase orders without
penalty. Our backlog includes only those customer orders for which we have
accepted purchase orders and assigned shipment dates within the upcoming twelve
months. While our backlog may be substantial at times, it is subject to
cancellation or changes in delivery schedules and may not necessarily be an
indication of future revenues.

Sales of our image sensors are subject to seasonality. Some of the products
using our image sensors such as personal computer video cameras and digital
still cameras are consumer electronics goods. Typically, these goods are
subject to seasonality with generally increased sales in November and December
due to the holidays. In addition, we have experienced a decrease in orders in
the quarter ended April 30 from our Chinese and Taiwanese customers primarily
due to the Chinese New Year. As a result, product sales are impacted by
seasonal purchasing patterns with higher sales generally occurring in the
second half of each year.

We intend to maintain our technology leadership by continuing to develop
our core technology through our in house research and development efforts. As a
result, we expect our research and development expenses to increase in fiscal
year 2001.

26
<PAGE>

Results of Operations

The following tables set forth, for the periods indicated, certain
statement of operations data and certain statement of operations data reflected
as a percentage of revenues. Our results of operations are reported as a single
business segment.

<TABLE>
<CAPTION>
Nine Months Ended
Year Ended April 30, January 31,
------------------------- -------------------
1997 1998 1999 1999 2000
------- ------- ------- ---------- -------
(in thousands)
(unaudited)
<S> <C> <C> <C> <C> <C>
Statement of Operations Data:
Revenues....................... $ 59 $ 1,476 $ 5,243 $ 2,147 $25,111
Cost of revenues............... 557 2,652 4,086 1,595 17,698
------- ------- ------- ------- -------
Gross profit before reserve for
purchase commitment.......... (498) (1,176) 1,157 552 7,413
Reserve for purchase
commitments.................. -- -- 3,473 -- (3,235)
------- ------- ------- ------- -------
Gross profit (loss)........... (498) (1,176) (2,316) 552 10,648
------- ------- ------- ------- -------
Operating expenses:
Research and development...... 1,698 3,440 3,290 2,260 2,453
Selling, general and
administrative.............. 706 1,323 1,853 1,378 2,126
Stock compensation charge..... 44 206 459 331 1,159
------- ------- ------- ------- -------
Total operating expenses..... 2,448 4,969 5,602 3,969 5,738
------- ------- ------- ------- -------
Income (loss) from operations.. (2,946) (6,145) (7,918) (3,417) 4,910
Interest income (expense),
net.......................... 108 106 396 267 138
------- ------- ------- ------- -------
Net income (loss).............. $(2,838) $(6,039) $(7,522) $(3,150) $ 5,048
======= ======= ======= ======= =======
</TABLE>

<TABLE>
<CAPTION>
Nine Months Ended
Year Ended April 30, January 31,
-------------------------- ----------------------
1997 1998 1999 1999 2000
-------- ------ ------ ----------- --------
(unaudited)
<S> <C> <C> <C> <C> <C>
As a Percentage of
Revenues:
Revenues.................. 100.0 % 100.0 % 100.0 % 100.0 % 100.0%
Cost of revenues.......... 944.1 179.7 77.9 74.3 70.5
-------- ------ ------ --------- --------
Gross profit before
reserve for purchase
commitments............. (844.1) (79.7) 22.1 25.7 29.5
Reserve for purchase
commitments............. -- -- 66.2 -- (12.9)
-------- ------ ------ --------- --------
Gross profit (loss)...... (844.1) (79.7) (44.2) 25.7 42.4
-------- ------ ------ --------- --------
Operating expenses:
Research and
development............ 2,878.0 233.1 62.8 105.3 9.8
Selling, general and
administrative......... 1,196.6 89.6 35.3 64.2 8.5
Stock compensation
charge................. 74.6 14.0 8.8 15.4 4.6
-------- ------ ------ --------- --------
Total operating
expenses.............. 4,149.2 336.7 106.9 184.9 22.9
-------- ------ ------ --------- --------
Income (loss) from
operations.............. (4,993.3) (416.4) (151.1) (159.2) 19.5
Interest income (expense)
net..................... 183.1 7.2 7.6 12.4 0.6
-------- ------ ------ --------- --------
Net income (loss)......... (4,810.2)% (409.2)% (143.5)% (146.8)% 20.1%
======== ====== ====== ========= ========
</TABLE>

Results of Operations for the Nine Months Ended January 31, 2000 and 1999

Revenues. Revenues were $25.1 million and $2.1 million for the nine months
ended January 31, 2000 and 1999, respectively. Revenues increased due to the
commencement of commercial sales of our color image sensor products to camera
manufacturers customers and increased demand for our image sensor products

27
<PAGE>

through our distribution channels. Revenues from two OEM customers, Creative
Technology Ltd. and Alaris, Inc. accounted for approximately 17% and 16%, of
total revenues for the nine months ended January 31, 2000, respectively. In
addition, revenues from one of our distributors, World Peace Industrial
Company, Ltd., or World Peace, accounted for approximately 24% of total
revenues for the nine months ended January 31, 2000. The remaining 43% of total
revenues for the nine months ended January 31, 2000 was derived from a number
of other camera manufacturer customers and distributors, none of which
accounted for 10% or more of total revenues. For the nine months ended
January 31, 1999, two distributors, World Peace and Holy Stone Enterprise Co.
Ltd., or Holy Stone, accounted for approximately 43% and 24% of total revenues,
respectively. No other distributor or camera manufacturer customer accounted
for 10% or more of total revenues for the nine months ended January 31, 1999.
In the first quarter of the year ended April 30, 1999, we decreased the prices
of our image sensor products in order to increase the demand. Subsequently, the
average sale price has continued to decline, but at a slower rate.
Nevertheless, revenues have increased because of higher volumes shipped.

Gross profit before reserve for purchase commitments. Gross margin before
reserve for purchase commitments was 29.5% and 22.1% for the nine months ended
January 31, 2000 and 1999, respectively. The increase in gross margin before
reserve for purchase commitments from the nine months ended January 31, 1999 to
the nine months ended January 31, 2000 was due to changes in product mix and
the benefit of fixed period costs being spread over a larger sales volume.

Reserve for purchase commitments. When the April 30, 1999 financial
statements were prepared, we believed that the demand for certain products was
less than originally estimated when we placed non-cancelable production orders.
Sales orders that we had expected to receive were not received by the time that
the audit of the April 30, 1999 financial statements was completed. There was
significant uncertainty that we would be able to sell the products ordered. As
a result, we accrued approximately $3.5 million as a reserve for a portion of
the purchase commitments.

Several months after the audit of the April 30, 1999 financial statements
was completed, we received sales orders for the products. During the nine
months ended January 31, 2000, most of the products were sold. Of the reserve,
approximately $2.3 million was released during the second quarter ended October
31, 1999 and $930,000 during the third quarter ended January 31, 2000. The
remaining reserve of $238,000 at January 31, 2000 is reflected as a reduction
in the basis of the related inventory.

Research and development. Research and development expenses were $2.5
million and $2.3 million for the nine months ended January 31, 2000 and 1999,
respectively. Research and development expenses represented 9.8% and 105.3% of
revenues for the nine months ended January 31, 2000 and 1999, respectively. The
increase in research and development expenses was primarily due to an increase
in salaries and payroll related expenses associated with additional personnel.
This increase was partially offset by reductions in the cost of engineering
supplies and materials and a reduction in engineering consulting fees. Research
and development expenses decreased as a percent of revenues because revenues
significantly increased. Research and development expenses consist primarily of
compensation and personnel related expenses and costs for purchased materials,
designs and tooling, depreciation of computers and workstations, and
amortization of computer assisted design software, all of which may fluctuate
significantly from period to period as a result of our product development
cycles. We expect that our future quarterly research and development expenses
will increase in absolute dollars as we design and develop our next generation
of image sensor products.

Selling, general and administrative. Selling, general and administrative
expenses were $2.1 million and $1.4 million for the nine months ended January
31, 2000 and 1999, respectively. Our selling, general and administrative
expenses consist primarily of compensation and personnel related expenses and
commissions paid to distributors and manufacturers' representatives. As a
percentage of revenues, our selling, general and administrative expenses
decreased to 8.5% of revenues for the nine months ended January 31, 2000, from
64.2% of revenues for the nine months ended January 31, 1999. The decrease in
selling, general and administrative expenses as a percentage of revenues was
largely the result of a significant increase in sales volume, partially offset
by increased compensation and personnel related expenses.

28
<PAGE>

Stock compensation charge. Stock compensation charges amounted to $1.2
million and $331,000 for the nine months ended January 31, 2000 and 1999,
respectively. Deferred compensation, representing the difference between the
deemed fair market value of our common stock on the date of grant and the
exercise price of stock options on the date of grant, is amortized on an
accelerated basis as the options vest. We expect deferred compensation charges
of $2.9 million as of January 31, 2000 to be amortized on an accelerated basis
over the vesting period of generally five years.

Interest income (expense), net. For the fiscal years ended April 30, 1999,
1998 and 1997, interest income and interest expense were minor because we
financed our business operations primarily through a series of relatively small
private equity transactions.

Provision for income taxes. While we generated operating profits of
approximately $4.9 million for the nine months ended January 31, 2000, there
was no provision for income taxes because of deductions resulting from the
reversal of deferred tax assets for which there was a full valuation allowance
as of the beginning of the period. We incurred operating losses for the nine
months ended January 31, 1999, and for the fiscal years ended April 30, 1997,
1998 and 1999 and therefore had no provision for income taxes in those periods.
As of January 31, 2000, we had net operating losses of approximately $9.0
million available to offset future taxable income. If not used, the net
operating losses expire between 2011 and 2019. Because of certain changes in
ownership of OmniVision in December 1996, there is an annual limitation of
approximately $200,000 on the use of approximately $1.5 million net operating
loss carryforwards pursuant to Section 382 of the Internal Revenue Code.

Results of Operations for the Fiscal Years Ended April 30, 1999, 1998 and 1997.

Revenues. Revenues for the fiscal years ended April 30, 1999, 1998 and 1997
were $5.2 million, $1.5 million and $59,000, respectively. Revenues increased
$3.7 million from fiscal year 1998 to fiscal year 1999 primarily as a result of
an increase in sales of our color image sensor products. For the fiscal year
1999, two of our distributors, Holy Stone and World Peace, represented
approximately 24% and 12% of total revenues, respectively. For the fiscal year
1998, one of our distributors, World Peace, represented approximately 43% of
total revenues. Revenues increased from fiscal year 1997 to fiscal year 1998
due to the commencement of commercial sales of our color image sensor products
to camera manufacturer customers and to increased demand for our image sensor
products through our distribution channels. In the first quarter of the year
ended April 30, 1999, we decreased the price of our image sensor products in
order to increase the demand. Subsequently, the average sale price has
continued to decline, but at a slower rate. Nevertheless, revenues have
increased because of higher volumes shipped.

Gross profit before reserve for purchase commitments. Gross margin before
reserve for purchase commitments for the fiscal years 1999, 1998 and 1997 was
22.1%, (79.7)% and (844.1)%, respectively. The increase in gross margin before
reserve for purchase commitments from fiscal year 1998 to fiscal year 1999 was
primarily due to the increase in sales of higher margin color image sensors and
improved final test yields. Negative gross margins before reserve for purchase
commitments for the fiscal years 1998 and 1997 were impacted by relatively low
final test yields for a variety of new black and white and color image sensors.

29
<PAGE>

1999 and $930,000 during the third quarter ended January 31, 2000. The
remaining reserve of $238,000 at January 31, 2000 is reflected as a reduction
in the basis of the related inventory.

Research and development. Research and development expenses for the fiscal
years 1999, 1998 and 1997 were approximately $3.3 million, $3.4 million and
$1.7 million, respectively. As a percentage of revenues, research and
development expenses represented 62.8%, 233.1% and 2,878.0% of revenues
respectively. As revenues increased from fiscal year 1998 to fiscal year 1999,
research and development expenses declined as a percentage of revenues. Our
research and development expenses increased by approximately $1.7 million from
fiscal year 1997 to fiscal year 1998 due to the increase in the number of
engineers and technicians. Although we expect absolute research and development
expenses to increase in the future, we expect these expenses as a percentage of
revenues to decrease.

Selling, general and administrative. Selling, general and administrative
expenses were $1.9 million, $1.3 million and $706,000 for the fiscal years
1999, 1998 and 1997, respectively. As a percentage of revenues, selling,
general and administrative expenses represented 35.3%, 89.6% and 1,196.6%,
respectively. Our selling, general and administrative expenses increased each
fiscal year due to increases in salaries and commissions to distributors and
manufacturers' representatives. The overall decrease in our selling, general
and administrative expenses as a percentage of revenues was principally due to
the increased revenues. Although we expect absolute expenses to increase, we
expect selling, general and administrative expenses as a percentage of revenues
to decrease.

Stock compensation charge. We incurred stock compensation charges of
$459,000, $206,000 and $44,000 for the fiscal years 1999, 1998 and 1997.

Interest income (expense), net. Interest income and interest expense for
the fiscal years 1999, 1998 and 1997 were minor because we have financed our
business operations primarily through a series of relatively small private
equity transactions.

Provision for income taxes. We incurred operating losses for each of the
fiscal years 1999, 1998 and 1997, and therefore made no provision for income
tax in these fiscal years. As of January 31, 2000, we had net operating losses
of approximately $9.0 million available to offset future taxable income. If not
used, the net operating losses expire between 2011 and 2019. Because of certain
changes in ownership of OmniVision, in December 1996 there is an annual
limitation of approximately $200,000 on the use of approximately $1.5 million
net operating loss carryforwards pursuant to Section 382 of the Internal
Revenue Code.

30
<PAGE>

Quarterly Results of Operations

The following table sets forth certain unaudited selected quarterly results
of operations data for the seven quarters ended January 31, 2000, as well as
such data expressed as a percentage of revenues. This data has been derived
from our unaudited financial statements that, in the opinion of management,
include all adjustments necessary for the fair presentation of such information
for the periods presented. This statement of operations data should be read in
conjunction with our annual financial statements, and the related notes thereto
appearing elsewhere in this prospectus.

<TABLE>
<CAPTION>
Three Months Ended
----------------------------------------------------------------------
July 31, Oct. 31, Jan. 31, April 30, July 31, Oct. 31, Jan. 31,
1998 1998 1999 1999 1999 1999 2000
-------- -------- -------- --------- -------- -------- --------
(unaudited)
(in thousands and as a percentage of revenues)
<S> <C> <C> <C> <C> <C> <C> <C>
Statement of Operations
Data:
Revenues................ $ 313 $ 750 $ 1,084 $ 3,096 $4,803 $8,063 $12,245
Cost of revenues........ 171 534 890 2,491 3,178 5,912 8,608
Reserve for purchase
commitments........... -- -- -- 3,473 -- (2,305) (930)
------- ------- ------- ------- ------ ------ -------
Gross profit (loss)... 142 216 194 (2,868) 1,625 4,456 4,567
------- ------- ------- ------- ------ ------ -------
Operating expenses:
Research and
development......... 758 753 749 1,030 787 762 904
Selling, general and
administrative...... 408 433 537 475 632 648 846
Stock compensation
charge.............. 75 128 128 128 79 666 414
------- ------- ------- ------- ------ ------ -------
Total operating
expenses......... 1,241 1,314 1,414 1,633 1,498 2,076 2,164
======= ======= ======= ======= ====== ====== =======
Income (loss) from
operations............ (1,099) (1,098) (1,220) (4,501) 127 2,380 2,403
Interest income
(expense), net........ 49 140 78 129 50 36 52
------- ------- ------- ------- ------ ------ -------
Net income (loss)....... $(1,050) $ (958) $(1,142) $(4,372) $ 177 $2,416 $ 2,455
------- ------- ------- ------- ------ ------ -------
As a Percentage of
Revenues:
Revenues................ 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0%
Cost of revenues........ 54.6 71.2 82.1 80.5 66.2 73.3 70.3
Reserve for purchase
commitments........... 112.2 (28.6) (7.6)
------- ------- ------- ------- ------ ------ -------
Gross profit (loss)... 45.4 28.8 17.9 (92.7) 33.8 55.3 37.3
------- ------- ------- ------- ------ ------ -------
Operating expenses:
Research and
development......... 242.2 100.4 69.1 33.3 16.4 9.5 7.4
Selling, general and
administrative...... 130.4 57.7 49.5 15.3 13.2 8.0 6.9
Stock compensation
charge.............. 24.0 17.1 11.8 4.1 1.6 8.3 3.4
------- ------- ------- ------- ------ ------ -------
Total operating
expenses......... 396.6 175.2 130.4 52.7 31.2 25.8 17.7
------- ------- ------- ------- ------ ------ -------
Income (loss) from
operations............ (351.2) (146.4) (112.5) (145.4) 2.6 29.5 19.6
Interest income
(expense), net........ 15.7 18.7 7.2 4.2 1.0 0.4 0.4
------- ------- ------- ------- ------ ------ -------
Net income (loss)....... (335.5)% (127.7)% (105.3)% (141.2)% 3.6% 29.9% 20.0%
======= ======= ======= ======= ====== ====== =======
</TABLE>

When we prepared the financial statements for that quarter, we believed
that our gross margin for the three months ended April 30, 1999 was adversely
impacted by a reserve for purchase commitments. Demand for certain products was
lower than we originally expected when we placed non-cancelable production
orders, and therefore the net realizable value of the products ordered would be
less than the cost. As a result, we accrued approximately $3.5 million for a
portion of the purchase commitments. During the nine months ended January 31,
2000, most of the products were sold. Of the reserve, approximately $2.3
million was released

31
<PAGE>

during the second quarter ended October 31, 1999 and $930,000 during the third
quarter ended January 31, 2000. The remaining reserve of $238,000 at January
31, 2000 is reflected as a reduction in the basis of the related inventory. In
addition to the impact of the foregoing reserve, gross margins have fluctuated
as the result of the introduction of new products, volatility of yields,
economies of scale and other factors.

Sales of our color image sensor products increased in the three months
ended October 31, 1999 and January 31, 2000. In the three months ended January
31, 2000, research and development expenses and selling, general and
administrative expenses increased due to increases in headcount and the
associated payroll and personnel related expenses. In addition, these increases
resulted from higher design and materials costs, depreciation and amortization
in the three months ended January 31, 2000.

We believe that period to period comparisons of our operating results
should not be relied upon as an indication of our future performance. In the
past, our results of operations have fluctuated significantly, and we expect
similar quarterly fluctuations in the future as a result of a number of factors
beyond our control. Among other things, these factors include the rate of
growth in the market for our products, changes in the demand for our products
and seasonality. In addition, because a significant percentage of our revenues
has been and is expected to continue to be derived from a limited number of
camera manufacturers and distributors, any variation in the timing of orders
from those large customers, or design wins or losses from potential large
customers, can result in significant fluctuations in our quarterly operating
results. Our anticipated research and development, selling and marketing, and
general and administrative expenses are based, in part, on future projections
of revenues. As a result of these and other factors, it is likely that in some
future period our operating results or business outlook will be below the
expectations of securities analysts or investors, which would likely result in
a significant reduction in the market price of our common stock. See "Risk
Factors."

Liquidity and Capital Resources

Since inception, we have satisfied our liquidity requirements principally
through the issuance and sale of securities, totaling approximately $21.8
million. For the nine months ended January 31, 2000, we generated $1.9 million
in cash from operating activities. During the fiscal years ended April 30, 1999
and 1998, we used $5.0 and $5.3 million, respectively, for operating
activities, primarily due to operating losses and increased working capital as
sales increased. Net cash used from investing activities was $1.4 million,
$650,000, and $413,000 for the nine months ended January 31, 2000 and the
fiscal years ended April 30, 1999 and 1998, respectively. As of January 31,
2000, we did not have any significant capital expenditure commitments. Net cash
provided from financing activities was $560,000 from the issuance and sale of
common stock upon the exercise of employee stock options during the nine months
ended January 31, 2000, $8.3 million from the issuance and sale of Series C
preferred stock in the fiscal year ended April 30, 1999, and $4.6 million from
the issuance and sale of Series C preferred stock in the fiscal year ended
April 30, 1998.

As of January 31, 2000, we had $6.4 million in cash and cash equivalents.
We believe that the net proceeds of the sale of common stock from this
offering, together with our existing cash resources, will be sufficient to meet
our capital requirements for at least the next 12 months. After this period,
capital requirements will depend on many factors, including the levels at which
we maintain inventory and accounts receivable, costs of securing access to
adequate manufacturing capacity and increases in our operating expenses. To the
extent that funds generated by this offering, together with existing resources
and cash from operations, are insufficient to fund our future activities, we
may need to raise additional funds through public or private equity or debt
financing. Additional funds may not be available, or if available, we may not
be able to obtain them on terms favorable to us or to our shareholders. In the
event that we do raise additional cash through financings, investors in this
offering could be further diluted.

From time to time, we may evaluate acquisitions of businesses, products or
technologies that complement our business. Although we have no current plans in
this regard, any transactions, if consummated, may consume a portion of our
working capital or require the issuance of securities that may result in
further dilution to existing stockholders.

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<PAGE>

Quantitative and Qualitative Discussion of Market Interest Rate Risk

Our cash equivalents and short term investments are exposed to financial
market risk due to fluctuation in interest rates, which may affect our interest
income and, in the future, the fair market value of our investments. We manage
our exposure to financial market risk by performing ongoing evaluations of our
investment portfolio. We presently invest in short term bank market rate
accounts which are exposed to changes in market interest rates, and in
certificates of deposit issued by banks, the value of which does not change
based on changes in interest rates. As our cash balances increase, we
anticipate investing in short term investment grade government and corporate
securities. These securities will be highly liquid and generally mature within
12 months from our purchase date. Due to the short maturities of our
investments, the carrying value should approximate the fair value. In addition,
we do not use our investments for trading or other speculative purposes. We
have performed an analysis to assess the potential effects of reasonably
possible near term changes in interest and foreign currency exchange rates. The
effects of any change in foreign currency exchange rates is not expected to be
material to our results of operations, cash flows or financial condition. Due
to the short duration of our investment portfolio, an immediate 10% change in
interest rates would not have a material effect on the fair market value of our
portfolio. Therefore, we would not expect our operating results or cash flows
to be affected to any significant degree by the effect of a sudden change in
market interest rates on our securities portfolio.

