MICROSEMI CORP, S-3/A, 2000-05-22

MICROSEMI CORP
S-3/A, 2000-05-22
SEMICONDUCTORS & RELATED DEVICES

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<PAGE>

As Filed with the Securities and Exchange Commission on May 22, 2000
Registration No. 333-34846
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
--------------

AMENDMENT NO. 2
TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
--------------
MICROSEMI CORPORATION
(Exact name of registrant as specified in its charter)
--------------
<TABLE>
<S> <C>
Delaware 95-2110371
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
</TABLE>
2830 South Fairview Street
Santa Ana, California 92704
Tel: (714) 979-8220
(Address, including zip code, and telephone number, including area code, of
registrant's principal executive offices)
--------------
David R. Sonksen,
Vice President--Finance, Chief Financial Officer, Secretary and Treasurer
Microsemi Corporation
2830 South Fairview Street
Santa Ana, California 92704
Tel: (714) 979-8220
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
Copy to:
<TABLE>
<S> <C>
Nick E. Yocca, Esq. J. Jay Herron, Esq.
Nicholas J. Yocca, Esq. Michael L. Hawkins, Esq.
Stradling, Yocca, Carlson & Rauth, P.C. Loren J. Weber, Esq.
660 Newport Center Drive, Suite 1600 O'Melveny & Myers LLP
Newport Beach, California 92660 114 Pacifica, Suite 100
Irvine, California 92618
</TABLE>
--------------
Approximate date of commencement of proposed sale to the public: As soon as
practicable after the registration statement is declared effective.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [_]
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 (the "Securities Act"), other than securities offered only in connection
with dividend or interest reinvestment plans, 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 delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [_]

CALCULATION OF REGISTRATION FEE
<TABLE>
- ----------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------
<CAPTION>
Proposed Proposed
Amounts maximum maximum Amount of
Title of class of to be offering price aggregate registration
securities to be registered registered(1) per share(2) offering price(2) fee(2)
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, par value $.20.................. 2,553,000 shares $25.4688 $65,021,718 $17,165.73(3)
- ----------------------------------------------------------------------------------------------------------------
</TABLE>
- --------------------------------------------------------------------------------
(1) Includes 333,000 shares subject to the underwriters' over-allotment option.
(2) The offering price could not be determined at the time of filing this
registration statement and the maximum offering price was estimated solely
for the purpose of calculating the amount of the registration fee payable
to the Securities and Exchange Commission (the "Commission"), as determined
in accordance with Rule 457(c), on the basis of the average of the high
($28.50) and low ($22.4375) prices as reported by the Nasdaq National
Market for the Common Stock on April 14, 2000.
(3) Previously paid.
--------------
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.

================================================================================
<PAGE>

++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
+The information in this prospectus is not complete and may be changed. A +
+registration statement relating to these securities has been filed with the +
+Securities and Exchange Commission. We may not sell these securities until +
+the registration statement is effective. This prospectus is not an offer to +
+sell these securities and it is not soliciting an offer to buy these +
+securities in any state where the offer or sale is not permitted. +
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++

SUBJECT TO COMPLETION, DATED MAY 19, 2000

2,220,000 Shares

[LOGO OF MICROSEMI]

Common Stock

-----------

We are selling 2,000,000 shares of our common stock. Additionally, the
selling stockholders named in this prospectus are selling 220,000 shares. We
will not receive any proceeds from the sale of shares by the selling
stockholders.

Our common stock is listed on the Nasdaq National Market under the symbol
"MSCC." The last reported sale price of our common stock on May 19, 2000 was
$26.875 per share.

-----------

Investing in our common stock involves risks.
See "Risk Factors" beginning on page 4.

-----------

<TABLE>
<CAPTION>
Per Share Total
--------- -----
<S> <C> <C>
Public offering price........................................... $ $
Underwriting discount........................................... $ $
Proceeds, before expenses, to Microsemi Corporation ............ $ $
Proceeds, before expenses, to the selling stockholders ......... $ $
</TABLE>

The underwriters named in this prospectus may purchase up to an additional
333,000 shares of common stock from us, not the selling stockholders, under
certain circumstances. The underwriters expect to deliver the shares to
purchasers on or about , 2000.

Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or determined if
this prospectus is truthful or complete. Any representation to the contrary is
a criminal offense.

-----------

A.G. Edwards & Sons, Inc.

CIBC World Markets

Needham & Company, Inc.