Foreign Currency Exchange Risk

We are an international company, selling our products globally and, in
particular in China, Japan, Korea, Singapore and Taiwan. Although we transact
our business in U.S. dollars, future fluctuations in the value of the U.S.
dollar may affect the competitiveness of our products, gross profits realized,
and results of operations. Further, we incur expenses in Japan, Korea, Taiwan
and other countries that are denominated in currencies other than the U.S.
dollar. We cannot estimate the effect that an immediate 10% change in foreign
currency exchange rates would have on our future operating results or cash
flows as a direct result of changes in exchange rates. However, we do not
believe that we currently have any significant direct foreign currency exchange
rate risk, and we have not hedged exposures denominated in foreign currencies
or any other derivative financial instruments.

Inflation

The impact of inflation on our business has not been material for the nine
months ended January 31, 2000 or for the fiscal years ended April 30, 1999,
1998 and 1997.

Year 2000 Issues

Prior to January 1, 2000, there was a great deal of concern regarding the
ability of computers to adequately recognize 21st century dates from 20th
century dates due to the two digit date fields used by many systems. Most
reports to date, however, are that computer systems are functioning normally
and the compliance and remediation work accomplished leading up to 2000 was
effective to prevent any problems. Computer experts have warned that there may
still be residual consequences of the change in centuries. This problem could
result in miscalculations, data corruption, system failures or disruptions of
operations. Any Year 2000 difficulties could result in a decrease in sales of
our products, an increase in allocation of resources to address Year 2000
problems of our customers without additional revenue commensurate with such
dedication of resources, or an increase in litigation costs relating to losses
suffered by our customers due to such Year 2000 problems.

In addition, because our internal systems utilize third party hardware and
software, residual Year 2000 problems affecting third parties' hardware and
software could cause our internal systems to fail. If residual Year 2000
problems cause the failure of any of the technology, software or systems
necessary to use our products or operate our business, we could lose customers,
suffer significant disruptions in our business, lose

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<PAGE>

revenues and incur substantial liabilities and expenses. We could also become
involved in costly litigation resulting from Year 2000 problems. This could
harm our business, financial condition and results of operations.

Recently Issued Accounting Pronouncements

In June 1998, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards ("SFAS") No. 133, "Accounting for Derivative
Instruments and Hedging Activities." SFAS No. 133 establishes a new model for
accounting for derivatives and hedging activities and supercedes and amends a
number of existing accounting standards. SFAS No. 133 requires that all
derivatives be recognized in the balance sheet at their fair market value and
the corresponding derivative gains or losses be either reported in the
statement of operations or as a deferred item depending on the type of hedge
relationship that exists with respect to such derivatives. In July 1999, the
Financial Accounting Standards Board issued SFAS No. 137 "Accounting for
Derivative Instruments and Hedging Activities--Deferral of the Effective Date
of FASB statement No. 133". SFAS No. 137 deferred the effective date until the
first quarter of fiscal years beginning after June 15, 2000. We do not expect
the adoption of SFAS No. 133 to have a material impact on our financial
position on results of operations.

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<PAGE>

BUSINESS

Overview

OmniVision Technologies, Inc. designs, develops and markets high
performance, high quality and cost efficient semiconductor imaging devices for
computing, communications and consumer electronics applications. Our main
product, an image sensor, is used to capture an image in cameras and camera
related products. We have developed our image sensors using the standard
semiconductor manufacturing process used for approximately ninety percent of
modern integrated circuits. As a result, unlike competitive image sensors which
require multiple chips to achieve the same functions, we are able to integrate
nearly all the camera functions into a single chip. This leads us to believe
that we supply the most highly integrated single chip image sensor. Our single
chip design can allow our customers to provide cameras that are smaller,
require fewer chips, consume less power and cost less to manufacture than
cameras using multiple chip image sensors. Our image sensors are currently used
for the following applications:

. digital still cameras, personal computer video cameras, personal
digital assistant cameras and mobile phone cameras which are used for
capturing images that can be stored, downloaded, viewed, edited and
manipulated, and for Internet applications such as creating still and
live video for websites and email;

. security and surveillance systems and closed circuit television
systems including onsite and remote security cameras for both home and
business and surveillance systems such as baby monitors and door
phones; and

. toys and games such as highly interactive participatory video games
where the users' motions and images can be incorporated into the game
and his or her motions, rather than a joystick or mouse, control
actions in the game.

We provide sales and engineering support to our current and prospective
customers in order to demonstrate how to incorporate our current image sensors
into their camera designs. We also assist our customers in developing new image
sensor specifications that are required for emerging applications. We believe
that these applications will be marketable within the next three years.
Examples of such applications include:

. personal identification systems such as fingerprint scanners and face
recognition systems;

. medical imaging devices used for routine doctors' office examinations;

. machine control systems such as bar code readers and quality
inspection systems;

. automotive applications that range from cameras that may replace rear
and side view mirrors to security systems, air bag inflation sensors,
rain detectors, accident recorders, driver monitors and maintenance
inspection systems; and

. videophones integrated in tabletop phones.

We shipped over 2.6 million image sensors in the first nine months of
fiscal year 2000. Our customers include industry leading camera manufacturers
such as Alaris, Creative Technology and Viewquest (a customer who is currently
manufacturing the IntelPlay Me2Cam, which is a personal computer video camera
for an Intel and Mattel joint venture, has recently commenced manufacturing a
personal computer video camera for Microsoft and plans to manufacture a
personal digital assistant camera for Kodak).

We have 12 United States patents, five Taiwanese patents and 31 patent
applications pending protecting the single chip image sensor design, noise
reduction and cancellation circuits, and image enhancement and color processing
technologies of our semiconductor imaging devices.

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<PAGE>

Industry Background

Growth of Digital Video Imaging

Multimedia technology and its uses have grown in the past decade. A
significant driver of this growth in multimedia has been the growth of video
technologies. Many large industries including the movie, television, publishing
and computer industries depend directly on video technologies to create and
deliver their products. Traditionally all video, still image and sound products
were based on analog technologies. More recently, computer based video
technology has been replacing traditional analog image and sound capture
technologies, such as conventional cameras, film and tape recorders. This has
begun to occur because digital technology offers enhanced quality, manipulation
and storage capabilities that analog technologies lack. For example, a movie
recorded and stored digitally can be easily searched and will not suffer
degradation over time.

The Internet and Miniaturization of Electronics Fuel Demand for Video Imaging

Video and image capture on PCs was first used in videoconferencing
applications. However, early videoconferencing applications were expensive, and
suffered from poor image quality and inadequate network infrastructure. Video
conferencing grew rapidly as image quality improved and cameras became more
affordable. Frost & Sullivan predicts that the market for video conferencing
cameras will grow from 2.6 million units in 1999 to 13.8 million units by 2003.
As cameras became readily available on PCs, applications other than
videoconferencing quickly followed. The introduction of the World Wide Web
browser, with its hypertext and Uniform Resource Locator, or URL, address
system, changed the Internet from a text based system to a multimedia driven
network that features sound, pictures and live video clips. Fueled by the
growth of the Internet as a method to publish, transport and store images, the
number of pictures generated is expected to grow significantly as different
uses of imaging and video continue to emerge. Today PC video cameras are used
for capturing still pictures and live video clips used for web sites, video
email, video greeting cards, web based photo exchanges, desktop publishing and
interactive games. As network bandwidth continues to improve, transferring
images across PC systems and communication networks will become even easier,
further driving the demand for video and multimedia applications.

Miniaturization has moved computing from the desktop to a wide assortment
of portable and hand held devices including laptops, personal digital
assistants, electronic games and mobile phones. These battery operated devices
are creating an opportunity for small, low power, low cost digital still
cameras to be integrated directly into the portable device so that images can
be captured for transfer to computer systems using wired or wireless methods.
Examples of commercial uses for these captured images include property damage
pictures for insurance claims, images of competitive products for analysis, or
enhancement of computer contact databases.

The more recent digital still cameras use a live video image sensor to
display a real time image on a miniature, built in display which serves as a
viewfinder. Still images captured by the same sensor and stored in the camera
are transferred to a computer system for viewing, editing, transmitting and
printing. When connected to the computer, digital still cameras can also
function like PC video cameras. These devices have made a significant impact on
the camera market by taking market share from film based cameras and are one of
the fastest growing consumer electronic products. Frost & Sullivan predicts
that the market for digital still cameras will grow from 4.0 million units in
1999 to 15 million units in 2003.

Advances in Image Sensor Technology

Image sensors are at the center of all electronic cameras. Image sensors
capture an image through a lens and convert that image into electronic signals.
Charged couple device, or CCD, technology has dominated the image sensor market
for over 25 years. As of 1998, there were approximately 32 charged couple
device image sensor manufacturers. However, production is concentrated with
relatively few, large, primarily vertically integrated camcorder manufacturers.
According to Frost & Sullivan, the top six charged couple device image

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<PAGE>

sensor manufacturers, Sony Corporation, Matsushita Electric Industrial, Sharp
Corporation, Toshiba Corporation, Victor Company of Japan and Sanyo Electric
Co. Ltd., account for approximately 55% to 65% of total charged couple device
image sensor production.

A newer, easier to use semiconductor technology, complementary metal oxide
semiconductor, or CMOS, has been adopted for most common integrated circuits.
According to Frost & Sullivan, approximately 90% of modern integrated circuits,
including microprocessors, logic circuits, special purpose integrated circuits,
and memory circuits, use the new common complementary metal oxide semiconductor
technology. Although complementary metal oxide semiconductor technology has
been available for image sensor designs for over 20 years, it has not been used
in commercial products because of poor image quality. Recent improvements in
complementary metal oxide semiconductor, including smaller size circuits,
better current control, and a more stable fabrication process, have made it
possible to design complementary metal oxide semiconductor image sensors that
provide high image quality and that have many advantages over charged couple
device sensors.

Advantages of Complementary Metal Oxide Semiconductor Over Charged Couple
Device Technology

Complementary metal oxide semiconductor technology has many advantages over
charged couple device technology including:

. Cameras using complementary metal oxide semiconductor image sensors
consume as little as one tenth as much power as those using charged
couple device technology, making them more suitable for battery
operated applications.

. Complementary metal oxide semiconductor image sensors require only one
voltage, the three or five volts typically used for modern integrated
complementary metal oxide semiconductor circuits, while charged couple
device image sensors require three separate and different voltages,
which means that complementary metal oxide semiconductor image sensors
are easier and less costly to integrate into companion circuit boards.

. Complementary metal oxide semiconductor technology permits integration
of more functions into fewer chips, providing space, cost, product
design and reliability advantages. Cameras using complementary metal
oxide semiconductor technology do not require as many semiconductors
as cameras using charged couple device technology.

. The complementary metal oxide semiconductor fabrication process
requires fewer masking steps than the charged couple device
fabrication process. The charged couple device fabrication process
requires 20 to 40 masking steps, which is two to three times more
complex than the complementary metal oxide semiconductor fabrication
process.

. Complementary metal oxide semiconductor image sensors do not cause an
image to lose definition when directed towards bright light while
charged couple device image sensors create a blurry or smeared image.

In addition, since charged couple device technology is used only for image
sensors, future improvements in the core technology and the fabrication process
are concentrated among a few large, vertically integrated equipment
manufactures. Such concentration tends to limit innovation and investments, and
according to Frost & Sullivan, economies of scale for the manufacture of
charged couple device image sensors have already been reached. By contrast,
complementary metal oxide semiconductor technology is used for approximately
90% of modern integrated circuits.

Because of the advantages of complementary metal oxide semiconductor
technology, the market for complementary metal oxide semiconductor image
sensors is expected to surpass the market for charged couple device image
sensors in 2001. Frost & Sullivan forecasts that complementary metal oxide
semiconductor's share of the image sensor market will grow from 25.1% in 1999
to 78.6% in 2003. In particular, Frost & Sullivan predicts that in 2003, 70% of
the 13.8 million video conferencing cameras will use

37
<PAGE>

complementary metal oxide semiconductor image sensors. Frost & Sullivan also
states that complementary metal oxide semiconductor technology will replace
charged couple device technology for a significant portion of the market for
consumer digital still cameras.

Applications for Complementary Metal Oxide Semiconductor Image Sensors

Based on discussions with current and potential customers, we anticipate
that the newer complementary metal oxide semiconductor image sensors will help
move video applications into many new mass markets, particularly where low
cost, low power consumption and small size are important. Some of these
applications include:

. a wide array of personal identification systems, including fingerprint
scanners, retina scanners and facial recognition systems that can be
used for credit card and debit card authorization, opening a hotel
door, entering a car or home, accessing a computer or online network,
and any number of applications where a system needs to identify a
person as a valid user;

. a wide array of medical instruments used for everything from routine
doctors' office examinations to disposable cameras for minimal
invasive surgery;

. videophones integrated into tabletop phones;

. machine control applications, including bar code readers, production
control systems and quality control monitors.

However, we believe that multiple chip complementary metal oxide
semiconductor image sensors do not fully take advantage of the benefits enabled
by complementary metal oxide semiconductor technology. Image sensors that
require more than one chip are more expensive, larger, heavier, consume more
power, are less reliable and are more difficult to integrate with other
electronic circuits. As a result, multiple chip image sensors may not be ideal
for many new mass market applications.

Our Solution

We design, develop and market our high performance, high quality and cost
efficient image sensors for computing, communications and consumer electronics
applications. We have developed our image sensors using the standard
complementary metal oxide semiconductor manufacturing process used for
approximately ninety percent of modern integrated circuits. As a result, unlike
competitive image sensors which require multiple chips to achieve the same
functions, we are able to integrate nearly all the camera functions into a
single chip. This leads us to believe that we supply the most highly integrated
single chip image sensor. Customers can use our single chip image sensor to
design camera products that are lower in cost, smaller in size, lighter in
weight, consume less power and are more reliable and easier to integrate with
other electronic circuits than cameras using the traditional charged couple
device technology or multiple chip complementary metal oxide semiconductor
image sensors.

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<PAGE>

Our proprietary circuit design integrates the image capture, the image
processing function, the color processing and the conversion and output into a
single chip. Our image sensors are used in conjunction with our interface
chips or other manufacturers' adaptor chips to connect directly with a
personal computer. The following diagram compares our highly integrated single
chip image sensors with a typical charged couple device image sensor and a
typical multiple chip complementary metal oxide semiconductor image sensor:

[A chart comparing the typical charged couple device Image Sensor, the typical
Competitive complementary metal oxide semiconductor Image Sensor and the
OmniVision Single Chip complementary metal oxide semiconductor Image Sensor.
The left column describes the typical charged couple device Image Sensor,
which consists of an image sensor chip with the image sensing array and a
multiple chip set with image processing, color space conversion, charged
couple device control functions and encoder or analog/digital converter and
interface. The center column describes the typical competitive complementary
metal oxide semiconductor image sensor, which consists of an image sensor chip
with the image sensing array and analog/digital converter and a multiple chip
set with image processing, color space conversion and an encoder or interface.
The right column describes the OmniVision single chip complementary metal
oxide semiconductor image sensor, which consists of a single image sensor chip
with the image sensing array, image processing, color space conversion, and an
encoder or analog/digital converter and interface. All three types of image
sensor lead to a live video output to TV standards and computer standards.]

Our image sensors provide a number of benefits to our customers, including
the following:

. Lower Cost. The highly integrated design of our image sensors allows
our customers to build a camera that can be generally less expensive
than one using charged couple device technology. Our single chip image
sensor also allows our customers to build cameras that are less
expensive than cameras using multiple chip complementary metal oxide
semiconductor image sensors.

. Lower Power Consumption. A camera using our image sensor can require
as little as one tenth of the power required for a charged couple
device camera and half the power required for a multiple chip
complementary metal oxide semiconductor camera, making our solution
more suitable for battery powered operation. In addition,
complementary metal oxide semiconductor image sensors

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<PAGE>

use a single voltage while charged couple device image sensors require
three voltages. As a result of this simplicity our customers can more
easily and quickly design camera products.

. Smaller Size. Our highly integrated, single chip design allows our
customers to develop cameras that are smaller in size and lighter in
weight than cameras that use charged couple device or multiple chip
complementary metal oxide semiconductor image sensors. For portable
applications, size and weight are critical factors in a consumer's
buying decision. Additionally, devices using our image sensors are
more reliable because there are fewer parts to fail.

. Streamlined Manufacturing and Production. Our image sensors provide
consistent quality that makes them easier to use for large scale
production than charged couple device image sensors because charged
couple device image sensors must each be hand calibrated to match
companion components. Our image sensors can be mounted with automatic
insertion equipment and run through standard automatic reflow
soldering lines, whereas charged couple device must each be
individually placed and soldered by hand.

. Ease of Use for End Users. As opposed to other charged couple device
and complementary metal oxide semiconductor image sensor
manufacturers, we offer a complete solution for our customers' end
users. Use of our image sensors along with our interface chips and our
Windows software drivers enables a plug and play connection of the
camera to a personal computer.

. Accelerated Time to Market. The highly integrated nature of our image
sensors and their programming ease simplify the design of cameras and
allows our customers to shorten their product design time. We also
help our customers accelerate their time to market by providing camera
reference designs, engineering design review services and customer
product evaluation testing and debugging services.

Our Strategy

Our objective is to be the leading supplier of complementary metal oxide
semiconductor image sensors for the camera manufacturer marketplace. Key
elements of our strategy include:

. Target Mass Market Applications. We intend to focus our efforts on
mass market opportunities for image sensors. We intend to replace
charged couple device technology as well as capitalize on existing
markets already dominated by complementary metal oxide semiconductor
technology by providing high quality, cost efficient products that
meet a variety of camera manufacturer requirements. These markets
include closed circuit television systems, digital still cameras,
personal computer video cameras, personal digital assistant cameras,
mobile phone cameras, security and surveillance systems, toys and
games, videophones, personal identification systems, medical imaging
devices, machine control systems and automotive applications.

. Focus on Camera Manufacturers. We intend to use our expertise in the
design of consumer cameras to assist our camera manufacturer customers
to design and develop their products using our image sensors. We
believe a focus on camera manufacturer customers is important because
we can take advantage of a camera manufacturer's brand name and
distribution and manufacturing capabilities to gain access to large
markets.

. Maintain Technology Leadership. We plan to maintain our technology
leadership by continuing to develop our core technology. We have an
ongoing, in house research effort further exploring the basic physics
relating to image sensing that will give us a solid base for future
improvements. We also plan to continue to increase yields through
improvements in product design, and in the four basic steps of our
manufacturing process, which include wafer fabrication, color filter
processing, chip packaging and production testing.

. Continue to Develop New Products. We will continue to develop new
products aimed at new and existing markets. We intend to expand the
range of image resolutions offered, provide more

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<PAGE>

products that use three volts, improve the image quality and integrate
more features, such as communications, compression and additional
interface standards into our image sensors. The modular design of our
integrated circuits allows us to quickly add improvements to existing
products and to develop new products using established, fully tested
circuits.

. Continue to Develop Strategic Relationships. We will continue to
establish both formal and informal strategic relationships with key
manufacturers and customers. Relationships with manufacturers enable
us to gain access to wafer capacity and develop joint engineering
projects aimed at improving the production yield and the sensor image
quality for our image sensors. Relationships with customers allow us
to collaborate in the design and development of cameras using our
image sensors. We believe strategic relationships are essential to our
success and will continue to focus on developing new relationships.

Products

We design, develop and market our high performance, high quality and cost
efficient complementary metal oxide semiconductor image sensors for computing,
communications and consumer electronics applications.

We have developed proprietary designs for a single chip image sensor that
includes the image capture, image processing circuitry, color processing and
conversion and output. Our products are programmable and allow our customers to
provide custom, proprietary features in their application software or hardware
design so that they can offer unique products to end users. Our technology
provides a platform for different products that allow our customers to choose
the most appropriate features for their applications. These features include:

- --------------------------------------------------------------------------------
Product Features
- ----------------------------------------------------------------------------
<TABLE>
<C> <S>
Complementary Metal Oxide
Semiconductor Image Sensors Black and white or color
- ----------------------------------------------------------------------------
Resolutions Low resolution
Medium resolution
- ----------------------------------------------------------------------------
Output Signal For Television
For Computers
- ----------------------------------------------------------------------------
Operating Voltage 5 volt or 3 volt
- ----------------------------------------------------------------------------
Optical Lens Size 1/4 or 1/3 or 1/2 inch format
- ----------------------------------------------------------------------------
Interface Chips For connecting to computers
- ----------------------------------------------------------------------------
Software Drivers Windows and Apple computer software drivers
- ----------------------------------------------------------------------------
</TABLE>

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<PAGE>

The following table summarizes our current image sensor product offerings:

- --------------------------------------------------------------------------------
CMOS Image Sensors
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Product
- ------------------------
Black and Color Introduction
White Sensors Sensors Resolution Output Target Markets Date
- ----------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
OV5016 Low For TV Security and surveillance 1/97
Toys and games
- --------------------------------------------------------------------------------
OV5017 Low For Machine control 5/97
Computers
- --------------------------------------------------------------------------------
OV7110 OV7610 Medium For PC video cameras 10/98
Computers Digital still cameras
Machine control
- --------------------------------------------------------------------------------
OV7410 OV7910 Medium For TV Security and surveillance 2/99
Close circuit television
Toys and games
- --------------------------------------------------------------------------------
OV6120 OV6620 Low For PC video cameras 4/99
Computers Toys and games
Machine control
- --------------------------------------------------------------------------------
OV7120 OV7620 Medium For PC video cameras 10/99
Computers Digital still cameras
Machine control
Security and surveillance
- --------------------------------------------------------------------------------
OV6130 OV6630 Low For PC video cameras 2/00
Computers Toys and games
Machine control
- --------------------------------------------------------------------------------
</TABLE>

We have new products currently scheduled for introduction in fiscal year
2001 that feature higher resolutions. These products have picture resolutions
of 800 x 600 and 1280 x 1024. Both will operate on three volts and are targeted
at the digital still camera, PC video camera, security and surveillance, and
machine control markets.

We also provide a companion chip used to interface our image sensors to the
universal serial bus, a connection which allows add on devices to be connected
to personal computers. These low cost, proprietary designed chips accept the
live video output from our image sensors, perform data compression and handle
the bus protocol for transferring the image data to the personal computer. They
also act as an I/2/C master, which is an industry standard protocol, for
passing programming information to and from our image sensor.

We also design, develop and license plug and play software drivers for
Microsoft Windows and Apple Computer's iMac system. These software drivers
accept the image data being received from the universal serial bus, provide the
data decompression if required and manage interface protocols with the camera.
These drivers have been designed for speed and flexibility and allow easy
customization of the user interface to give the appearance of the customer's
branded product or application software.

Customers

Our customers include industry leading camera manufacturers, contract
manufacturers and distributors. In the first nine months of fiscal year 2000 we
shipped over 2.6 million image sensors. The following table describes
representative camera manufacturer customers who purchase our products for
their own branded

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<PAGE>

products and contract manufacturers who build products for a camera
manufacturer. Also shown are our representative distributors who purchase our
products for resale.

<TABLE>
<CAPTION>
Customer Product Family Markets

Camera Manufacturer and Contract Manufacturer Customers

<S> <C> <C>
Advanced Integration of Pure Color digital sensors PC video cameras
Intelligence USB interface

- --------------------------------------------------------------------------------
Alaris Color digital sensors PC video cameras
Color analog sensors Toys and games

- --------------------------------------------------------------------------------
COMedia Black and white analog Security and surveillance
sensors
Color analog sensors

- --------------------------------------------------------------------------------
Creative Technology Color digital sensors PC video cameras
USB interface Digital still cameras

- --------------------------------------------------------------------------------
CRS Electronic Color analog sensors Toys and games

- --------------------------------------------------------------------------------
Marshall Electronics Color analog sensors Security and surveillance

- --------------------------------------------------------------------------------
Olympus Optical Co. Color digital sensors Security and surveillance
Color analog sensors PC video cameras

- --------------------------------------------------------------------------------
Prochips Technology Color digital sensors PC video cameras
USB interface

- --------------------------------------------------------------------------------
RDI/Core Technology Black and white analog Security and surveillance
sensors
Color analog sensors

- --------------------------------------------------------------------------------
Viewquest Technologies Color digital sensors Toys and games
USB interface PC video cameras
Personal digital assistant
cameras

- --------------------------------------------------------------------------------
Welch Allyn Black and white analog Security and surveillance
sensors
Color analog sensors

- --------------------------------------------------------------------------------
X-10 (USA) Color analog sensors Security and surveillance

<CAPTION>
Distributors

<S> <C> <C>
Wintek Electronics Color digital sensors PC video cameras
Black and white digital Digital still cameras
sensors
Color analog sensors General purpose cameras
USB interface Security and surveillance

- --------------------------------------------------------------------------------
World Peace Industrial Color digital sensors PC video cameras
Black and white digital Digital still cameras
sensors
Color analog sensors Security and surveillance
USB interface General purpose cameras
</TABLE>

In many cases, our camera manufacturer customers outsource manufacturing
functions to third parties. In these cases we typically help these third party
manufacturers bring the design to production. Once the production is ready, we
sell our products to these third party manufacturers either directly or through
distributors. For example, Viewquest, a major manufacturer in Taiwan,
manufactures cameras for an Intel and Mattel joint venture and for Microsoft,
and plans to manufacture a personal digital assistant camera for Kodak. In many
cases these third party manufacturers will also introduce us to additional
camera manufacturers with whom they have previous relationships.

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<PAGE>

In the nine months ended January 31, 2000, approximately 66% of our
revenues were directly to camera manufacturers and their contract
manufacturers. Our two largest customers, Creative Technology Ltd. and Alaris,
Inc., accounted for 17% and 16% of our total revenues, respectively. No other
single camera manufacturer customer represented more than 10% of total
revenues.

In the nine months ending January 31, 2000, approximately 34% of our
revenues were to distributors. The largest distributor was World Peace
Industrial Co. Ltd., who represented approximately 24% of total revenues. No
other single distributor represented more than 10% of total revenues.

Strategic Relationships

We have established an informal strategic relationship with Taiwan
Semiconductor Manufacturing Company, or TSMC, both in Taiwan and in the United
States. TSMC is our primary source of wafer fabrication. This relationship
includes joint engineering projects aimed at improving production yields,
improving image quality and correlating final packaged chip testing and wafer
level testing. We provide extensive, in depth technical expertise on image
sensor design issues which has allowed TSMC to develop an image sensor
production business. TSMC provides us with extensive, in depth technical
expertise on variations of the complementary metal oxide semiconductor,
semiconductor fabrication process which assists us in improving the design and
production of our image sensors. We are TSMC's largest customer for
complementary metal oxide semiconductor image sensors and in the past we have
received preferential capacity scheduling.

We have signed an agreement with Powerchip Semiconductor Company, or PSC,
as a second source for wafer fabrication. PSC is an equity investor in
OmniVision. By working closely with PSC's engineers, we have been able to
design new image sensor products that take advantage of PSC's memory chip
fabrication processes. PSC's fabrication process gives us a number of important
improvements, including better current control for better image quality, three
volt power for portable applications and more image sensor chips per wafer. In
return, we have assisted PSC in the image sensor fabrication and the color
filter application process business.

We have signed an agreement with Shanghai HuaHong NEC Electronics Co. Ltd.,
or HuaHong-NEC, as an additional source of wafer manufacturing. HuaHong-NEC is
an equity investor in OmniVision. This agreement not only assures us future
production capacity, but also gives us a production source in China that will
be strategically important as we develop a market in China. We will use our
technical expertise to help HuaHong-NEC develop its image sensor fabrication
business.

We have several informal strategic relationships with key customers in the
development of new camera products incorporating our image sensors. By working
directly with key customers, we can help them take advantage of our image
sensors and can inform them of new developments so they can market their
products more quickly. By learning more about our customers' desires and
requirements we are able to plan and prioritize our product development
projects. These key customers include Creative Technology, for PC video cameras
and digital still cameras, Alaris for PC video cameras, Viewquest for toys, PC
video cameras and personal digital assistant cameras, and Welch Allyn for
medical instruments, security and surveillance systems and machine control
applications.

Sales and Marketing

We sell our products through a direct sales force and indirectly through
distributors and manufacturer's representatives. As of January 31, 1999 our
sales and marketing organizations had a total of 14 employees, including 7 of
whom are in Taiwan. We also have 18 independent distributors and manufacturers'
representatives, nine of whom are in Asia and six of whom are in Europe.

Our sales and marketing strategy is to achieve design wins with key
industry leaders who target mass market applications. Our marketing efforts
focus primarily on promoting the advantages of a single chip

44
<PAGE>

image sensor and in supporting our customers at industry trade shows around the
world. We sell our image sensors to camera manufacturers who market camera
products under their own brand. We also sell to large manufacturing companies
that produce camera products for others to market under different brand names.
Through our relationships, we have developed considerable expertise in the
design of consumer cameras. We use that expertise in assisting our customers to
develop their products using our image sensors. We also provide reference
designs and engineering design review and engineering product evaluation
testing and debugging services for our customers. We believe that good customer
support at a technical level is extremely important in developing long term
relationships with key customers.

Technology

We have key technical competencies in analog signal processing design,
mixed signal circuit design, advanced complementary metal oxide semiconductor
image sensor design, automatic testing and single chip semiconductor design.

Analog Circuit Design

We have the in house expertise to design sophisticated analog semiconductor
circuits. This expertise is unique because most semiconductor design engineers
today work in the area of digital circuit design. Our in house expertise allows
us to process the video data captured in the analog domain, which has many
significant advantages over digital processing. Analog processing works
directly on the original image signals without the loss of data typical with
conversion to digital processing. Analog circuits require considerably less
space which means we can design smaller chips with far less noise caused by
heat or cross talk than digital circuits. The image processing circuits take
approximately 20% of the space in our typical image sensor design, leaving 80%
for the image sensing array. Most charged couple device image sensors and other
competitive complementary metal oxide semiconductor image sensor products
convert the image signal to digital as the very first step. In our product
designs, conversion to a digital signal is the last step taken before the
output step rather than the first. Analog processing is the key for integrating
all the functions on a single chip thereby taking full advantage of the
benefits of complementary metal oxide semiconductor technology.

Mixed Analog/Digital Circuit Design

We have developed extensive in house expertise in the technology of mixing
analog and digital signals in the same semiconductor design without suffering
the common problems of interference from noise caused by heat or crosstalk. We
use digital circuits in our image sensors to interface to the outside digital
world. We have developed a method of programming the analog processing circuits
which gives our customers extensive and flexible programming capability from
digitally based microprocessors and micro controllers.

Advanced Complementary Metal Oxide Semiconductor Image Sensor Design

Our in house semiconductor design engineers are skilled in the design of
high speed, low power and mixed analog/digital complementary metal oxide
semiconductor image sensors. We use advanced design techniques to develop high
speed, highly integrated semiconductors which can be fabricated using standard
complementary metal oxide semiconductor processes and which can be manufactured
using conventional low cost packages.

Automatic Testing

Automatic testing methods and equipment designed for conventional
complementary metal oxide semiconductor devices are not sufficient for testing
an image sensor. In addition to testing all the normal logic and electrical
functions, an optical test must be performed on the image sensor. The sensor is
turned on and captures a live image which is subsequently analyzed for quality
and color. Our in house expertise allows us to design automatic testing
equipment, specifically for complementary metal oxide semiconductor image
sensors.

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<PAGE>

Using commercially available off the shelf modules and components, we have
designed and developed a complete microcomputer based testing system that has
automatic handling capability, an image source, a lighting and lens system and
automatic output sorting. This low cost system is programmable so that testing
criteria and testing methodology can be easily changed and can be replicated to
meet increased production requirements. The system produces detailed reports on
test results that are used for feedback to our quality control and operations
department. We currently use these systems to deliver a high quality product at
high production volumes.

Single Chip Semiconductor Design

Our expertise has allowed us to create a single chip complementary metal
oxide semiconductor image sensor. Our single chip integrates the image capture,
the image processing, the color processing and conversion and output for either
television or computers.

Research and Development

The internal design of our complementary metal oxide semiconductor image
sensors has been done in a modular fashion. The major functions, such as the
image capture, image sensor control logic, color processing, analog output,
digital output and programming control, are stand alone circuits that can
rapidly be modified or used as is in new product developments. As a result,
circuit improvements automatically migrate to each new product, and the total
development time and cost for new products is greatly reduced.

We use a team approach to design new products which includes a senior
design engineer and additional engineers with specific design expertise. As of
January 31, 2000, we had a total of 11 employees in our core logic group
responsible for image sensor design and development. In addition, we had a
total of 17 employees in our engineering systems group responsible for the
design and development of interface chips, software drivers, reference camera
designs, automated test equipment and customer engineering support services.

We have invested, and expect that we will continue to invest, significant
funds on research and development. Our research and development expenses were
approximately $1.7 million in fiscal year 1997, $3.4 million in fiscal year
1998 and $3.3 million in fiscal year 1999.

Intellectual Property

Our success and future revenue growth will depend, in part, on our ability
to protect our intellectual property. We rely on a combination of patent,
copyright, trademark and trade secrets, as well as nondisclosure agreements and
other methods to protect various aspects of our image sensors such as the image
capture and the image processing circuit. As of January 31, 2000, we have been
issued 12 United States patents. We have also received five Taiwanese patents.
We have filed 22 additional United States patent applications, of which two
have been allowed. We have also filed nine additional foreign patent
applications. These patents and patent applications protect the single chip
image sensor design, noise reduction and cancellation circuits and image
enhancement and color processing technologies of our semiconductor image
sensors.

From time to time, third parties, including our competitors, may assert
patent, copyright and other intellectual property rights to technologies that
are important to us. We expect that we will increasingly be subject to license
offers and infringement claims as the number of products and competitors in our
market grows and the functionality of products overlaps. In this regard, in
March of 1999, we received a written notice from Photobit Corporation, or
Photobit, in which Photobit claimed to have patent rights in certain technology
covered by U.S. Patent No. 5,841,126. Photobit requested that we review our
products in light of U.S. Patent No. 5,841,126. We have reviewed Photobit's
patent and based on an opinion from our patent counsel, Blakely, Sokoloff,
Taylor & Zafman LLP, we do not believe there is a valid claim against us under
this patent. We shall vigorously defend ourselves against any claim arising
from this notice.

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<PAGE>

Photobit or other companies may pursue litigation with respect to these or
other claims. The results of any litigation are inherently uncertain. In the
event of an adverse result in any litigation with respect to intellectual
property rights relevant to our products that could arise in the future, we
could be required to obtain licenses to the infringing technology, pay
substantial damages under applicable law, including treble damages if we are
held to have willfully infringed, to cease the manufacture, use and sale of
infringing products or to expend significant resources to develop noninfringing
technology. Licenses may not be available from third parties, including
Photobit, either on commercially reasonable terms or at all. In addition,
litigation frequently involves substantial expenditures and can require
significant management attention, even if we ultimately prevail. Accordingly,
any infringement claim or litigation against us could significantly harm our
business, operating results and financial condition.

Manufacturing

Wafer Fabrication

Our semiconductor products are fabricated using standard complementary
metal oxide semiconductor processes, which permit us to engage independent
wafer foundries to fabricate our semiconductors. By outsourcing our
manufacturing to semiconductor foundries, we are able to avoid the high cost of
owning and operating a semiconductor wafer fabrication facility. This allows us
to focus our resources on the design, development and marketing of our image
sensors.

We outsource the majority of our wafer manufacturing to TSMC. During 1999
we began developing new image sensors to take advantage of PSC's memory chip
fabrication technology, and we have begun receiving production quantities of
wafers from PSC. We expect that the volume of production from PSC will increase
over time. We also have an agreement with HuaHong-NEC to provide us with
additional wafer manufacturing support.

Our image sensors are currently fabricated using a standard process at 0.5
and 0.6 microns. Some new products that will use the 0.35 micron process are in
development. We continue to evaluate the benefits and feasibility of migrating
to a smaller circuit technology in order to reduce costs or to increase quality
and performance.

Our interface chip is currently being fabricated by Samsung on its standard
fabrication line. Samsung not only fabricates the wafers, but also packages the
chips and performs a final test, delivering a final product that can be shipped
directly to our customers when required.

Color Filter Application

Approximately 80% of our sales of image sensors are color image sensors.
These require a color filter to be applied to the wafer before packaging. This
color filter application uses a series of masks to place red, green and blue
dyes on the individual picture elements in an industry standard Bayer pattern.
As a final step, a micro lens is applied to each picture element. We outsource
the application of our color filters to Toppan Printing Co., Ltd. in Japan and
to TSMC in Taiwan. We have also recently qualified PSC in Taiwan. We continue
to evaluate the benefits of using other vendors with different process
technology in order to further reduce costs or increase quality and
performance.

Assembly

After wafer fabrication, and color filter application if required, the
wafers are diced into chips, which are then assembled into packages. Our
products are designed to use low cost standard packages that are widely in use
for optical sensor chips. These packages have a glass lid to allow light to
pass through to the image sensor array. We outsource all our packaging
requirements to Alphatec in Thailand and Kyocera in Japan. We continue to
evaluate the benefits of using other vendors and other packaging technologies
in order to further reduce costs or increase quality or performance.

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<PAGE>

Testing

High volume product testing is an important part of the production of image
sensors and is a substantial barrier to entry for many companies. Production
testing equipment designed for conventional complementary metal oxide
semiconductors is not sufficient for testing image sensors because an optical
image must be captured and checked in addition to checking the normal logic and
electrical functions. The few commercially available image sensor testers are
expensive and do not meet our high standards.

We have designed our own automatic test equipment, using readily available
modules and components. These testers are computer based and have automatic
handling capability, a lighting and lens system, a changeable image source and
automatic output sorting by grade. The system is programmable so that testing
criteria and methodology can be changed easily to accommodate new products or
special testing requests. Our cost to build a system is substantially less than
that of commercially available testing. We can expand our production capability
by building additional systems at a low cost. Current testing capacity is in
excess of one million units per month.

Our policy is to do a complete optical test of all our image sensors.
Currently substantially all of our testing is done on our testing machines
installed at our headquarters facility in Sunnyvale, California, although a
very small amount of testing for a few older products is done by hand by a
third party. We continue to evaluate the benefits of making our testing
machines available to outside vendors who could perform our testing in order to
reduce costs.

We use the reports from our testing machines to monitor the cause of any
failure in order to place responsibility with the appropriate vendor, i.e.
wafer fabrication, color filter application and packaging. Since image sensors
are optical products, the introduction of impurities is a major concern during
the color filter application and packaging process. We use test data to
establish yield goals at each step of the manufacturing process and take
remedial action as appropriate.

Quality Assurance

We focus on product quality through all stages of the design and
manufacturing process. Our designs are subjected to in depth circuit simulation
before being committed to silicon. Test wafers are fabricated and test chips
are packaged and live tested before a new product is committed to production.
Initial production runs are kept at a minimum until sufficient products have
completed the entire manufacturing and testing process and are delivered to and
approved by customers. Full production runs are committed only at that time.

We qualify each of our vendors through a series of industry standard
environmental product stress tests, as well as an audit and an analysis of the
subcontractor's quality system and manufacturing capability. We also
participate in quality and reliability monitoring through each stage of the
production cycle by reviewing electrical parametric data from our foundries and
other subcontractors. We closely monitor wafer foundry production to obtain
consistent overall quality, reliability and yield levels.

Competition

We compete in an industry characterized by intense competition, rapid
technological changes, evolving industry standards, declining average selling
prices and rapid product obsolescence. We believe that the principal factors
affecting competition in our markets are time to market, quality, total system
design cost, availability of foundry capacity, customer support and reputation.
Our primary competition comes from charged couple device image sensor
manufacturers and complementary metal oxide semiconductor image sensor
manufacturers..

. Charged Couple Device Image Sensor Manufacturers. Image sensor
manufacturers using charged couple device technology include a number
of well established companies, particularly vertically integrated
camcorder manufacturers. Our main competition comes from the top six
companies that

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<PAGE>

collectively account for approximately 55% to 65% of the total charged
couple device image sensor market. These six include Matsushita
Electric Industrial, Sanyo Electric Co. Ltd., Sharp Corporation, Sony
Corporation, Toshiba Corporation and Victor Company of Japan; and

. Complementary Metal Oxide Semiconductor Image Sensor
Manufacturers. Image sensor manufacturers using the complementary metal
oxide semiconductor technology include a number of well established
companies such as Agilent Technologies, Inc., Conexant Systems, Inc.,
Hyundai Electronics Industries Co. Ltd., Intel, Lucent Technologies,
Inc., Mitsubishi Electronic, Motorola, Inc., and Toshiba Corporation.
In addition, we compete with a large number of smaller startup
companies including Chrontel, Inc., ElecVision, Inc., Photobit
Corporation and VLSI Vision Ltd. (now a division of ST
Microelectronics).

Our competitors include many large domestic and international companies
that have greater access to advanced wafer foundry capacity, substantially
greater financial, technical, marketing, distribution and other resources,
broader product lines, access to large customer bases and longer standing
relationships with suppliers and customers than we do. However, we believe
that our single chip design offers competitive advantages that can allow our
customers to design cameras that are lower in cost, smaller, lighter weight,
consume less power, more reliable and more easily integrated with other
circuits than cameras using charged couple device technology or multiple chip
image sensors using complementary metal oxide semiconductor technology.

Backlog

Sales are generally made pursuant to standard purchase orders. Our backlog
includes only those customer orders for which we have accepted purchase orders
and assigned shipment dates within the upcoming twelve months. As of January
31, 2000, our backlog was $15.9 million. Although our backlog is typically
filled within two to four quarters, our current backlog is subject to changes
in delivery schedules and backlog may not necessarily be an indication of
future revenue.

Employees

As of January 31, 2000 we had a total of 71 full time employees, 64
located at our headquarters in Sunnyvale, California and seven at our Taiwan
office. Of the 71 employees, 11 are in design engineering, 17 are in systems
development, 22 are in production, 14 are in sales and marketing and seven are
in general and administrative. None of our employees are represented by a
collective bargaining agreement, and we have never experienced any work
stoppage. We believe that our employee relations are good.

Facilities

Our headquarters, including our principal engineering, administrative,
marketing and testing facilities, are located in approximately 21,280 square
feet of space we have leased in Sunnyvale, California under a lease expiring
April 30, 2003. We intend to lease additional space in the next 12 months. We
also lease a sales and support office in Taiwan.

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<PAGE>

MANAGEMENT

Executive Officers and Directors

The following table sets forth, as of March 6, 2000 certain information
concerning our executive officers and directors:

<TABLE>
<CAPTION>
Name Age Position
----------------------- --- -----------------------------------------------------
<S> <C> <C>
Shaw Hong............... 62 Chief Executive Officer and Director
H. Gene McCown.......... 64 Vice President of Finance and Chief Financial Officer
Robert J. Stroh......... 60 Vice President of Sales and Marketing
Raymond Wu.............. 46 Executive Vice President and Director
Hank O'Hara............. 65 Vice President of Worldwide Sales
Frank Huang(1)(2)....... 50 Director
Edward C.V. Winn(1)(2).. 61 Director
Leon Malmed(1)(2)....... 62 Director
</TABLE>
- --------
(1) Member of the Compensation Committee
(2) Member of the Audit Committee

Shaw Hong, one of our cofounders, has served as one of our directors and as
our Chief Executive Officer and President since May 1995. From January 1990 to
April 1995, Mr. Hong was the President of HK Technology, Inc., an integrated
circuit design company. Mr. Hong received a B.S. degree in Electrical
Engineering from Jiao Tong University in China and a M.S. in Electrical
Engineering from Oregon State University.

H. Gene McCown has served as our Vice President of Finance and Chief
Financial Officer since July 1999. From July 1998 to January 1999, Mr. McCown
served as Vice President of Finance and Chief Financial Officer of Innovative
Robotic Solutions, Inc, a manufacturer of semiconductor equipment. From July
1991 to July 1998, Mr. McCown served as Vice President of Finance and Chief
Financial Officer of Chrontel, Inc., a semiconductor manufacturer. Mr. McCown
received a B.S. in Accounting from San Jose State University.