Prospectus dated May , 2000
<PAGE>

[GRAPHIC: Picture of a boy standing inside a circular translucent
plastic model of our logo, holding in his right hand a
mock-up of a mobile communication device.]

enable color enable color enable color
protect heartbeats protect heartbeats
amplify sound amplify sound amplify
extend battery life extend battery life
hearing improve hearing improve
MMSM(TM) MMSM(TM) MMSM(TM) MMSM(TM) MMSM(TM)
communicate in space communicate in
[Line of text obscured by the graphic described above]
class d class d class d class d
mobile phone mobile phone mobile
SCSI SCSI SCSI SCSI SCSI
RangeMAX(TM) RangeMAX(TM) RangeMAX(TM)
mobile wireless mobile wireless
AudioMAX(TM) AudioMAX(TM) AudioMAX(TM)
broadband broadband broadband
[Three lines of text obscured by the graphic described above]
connect business connect business
power computing power computing
semi.com www.Microsemi.com www.Micro
Powermite(TM) Powermite(TM) Powermite(TM)

<PAGE>

Solutions for mobile connectivity
power
management
LCD Backlight Drivers
Class D Audio
Pentium Switchers [Graphic: A mock up of a mobile wireless communication
Low Drop Out device beside two electronic components]
Regulators
SCSI Terminators

APPLICATIONS [LOGO]
Palm Top Computers
Notebooks/Desktops
Hearing Aid Solutions

transient
suppression
ESD Protection
Lightning Suppression
Low Cap High Speed [Graphic: electronic component]
Modular Solutions

APPLICATIONS
Mobile Phones [Graphic [Graphic: [Graphic: Chest
USB Port Protection Handheld notebook x-ray picture
Gigabit Ethernet Phone] computer] of human with
Cable Modems implanted heart
Fiber Optic Repeaters pacer]

mobile computers/ medical
connectivity peripherals

<PAGE>

[Graphic: RF
A mock up of a microwave
mobile wireless and opto
communication device]

Solutions for InGaP Power Amplifiers
mobile connectivity
SiGe Gain Blocks
RF Power Transistors

APPLICATIONS
[LOGO] Mobile Phones/Radios
Base Stations
Cable Modems
Wireless LAN

power
conditioning
Diodes and Rectifiers
Zeners and Regulators
Transistors and SCRs
MOSFETs and IGBTs

[Graphics:
electronic
component]

APPLICATIONS
Mobile Phones
[Graphic: [Graphic [Graphic: [Graphic Battery Charges
Man Looking View of Person, Astronaut Power Supplies
at PBX cockpit wearing a on space Fiber Optic Repeaters
monitor] instruments safety suit, walk in Satellites
at night] welding] Earth orbit]

tele- military industrial space
communication aerospace commercial satellite

<PAGE>

TABLE OF CONTENTS

<TABLE>
<CAPTION>
Page
----
<S> <C>
Prospectus Summary.................................................... 1
Risk Factors.......................................................... 4
Use of Proceeds....................................................... 14
Price Range of Common Stock and Dividend Policy....................... 15
Capitalization........................................................ 16
Selected Consolidated Financial Data.................................. 17
Management's Discussion and Analysis of Financial Condition and
Results of Operations................................................ 18
Business.............................................................. 23
Management............................................................ 32
Principal and Selling Stockholders.................................... 35
Description of Capital Stock.......................................... 37
Underwriting.......................................................... 38
Certain United States Federal Tax Consequences to Non-U.S. Holders of
Common Stock......................................................... 40
Legal Matters......................................................... 43
Experts............................................................... 43
Where You Can Find More Information................................... 43
Index to Consolidated Financial Statements............................ F-1
</TABLE>

In this prospectus, unless the context otherwise requires, the terms "we,"
"us," "our," "the company," "the Company" and "Microsemi" refer to Microsemi
Corporation and its majority-owned subsidiaries. Our "fiscal year" refers to a
fifty-two or fifty-three week period ending on or about September 30 of each
year.

You should rely only on the information contained in or incorporated by
reference in this prospectus. We have not authorized anyone to provide you with
different information. Our website is located at www.microsemi.com. Information
on the website is not part of this prospectus. We are not making an offer of
these securities in any state where the offer is not permitted. You should not
assume that the information provided by this prospectus is accurate as of any
date other than the date on the front of this prospectus.

Microsemi(R), RangeMAX(R), AudioMAX(R), Powermite(R), Powermite Squared(R),
Powermite Two(R), Powermite II(R), LinFinity(TM), LMI(R), LOCAP(R),
THINKEY(TM), SHELFET(TM), TVSARRAY(TM), PWRPAK(TM), BUSMAX(TM), ULTRAMAX(TM),
MMSM(TM) and THE INFINITE POWER OF INNOVATION(R) are some of our trademarks.
Other marks used herein are the property of their respective owners, which
includes us in some instances.
<PAGE>

PROSPECTUS SUMMARY

You should read the following summary together with the more detailed
information regarding our company and the common stock being sold in this
offering, including "risk factors" and our consolidated financial statements
and related notes, included elsewhere in this prospectus and incorporated by
reference. This summary highlights selected information from this prospectus
and does not contain all of the information that may be important to you.