Robert J. Stroh has served as our Vice President of Sales and Marketing
since June 1998. From January 1997 to June 1998, Mr. Stroh served as our
Director of Marketing and Sales. From June 1993 to December 1996, Mr. Stroh
founded and was president of Stroh Golf Ventures, a company that conducted golf
camps, Stroh Holdings LLC, an Internet sales company, and Direct Product
Network, Inc., an Internet sales company. Mr. Stroh received an M.B.A. from
Indiana University and a B.S. in Business from Pennsylvania State University.

Raymond Wu, one of our cofounders, has served as one of our directors since
May 1995 and as our Executive Vice President since October of 1999. From July
1998 to October 1999, Mr. Wu served as our Vice President of Business
Development. From May 1995 to July 1998, Mr. Wu was the head of our Sales
department and our Engineering department. From January 1990 to April 1995, Mr.
Wu held various positions within the design and mechanical engineering
departments of HK Technology, Inc. Mr. Wu received a B.S. degree in Electrical
Engineering from Chung-Yuan University in Taiwan and a M.S. in Electrical
Engineering from Wayne State University.

Hank O'Hara has served as our Vice President of Worldwide Sales since April
2000. From February 1997 to April 2000, Mr. O'Hara co-founded and served as
Vice President Sales and Marketing of Alacritech, a designer and manufacturer
of high performance networking boards. From January 1994 to February 1997, he
served as Vice President of Sales of Pericom Semiconductor, a manufacturer of
high performance networking services. In addition, over the past 30 years, Mr.
O'Hara has held sales and marketing positions at various public companies. Mr.
O'Hara received a B.S. in Mechanical Engineering from California Polytechnical
Institute at San Luis Obispo.

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<PAGE>

Frank Huang has served as one of our directors since December 1999. From
August 1993 to the present, Dr. Huang has served as the Chairman of UMAX Group,
formerly UMAX Data Systems, a scanner designer and manufacturer. From December
1994 to the present, Dr. Huang has served as the Chairman of Powerchip
Semiconductor Corp., a joint venture between UMAX Group and Mitsubishi
Electrical Corporation for DRAM manufacturing. Dr. Huang received a Ph.D. in
Medicine from Mount Sinai Medical School and was a Deputy Professor of Medicine
at Taipei Medical College.

Edward C.V. Winn has served as one of our directors since March 2000. From
March 1992 to January 2000, Mr. Winn served in various capacities with TriQuint
Semiconductor, Inc., most recently as Executive Vice President, Finance and
Administration and Chief Financial Officer. From 1985 until December 1991, he
served in various capacities with Avantek, Inc., a microwave semiconductor
corporation, most recently as Product Group Vice President. Mr. Winn received a
B.S. in Physics from Rensselaer Polytechnic Institute and an M.B.A. from
Harvard University.

Leon Malmed has served as one of our directors since March 2000. From
December 1992 to the present, Mr. Malmed has served in various capacities with
SanDisk Corporation, most recently as Senior Vice President of Worldwide
Marketing and Sales. From 1991 to 1992, Mr. Malmed was Executive Vice President
of Sales and Marketing at SyQuest Technology, Inc., a manufacturer of removable
cartridge disk drives. From 1990 to 1991, Mr. Malmed was Senior Vice President
of Sales and Marketing at Prairetek, Inc., a manufacturer of disk drives. From
1982 to 1990, Mr. Malmed was Senior Vice President of Maxtor Corporation. Mr.
Malmed holds a B.S. in Mechanical Engineering from the University of Paris.

Committees of the Board of Directors

Our compensation committee consists of Messrs. Huang, Winn and Malmed. The
compensation committee makes recommendations regarding our various incentive
compensation and benefit plans and determines salaries for our executive
officers and incentive compensation for our employees and consultants.

Our audit committee consists of Messrs. Huang, Winn and Malmed. The audit
committee makes recommendations to the board of directors regarding the
selection of our independent auditors, reviews the results and scope of the
audit and other services provided by our independent auditors and reviews and
evaluates our control functions.

Board Composition

Our board currently consists of five directors. Our certificate of
incorporation and bylaws that become effective upon the completion of this
offering provide that our Board will be divided into three classes, Class I,
Class II and Class III, with each class serving staggered three year terms. The
Class I directors, Messrs. Hong and Winn, will stand for reelection at the 2001
annual meeting of stockholders. The Class II directors, Messrs. Wu and Malmed,
will stand for reelection at the 2002 annual meeting of stockholders. The Class
III director, Mr. Huang will stand for reelection at the 2003 annual meeting of
stockholders. Any additional directorships resulting from an increase in the
number of directors will be distributed among the three classes so that, as
nearly as possible, each class will consist of one third of the directors. This
staggered classification of the board of directors may have the effect of
delaying or preventing changes in control or management. There are no family
relationships among any of our directors, officers or key employees.

Compensation Committee Interlocks and Insider Participation

None of the members of our compensation committee was, at any time since
our formation, an officer or employee of OmniVision. None of our executive
officers serves as a member of the board of directors or compensation committee
of any entity that has one or more executive officers serving as a member of
our board of directors or compensation committee.

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<PAGE>

Director Compensation

We reimburse our directors for certain expenses in connection with their
attendance at our board and committee meetings. In addition, we pay cash
compensation to our directors in the amount of $1,500 per board meeting
attended, $500 per telephonic board meeting attended and $500 per Committee
meeting attended if such meeting is held separate from a board meeting. Under
our 2000 Stock Plan, nonemployee directors are eligible to receive stock option
grants at the discretion of the board of directors, and, after this offering is
completed, all nonemployee directors will receive stock options pursuant to the
automatic option grant program in effect under the 2000 Director Option Plan.
See "--Stock Plans" for more information about the automatic grant program.

Executive Compensation

The following table sets forth the compensation earned for services
rendered to us in all capacities by our Chief Executive Officer and our four
most highly compensated executive officers whose total cash compensation
exceeded $100,000--collectively, the "Named Executive Officers"--for the year
ended April 30, 1999.

Summary Compensation Table
<TABLE>
<CAPTION>
Long Term
Compensation
Awards
------------
Annual
Compensation Securities
-------------- Underlying All Other
Name and Principal Position Salary Bonus Options Compensation
--------------------------- -------- ----- ------------ ------------
<S> <C> <C> <C> <C>
Shaw Hong
President and Chief Executive
Officer............................ $112,000 $ -- 90,000 $3,864(1)
Tai Ching Shyu (2)
Former Vice President of System
Product Development................ 109,600 -- 25,000 3,406(3)
Steven Busby (4)
Former Chief Financial Officer....... 108,766 -- 100,000 900(5)
Robert J. Stroh
Vice President of Sales and
Marketing.......................... 108,333 -- 25,000 4,844(6)
Raymond Wu
Vice President....................... $107,583 -- 70,000 $3,346(7)
</TABLE>
- --------
(1) Consists of $504 in premiums paid on Mr. Hong's life insurance policy and
$3,360 in contributions to Mr. Hong's account under our Salary Reduction
Simplified Employee Pension Plan.

(2) Mr. Shyu left the company in February 2000.

(3) Represents $118 in premiums paid on Mr. Shyu's life insurance policy and
$3,288 in contributions to Mr. Shyu's account under our Salary Reduction
Simplified Employee Pension Plan.

(4) Mr. Busby left the company in July 1999.

(5) Represents $900 in contributions to Mr. Busby's account under our Salary
Reduction Simplified Employee Pension Plan.

(6) Represents $594 in premiums on Mr. Stroh's life insurance policy and $4,250
in contributions to Mr. Stroh's account under our Salary Reduction
Simplified Employee Pension Plan.

(7) Consists of $118 in premiums on Mr. Wu's life insurance policy and $3,228
in contributions to Mr. Wu's account under our Salary Reduction Simplified
Employee Pension Plan.

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<PAGE>

Option Grants in Last Fiscal Year

The following table provides information relating to stock options awarded
to each of the Named Executive Officers during the year ended April 30, 1999.
For grants in fiscal year 2000 to the Named Executive Officers, see "Certain
Transactions--Option Grants to Directors and Executive Officers." All of the
options were awarded under our 1995 Stock Option Plan. Options under the 1995
Stock Option Plan generally vest over five years with 20% of the shares subject
to the option vesting on the first anniversary of the grant date and 1/20th of
the remaining shares vesting ratably each calendar quarter thereafter.

Potential Realizable
Individual Grants Value at Assumed
---------------------------------------------- Annual Rates of
Number of Stock Price
Securities Percent of Appreciation
Underlying Total Options for Options Term
Options Granted in Exercise Expiration ---------------------
Name Granted (#) Fiscal 1999 Price ($) Date 5% 10%
---- ----------- ------------- --------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Shaw Hong............... 90,000 11.3% $0.30 07/17/08 $1,439,005 $2,307,368
Tai Ching Shyu(1)....... 25,000 3.2 0.30 07/17/08 399,724 640,935
Robert J. Stroh......... 25,000 3.2 0.30 07/17/08 399,724 640,935
Steven Busby(2)......... 100,000 12.6 0.30 07/17/08 1,598,895 2,563,742
Raymond Wu.............. 70,000 8.8 0.30 07/17/08 1,119,226 1,794,619
</TABLE>
- --------
(1)Mr. Shyu left the company in February 2000.
(2)Mr. Busby left the company in July 1999.

The exercise price per share of each option was equal to the fair market
value of the common stock as determined by the board of directors on the date
of grant. The potential realizable value assumes an initial public offering
price of $10.00 per share over the 10 year term of the options based on assumed
rates of stock appreciation of 5% and 10%, compounding annually less the total
option exercise price. There is no assurance provided to any holder of our
securities that the actual stock price appreciation over the ten year option
term will be at the assumed 5% and 10% levels or at any other defined level.

The percentages above are based on an aggregate of 794,000 shares subject
to options we granted to employees in the year ended April 30, 1999.

Aggregate Option Exercises in Last Fiscal Year and Fiscal Year-End Option
Values

The following table sets forth for each of the Named Executive Officers the
number of shares of common stock acquired and the dollar value realized upon
exercise of options during the year ended April 30, 1999 and the number and
value of securities underlying unexercised options held at April 30, 1999.

The value of in the money options is based on a value of $0.75 per share,
the fair market value of our common stock as of April 30, 1999, as determined
by the board of directors, less the per share exercise price, multiplied by the
number of shares issued upon exercise of the option. All options were granted
under our 1995 Stock Option Plan.

Number of Securities Value of Unexercised
Underlying Unexercised In-the-Money Options
Shares Options of April 30, 1999 at April 30, 1999
Acquired on Value ------------------------- -------------------------
Name Exercise (#) Realized ($) Exercisable Unexercisable Exercisable Unexercisable
---- ------------ ------------ ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Shaw Hong............... -- -- 226,500 163,500 $169,875 $122,625
Tai Ching Shyu(1)....... -- -- 123,500 111,500 92,625 83,625
Steven Busby(2)......... -- -- -- 100,000 -- 75,000
Robert J. Stroh......... 52,000 31,200 6,500 44,500 4,875 33,375
Raymond Wu.............. -- -- 156,500 143,500 117,375 107,625
</TABLE>
- --------
(1)Mr. Shyu left the company in February 2000.
(2)Mr. Busby left the company in July 1999.

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<PAGE>

Stock Plans

1995 Stock Option Plan

Our 1995 Stock Option Plan was adopted by our board of directors and
stockholders in May 1995. A total of 3,600,000 shares of common stock were
reserved for issuance under the 1995 Stock Option Plan. In February 2000, the
Board of Directors terminated the 1995 Stock Option Plan as to future grants.
However, options outstanding under the 1995 Stock Option Plan continue to be
governed by the terms of the 1995 Stock Option Plan.

As of January 31, 2000, we had issued 2,736,550 shares of common stock
upon the exercise of options granted under the 1995 Stock Option Plan, we had
outstanding options to purchase 844,450 shares of common stock at a weighted
average exercise price of $0.97 per share and no shares remain available for
future option grants under the 1995 Stock Option Plan.

2000 Stock Plan

Our 2000 Stock Plan was adopted by our board of directors in February 2000
and our stockholders on March 6, 2000. A total of 3,000,000 shares of common
stock have been reserved for issuance under our stock option plan, together
with an annual increase in the number of shares reserved thereunder beginning
on the first day of our fiscal year, commencing May 1, 2002, in an amount
equal to the lesser of:

. 1,500,000 shares;

. 6% of our outstanding shares of common stock on the last day of the
prior fiscal year; or

. an amount determined by our board of directors.

The 2000 Stock Plan provides for grants of incentive stock options to our
employees including officers and employee directors and nonstatutory stock
options to our consultants including nonemployee directors. The purposes of
our stock option plan are to attract and retain the best available personnel
for positions of substantial responsibility, to provide additional incentive
to our employees and consultants and to promote the success of our business.
At the request of the board of directors, the compensation committee
administers our stock option plan and determines the optionees and the terms
of options granted, including the exercise price, number of shares subject to
the option and the exercisability thereof.

The term of the options granted under the 2000 Stock Plan is stated in the
option agreement. However, the term of an incentive stock option may not
exceed ten years and, in the case of an option granted to an optionee who owns
more than 10% of our outstanding stock at the time of grant, the term of an
option may not exceed five years. Options granted under the 2000 Stock Plan
vest and become exercisable as set forth in each option agreement.

With respect to any optionee who owns more than 10% of our outstanding
stock, the exercise price of any stock option granted must be at least 110% of
the fair market value on the grant date.

No incentive stock options may be granted to an optionee, which, when
combined with all other incentive stock options becoming exercisable in any
calendar year that are held by that person, would have an aggregate fair
market value in excess of $100,000. In any fiscal year, we may not grant any
employee options to purchase more than 500,000 shares or 1,000,000 shares in
the case of an employee's initial employment.

The 2000 Stock Plan will terminate in February 2010, unless our board of
directors terminates it sooner.

As of April 13, 2000, we had issued 1,192,000 shares of common stock upon
the exercise of options granted under the 2000 Stock Plan at a weighted
average exercise price of $9.00 per share and 1,808,000 shares remain
available for future option grants under the 2000 Stock Plan.

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<PAGE>

2000 Employee Stock Purchase Plan

Our 2000 Employee Stock Purchase Plan was adopted by our board of directors
in February 2000 and will become effective upon the closing of this offering.
We have reserved a total of 1,500,000 shares of common stock for issuance under
the 2000 employee stock purchase plan, together with an annual increase in the
number of shares reserved thereunder beginning on the first day of our fiscal
year commencing May 1, 2002 in an amount equal to the lesser of:

. 1,000,000 shares;

. 4% of our outstanding common stock on the last day of the prior fiscal
year; or

. an amount determined by our board of directors.

Our employee stock purchase plan is administered by the board of directors
and is intended to qualify under Section 423 of the Internal Revenue Code. Our
employees, including our officers and employee directors but excluding our five
percent or greater stockholders, are eligible to participate if they are
customarily employed for at least 20 hours per week and for more than five
months in any calendar year. Our employee stock purchase plan permits eligible
employees to purchase common stock through payroll deductions, which may not
exceed the lesser of 15% of an employee's compensation, as defined on Form W-2,
or $25,000 per annum.

Our employee stock purchase plan will be implemented in a series of
overlapping 24-month offering periods, and each offering period consists of
four six-month purchase periods. The initial offering period under our employee
stock purchase plan will begin on the effective date of this offering, and the
subsequent offering periods will begin on the first trading day on or after
June 1 and December 1 of each year. Each participant will be granted an option
on the first day of the offering period and the option will be automatically
exercised on the date six months later, the end of a purchase period,
throughout the offering period. If the fair market value of our common stock on
any purchase date is lower than such fair market value on the start date of
that offering period, then all participants in that offering period will be
automatically withdrawn from such offering period and re-enrolled in the
immediately following offering period. The purchase price of our common stock
under our employee stock purchase plan will be 85 percent of the lesser of the
fair market value per share on the start date of the offering period or at the
end of the purchase period. Employees may end their participation in an
offering period at any time, and their participation ends automatically on
termination of employment with our company.

Our employee stock purchase plan will terminate in February 2010, unless
our board of directors terminates it sooner.

2000 Director Option Plan

Our 2000 Director Option Plan will become effective upon the closing of
this offering. We have reserved a total of 250,000 shares of common stock for
issuance under the 2000 director option plan, together with an annual increase
in the number of shares reserved thereunder beginning on the first day of our
fiscal year commencing May 1, 2002 equal to the lesser of:

. 75,000 shares;

. 0.25% of the outstanding shares of our common stock on the last day of
the prior fiscal year; or

. an amount determined by the board of directors.

The option grants under the 2000 Director Option Plan are automatic and non
discretionary, and the exercise price of the options is 100% of the fair market
value of our common stock on the grant date.

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<PAGE>

The 2000 Director Option Plan provides for an initial grant to a
nonemployee director of an option to purchase 20,000 shares of common stock.
Subsequent to the initial grants, each nonemployee director will be granted an
option to purchase 10,000 shares of common stock at the next meeting of the
board of directors following the annual meeting of stockholders, if on the date
of the annual meeting, the director has served on the board of directors for
six months.

The term of the options granted under the 2000 Director Option Plan is ten
years, but the options expire three months following the termination of the
optionee's status as a director or twelve months if the termination is due to
death or disability. The initial 20,000 share grants will become exercisable at
a rate of one-fourth of the shares on the first anniversary of the grant date
and at a rate of 1/16th of the shares per quarter thereafter. The subsequent
10,000 share grants will become exercisable at the rate of 1/16th of the shares
per quarter.

As of January 31, 2000, no shares had been granted under the 2000 Director
Option Plan.

401(k) Plan

In January 2000, we adopted a 401(k) plan covering our full-time employees
located in the United States. The 401(k) plan is intended to qualify under
Section 401(k) of the Internal Revenue Code, so that contributions to the
401(k) plan by employees or by us, and the investment earnings thereon, are not
taxable to employees until withdrawn from the 401(k) plan, and so that we can
deduct our contributions, if any, when made. Pursuant to the 401(k) plan,
employees may elect to reduce their current compensation by up to the
statutorily prescribed annual limit ($10,000 in 2000) and to have the amount of
such reduction contributed to the 401(k) plan. The 401(k) plan permits, but
does not require, that we provide additional matching contributions to the
40l(k) plan on behalf of all participants in the 401(k) plan. We make
contributions to the 401(k) plan each pay period to all participants in an
amount equal to 3% of their base salary.

Employment Agreements and Change of Control Arrangements

We do not have any employment, noncompete and change in control
arrangements with our current officers.

Limitations of Liability and Indemnification Matters

Our certificate of incorporation limits the liability of directors to the
maximum extent permitted by Delaware law. Delaware law provides that directors
of a corporation will not be personally liable for monetary damages for breach
of their fiduciary duties as directors, except liability for any of the
following:

. any breach of their duty of loyalty to the corporation or its
stockholders;

. acts or omissions not in good faith or which involve intentional
misconduct or a knowing violation of law;

. unlawful payments of dividends or unlawful stock repurchases or
redemptions as provided in Section 174 of the Delaware General
Corporate Law; or

. any transaction from which the director derived an improper personal
benefit.

This limitation of liability does not apply to liabilities arising under
the federal securities laws and does not affect the availability of equitable
remedies such as injunctive relief or rescission.

Our bylaws provide that we shall indemnify our directors and officers and
may indemnify our employees and other agents to the fullest extent permitted by
law. We believe that indemnification under our bylaws covers at least
negligence and gross negligence on the part of indemnified parties. Our bylaws
also permit us to secure insurance on behalf of any officer, director, employee
or other agent for any liability arising out of his or her actions in such
capacity, regardless of whether the bylaws would otherwise permit
indemnification.

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<PAGE>

We have entered into agreements to indemnify our directors, executive
officers and other employees as determined by the board of directors. These
agreements, among other things, will indemnify our directors and executive
officers for certain expenses, including attorneys' fees, judgments, fines and
settlement amounts incurred by any such person in any action or proceeding,
including any action by us arising out of such person's services as our
director or executive officer, any of our subsidiaries or any other company or
enterprise to which the person provides services at our request. We believe
that these provisions and agreements are necessary to attract and retain
qualified persons as directors and executive officers.

At present we are not aware of any pending litigation or proceeding
involving any director, officer, employee or agent of our company where
indemnification will be required or permitted. Nor are we aware of any
threatened litigation or proceeding that might result in a claim for
indemnification.

57
<PAGE>

CERTAIN TRANSACTIONS

Our Formation

In connection with our incorporation in May 1995, we issued an aggregate of
1,200,000 shares of common stock to our founders, Shaw Hong, Raymond Wu, Tai-
Ching Shyu and Datong Chen for aggregate proceeds of $72,000. These founders'
shares are subject to a right of repurchase by us at the original purchase
price of $0.06 per share. This repurchase right lapsed as to one fifth of the
shares upon the one year anniversary of the vesting start date and lapses as to
the remaining shares on a cumulative quarterly basis over a period of 48 months
from the one year anniversary of the vesting start date. In February 2000, we
gave Mr. Shyu notice that we would repurchase 45,000 shares from him due to the
termination of his employment for an aggregate of $2,700.