MICROSEMI

We are a leading designer, manufacturer and marketer of analog, mixed-signal
and discrete semiconductors. Our semiconductors manage and regulate power,
protect against transient voltage spikes and transmit, receive and amplify
signals. Our products include individual components as well as complete circuit
solutions that enhance our customers' end products by providing battery
optimization, reducing size or protecting circuits. Our commercial products are
used in dynamic high growth mobile connectivity applications, including mobile
phones and handheld Internet devices, and broadband communications applications
such as base stations, wireless LAN, cable and fiber optic systems. These
high growth opportunities have emerged from our ongoing capabilities in
designing and manufacturing semiconductors for military, satellite and medical
applications. Our diverse customer base includes Motorola, Lockheed Martin,
Seagate, Mitsubishi, Guidant, Samsung, Medtronic, Boeing, Palm, Dell and
Compaq.

Industry

We serve several end markets of the semiconductor industry. These end
markets include battery-operated products, communications and Internet
infrastructure, and military and aerospace. Battery-operated products include
portable digital assistants (PDAs), mobile phones, portable or implantable
medical equipment, hearing aids, notebook computers and wireless web tablets.
These products demand semiconductor solutions that extend battery life, operate
at high speed and provide small size, high reliability and complex power
functions. Communications and Internet infrastructure includes networking,
fiber optic communications and base stations that require high speed and high
bandwidth products.

The major drivers for these markets include:

. Growth in wireless Internet connectivity and wireless broadband systems
(W-CDMA, IMT-2000, CMDA2000);

. Growth in sales of mobile phones;

. Growth in consumer demand for highly sophisticated multipurpose handheld
devices;

. New and emerging wireless or battery-operated applications; and

. The convergence of voice, video, and data transmission.

Our Solutions

We offer leading products combining innovative semiconductor design, process
and product packaging solutions that are optimized for a given application
utilizing our system engineering expertise. Many of our customers produce or
develop products in mobile connectivity, communication infrastructure and
computers/peripherals. We first developed our technology and expertise for
military and aerospace, satellite, communications and implantable medical
applications. We have created innovative product solutions that we believe
increase efficiency and play time, reduce component size, enable high speeds,
lower costs, provide high reliability and robustness, reduce power consumption
or offer other increased functionality relative to competing products in the
marketplace today.

1
<PAGE>

We categorize our product solutions into four general groups:

. Power Management. Our power management semiconductors are used to route,
control and manage power efficiently as it is delivered to subsystems.
Our devices typically will perform a circuit function in place of
alternatives that use multiple components.

. RF/Microwave and Opto Electronic. Our RF/microwave and opto electronic
semiconductors are used to assist the transmission or reception of
wired, wireless, fiber optic and RF signals. Our devices are used in
both wired and wireless systems, which typically operate at frequencies
greater than 150MHz, usually at 500 to 900MHz for land mobile radio, 1.7
to 1.9GHz for digital PCS, 2.4 to 2.5GHz for BlueTooth-enabled
technology, 5.2 to 5.7GHz for wireless LAN, and from 28 to 31GHz for
LMDS.

. Transient Protection. Our transient protection semiconductors are
designed to protect sensitive integrated circuits from all types of
transient threats, ranging from electrostatic discharge to induced
lightning. Our voltage-clamping devices quickly absorb large amounts of
energy for short periods of time.

. Power Conditioning. Our power conditioning semiconductors are used in
the rectification and switching of raw electrical power. Our diodes,
zeners, transistors and MOSFETs are used to condition raw AC or DC power
for use by power management devices.

Our Strategy

Our goal is to expand our leading position as a supplier of technologies for
the high growth wireless, handheld mobile connectivity, medical and fiber optic
markets. Our strategy has the following key elements:

. Provide system-engineered product solutions;

. Leverage and enhance expertise in innovative package technologies;

. Pursue strategic technology acquisitions and alliances;

. Develop new process technologies for high growth markets; and

. Leverage internal and external manufacturing capabilities.

Microsemi was incorporated in Delaware on September 27, 1960. Our principal
executive office is located at 2830 South Fairview Street, Santa Ana,
California 92704, and our telephone number is (714) 979-8220. Our website is
located at www.microsemi.com. Information on the website is not part of this
prospectus.

The Offering

<TABLE>
<S> <C>
Common stock offered by us........................ 2,000,000 shares

Common stock offered by the selling stockholders.. 220,000 shares

Common stock to be outstanding after the
offering......................................... 13,462,356 shares(1)

Use of proceeds................................... Repayment of bank debt and general corporate
purposes. See "Use of Proceeds."