Preferred Stock Financings

As of June 1996, we have issued an aggregate of 4,300,003 shares of Series
A preferred stock for aggregate proceeds of $2,580,000. As of April 1998, we
have issued an aggregate of 3,671,668 shares of Series B preferred stock for
aggregate proceeds of $5,507,502. As of June 1998, we have issued an aggregate
of 4,333,333 shares of Series C preferred stock for aggregate proceeds of
$12,999,999. Upon the closing of this offering, all shares of outstanding
preferred stock will be automatically converted into shares of common stock.
The holders of our preferred stock include, among others, our executive
officers and directors and the following holders of more than 5% of our
outstanding stock:

<TABLE>
<CAPTION>
Preferred Stock Aggregate
--------------------------- Consideration
Stockholder Series A Series B Series C Paid
- ----------- --------- -------- -------- -------------
<S> <C> <C> <C> <C>
Shaw Hong............................. 50,000 -- -- $ 30,000
Datong Chen........................... 50,000 -- -- 30,000
Raymond Wu............................ 45,334 -- -- 27,200
Aucera Technology Group............... 1,333,334 -- -- 800,000
Kempten Limited ...................... 933,333 -- -- $560,000
</TABLE>

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<PAGE>

Option Grants to our Directors and Executive Officers

Stock option grants to our directors and executive officers are described
under the captions "Management--Director Compensation" and "--Executive
Compensation". The exercise price per share of each option granted to our
officers and directors was equal to the fair market value of the common stock
as determined by the board of directors on the date of grant. Since our
inception, we have granted options to our directors and current and former
executive officers, including the Named Executive Officers as follows:

<TABLE>
<CAPTION>
Number
of Exercise
Stockholder Shares Grant Date Price
----------- ------- ---------- --------
<S> <C> <C> <C>
Shaw Hong................................ 150,000 June 25, 1996 $0.06
150,000 July 8, 1996 0.06
90,000 July 17, 1998 0.30
65,000 September 22, 1999 0.75
H. Gene McCown........................... 100,000 September 22, 1999 0.75
Robert J. Stroh.......................... 130,000 March 8, 1997 0.15
25,000 July 17, 1998 0.30
Raymond Wu............................... 150,000 June 25, 1996 0.06
80,000 July 8, 1996 0.06
70,000 July 17, 1998 0.30
5,000 September 22, 1999 0.75
Tai-Ching Shyu........................... 100,000 June 25, 1996 0.06
50,000 July 8, 1996 0.06
60,000 October 30, 1997 0.25
25,000 July 17, 1998 0.30
Steven Busby............................. 100,000 July 17, 1998 0.30
Frank Huang.............................. 20,000 March 6, 2000 9.00
Edward C. V. Winn........................ 20,000 March 6, 2000 9.00
Leon Malmed.............................. 20,000 March 6, 2000 9.00
Hank O'Hara.............................. 140,000 April 12, 2000 9.00
</TABLE>

Messrs. Hong, Stroh, and Wu exercised these options in full subject to
repurchase by us at the original exercise price. The repurchase right lapses as
to one-fifth of the shares upon the one year anniversary of the vesting start
date and lapses as to the remaining shares on a cumulative quarterly basis over
a period of 48 months from the one year anniversary of the vesting start date.
Mr. Shyu exercised the options granted to him in June and July 1996 in full
subject to repurchase by us at the original exercise price. The repurchase
right lapses as to one-fifth of the shares upon the one year anniversary of the
vesting start date and lapses as to the remaining shares on a cumulative
quarterly basis over a period of 48 months from the one year anniversary of the
vesting start date. In February 2000, we gave Mr. Shyu notice that we would
repurchase an aggregate of 25,000 unvested shares from him due to his
termination for an aggregate of $1,500. In June 1999 Mr. Busby exercised 20,000
options granted to him and the remaining 80,000 options were returned to the
1995 Stock Plan.

Transactions with Officers and Directors

Frank Huang, one of our directors, is the Chairman of the Board of
Directors of Powerchip Semiconductor Corp., a joint venture between UMAX Group
and Mitsubishi Electrical Corporation. Mr. Huang is also the Chairman of the
Board of Directors of UMAX Group. We have entered into a Confidential Foundry
Agreement with Powerchip Semiconductor Corp., dated March 13, 1998, under which
Powerchip Semiconductor Corp. has agreed to supply us with semiconductor
wafers. Our total purchases from Powerchip Semiconductor Corp. were $5,000 and
$1,396,000 for the year ended April 30, 1999 and the nine months ended January
31, 2000. These transactions were on terms no less favorable than we could have
obtained from unaffiliated third parties. In addition, Powerchip Semiconductor
Corp. owns 333,333 shares of our Series B preferred stock.

59
<PAGE>

Mr. Huang is also the Chairman of the Board of Directors of PowerWorld
Capital Management, a wholly owned subsidiary of UMAX Group. PowerWorld Capital
Management owns 166,667 shares of our Series B preferred stock.

The options granted to Messrs. Huang, Winn and Malmed were automatically
granted under the terms of the 2000 Director Stock Option Plan upon their
election to the Board of Directors on March 6, 2000.

Policy Regarding Transactions with Affiliates

All future transactions with affiliates, including any loans we make to our
officers, directors, principal stockholders or other affiliates, will be
approved by a majority of our Board of Directors, including a majority of the
independent and disinterested members or, if required by law, a majority of
disinterested stockholders, and will be on terms no less favorable to us than
we could have obtained from unaffiliated third parties.

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<PAGE>

PRINCIPAL STOCKHOLDERS

The following table sets forth information regarding the beneficial
ownership of our common stock as of January 31, 2000, by the following
individuals or groups:

. each person, or group of affiliated persons, whom we know beneficially
owns more than 5% of our outstanding stock;

. each of our executive officers listed in our Summary Compensation Table
on page 53;

. each of our directors; and

. all of our current directors and executive officers as a group.

Unless otherwise indicated, the address for each stockholder on this table
is c/o OmniVision Technologies, Inc., 930 Thompson Place, Sunnyvale, California
94086. Except as otherwise noted, and subject to applicable community property
laws, to the best of our knowledge, the persons named in this table have sole
voting and investing power with respect to all of the shares of common stock
held by them.

This table lists applicable percentage ownership based on 16,241,551 shares
of common stock outstanding as of January 31, 2000, as adjusted to reflect the
conversion of all outstanding shares of preferred stock upon the closing of
this offering, and also lists applicable percentage ownership based on
21,241,551 shares of common stock outstanding after completion of this
offering, assuming that the underwriters' over-allotment option is not
exercised. If the over-allotment option is exercised in full, we will sell an
aggregate of 5,750,000 shares of new common stock.

<TABLE>
<CAPTION>
Shares Beneficially Owned
----------------------------------------------------------------------------
Shares Subject to Shares Issuable
a Right of Pursuant to
Repurchase Options Exercisable
Within 60 days of Within 60 days of Percent Before Percent After
Beneficial Owner Number January 31, 2000 January 31, 2000 Offering Offering
---------------- --------- ----------------- ------------------- -------------- -------------
<S> <C> <C> <C> <C> <C>
Aucera Technology
Group................. 1,333,334 -- -- 8.2% 6.3%
7th Flr., 216 Nanking
East Road 104
Taipei, Taiwan
Kempten Limited......... 933,333 -- -- 5.8 4.4
P.O. Box 3186
Town Road, Tortola, BVI
Shaw Hong............... 995,000 226,500 -- 6.1 4.7
Tai-Ching Shyu.......... 520,833 70,000 37,500 3.2 2.4
Steven Busby............ 20,000 -- -- * *
Robert Stroh ........... 155,000 69,500 -- * *
Raymond Wu.............. 650,334 111,500 -- 4.0 3.1
H. Gene McCown ......... -- -- -- -- --
Edward C.V. Winn........ -- -- -- -- --
Leon Malmed............. -- -- -- -- --
Frank Huang............. 500,000 -- -- 3.1 2.3
All current directors
and executive officers
as a group (7 people)... 2,300,334 447,500 37,500 14.4 10.8
</TABLE>
- --------
*Less than 1% of the outstanding shares of common stock.

We have determined beneficial ownership in accordance with the rules of the
Securities and Exchange Commission. In computing the number of shares
beneficially owned by a person and the percentage ownership

61
<PAGE>

of that person, we have included the shares of common stock subject to options
held by that person that are currently exercisable, but we have not included
those shares or will become exercisable within 60 days after January 31, 2000
for purposes of computing percentage ownership of any other person. We have
assumed unless otherwise indicated below that the person and entities named in
the table have sole voting and investment power with respect to all shares
beneficially owned, subject to community property laws where applicable.

Mr. Stanley Chiu has the power to vote and dispose of the shares
beneficially owned by Aucera Technology Group.

Mr. Chi-Chih Chen has the power to vote and dispose of the shares
beneficially owned by Kempten Limited.

The beneficial ownership for Shaw Hong includes 995,000 shares held by a
family trust of which Mr. Hong is a trustee. The beneficial ownership for Mr.
Hong includes 31,500 shares held by the family trust subject to a right of
repurchase by us within 60 days of January 31, 2000 in the event of the
termination of employment of Wen Hong, Mr. Hong's wife and one of our
employees.

The beneficial ownership for Frank Huang includes 333,333 shares held by
Powerchip Semiconductor Corp. and 166,667 shares held by PowerWorld Capital
Management. Mr. Huang is Chairman of the Board of Directors of both entities
and disclaims beneficial ownership of these shares.

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<PAGE>

DESCRIPTION OF CAPITAL STOCK

General

Our certificate of incorporation that becomes effective upon the closing of
this offering authorizes the issuance of up to 100,000,000 shares of common
stock, $0.001 par value, and authorizes the issuance of 10,000,000 shares of
undesignated preferred stock, $.001 par value. From time to time, our board of
directors may establish the rights and preferences of the preferred stock. As
of January 31, 2000, 3,936,550 shares of common stock were issued and
outstanding and held by 37 stockholders, and 12,305,001 shares of preferred
stock were issued and outstanding and held by 76 stockholders. Upon the closing
of this offering, all outstanding shares of preferred stock will convert into
an aggregate of 12,305,001 shares of common stock. The following description of
our capital stock is, by necessity, not complete. We encourage you to refer to
our certificate of incorporation and bylaws, which are included as exhibits to
the registration statement of which this prospectus forms a part, and
applicable provisions of Delaware law for a more complete description.

Common Stock

Each holder of common stock is entitled to one vote for each share held on
all matters to be voted upon by the stockholders. Subject to preferences that
may be applicable to any outstanding preferred stock, holders of common stock
are entitled to receive ratably such dividends, if any, as may be declared from
time to time by the board of directors out of funds legally available for that
purpose. See "Dividend Policy." In the event of a liquidation, dissolution or
winding up of OmniVision, the holders of common stock are entitled to share in
our assets remaining after the payment of liabilities and the satisfaction of
any liquidation preference granted to the holders of any outstanding shares of
preferred stock. Holders of common stock have no preemptive or conversion
rights or other subscription rights. There are no redemption or sinking fund
provisions applicable to the common stock. All outstanding shares of common
stock are fully paid and nonassessable. The rights, preferences and privileges
of the holders of common stock are subject to, and may be adversely affected by
the rights of the holders of shares of any series of preferred stock which we
may designate in the future.

Preferred Stock

The board of directors has the authority, without action by the
stockholders, to designate and issue preferred stock in one or more series and
to designate the rights, preferences and privileges of each series, which may
be greater than the rights of the common stock. It is not possible to state the
actual effect of the issuance of any shares of preferred stock upon the rights
of holders of the common stock until the board of directors determines the
specific rights of the holders of such preferred stock. However, the effects
might include, among other things:

. restricting dividends on the common stock;

. diluting the voting power of the common stock;

. impairing the liquidation rights of the common stock; or

. delaying or preventing a change in control of OmniVision without
further action by the stockholders.

Upon the closing of this offering, no shares of preferred stock will be
outstanding, and OmniVision has no present plans to issue any shares of
preferred stock.

Registration Rights of Certain Holders

After this offering, holders of 12,305,001 shares of common stock (the
"Registrable Securities") or their transferees are entitled to certain rights
with respect to the registration of such shares under the Securities Act. These
rights are provided under the terms of an agreement between OmniVision and the
holders of the Registrable Securities. Beginning six months following the date
of this prospectus, holders of at least 40% of

63
<PAGE>

the Registrable Securities may require on two occasions, that we use our best
efforts to register the Registrable Securities for public resale. OmniVision is
obligated to register these shares only if the outstanding Registrable
Securities have an anticipated public offering price of at least $10,000,000.
Also, holders of 40% of the Registrable Securities may require, no more than
once during any twelve-month period, that OmniVision register their shares for
public resale on Form S-3 or similar short-form registration if OmniVision is
eligible to use Form S-3 or similar short-form registration and if the value of
the securities to be registered is at least $500,000. Furthermore, in the event
OmniVision elects to register any of its shares of common stock for purposes of
effecting any public offering (with the exception of our initial public
offering), the holders of Registrable Securities are entitled to include their
shares of common stock in the registration, but OmniVision may reduce or
exclude entirely in the case of OmniVision's initial public offering the number
of shares proposed to be registered in view of market conditions. OmniVision
will bear all expenses in connection with any registration including the
reasonable cost of one attorney for the holders of Registrable Securities,
other than underwriting discounts and commissions. All registration rights will
terminate five years following the consummation of this offering or when all
Registrable Securities have been sold on or after the consummation of this
offering under Rule 144, pursuant to certain exceptions.

Certain Charter and Bylaw Provisions and Delaware Law

Certain provisions of Delaware law and OmniVision's certificate of
incorporation and bylaws could make the following more difficult:

. the acquisition of OmniVision by means of a tender offer;

. the acquisition of OmniVision by means of a proxy contest or otherwise;
or

. the removal of OmniVision's incumbent officers and directors.

These provisions, summarized below, are expected to discourage certain
types of coercive takeover practices and inadequate takeover bids. These
provisions are also designed to encourage persons seeking to acquire control of
OmniVision to first negotiate with OmniVision's board. OmniVision believes that
the benefits of increased protection of its potential ability to negotiate with
the proponent of an unfriendly or unsolicited proposal to acquire or
restructure OmniVision outweigh the disadvantages of discouraging such
proposals because negotiation of such proposals could result in an improvement
of their terms.

Election And Removal Of Directors.

Our board of directors is divided into three classes. The directors in each
class will serve for a three-year term, with OmniVision's stockholders electing
one class each year. See "Management--Board Composition." This system of
electing and removing directors may tend to discourage a third party from
making a tender offer or otherwise attempting to obtain control of OmniVision,
because it generally makes it more difficult for stockholders to replace a
majority of the directors.

Stockholder Meetings.

Under our bylaws, upon the closing of this offering, the board of
directors, the chairman of the board, the chief executive officer and the
holders of at least 50% of the shares of the corporation's capital stock may
call special meetings of stockholders.

Requirements For Advance Notification Of Stockholder Nominations And
Proposals.

Our bylaws establish advance notice procedures for stockholder proposals
and the nomination of candidates for election as directors, other than
nominations made by or at the direction of the board of directors or a
committee of the board.

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<PAGE>

Anti-Takeover Effects of Some Provisions of Delaware Law and Our Charter
Documents

A number of the provisions of Delaware law and our certificate of
incorporation and bylaws could make the acquisition of our company through a
tender offer, a proxy contest or other means more difficult and could make the
removal of incumbent officers and directors more difficult. These provisions
include our failure to "opt out" of the protections of Section 203 of the
Delaware Code, as described below, as well as our reservation of 10,000,000
shares of blank check preferred and our staggered board of directors. We expect
these provisions to discourage coercive takeover practices and inadequate
takeover bids and to encourage persons seeking to acquire control of our
company to first negotiate with our board of directors. We believe that the
benefits provided by our ability to negotiate with the proponent of an
unfriendly or unsolicited proposal outweigh the disadvantages of discouraging
such proposals. We believe the negotiation of an unfriendly or unsolicited
proposal could result in an improvement of its terms.

Delaware Law

We are subject to Section 203 of the Delaware General Corporation Law, an
anti-takeover law. In general, Section 203 prohibits a publicly held Delaware
corporation from engaging in a "business combination" with an "interested
stockholder" for a period of three years following the date the person became
an interested stockholder, unless:

. prior to the date of the transaction, the board of directors of the
corporation approved either the business combination or the transaction
which resulted in the stockholder becoming an interested stockholder;

. the stockholder owned at least 85% of the voting stock of the
corporation outstanding at the time the transaction commenced,
excluding for purposes of determining the number of shares outstanding
(a) shares owned by persons who are directors and also officers, and
(b) shares owned by employee stock plans in which employee participants
do not have the right to determine confidentially whether shares held
subject to the plan will be tendered in a tender or exchange offer; or

. on or subsequent to the date of the transaction, the business
combination is approved by the board and authorized at an annual or
special meeting of stockholders, and not by written consent, by the
affirmative vote of at least 66 2/3% of the outstanding voting stock
which is not owned by the interested stockholder.

Generally, a "business combination" includes a merger, asset or stock sale,
or other transaction resulting in a financial benefit to the interested
stockholder. An "interested stockholder" is a person who, together with
affiliates and associates, owns or, within three years prior to the
determination of interested stockholder status, did own 15% or more of a
corporation's outstanding voting securities. We expect the existence of this
provision to have an anti-takeover effect with respect to transactions our
board of directors does not approve in advance. We also anticipate that Section
203 may discourage attempts that might result in a premium over the market
price for the shares of common stock held by stockholders.

Charter Documents

Upon completion of this offering, our certificate of incorporation provides
for our board of directors to be divided into three classes serving staggered
terms. Approximately 1/3 of the board of directors will be elected each year.
The provision for a classified board could prevent a party who acquires control
of a majority of the outstanding voting stock from obtaining control of the
board of directors until the second annual stockholders meeting following the
date the acquirer obtains the controlling stock interest. The classified board
provision could discourage a potential acquirer from making a tender offer or
otherwise attempting to obtain control of our company and could increase the
likelihood that incumbent directors will retain their positions. Our
certificate of incorporation provides that directors may be removed:

. with cause by the affirmative vote of the holders of at least a
majority of the outstanding shares of voting stock or

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<PAGE>

. without cause by the affirmative vote of the holders of at least 66
2/3% of the then-outstanding shares of the voting stock.

Our bylaws establish an advance notice procedure for stockholder proposals
to be brought before an annual meeting of our stockholders, including proposed
nominations of persons for election to the board of directors. At an annual
meeting, stockholders may only consider proposals or nominations specified in
the notice of meeting or brought before the meeting by or at the direction of
the board of directors. Stockholders may also consider a proposal or nomination
by a person who was a stockholder of record on the record date for the meeting,
who is entitled to vote at the meeting and who has given to our Secretary
timely written notice, in proper form, of his or her intention to bring that
business before the meeting. The bylaws do not give the board of directors the
power to approve or disapprove stockholder nominations of candidates or
proposals regarding other business to be conducted at a special or annual
meeting of the stockholders. However, our bylaws may have the effect of
precluding the conduct of that item of business at a meeting if the proper
procedures are not followed. These provisions may also discourage or deter a
potential acquiror from conducting a solicitation of proxies to elect the
acquirer's own slate of directors or otherwise attempting to obtain control of
our company.

Under Delaware law, a special meeting of stockholders may be called by the
board of directors or by any other person authorized to do so in the
certificate of incorporation or the bylaws. The following persons are
authorized to call a special meeting of stockholders:

. a majority of our board of directors;

. the chairman of the board;

. the chief executive officer; or

. 50% of our stockholders entitled to vote at the special meeting.

The limitation on the right of our stockholders to call a special meeting
will make it more difficult for a stockholder to force stockholder
consideration of a proposal over the opposition of the board of directors by
calling a special meeting of stockholders. The restriction on the ability of
stockholders to call a special meeting also will make it more difficult to
replace the board until the next annual meeting.

Although Delaware law provides that stockholders may execute an action by
written consent in lieu of a stockholder meeting, it also allows us to
eliminate stockholder actions by written consent. Elimination of written
consents of stockholders may lengthen the amount of time required to take
stockholder actions since actions by written consent are not subject to the
minimum notice requirement of a stockholders' meeting. However, we believe that
the elimination of stockholders' written consents may deter hostile takeover
attempts. Without the availability of stockholders' actions by written consent,
a holder controlling a majority of our capital stock would not be able to amend
our bylaws or remove directors without holding a stockholders meeting. The
holder would have to obtain the consent of a majority of the board of
directors, the chairman of the board or the chief executive officer to call a
stockholders' meeting and satisfy the notice periods determined by the board of
directors. Our certificate of incorporation provides for the elimination of
actions by written consent of stockholders upon the closing of this offering.

Transfer Agent and Registrar

The transfer agent and registrar for the common stock is BankBoston, N.A.
BankBoston is located at 150 Royall Street, Canton, Massachusetts, 02021 and
its telephone number is (781) 575-3120.

Nasdaq Stock Market Listing

We have applied to have our common stock listed on the Nasdaq National
Market for quotation under the symbol "OVTI."

66
<PAGE>

SHARES ELIGIBLE FOR FUTURE SALE

Prior to this offering, there has been no public market for our stock.
Future sales of substantial amounts of our common stock in the public market
following this offering or the possibility of such sales occurring could
adversely affect prevailing market prices for our common stock or could impair
our ability to raise capital through an offering of equity securities.

After this offering, we will have outstanding 21,241,551 shares of common
stock, based upon shares outstanding as of January 31, 2000, assuming no
exercise of the underwriters' over allotment option and no exercise of
outstanding options after January 31, 2000. All of the shares sold in this
offering will be freely tradeable without restriction under the Securities Act
except for any shares purchased by our "affiliates" as that term is defined in
Rule 144 under the Securities Act. The remaining 16,241,551 shares of common
stock held by existing stockholders are "restricted" shares as that term is
defined in Rule 144 under the Securities Act. We issued and sold the restricted
shares in private transactions in reliance upon exemptions from registration
under the Securities Act. Restricted shares may be sold in the public market
only if they are registered under the Securities Act or if they qualify for an
exemption from registration, such as Rule 144 or 701 under the Securities Act,
which are summarized below.

Our officers, directors, employees and other stockholders, who collectively
hold an aggregate of 16,241,551 restricted shares, and the underwriters entered
into lock up agreements in connection with this offering. These lock up
agreements provide that, with limited exceptions, our officers, directors,
employees and stockholders have agreed not to offer, sell, contract to sell,
grant any option to purchase or otherwise dispose of any of our shares for a
period of 180 days after the effective date of this offering. FleetBoston
Robertson Stephens may, in its sole discretion and at any time without prior
notice, release all or any portion of the shares subject to these lock up
agreements. We have also entered into an agreement with FleetBoston Robertson
Stephens that we will not offer, sell or otherwise dispose of our common stock
until 180 days after the effective date of this offering.

Taking into account the lock up agreements, the number of shares that will
be available for sale in the public market under the provisions of Rule 144,
144(k) and 701 will be as follows:

<TABLE>
<CAPTION>
Number of
Date of Availability for Sale Shares
----------------------------- ----------
<S> <C>
At various times between January 31, 2000 and July 31, 2000..... 0
At various times thereafter upon the expiration of applicable
holding periods............................................... 16,241,551
</TABLE>

Following the expiration of the lock up period, shares issued upon exercise
of options granted by us prior to the completion of this offering will also be
available for sale in the public market pursuant to Rule 701 under the
Securities Act unless those shares are held by one of our affiliates, directors
or officers.

Rule 701 permits resales of shares in reliance upon Rule 144 but without
compliance with certain restrictions, including the holding period requirement,
of Rule 144. In general, under Rule 144 as currently in effect, a person, or
persons whose shares are aggregated, who has beneficially owned restricted
shares for at least one year, including the holding period of any prior owner
except an affiliate, would be entitled to sell within any three month period a
number of shares that does not exceed the greater of:

. one percent of the number of shares of common stock then outstanding;
or

. the average weekly trading volume of the common stock during the four
calendar weeks preceding the filing of a Form 144 with respect to such
sale

Sales under Rule 144 are also subject to certain manner of sale provisions
and notice requirements and to the availability of current public information
about us. Under Rule 144(k), a person who is not deemed to have been an
affiliate of our company at any time during the three months preceding a sale,
and who has beneficially

67
<PAGE>

owned the shares proposed to be sold for at least two years including the
holding period of any prior owner except an affiliate, is entitled to sell such
shares without complying with the manner of sale, public information, volume
limitation or notice provisions of Rule 144.

We intend to file a registration statement on Form S-8 under the Securities
Act covering the shares of common stock reserved for issuance under the stock
plans and subject to outstanding options under our 1995 stock option plan. See
"Management--Stock Plans." We expect this registration statement to be filed
and to become effective as soon as practicable after the effective date of this
offering. Shares of common stock issued upon exercise of options under the Form
S-8 will be available for sale in the public market, subject to Rule 144 volume
limitations applicable to affiliates and subject to the contractual
restrictions described above. At January 31, 2000, options to purchase 844,450
shares of common stock were outstanding, of which options to purchase
approximately 179,216 shares were then vested and exercisable. Beginning 180
days after the effective date of this offering, approximately 215,000 shares
issuable upon the exercise of vested stock options will become eligible for
sale in the public market, if such options are exercised.

Following this offering, the holders of an aggregate of 12,305,001 shares
of outstanding common stock will have the right to require us to register their
shares for sale upon meeting certain requirements. See "Description of Capital
Stock--Registration Rights" for additional information regarding registration
rights.

68
<PAGE>

UNDERWRITING

The underwriters named below, acting through their representatives,
FleetBoston Robertson Stephens Inc., Prudential Securities Incorporated and
Needham & Company, Inc., have severally agreed with us, subject to the terms
and conditions of the underwriting agreement, to purchase the number of shares
of common stock set forth opposite their respective names below. The
underwriters are committed to purchase and pay for all such shares, if any are
purchased.

<TABLE>
<CAPTION>
Number of
Underwriters Shares
------------ ---------
<S> <C>
FleetBoston Robertson Stephens Inc................................
Prudential Securities Incorporated................................
Needham & Company, Inc............................................
Total...........................................................
===
</TABLE>

The representatives have advised us that the underwriters propose to offer
the shares of common stock to the public at the public offering price set forth
on the cover page of this prospectus and to certain dealers at such price less
a concession of not more than $ per share, of which $ may be
reallowed to other dealers. After the completion of this offering, the public
offering price, concession and reallowance to dealers may be reduced by the
representatives. No such reduction shall change the amount of proceeds to be
received by us as set forth on the cover page of this prospectus.

Over Allotment Option. We have granted to the underwriters an option,
exercisable during the 30 day period after the date of this prospectus, to
purchase up to 750,000 additional shares of common stock at the same price per
share as we will receive for the 5,000,000 shares that the underwriters have
agreed to purchase from us. To the extent that the underwriters exercise this
option, each of the underwriters will have a firm commitment to purchase
approximately the same percentage of such additional shares that the number of
shares of common stock to be purchased by it shown in the above table
represents as a percentage of the total number of shares offered by the
prospectus. If purchased, the additional shares will be sold by the
underwriters on the same terms as those on which the 5,000,000 shares are being
sold.

The following table shows the per share and total underwriting discounts
and commissions to be paid by us to the underwriters. this information is
presented assuming either no exercise of full exercise by the underwriters of
their over-allotment option.

<TABLE>
<CAPTION>
Per Without With
Share Over-allotment Over-allotment
----- -------------- --------------
<S> <C> <C> <C>
Public offering price... $ $ $
Underwriting discounts
and commissions....... $ $ $
Proceeds, before
expenses, to us....... $ $ $
</TABLE>

Indemnity. The underwriting agreement contains covenants of indemnity among
the underwriters and us against certain civil liabilities, including
liabilities under the Securities Act and liabilities arising from breaches of
representations and warranties contained in the underwriting agreement.

Lock Up Agreements. Each of our executive officers, directors, stockholders
and option holders has agreed, for a period of 180 days after the date of this
prospectus, not to offer, to sell contract to sell, or otherwise sell, dispose
of, loan, pledge or grant any rights with respect to any shares of common
stock, any options or warrants to purchase any shares of common stock, or any
securities convertible into or exchangeable for common stock owned as of the
date of this prospectus or acquired directly from us by these holders or with
respect to which they have or may acquire the power of disposition, without the
prior written consent of FleetBoston Robertson Stephens Inc. However,
FleetBoston Robertson Stephens Inc. may, in their sole discretion and at any
time without notice, release all or any portion of the securities subject to
lock-up

69
<PAGE>

agreements. There are no agreements between the underwriters and any of our
stockholders providing consent by the representatives to the sale of shares
prior to the expiration of the 180 day lock-up period.

Future Sales By Us. In addition, we have agreed that until 180 days after
the date of this prospectus, we will not, without prior written consent of
FleetBoston Robertson Stephens Inc., (a) consent to the disposition of any
shares held by stockholders prior to the expiration of the 180 day lock-up
period or (b) issue, sell, contract to sell or otherwise dispose of any shares
of common stock, any options to purchase any share of common stock or any
securities convertible into, exercisable for or exchangeable for shares of
common stock, other than our sale of shares in this offering, the issuance of
shares of common stock upon the exercise of outstanding options and warrants
and the grant of options to purchase shares of common stock under existing
employee stock option or stock purchase plans. See "Shares Eligible For Future
Sale."

Directed Shares. At our request, the underwriters will reserve up to
shares of common stock to be issued by us and offered hereby for sale,
at the initial public offering price, to directors, officers, employees,
business associates and related persons of OmniVision. The number of shares of
common stock available for sale to the general public will be reduced to the
extent that such individuals purchase all or a portion of these reserved
shares. Any reserved shares which are not purchased will be offered by the
underwriters to the general public on the same basis as the shares of common
stock offered hereby.

No Prior Public Market. Prior to this offering, there has been no public
market for our common stock. Consequently, the initial public offering price
for our common stock offered by this prospectus has been determined through
negotiations between us and the representatives. Among the factors considered
in these negotiations were prevailing market conditions, our financial
information, market valuations of other companies that we and the
representatives believe to be comparable to us, estimates of our business
potential and the present state of our development.

Stabilization. The representatives have advised us that, pursuant to
Regulation M under the Exchange Act, some participants in the offering may
engage in transactions, including stabilizing bids, syndicate covering
transactions or the imposition of penalty bids which may have the effect of
stabilizing or maintaining the market price of the common stock at a level
above that which might otherwise prevail in the open market. A "stabilizing
bid" is a bid for or the purchase of the common stock on behalf of the
underwriters for the purpose of fixing or maintaining the price of the common
stock. A "syndicate covering transaction" is the bid for or the purchase of the
common stock on behalf of the underwriters to reduce a short position incurred
by the underwriters in connection with the offering. A "penalty bid" is an
arrangement permitting the representatives to reclaim the selling concession
otherwise accruing to an underwriter or syndicate member in connection with the
offering if the common stock originally sold by such underwriter or syndicate
member is purchased by the representatives in a syndicate covering transaction
and has therefore not been effectively placed by such underwriter or syndicate
member. The representatives have advised us that such transactions may be
effected on the Nasdaq National Market or otherwise and, if commenced, may be
discontinued at any time.

Electronic Offers, Sales or Distribution. Prudential Securities
Incorporated facilitates the marketing of new issues online through its
Prudential Securities.com division. Clients of Prudential AdvisorSM, a full
service brokerage firm program, may view offering terms and a prospectus online
and place orders through their financial advisors.

Expenses of the Offering. The expenses of the offering are estimated at
approximately $1.3 million and are payable entirely by us.

70
<PAGE>

LEGAL MATTERS

The validity of the common stock offered hereby will be passed upon for us
by Wilson Sonsini Goodrich & Rosati, Professional Corporation, Palo Alto,
California. Certain legal matters with this offering will be passed upon for
the underwriters by Brobeck Phelger & Harrison LLP, San Francisco, California.
Certain legal matters related to intellectual property will be passed on for us
by Blakely Sokoloff Taylor & Zofman, Kirkland, Washington. As of January 31,
2000, a certain investment partnership and members of Wilson Sonsini Goodrich &
Rosati, Professional Corporation, beneficially owned an aggregate of 19,801
shares of our common stock.

EXPERTS

Our financial statements at April 30, 1998 and 1999 and for each of the
three years in the period ended April 30, 1999 and at January 31, 2000 and for
the nine months ended January 31, 2000 included in this prospectus have been so
included in reliance on the report of PricewaterhouseCoopers LLP, independent
accountants given on the authority of said firm as experts in auditing and
accounting.

WHERE YOU CAN FIND ADDITIONAL INFORMATION

OmniVision has filed with the Securities and Exchange Commission a
registration statement on Form S-1 under the Securities Act with respect to the
common stock offered hereby. This prospectus does not contain all of the
information set forth in the registration statement and the exhibits and
schedules thereto. For further information with respect to OmniVision and our
common stock, reference is made to the registration statement and the exhibits
and schedules filed as a part thereof. Statements contained in this prospectus
as to the contents of any contract or any other document referred to are not
necessarily complete. In each instance, reference is made to the copy of such
contract or document filed as an exhibit to the registration statement, and
each such statement is qualified in all respects by such reference. Copies of
the registration statement, including exhibits and schedules thereto, may be
inspected without charge at the Securities and Exchange Commission's principal
office in Washington, D.C., or obtained at prescribed rates from the Public
Reference Section of the Securities and Exchange Commission at 450 Fifth
Street, N.W., Washington, D.C. 20549. The Securities and Exchange Commission
maintains a World Wide Web site that contains reports, proxy and information
statements and other information regarding registrants that file electronically
with the Securities and Exchange Commission. The address of the site is
http://www.sec.gov.

71
<PAGE>

OMNIVISION TECHNOLOGIES, INC.

INDEX TO FINANCIAL STATEMENTS

<TABLE>
<CAPTION>
Page
----
<S> <C>
Report of Independent Accountants.......................................... F-2

Balance Sheets............................................................. F-3

Statements of Operations................................................... F-4

Statements of Stockholders' Equity ........................................ F-5

Statement of Redeemable Convertible Preferred Stock........................ F-6

Statements of Cash Flows................................................... F-7

Notes to Financial Statements.............................................. F-8
</TABLE>

F-1
<PAGE>

REPORT OF INDEPENDENT ACCOUNTANTS

To the Board of Directors and Stockholders of
OmniVision Technologies, Inc.

In our opinion, the accompanying balance sheets and the related statements
of operations, of stockholders' equity, of redeemable convertible preferred
stock and of cash flows present fairly, in all material respects, the financial
position of OmniVision Technologies, Inc. at April 30, 1998 and 1999 and
January 31, 2000, and the results of its operations and its cash flows for each
of the three years in the period ended April 30, 1999 and the nine months ended
January 31, 2000, in conformity with accounting principles generally accepted
in the United States. These financial statements are the responsibility of the
Company's management; our responsibility is to express an opinion on these
financial statements based on our audits. We conducted our audits of these
statements in accordance with auditing standards generally accepted in the
United States which require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements, assessing
the accounting principles used and significant estimates made by management,
and evaluating the overall financial statement presentation. We believe that
our audits provide a reasonable basis for the opinion expressed above.

PricewaterhouseCoopers LLP

San Jose, California
March 6, 2000

F-2
<PAGE>

OMNIVISION TECHNOLOGIES, INC.

BALANCE SHEETS
(in thousands)

<TABLE>
<CAPTION>
Pro Forma
Stockholders'
Equity
April 30, January 31,
------------------ January 31, 2000
1998 1999 2000 (Note 1)
-------- -------- ----------- -------------
(unaudited)
<S> <C> <C> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents...... $ 2,686 $ 5,374 $ 6,370
Accounts receivable, net....... 41 1,733 4,275
Inventories.................... 158 2,241 6,166
Prepaid expenses and other
assets....................... 91 103 748
-------- -------- --------
Total current assets........ 2,976 9,451 17,559
Property and equipment, net...... 745 1,085 2,157
-------- -------- --------
Total assets................ $ 3,721 $ 10,536 $ 19,716
======== ======== ========
LIABILITIES AND STOCKHOLDERS'
EQUITY
Current liabilities:
Accounts payable............... $ 293 $ 1,735 $ 7,417
Accrued expenses and other
liabilities.................. 340 615 516
Reserve for purchase
commitment................... -- 3,474 --
Deferred revenue............... -- 282 337
-------- -------- --------
Total current liabilities... 633 6,106 8,270
-------- -------- --------
Commitments and contingencies
(Note 12)
Redeemable convertible preferred
stock.......................... $ 12,746 $ 21,082 $ 21,082
Stockholders' equity (deficit):
Common stock, $0.001 par
value; 100,000 shares
authorized; 1,200, 1,256 and
3,937 shares issued and
outstanding, 16,242 shares
issued and outstanding
pro forma.................... 1 1 4 16
Additional paid-in capital..... 823 1,656 5,816 26,886
Deferred compensation related
to stock options............. (429) (734) (2,929) (2,929)
Accumulated deficit............ (10,053) (17,575) (12,527) (12,527)
-------- -------- -------- --------
Total stockholders' equity.. (9,658) (16,652) (9,636) $ 11,446
-------- -------- -------- ========
Total liabilities and
stockholders' equity...... $ 3,721 $ 10,536 $ 19,716
======== ======== ========
</TABLE>

The accompanying notes are an integral part of these financial statements.

F-3
<PAGE>

OMNIVISION TECHNOLOGIES, INC.

STATEMENTS OF OPERATIONS
(in thousands, except per share data)

<TABLE>
<CAPTION>
Nine Months Ended
Year Ended April 30, January 31,
---------------------------- -------------------
1997 1998 1999 1999 2000
-------- -------- -------- ----------- -------
(unaudited)
<S> <C> <C> <C> <C> <C>
Revenues................... $ 59 $ 1,476 $ 5,243 $ 2,147 $25,111
Cost of revenues (including
$0, $45, $60, $44 and
$249 of stock-based
compensation,
respectively)............ 557 2,652 4,086 1,595 17,698
Reserve for purchase
commitments.............. -- -- 3,473 -- (3,235)
-------- -------- -------- -------- -------
Gross profit (loss)........ (498) (1,176) (2,316) 552 10,648
-------- -------- -------- -------- -------
Operating expenses:
Research and development
(excluding $31, $186,
$302, $219 and $755 of
stock-based
compensation,
respectively)........... 1,698 3,440 3,290 2,260 2,453
Selling, general and
administrative
(excluding $13, $20,
$157, $112 and $404 of
stock-based
compensation,
respectively)........... 706 1,323 1,853 1,378 2,126
Stock compensation
charge.................. 44 206 459 331 1,159
-------- -------- -------- -------- -------
Total operating
expenses.............. 2,448 4,969 5,602 3,969 5,738
-------- -------- -------- -------- -------
Income (loss) from
operations............... (2,946) (6,145) (7,918) (3,417) 4,910
Interest income (expense),
net...................... 108 106 396 267 138
-------- -------- -------- -------- -------
Net income (loss).......... $ (2,838) $ (6,039) $ (7,522) $ (3,150) $ 5,048
======== ======== ======== ======== =======
Net income (loss) per
share:
Basic..................... $ (16.89) $ (12.71) $ (10.39) $ (4.51) $ 1.75
======== ======== ======== ======== =======
Diluted................... $ (16.89) $ (12.71) $ (10.39) $ (4.51) $ 0.31
======== ======== ======== ======== =======
Shares used in computing
net income (loss) per
share:
Basic..................... 168 475 724 699 2,879
======== ======== ======== ======== =======
Diluted................... 168 475 724 699 16,418
======== ======== ======== ======== =======
Pro forma net income (loss)
per share (unaudited):
Basic..................... $ (0.58) $ 0.33
======== =======
Diluted................... $ (0.58) $ 0.31
======== =======
Shares used in computing
pro forma net income
(loss) per share
(unaudited):
Basic.................... 12,951 15,184
======== =======
Diluted.................. 12,951 16,418
======== =======
</TABLE>

The accompanying notes are an integral part of these financial statements.

F-4
<PAGE>

OMNIVISION TECHNOLOGIES, INC.

STATEMENTS OF STOCKHOLDERS' EQUITY
(in thousands)

<TABLE>
<CAPTION>
Common Stock Additional
-------------- Paid-in Deferred Accumulated
Shares Amount Capital Compensation Deficit Total
------ ------ ---------- ------------ ----------- --------
<S> <C> <C> <C> <C> <C> <C>
Balance at April 30,
1996................... 1,230 $ 1 $ 152 $ (51) $ (1,176) $ (1,074)
Purchase of common
stock................. (30) -- (2) -- -- (2)
Deferred compensation
related to stock
options granted....... -- -- 77 (77) -- --
Amortization of
deferred
compensation.......... -- -- -- 44 -- 44
Net loss............... -- -- -- -- (2,838) (2,838)
----- --- ------ ------- -------- --------
Balance at April 30,
1997................... 1,200 1 227 (84) (4,014) (3,870)
Deferred compensation
related to stock
options granted....... -- -- 596 (596) -- --
Amortization of
deferred
compensation.......... -- -- -- 251 -- 251
Net loss............... -- -- -- -- (6,039) (6,039)
----- --- ------ ------- -------- --------
Balance at April 30,
1998................... 1,200 1 823 (429) (10,053) (9,658)
Exercise of stock
options............... 56 -- 9 -- -- 9
Deferred compensation
related to stock
options granted....... -- -- 824 (824) -- --
Amortization of
deferred
compensation.......... -- -- -- 519 -- 519
Net loss............... -- -- -- -- (7,522) (7,522)
----- --- ------ ------- -------- --------
Balance at April 30,
1999................... 1,256 1 1,656 (734) (17,575) (16,652)
Exercise of stock
options............... 2,681 3 557 -- -- 560
Deferred compensation
related to stock
options granted....... -- -- 3,603 (3,603) -- --
Amortization of
deferred
compensation.......... -- -- -- 1,408 -- 1,408
Net income............. -- -- -- -- 5,048 5,048
----- --- ------ ------- -------- --------
Balance at January 31,
2000................... 3,937 $ 4 $5,816 $(2,929) $(12,527) $ (9,636)
===== === ====== ======= ======== ========
</TABLE>

The accompanying notes are an integral part of these financial statements.

F-5
<PAGE>

OMNIVISION TECHNOLOGIES, INC.

STATEMENTS OF REDEEMABLE CONVERTIBLE PREFERRED STOCK
(in thousands)

<TABLE>
<CAPTION>
Series A Series B Series C
Preferred Preferred Preferred
Stock Stock Stock Additional
------------- -------------- ------------- Paid-in
Shares Amount Shares Amount Shares Amount Capital Total
------ ------ ------ ------ ------ ------ ---------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Balance at April 30,
1996.................. 4,130 $ 4 -- $ -- -- $ -- $ 2,474 $ 2,478
Issuance of Series A
preferred stock at
$0.60 per share for
cash................. 170 -- -- -- -- -- 102 102
Issuance of Series B
preferred stock at
$1.50 per share for
cash................. -- -- 3,692 4 -- -- 5,534 5,538
----- --- ----- ---- ----- ---- ------- -------
Balance at April 30,
1997.................. 4,300 4 3,692 4 -- -- 8,110 8,118
Issuance of Series C
preferred stock at
$3.00 per share for
cash................. -- -- -- -- 1,553 1 4,656 4,657
Repurchase of Series B
preferred stock...... -- -- (20) -- -- -- (30) (30)
----- --- ----- ---- ----- ---- ------- -------
Balance at April 30,
1998.................. 4,300 4 3,672 4 1,553 1 12,736 12,745
Issuance of Series C
preferred stock at
$3.00 per share for
cash................. -- -- -- -- 2,781 3 8,334 8,337
----- --- ----- ---- ----- ---- ------- -------
Balance at April 30,
1999 and at January
31, 2000.............. 4,300 $ 4 3,672 $ 4 4,334 $ 4 $21,070 $21,082
===== === ===== ==== ===== ==== ======= =======
</TABLE>

The accompanying notes are an integral part of these financial statements.

F-6
<PAGE>

OMNIVISION TECHNOLOGIES, INC.

STATEMENTS OF CASH FLOWS
(in thousands)

<TABLE>
<CAPTION>
Nine Months Ended
Year Ended April 30, January 31,
------------------------- -------------------
1997 1998 1999 1999 2000
------- ------- ------- ----------- -------
(unaudited)
<S> <C> <C> <C> <C> <C>
Cash flows from operating
activities:
Net income (loss)............. $(2,838) $(6,039) $(7,522) $(3,150) $ 5,048
Adjustments to reconcile net
income (loss) to net cash
used in operating
activities:
Reserve for purchase
commitment................ -- -- 3,474 -- (3,236)
Depreciation................ 57 247 309 233 372
Allowance for doubtful
accounts and sales
returns................... -- 408 137 (26) 356
Amortization of deferred
compensation.............. 44 251 519 378 1,408
Changes in assets and
liabilities:
Accounts receivable....... 83 (432) (1,829) (506) (2,898)
Inventories............... (2) (63) (2,083) (590) (4,163)
Prepaid expenses and other
assets.................. (78) (13) (12) -- (645)
Accounts payable.......... (11) 204 1,442 589 5,682
Accrued expenses and other
liabilities............. 1 161 275 71 (99)
Deferred revenue.......... -- -- 282 62 55
------- ------- ------- ------ -------
Net cash used in
operating activities... (2,744) (5,276) (5,008) (2,939) 1,880
------- ------- ------- ------ -------
Cash flows from investing
activities:
Acquisition of property and
equipment................... (476) (413) (650) (304) (1,444)
------- ------- ------- ------ -------
Net cash used in
investing activities... (476) (413) (650) (304) (1,444)
------- ------- ------- ------ -------
Cash flows from financing
activities:
Proceeds from issuance of
preferred stock............. 5,640 4,658 8,337 8,337 --
Payment for repurchase of
preferred stock............. -- (30) -- -- --
Issuance (repurchase) of
common stock................ (2) -- 9 -- 560
------- ------- ------- ------ -------
Net cash provided by
financing activities.... 5,638 4,628 8,346 8,337 560
------- ------- ------- ------ -------
Net increase/(decrease) in cash
and cash equivalents......... 2,418 (1,061) 2,688 5,094 996
Cash and cash equivalents at
beginning of year............ 1,329 3,747 2,686 2,686 5,374
------- ------- ------- ------ -------
Cash and cash equivalents at
end of year (period)......... $ 3,747 $ 2,686 $ 5,374 $7,780 $ 6,370
======= ======= ======= ====== =======
</TABLE>

The accompanying notes are an integral part of these financial statements.

F-7
<PAGE>

OMNIVISION TECHNOLOGIES, INC.

NOTES TO FINANCIAL STATEMENTS

NOTE 1--OMNIVISION AND SUMMARY OF ITS SIGNIFICANT ACCOUNTING POLICIES:

The Company

OmniVision Technologies, Inc. (the "Company") designs, develops and markets
CMOS image sensors. The Company was incorporated in California in May 1995. The
Company's principal location of business is Sunnyvale, California. The Company
operates in one business segment.

Reincorporation

On March 6, 2000, the Company's stockholders approved the reincorporation
of the Company in the State of Delaware. As a result of the reincorporation,
the Company is authorized to issue 100,000,000 shares of $0.001 par value
common stock and 10,000,000 shares of $0.001 par value preferred stock. Share
and per share information for all periods presented have been retroactively
adjusted to reflect the reincorporation.

Use of estimates

The preparation of financial statements in conformity with generally
accepted accounting principles requires 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 reported amounts of revenues and expenses during the reporting
period. Actual results could differ from those estimates.

Cash equivalents

The Company considers all highly liquid investments purchased with a
maturity at the date of purchase of three months or less to be cash
equivalents. Cash equivalents consist principally of money market deposit
accounts that are stated at cost, which approximates fair value.

Fair value of financial statements

The reported amounts of certain of the Company's financial instruments
including cash and cash equivalents, receivables, accounts payable and accrued
liabilities approximate fair value due to their short maturities.

Property and equipment

Property and equipment are stated at cost. Depreciation is computed using
the straight-line method over the estimated useful lives ranging from three to
seven years. Amortization of leasehold improvements is computed using the
straight-line method over the shorter of the estimated life of the assets or
the extended lease term.

Long lived assets

The Company accounts for long-lived assets under Statement of Financial
Accounting Standards ("SFAS") No. 121, Accounting for the Impairment of Long
Lived Assets and for Long Lived Assets to be Disposed of, which requires the
Company to review for impairment of long-lived assets, whenever events or
changes in circumstances indicate that the carrying amount of an asset might
not be recoverable. When such an event occurs, the Company estimates the future
cash flows expected to result from the use of the asset and its eventual
disposition. If the undiscounted expected future cash flows is less than the
carrying amount of the asset, an impairment loss is recognized. To date, no
impairment loss has been recognized.

F-8
<PAGE>

OMNIVISION TECHNOLOGIES, INC.

NOTES TO FINANCIAL STATEMENTS--(Continued)

Revenue recognition

Revenue from product sales is recognized at the time of shipment, except
for certain shipments to distributors under agreements allowing for return or
credits, in which case revenue is deferred until the distributor resells the
product. A provision is made for expected sales returns and allowances when
revenue is recognized.

Inventories

Inventories are stated at the lower of cost, determined on first-in,
first-out ("FIFO") basis, or market.

Research and development

Research and development costs are expensed as incurred.

Income taxes

OmniVision accounts for income taxes under the asset and liability
approach whereby the expected future tax consequences of temporary differences
between the book and tax basis of assets and liabilities are recognized as
deferred tax assets and liabilities. A valuation allowance is established for
any deferred tax assets for which there is significant uncertainty regarding
realization.

Comprehensive income

Comprehensive income is defined as the change in equity of a company
during a period from transactions and other events and circumstances excluding
transactions resulting from investment by owners and distribution to owners.
For the periods presented, the comprehensive income (loss) did not differ from
the net income (loss).

Certain risks and uncertainties

The Company's products are concentrated in a single segment in the
semiconductor imaging devices industry which is characterized by rapid
technological advances, changes in customer requirements and evolving industry
standards. These products depend in part on a limited number of suppliers of
wafers . Also, the Company has depended on a limited number of products and
customers for substantially all revenue to date. Failure by the Company to
anticipate or to respond adequately to technological developments in its
industry, changes in customer or supplier requirements or changes in industry
standards, or any significant delays in the development or introduction of
products or services, could have a material adverse effect on the Company's
business and operating results.

Segment information

The Company identifies its operating segments based on business
activities, management responsibility and geographical location. For all
periods presented, the Company operated in a single business segment. Revenue
by geographic location is presented in Note 10.

Stock based compensation

The Company accounts for stock based employee compensation arrangements in
accordance with provisions of Accounting Principles Board Opinion ("APB") No.
25, Accounting for Stock Issued to Employees and complies with the disclosure
provisions of SFAS No. 123, Accounting for Stock-Based

F-9
<PAGE>

OMNIVISION TECHNOLOGIES, INC.

NOTES TO FINANCIAL STATEMENTS--(Continued)

Compensation. Under APB No. 25, compensation expense is based on the excess, if
any, on the date grant, of the fair value of the Company's common stock over
the amount an employee must pay to acquire the stock. Deferred compensation is
amortized over the vesting period on an accelerated basis using the model
presented in paragraph 24 of FASB Interpretation No. 28. Accordingly, the
percentages of the deferred compensation amortized in the first, second, third,
fourth and fifth years following the option grant date are 45.6%, 25.6%, 15.8%,
9.0% and 4.0%, respectively. SFAS 123 requires a "fair value" based method of
accounting for an employee stock option or similar equity investment. The pro
forma disclosures of the difference between the compensation expense included
in net loss and the related cost measured by the fair value method are
presented in Note 7.

Basic and diluted net income (loss) per share

The Company computes net income (loss) per share in accordance with SFAS
No. 128, Earnings per Share, under the provisions of which basic income (loss)
per share is computed by dividing the income (loss) available to holders of
common stock for the period by the weighted average number of shares of common
stock outstanding during the period. The calculation of diluted income (loss)
per share excludes potential common stock if the effect of such stock is
antidilutive. Potential common stock consists of unvested restricted common
stock, incremental common or preferred shares issuable upon the exercise of
stock options and shares issuable upon conversion of the Series A, Series B,
and Series C convertible preferred stock.

Pro forma net loss per share (unaudited)

The pro forma net loss per share is calculated assuming that all
outstanding shares of convertible preferred stock are converted into common
stock at the beginning of the periods presented, or on the date of issuance of
the Preferred Stock, whichever is later.

Pro forma stockholders' equity (unaudited)

If the offering is consummated, all shares of convertible preferred stock
outstanding will automatically convert into common stock. The pro forma effect
of this conversion has been reflected in the accompanying financial statements
as of January 31, 2000.

Interim results (unaudited)

The accompanying statements of operations and of cash flows for the nine
months ended January 31, 1999 are unaudited. In the opinion of management,
these statements have been prepared on the same basis as the audited
consolidated financial statements and include all adjustments, consisting of
only normal recurring adjustments, necessary for the fair presentation of the
results for the interim periods. The data disclosed in the notes to the
consolidated financial statements as of such dates and for such periods are
unaudited.

Recent accounting pronouncements

In June 1998, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards ("SFAS") No. 133. "Accounting for Derivative
Instruments and Hedging Activities." SFAS No. 133 establishes a new model for
accounting for derivatives and hedging activities and supercedes and amends a
number of existing accounting standards. SFAS No. 133 requires that all
derivatives be recognized in respect to such derivatives. In July 1999, the
Financial Accounting Standards Board issued SFAS No. 137 "Accounting for
Derivative Instruments and Hedging Activities, Deferral of the Effective Date
of FASB

F-10
<PAGE>

OMNIVISION TECHNOLOGIES, INC.

NOTES TO FINANCIAL STATEMENTS--(Continued)

statement No. 133" ("SFAS No. 137"). SFAS No. 137 deferred the effective date
until the first quarter of fiscal years beginning after June 15, 2000. The
Company does not expect the adoption of this pronouncement to have a material
impact on its financial condition or results of operations.

NOTE 2--BALANCE SHEET ACCOUNTS (IN THOUSANDS):

<TABLE>
<CAPTION>
April, 30,
-------------- January 31,
1998 1999 2000
------ ------ -----------
<S> <C> <C> <C>
Accounts receivable:
Accounts receivable............................ $ 449 $2,278 $5,179
Less: Allowance for doubtful accounts.......... (10) (56) (159)
Sales return reserve......................... (398) (489) (745)
------ ------ ------
$ 41 $1,733 $4,275
====== ====== ======
Inventories:
Work in progress............................... $ 32 $2,043 $5,151
Finished goods................................. 126 198 1,015
------ ------ ------
$ 158 $2,241 $6,166
====== ====== ======
Property and equipment:
Machinery and equipment........................ $ 418 $ 632 $1,882
Furniture and fixtures......................... 163 189 298
Software....................................... 483 523 650
Construction in progress....................... -- 369 327
------ ------ ------
1,064 1,713 3,157
Less: Accumulated depreciation................. (319) (628) (1,000)
------ ------ ------
$ 745 $1,085 $2,157
====== ====== ======
Accrued expenses and other liabilities:
Employee compensation.......................... $ 259 $ 337 $ 240
Other.......................................... 81 278 276
------ ------ ------
$ 340 $ 615 $ 516
====== ====== ======
</TABLE>

NOTE 3--INCOME TAXES:

There was no income tax provision for the years ended April 30, 1997, 1998
and 1999 because operations resulted in pre-tax losses. As of April 30, 1999,
the Company had net operating loss carryforwards of approximately $9,000,000
for federal income tax purposes. These losses are available to reduce taxable
income and expire from 2011 through 2019. Because of certain changes in the
ownership of the Company in December 1996, there is an annual limitation of
approximately $200,000 on the use of approximately $1,500,000 net operating
loss carryforwards pursuant to Section 382 of the Internal Revenue Code.

There was no income tax provision for the nine months ended January 31,
2000 because of deductions resulting from the reversal of deferred tax assets
for which there was a full valuation allowance as of the beginning of the
period.

Deferred tax assets at April 30, 1998 and 1999 and January 31, 2000 relate
primarily to net operating losses, fixed assets, reserves, accruals and
credits. A valuation allowance has been provided in an amount equal to these
assets because there is significant uncertainty regarding their realization.

F-11
<PAGE>

OMNIVISION TECHNOLOGIES, INC.

NOTES TO FINANCIAL STATEMENTS--(Continued)

The following is an analysis of the Company's deferred tax assets (in
thousands):

<TABLE>
<CAPTION>
April 30,
---------------- January 31,
1998 1999 2000
------- ------- -----------
<S> <C> <C> <C>
Net operating loss carryforward............... $ 2,702 $ 3,754 $ 2,290
Fixed assets.................................. 18 48 (4)
Reserves...................................... 380 1,724 417
Credits....................................... 400 607 835
Others........................................ 32 224 284
------- ------- -------
Total....................................... 3,532 6,357 3,822
------- ------- -------
Valuation allowance........................... (3,532) (6,357) (3,822)
------- ------- -------
Net deferred tax assets....................... $ -- $ -- $ --
======= ======= =======
</TABLE>

NOTE 4--RESERVE FOR PURCHASE COMMITMENTS:

When the April 30, 1999 financial statements were prepared, the Company
believed that the demand for certain products was less than originally
estimated when the Company placed noncancelable production orders. Sales orders
that the Company had expected to receive were not received by the time that the
audit of the April 30, 1999 financial statements was completed. There was
significant uncertainty that the Company would be able to sell the products
ordered. As a result, the Company accrued $3,473,000 as a reserve for a portion
of the purchase commitments.

Several months after the audit of the April 30, 1999 financial statements
was completed, the Company received sales orders for the products. During the
nine months ended January 31, 2000, most of the products were sold. Of the
reserve, $2,305,000 was released during the second quarter ended October 31,
1999 and $930,000 during the third quarter ended January 31, 2000. The
remaining reserve of $238,000 at January 31, 2000 is reflected as a reduction
in the basis of the related inventory.

NOTE 5--RELATED PARTIES TRANSACTIONS:

The chairman of Powerchip Semiconductor Corp. ("PSC") is a board member of
the Company. PSC has been a vendor for the Company beginning in the year ended
April 30, 1999. Total purchases were $5,000 and $1,396,000 for the year ended
April 30, 1999 and the nine months ended January 31, 2000.

F-12
<PAGE>

OMNIVISION TECHNOLOGIES, INC.

NOTES TO FINANCIAL STATEMENTS--(Continued)

NOTE 6--NET INCOME (LOSS) PER SHARE:

The following table sets forth the computation of basic and diluted income
(loss) per share attributable to common stockholders of the period indicated
(in thousands, except per share data):

<TABLE>
<CAPTION>
Nine Months Ended
Year Ended April 30, January 31,
------------------------- ------------------
1997 1998 1999 1999 2000
------- ------- ------- ----------- ------
(unaudited)
<S> <C> <C> <C> <C> <C>
Numerator:
Net income (loss)............... $(2,838) $(6,039) $(7,522) $(3,150) $5,048
======= ======= ======= ======= ======
Net income (loss) attributable
to common stockholders........ $(2,838) $(6,039) $(7,522) $(3,150) $5,048
======= ======= ======= ======= ======
Denominator:
Denominator for basic earnings
per share--weighted average
common shares................. 168 475 724 699 2,879
Effect of dilutive securities
Common stock options........... -- -- -- -- 614
Unvested common stock subject
to repurchase................ -- -- -- -- 620
Convertible preferred stock.... -- -- -- -- 12,305
------- ------- ------- ------- ------
Denominator for dilutive earnings
per share...................... 168 475 724 699 16,418
======= ======= ======= ======= ======
Basic earnings per share......... $(16.89) $(12.71) $(10.39) $ (4.51) $ 1.75
Diluted earnings per share....... $(16.89) $(12.71) $(10.39) $ (4.51) $ 0.31

The following table sets forth weighted average potential shares of common
stock that are not included in the diluted net income (loss) per share
calculation above because to do so would be antidilutive for the periods
indicated:

<CAPTION>
Nine Months Ended
Year Ended April 30, January 31,
------------------------- ------------------
1997 1998 1999 1999 2000
------- ------- ------- ----------- ------
(unaudited)
<S> <C> <C> <C> <C> <C>
Weighted average effect of common
stock equivalents:
Unvested common stock subject to
repurchase.................... 1,041 725 492 509 --
Options outstanding............. 1,238 1,723 2,350 2,339 --
Shares resulting from the
conversion of the:
Series A convertible preferred
stock........................ 4,300 4,300 4,300 4,300 --
Series B convertible preferred
stock........................ 710 3,692 3,672 3,672 --
Series C convertible preferred
stock........................ -- 418 4,256 4,233 --
------- ------- ------- ------- ------
Total common stock equivalents
excluded from the
computation of earnings per
share as their effect was
antidilutive................ 7,289 10,858 15,070 15,053 --
======= ======= ======= ======= ======
</TABLE>

F-13
<PAGE>

OMNIVISION TECHNOLOGIES, INC.

NOTES TO FINANCIAL STATEMENTS--(Continued)

NOTE 7--REDEEMABLE CONVERTIBLE PREFERRED STOCK

The Company is authorized to issue 12,783,336 shares of Convertible
preferred stock ("preferred stock"). As of April 30, 1999, 4,450,003, 4,000,000
and 4,333,333 shares of preferred stock were designated Series A, Series B and
Series C, respectively. Series A, Series B and Series C preferred stock were
issued at $0.60, $1.50 and $3.00 per share, respectively. The rights,
preferences and restrictions of the preferred stock are as follows:

Conversion. Each share of Series A, Series B and Series C preferred stock
is convertible into such number of shares of common stock as is determined by
dividing the original issuance price by $0.60, $1.50 the balance sheet at their
fair market value and the corresponding derivative gains or losses be either
reported in the statement of operations or as a deferred item depending on the
type of hedge relationship exists with and $3.00, respectively ("Initial
Conversion Price"). The Initial Conversion Price is subject to subsequent
adjustment to give effect to certain dilutive events that may occur. Such
conversion is automatic upon the effective date of a public offering of common
stock with aggregate proceeds of at least $10,000,000.

Dividends. Holders of Series A, Series B and Series C preferred stock are
entitled to receive, when and as declared by the Board of Directors,
noncumulative dividends at the annual rate of $0.06, $0.15 and $0.30 per share,
respectively. Such dividends are payable in preference to any dividend for
common stock declared by the Board of Directors. No dividends were declared
since inception.

Voting. The holders of the preferred stock have the right to vote with the
common stock, on an as-if-converted basis, on all other matters as provided
under California law. The holder of each share of preferred stock is entitled
to the number of votes equal to the number of shares of common stock into which
such share of preferred stock could be converted on the record date for the
vote or the consent of shareholders and shall have voting rights and powers
equal to the voting rights and powers of the common stock.

Liquidation. In the event of any liquidation, dissolution or winding up of
the corporation, the holders of each share of preferred stock then outstanding
are entitled to be paid, before any payment made to the holders of the common
stock, an amount equal to the original issue price per share ("Preference
Amount") of preferred stock. If the assets of the corporation are insufficient
to pay the full liquidation preference to the preferred stock, the assets shall
be distributed ratably among the holders of the preferred stock in proportion
to the full preference amount each such holder is otherwise entitled to
receive. After payment has been made to the holders of the preferred stock of
their full preference amount, any remaining assets or surplus funds of the
corporation are to be shared by and distributed ratably among the holders of
common stock in proportion to the number of shares then held by each of them.

A consolidation or merger of the Company with or into any other corporation
or corporations, acquisition by any other corporation or corporations, or a
sale of all or substantially all of the assets or voting control of the
Company, in which the prior stockholders of the Company do not own a majority
of the outstanding shares of the surviving corporation (a "change in control")
is deemed to be a liquidation.

Redemption

Series A, B and C preferred stock is redeemable upon a change in control of
the Company at an amount equal to the liquidation preference described above.

Series A, B and C preferred stock has been recorded at fair value at the
date of issuance outside of stockholder's equity, which equals the redemption
value.

F-14
<PAGE>

OMNIVISION TECHNOLOGIES, INC.

NOTES TO FINANCIAL STATEMENTS--(Continued)

NOTE 8--COMMON STOCK

As of March 2000, the Company is authorized to issue up to 100,000,000
shares of common stock. Of the shares authorized, 3,600,000 shares of common
stock have been reserved for issuance under the Company's employee stock option
plans.

Certain common stock option holders have the right to exercise unvested
options, subject to a repurchase right held by the Company, in the event of
voluntary or involuntary termination of employment of the stockholder. As of
January 31, 2000, 1,025,000 shares of common stock were subject to repurchase
by the Company at the original exercise price. Of the shares issued to date,
1,200,000 shares of the Company's common stock have been issued under
restricted stock purchase agreements, under which the Company has the option to
repurchase issued shares of common stock. Under these agreements, 20% of the
Company's repurchase rights lapse after one year. The remaining rights lapse
quarterly over the following four years. At January 31, 2000, 180,000
outstanding common shares were subject to repurchase.

NOTE 9--STOCK-BASED COMPENSATION:

Stock Option Plan

In May 1995, the Company adopted the 1995 Stock Plan under which 3,600,000
shares of common stock were reserved for issuance to eligible employees,
directors and consultants upon exercise of the stock options and stock purchase
rights. Incentive stock options are granted at a price not less than 100% of
the fair market value of the Company's common stock and at a price of not less
than 110% of the fair market value for grants to any person who owned more than
10% of the voting power of all classes of stock on the date of grant.
Nonstatutory stock options are granted at a price not less than 85% of the fair
market value of the common stock and at a price not less than 110% of the fair
market value for grants to a person who owned more than 10% of the voting power
of all classes of stock on the date of the grant. Options granted under the
1995 Stock Plan generally vest over five years and are exercisable immediately
or for up to ten years (five years for grants to any person who owned more than
10% of the voting power of all classes of stock on the date of the grant).
Those options exercised but unvested are subject to repurchase by the Company
at the exercise price.

F-15
<PAGE>

OMNIVISION TECHNOLOGIES, INC.

NOTES TO FINANCIAL STATEMENTS--(Continued)

The following table summarizes option activities:

<TABLE>
<CAPTION>
Options Outstanding
--------------------------------
Weighted
Average
Options Price
Available Number of Price per per
for Grant Shares Share Share
---------- ---------- ----------- --------
<S> <C> <C> <C> <C>
Balance at April 30, 1996......... 2,720,000 880,000 $0.06
Granted........................... (1,300,000) 1,300,000 $0.06-$0.25 0.09
Canceled.......................... 405,000 (405,000) 0.06 0.06
---------- ----------
Balance at April 30, 1997......... 1,825,000 1,775,000 0.08
Granted........................... (717,000) 717,000 0.25-$0.30 0.25
Canceled.......................... 368,000 (368,000) 0.15-$0.25 0.19
---------- ----------
Balance at April 30, 1998......... 1,476,000 2,124,000 0.12
Granted........................... (741,000) 741,000 0.30 0.30
Exercised......................... -- (56,000) 0.15-$0.25 0.16
Canceled.......................... 48,000 (48,000) 0.25-$0.30 0.28
---------- ----------
Balance at April 30, 1999......... 783,000 2,761,000 0.17
Granted........................... (877,000) 877,000 0.75-$4.50 1.09
Exercised......................... -- (2,680,550) 0.06-$0.75 0.21
Canceled.......................... 113,000 (113,000) $0.30-$0.75 0.73
---------- ----------
Balance at January 31, 2000....... 19,000 844,450 $0.97
========== ==========
</TABLE>

The following table summarizes information about stock options outstanding
at January 31, 2000:

<TABLE>
<CAPTION>
Options Outstanding at January Options Exercisable at
31, 2000 January 31, 2000
--------------------------------------------------------------------
Weighted Average
Exercise Number Remaining Number Weighted Average
Prices Outstanding Contractual Life Outstanding Exercise Price
-------- ----------- ---------------- ----------- ----------------
<S> <C> <C> <C> <C>
$0.06 20,000 1.44 14,256 $0.06
0.25 88,250 2.42 45,596 0.25
0.30 134,000 3.37 43,807 0.30
0.75 522,200 4.31 71,557 0.75
$4.50 80,000 4.75 4,000 4.50
------- ---- -------
844,450 3.94 179,216 $0.21
======= ==== ======= =====
</TABLE>

Stock based compensation under APB No. 25

In connection with certain stock option grants the Company recorded
deferred stock compensation costs totaling $5,178,000 being the difference
between the exercise price and the deemed fair value at the date of grant which
is being recognized over the vesting period of the related options of generally
five years. Future amortization of deferred compensation expense is estimated
to be approximately $475,000, $1,190,000, $701,000, $380,000 and $181,000 in
the years ended April 30, 2000, 2001, 2002 and 2003, and 2004 and after
respectively.

F-16
<PAGE>

OMNIVISION TECHNOLOGIES, INC.

NOTES TO FINANCIAL STATEMENTS--(Continued)

Stock based compensation expense is comprised of the following (in
thousands):

<TABLE>
<CAPTION>
Nine Months
Year Ended Ended
April 30, January 31,
-------------- -----------
1997 1998 1999 1999 2000
---- ---- ---- ---- ------
<S> <C> <C> <C> <C> <C>
Cost of revenues................................. $-- $ 45 $ 60 $ 44 $ 249
--- ---- ---- ---- ------
Research and development......................... 31 186 302 219 755
Selling, general and administrative.............. 13 20 157 112 404
--- ---- ---- ---- ------
Total operating expenses....................... 44 206 459 331 1,159
--- ---- ---- ---- ------
Total compensation charge...................... $44 $251 $519 $375 $1,408
=== ==== ==== ==== ======
</TABLE>

Fair value disclosures

Pro forma information regarding net loss and net loss per share is required
by SFAS No. 123, which also requires that the information be determined as if
the Company had accounted for its employee stock options granted under the fair
value method. The fair value for these options was estimated using the Black-
Scholes option pricing model.

The Company calculated the fair value of each option grant on the date of
grant using the Black-Scholes option pricing model as prescribed by SFAS No.
123 using the following assumptions:

<TABLE>
<S> <C>
Risk free interest rate........................................ 4.43%-6.47%
Expected life (in years)....................................... 4.1
Dividend yield................................................. 0%
Expected volatility............................................ 0%
</TABLE>

As the determination of fair value of all options granted after such time
as the Company becomes a public entity will include an expected volatility
factor in addition to the factors described in the preceding paragraph, the
above results may not be representative of future periods.

The weighted average grant date fair value of options granted during the
years ended April 30, 1997, 1998 and 1999 and the nine months ended January 31,
2000 was $0.75, $1.27, $1.63 and $5.29, respectively.

Had compensation cost been determined based upon the fair value at the
grant date, consistent with the methodology prescribed under SFAS No. 123, the
Company's pro forma net loss and pro forma basic and diluted net loss per share
under SFAS No. 123 would have been (in thousands, except per share data):

<TABLE>
<CAPTION>
Nine Months
Ended January
Year Ended December 31, 31,
------------------------- ---------------
1997 1998 1999 1999 2000
------- ------- ------- ------- ------
<S> <C> <C> <C> <C> <C>
Net income (loss)-as reported.. $(2,838) $(6,039) $(7,522) $(3,150) $5,048
Net income (loss)-as adjusted.. (2,874) (6,181) (8,247) (3,666) 4,369

Net income (loss) per share:
basic as reported............. (16.89) (12.71) (10.39) (4.51) 1.75
diluted as reported..........: (16.89) (12.71) (10.39) (4.51) 0.31
Net income (loss) per share:
basic as adjusted............. (17.11) (13.01) (11.39) (5.24) 1.52
diluted as adjusted........... $(17.11) $(13.01) $(11.39) $ (5.24) $ 0.27
</TABLE>

F-17
<PAGE>

OMNIVISION TECHNOLOGIES, INC.

NOTES TO FINANCIAL STATEMENTS--(Continued)

NOTE 10--CONCENTRATION OF CREDIT RISK

Financial instruments which potentially subject the Company to
concentrations of credit risk consist principally of trade receivables and
investments in a money market account. The Company's products are primarily
sold to OEM customers and to distributors. The Company performs ongoing credit
evaluations of its customers and maintains reserves for credit losses. In
fiscal 1998, the Company's sales to four customers represented 17%, 16%, 12%
and 12% of total revenues. At April 30, 1998, three customers accounted for
22%, 22% and 12% of accounts receivable. In fiscal 1999, the Company's sales to
two customers represented 43% and 24% of total revenues. At April 30, 1999,
three customers accounted for 34%, 20% and 20% of accounts receivable. In nine
months ended January 31, 2000, the Company's sales to three customers
represented 24%, 17% and 16% of total sales. At January 31, 2000, four
customers accounted for 30%, 17%, 12% and 11% of accounts receivable.

NOTE 11--SEGMENT AND GEOGRAPHIC INFORMATION:

The Company identifies its operating segments based on business activities,
management responsibility and geographic location. For all periods presented,
the Company operated in a single business segment.

The Company sells its products in the United States and to the Asia Pacific
region. Revenues by geographic locations based on the country of the customer
were as follows:

<TABLE>
<CAPTION>
Years Ended April Nine Months
30, Ended
------------------ January 31,
1997 1998 1999 2000
---- ------ ------ -----------
(in thousands)
<S> <C> <C> <C> <C>
United States................................. $34 $ 355 $ 735 $ 7,394
Taiwan........................................ 7 777 3,084 9,142
Singapore..................................... 536 4,478
Hong Kong..................................... 297 435 1,740
Other Asia Pacific Countries.................. 18 47 389 2,208
Europe........................................ -- -- 64 149
--- ------ ------ -------
$59 $1,476 $5,243 $25,111
=== ====== ====== =======
</TABLE>

NOTE 12--COMMITMENTS AND CONTINGENCIES:

The Company leases its facilities in the U.S. under non cancelable lease
agreements. The facility leases expire April 30, 2003. Future minimum lease
payments under all non cancelable operating leases as of January 31, 2000 are
$67,000, $268,000, $268,000 and $268,000 in the years ending April 30, 2000,
2001, 2002 and 2003, respectively. Rental expenses under all operating leases
amounted to $88,000, $250,000, $203,000 and $201,000 for the years ended April
30, 1997, 1998, 1999 and the nine months ended January 31, 2000, respectively.

From time to time, the Company has been subject to legal proceedings and
claims with respect to such matters as patents, product liabilities and other
actions arising out of the normal course of business. While the effect on
future financial results cannot be predicted with certainty, the Company
believes that the final outcome of such matters will not have a material
adverse effect on its financial position and results of operations or cash
flows.

F-18
<PAGE>

[Company Logo centered at the top of the page. Title in bold and
underlined, "Ongoing Solutions for Mass Market Applications". In the center of
the page is an image of a representative Phone System or Internet System with
the following language at the top of the image "Phone System" and the following
language at the bottom of the image "Internet System". This image is surrounded
by four large drawings. Each of these drawings depict an individual interacting
with a product which incorporates our single chip complementary metal oxide
semiconductor imaging sensors with the name of the product listed above or
below the respective drawing. The products depicted are the following: Mobile
Phones, Personal Digital Assistants, Laptop Video Cameras and PC Video Cameras.
Centered at the bottom of the page in small font is the text, "Many of the mass
market cameras equipped with OmniVision's single chip image sensors are used
for phone and internet communications."]
<PAGE>

[LOGO OF OMNIVISION]

<PAGE>

SUBJECT TO COMPLETION, DATED APRIL 14, 2000
[LOGO OF OMNIVISION APPEARS HERE]

5,000,000 Shares

Common Stock

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

Investing in our common stock involves risks.
See "Risk Factors" beginning on page 8.

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

We have granted the underwriters a 30 day option to purchase up to an
additional 750,000 shares of common stock to cover over allotments.

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

Robertson Stephens International

Prudential-Bache International

Needham & Company, Inc.

The date of this prospectus is , 2000
<PAGE>

PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

Item 13. Other Expenses of Issuance and Distribution

The following table sets forth all fees and expenses payable by OmniVision
in connection with the registration of the common stock hereunder. All of the
amounts shown are estimates except for the SEC registration fee, NASD filing
fee and the Nasdaq National Market listing fees.

<TABLE>
<CAPTION>
Amount
To Be Paid
----------
<S> <C>
SEC Registration Fee............................................. $ 16,698
NASD Filing Fee.................................................. 6,825
Nasdaq National Market Listing Fee............................... 1,000
Printing and Engraving Expenses.................................. 235,000
Legal Fees and Expenses.......................................... 600,000
Accounting Fees and Expenses..................................... 270,000
Blue Sky Fees and Expenses....................................... 5,000
Transfer Agent and Registrar Fees and Expenses................... 15,000
Miscellaneous Expenses........................................... 150,477
Total.......................................................... $1,300,000
</TABLE>

Item 14. Indemnification of Directors and Officers

The Registrant is subject to Section 145 of the Delaware General
Corporation Law ("Section 145"). Section 145 permits indemnification of
officers and directors of the Company under certain conditions and subject to
certain limitations. Section 145 also provides that a corporation has the power
to maintain insurance on behalf of its officers and directors against any
liability asserted against such person and incurred by him or her in such
capacity, or arising out of his or her status as such, whether or not the
corporation would have the power to indemnify him or her against such liability
under the provisions of Section 145. Under Article VIII, Sections 8.1 and 8.2
of the Registrant's Bylaws will provide for mandatory indemnification of its
directors and officers and permissible indemnification of employees and other
agents to the maximum extent not prohibited by the Delaware General Corporation
Law. The rights to indemnity thereunder continue as to a person who has ceased
to be a director, officer, employee or agent and inure to the benefit of the
heirs, executors and administrators of the person. In addition, expenses
incurred by a director or executive officer in defending any civil, criminal,
administrative or investigative action, suit or proceeding by reason of the
fact that he or she is or was a director or officer of the Registrant (or was
serving at the Registrant's request as a director or officer of another
corporation) shall be paid by the Registrant in advance of the final
disposition of such action, suit or proceeding upon receipt of an undertaking
by or on behalf of such director or officer to repay such amount if it shall
ultimately be determined that he or she is not entitled to be indemnified by
the Registrant as authorized by the relevant section of the Delaware General
Corporation Law.

As permitted by Section 102(b)(7) of the Delaware General Corporation Law,
the Registrant's Certificate of Incorporation provides that, pursuant to
Delaware law, its directors shall not be personally liable for monetary damages
for breach of the directors' fiduciary duty as directors to the Registrant and
its stockholders. This provision in the Certificate of Incorporation does not
eliminate the directors' fiduciary duty, and in appropriate circumstances
equitable remedies such as injunctive or other forms of non-monetary relief
will remain available under Delaware law. In addition, each director will
continue to be subject to liability for breach of the director's duty of
loyalty to the Registrant for acts or omission not in good faith or involving
international misconduct, for knowing violations of law, for actions leading to
improper personal benefit to the director, and for payment of dividends or
approval of Stock repurchases or redemptions that are unlawful under Section
174 of the Delaware General Corporation Law. The provision also does not affect
a director's

II-1
<PAGE>

responsibilities under any other law, such as the federal securities laws or
state or federal environmental laws. The Registrant has entered into
indemnification agreements with each of its directors and executive officers.
Generally, the indemnification agreements attempt to provide the maximum
protection permitted by Delaware law as it may be amended from time to time.
Moreover, the indemnification agreements provide for certain additional
indemnification. Under such additional indemnification provisions, however, an
individual will not receive indemnification for judgments, settlements or
expenses if he or she is found liable to the Registrant (except to the extent
the court determines he or she is fairly and reasonably entitled to indemnity
for expenses). The indemnification agreements provide for the Registrant to
advance to the individual any and all reasonable expenses (including legal fees
and expenses) incurred in investigating or defending any such action, suit or
proceeding. In order to receive an advance of expenses, the individual must
submit to the Registrant copies of invoices presented to him or her for such
expenses. Also, the individual must repay such advances upon a final judicial
decision that he or she is not entitled to indemnification.

The Registrant intends to enter into additional indemnification agreements
with each of its directors and executive officers to effectuate these indemnity
provisions and to purchase directors' and officers' liability insurance.

In addition to the foregoing, the Underwriting Agreement contains certain
provisions by which the Underwriters have agreed to indemnify the Registrant,
each person, if any, who controls the Registrant within the meaning of Section
15 of the Securities Act, each director of the Registrant, each officer of the
Registrant who signs the Registration Statement, with respect to information
furnished in writing by or on behalf of the Underwriters for use in the
Registration Statement.

At present, there is no pending litigation or proceeding involving a
director, officer, employee or other agent of the Registrant in which
indemnification is being sought, nor is the Registrant aware of any threatened
litigation that may result in a claim for indemnification by any director,
officer, employee or other agent of the Registrant.

Item 15. Recent Sales of Unregistered Securities

Since our incorporation in May 1995, we have sold and issued the following
securities:

(1) In May 1995, the Registrant issued and sold 1,200,000 shares of
common stock to its four founders for $72,000 pursuant to Section 4(2) of
the Securities Act.

(2) As of June 1996, the Registrant has issued and sold 4,300,001
shares of Series A preferred stock to 27 investors for $2,500,000.60
pursuant to Section 4(2) of the Securities Act.

(3) As of April 1998, the Registrant has issued and sold 3,671,668
shares of Series B preferred stock to 33 investors for $5,507,502 pursuant
to Section 4(2) of the Securities Act.

(4) As of June 1998, the Registrant has issued and sold 4,333,332
shares of Series C preferred stock to 23 investors for $12,999,999 pursuant
to Section 4(2) of the Securities Act.

(5) Pursuant to Rule 701 promulgated under the Securities Act, from May
1995 to January 31, 2000, the Registrant issued and sold 2,736,550 shares
of Common Stock to employees and consultants for aggregate consideration of
$568,437.50 upon the exercise of stock options pursuant to the Registrant's
1995 Stock Option Plan.

The recipients of securities in each such transaction represented their
intentions to acquire the securities for investment only and not with a view to
or for sale in connection with any distribution thereof and appropriate legends
were affixed to the share certificates and warrants issued in such
transactions. All recipients had adequate access, through their relationships
with us, to information about us.

II-2
<PAGE>

Item 16. Exhibits and Financial Statement Schedules

(a) Exhibits

<TABLE>
<CAPTION>
Exhibit
Number Description of Document
--------- -----------------------
<C> <S>
+1.1 Form of Underwriting Agreement

+2.1 Merger Agreement between OmniVision Technologies, Inc., a Delaware
corporation and OmniVision Technologies, Inc., a California
corporation

+3.1(a) Certificate of Incorporation of Registrant

+3.1(b) Form of Restated Certificate of Incorporation to be filed after the
closing of the offering made under this Registration Statement

+3.2 Bylaws of the Registrant

4.1 Specimen Common Stock Certificate

+4.2 Amended and Restated Registration Rights Agreement, dated as of May
20, 1998, by and among the Registrant and certain stockholders of
the Registrant

+5.1 Form of Opinion of Wilson Sonsini Goodrich & Rosati, Professional
Corporation

+10.1 Form of Indemnification Agreement between the Registrant and each of
its directors and officers

+10.2 2000 Stock Plan

+10.3 2000 Employee Stock Purchase Plan and form of subscription agreement

+10.4 2000 Director Option Plan and form of option agreement

+10.5 Lease Agreement dated April 4, 1997 between the Registrant and Lewis
Duckor for the premises at 930 Thompson Avenue, Sunnyvale California
94086

+10.6 First Amendment to Lease Agreement dated July 15, 1999 between the
Registrant and Lewis Duckor for the premises at 930 Thompson Avenue,
Sunnyvale California 94086

+*10.7 Non-exclusive Distributor Agreement between the Registrant and World
Peace Industrial Co., Ltd. dated January 1, 1998

+*10.8 Confidential Foundry Agreement between Registrant and Powerchip
Semiconductor Corp. dated March 13, 1998

+10.9 Non-exclusive Distributor Agreement between the Registrant and Holy
Stone Enterprise Co., Ltd. dated July 1, 1998

+*10.10 Software License Agreement between the Registrant and Creative
Technology Ltd. dated February 1, 1999

+*10.11 Non-exclusive Distributor Agreement between the Registrant and
Wintek Electronics Co., Ltd. dated October 22, 1999

+*10.12 Confidential Foundry Agreement between Registrant and Shanghai
HuaHong-NEC Electronics Co., Ltd. dated December 13, 1999

+*10.13 Sales Agreement between the Registrant and CoAsia MicroElectronics
Cop. dated May 7, 1999

+*10.14 Agreement between the Registrant, CoAsia MicroElectronics and
Samsung Electronics Taiwan Co., Ltd. dated July 17, 1998

Letter Agreement between the Registrant and Creative Technology Ltd.
+*10.15 dated February 1, 1999

23.1 Consent of PricewaterhouseCoopers LLP, Independent Accountants

23.2 Consent of Blakely, Sokoloff, Taylor & Zafman LLP

+24.1 Power of Attorney

+27.1 Financial Data Schedule
</TABLE>
- --------

* A request for confidential treatment for portions of this agreement has
been submitted to the Commission. Omitted portions have been filed
separately with the Commission.

+ This exhibit was previously filed with the Commission.

II-3
<PAGE>

(b) Financial Statement Schedules:

Schedules not listed above have been omitted because the information
required to be set forth therein is not applicable or is shown in the financial
statements or notes thereto.

Item 17. Undertakings

The undersigned registrant hereby undertakes to provide to the underwriters
at the closing specified in the underwriting agreements certificates in such
denominations and registered in such names as required by the underwriters to
permit prompt delivery to each purchaser.

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 Securities
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 offering as expressed in the
Securities Act and will be governed by the final adjudication of such issue.

The undersigned registrant hereby undertakes that:

(1) For purposes of determining any liability under the Securities Act
of 1933, the information omitted from the form of prospectus filed as part
of this registration statement in reliance upon Rule 430A and contained in
a form of prospectus filed by the registrant pursuant to Rule 424(b)(1) or
(4) or 497(h) under the Securities Act shall be deemed to be part of this
registration statement as of the time it was declared effective.

(2) For the purpose of determining any liability under the Securities
Act of 1933, each post-effective amendment that contains a form of
prospectus shall be deemed to be 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.

II-4
<PAGE>

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, as amended,
OmniVision Technologies, Inc. has duly caused this Registration Statement on
Form S-1 to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Sunnyvale, State of California, on the 14th day of
April, 2000.

OMNIVISION TECHNOLOGIES, INC.

*
By: _________________________________
Shaw Hong
Chief Executive Officer

Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement on Form S-1 has been signed by the following
persons in the capacities and on the dates indicated.

<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----

<S> <C> <C>
* Chief Executive Officer, April 14, 2000
____________________________________ President and Director
Shaw Hong (Principal Executive
Officer)

/s/ H. Gene McCown Vice President of Finance April 14, 2000
____________________________________ and Chief Financial Officer
H. Gene McCown (Principal Financial and
Accounting Officer)

* Executive Vice President and April 14, 2000
____________________________________ Director
Raymond Wu

* Director April 14, 2000
____________________________________
Frank Huang

* Director April 14, 2000
____________________________________
Edward C.V. Winn

* Director April 14, 2000
____________________________________
</TABLE> Leon Malmed

/s/ H. Gene McCown

* By: _____________________

H. Gene McCown

Attorney-In-Fact

II-5
<PAGE>

Valuation and Qualifying Accounts

For the years ended April 30, 1997, 1998, 1999 and for the nine months ended
January 31, 2000

(in thousands)

<TABLE>
<CAPTION>
Balance at Balance
beginning Charged Credited at end
Description of period to expenses to expenses of period
- ----------- ---------- ----------- ----------- ---------
<S> <C> <C> <C> <C>
Allowance for doubtful accounts
receivable:
Fiscal year ended April 30,
1997.......................... $ -- $ -- $ -- $ --
Fiscal year ended April 30,
1998.......................... -- 10 -- 10
Fiscal year ended April 30,
1999.......................... $ 10 $ 49 $ 3 $ 56
Nine months ended January 31,
2000.......................... 56 103 -- 159
Deferred tax valuation allowance:
Fiscal year ended April 30,
1997.......................... $ 105 $ 951 $ -- $1,056
Fiscal year ended April 30,
1998.......................... 1,056 2,476 -- 3,532
Fiscal year ended April 30,
1999.......................... $3,532 $2,825 $ -- $6,357
Nine months ended January 31,
2000.......................... 6,357 -- 2,535 3,822
Sales return reserve:
Fiscal year ended April 30,
1997.......................... -- -- -- --
Fiscal year ended April 30,
1998.......................... -- 403 5 398
Fiscal year ended April 30,
1999.......................... 398 91 -- 489
Nine months ended January 31,
2000.......................... 489 256 -- 745
</TABLE>

II-6
<PAGE>

EXHIBIT INDEX

<TABLE>
<CAPTION>
Exhibit
Number Description of Document
--------- -----------------------
<C> <S>
+1.1 Form of Underwriting Agreement

+2.1 Merger Agreement between OmniVision Technologies, Inc., a Delaware
corporation and OmniVision Technologies, Inc., a California
corporation

+3.1(a) Certificate of Incorporation of Registrant

+3.1(b) Form of Restated Certificate of Incorporation to be filed after the
closing of the offering made under this Registration Statement

+3.2 Bylaws of the Registrant

4.1 Specimen Common Stock Certificate

+4.2 Amended and Restated Registration Rights Agreement, dated as of May
20, 1998, by and among the Registrant and certain stockholders of
the Registrant

+5.1 Form of Opinion of Wilson Sonsini Goodrich & Rosati, Professional
Corporation

+10.1 Form of Indemnification Agreement between the Registrant and each of
its directors and officers

+10.2 2000 Stock Plan

+10.3 2000 Employee Stock Purchase Plan and form of subscription agreement

+10.4 2000 Director Stock Option Plan and form of option agreement