Nasdaq National Market symbol..................... MSCC
</TABLE>
- --------

(1) The information above assumes that the underwriters do not exercise the
option that we have granted to them to purchase additional shares in the
offering and is based on the shares outstanding as of April 24, 2000. It
excludes 1,434,250 shares of common stock subject to then outstanding
options with a weighted average exercise price of $14.11 per share and
261,312 shares of common stock then available for future grants under our
1987 Stock Plan, as amended.

2
<PAGE>

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

<TABLE>
<CAPTION>
Six Months
Fiscal Years Ended Ended (1)
-------------------------------------- -----------------
September 28, September 27, October 3, April 4, April 2,
1997 1998 1999 1999 2000
------------- ------------- ---------- -------- --------
<S> <C> <C> <C> <C> <C>
Income Statement Data:
Net sales............... $163,234 $164,710 $185,081 $78,908 $115,560
Gross profit............ 45,960 47,285 40,870 21,206 30,727
Income from operations.. 22,519 20,459 5,089 7,697 4,091
Net income.............. 11,051 11,322 1,499 4,274 1,160

Earnings per share:
Basic................. $ 1.30 $ 1.05 $ 0.13 $ 0.38 $ 0.11
Diluted............... $ 1.03 $ 0.98 $ 0.13 $ 0.37 $ 0.10

Shares used in per share
calculations:
Basic................. 8,493 10,735 11,131 11,337 11,019
Diluted............... 11,901 11,956 11,244 11,449 11,418
</TABLE>

<TABLE>
<CAPTION>
April 2, 2000
------------------------
Actual As Adjusted (2)
-------- ---------------
<S> <C> <C>
Balance Sheet Data:
Cash and cash equivalents.............................. $ 6,236 $ 17,030
Working capital........................................ 44,627 74,921
Total assets........................................... 191,465 202,259
Total debt, including current portion.................. 55,119 15,619
Stockholders' equity................................... 94,802 145,096
</TABLE>
- --------

(1) The six months ended April 4, 1999 comprised 27 weeks, and the six months
ended April 2, 2000 comprised 26 weeks.

(2) As adjusted to give effect to our sale of 2,000,000 shares of common stock
in this offering at an assumed public offering price of $26.875 per share
and our use of the estimated net proceeds. See "Use of Proceeds" and
"Capitalization."

3
<PAGE>

RISK FACTORS

Before you invest in our common stock, you should carefully consider the
risks described below. You should also refer to the other information included
in this prospectus and the information incorporated in this prospectus by
reference before you decide to invest in our common stock.

Downturns in the highly cyclical semiconductor industry would adversely affect
our operating results and the value of our business.

The semiconductor industry is highly cyclical, and the value of our business
may decline during the "down" portion of these cycles. During recent years, we,
as well as many others in our industry, experienced significant declines in the
pricing of, as well as demand for, our products and lower facilities
utilization. Although markets for semiconductors have improved, they may stop
improving or experience renewed, possibly more severe and prolonged, downturns
in the future. The markets for our products depend on continued demand in the
mobile connectivity, telecommunications, computers/peripherals, military and
aerospace, space/satellite, industrial/commercial and medical markets, and
these end-markets may experience changes in demand that could adversely affect
our operating results and financial condition.

The semiconductor business is highly competitive and increased competition
could reduce the value of an investment in our company.

The semiconductor industry, including the areas in which we do business, is
highly competitive. We expect intensified competition from existing competitors
and new entrants. Competition is based on price, product performance, product
availability, quality, reliability and customer service. Even in strong
markets, pricing pressures may emerge. For instance, competitors may attempt to
gain a greater market share by lowering prices. The market for commercial
products is characterized by declining selling prices. We anticipate that our
average selling prices will continue to decrease in future periods, although
the timing and amount of these decreases cannot be predicted with any
certainty. The pricing pressure in the semiconductor industry in recent years
was due primarily to the Asian currency crisis, industry-wide excess
manufacturing capacity and weak economic growth outside the United States. We
compete in various markets with companies of various sizes, many of which are
larger and have greater financial and other resources than we have, and thus
may be better able to pursue acquisition candidates and to withstand adverse
economic or market conditions. In addition, companies not currently in direct
competition with us may introduce competing products in the future. We have
numerous competitors. Some of our current major competitors are Motorola, Inc.,
Dallas Semiconductor Corporation, General Semiconductor, Inc., National
Semiconductor Corporation, Texas Instruments, Inc., Philips Electronics, ON
Semiconductor, L.L.C., Fairchild Semiconductor Corporation, Micrel
Incorporated, International Rectifier Corporation, Semtech Corporation, Linear
Technology Corp., Alpha Industries, Inc., Diodes, Inc., Vishay Intertechnology,
Inc. and its subsidiary Siliconix Incorporated. Some of our competitors in
developing markets are Triquint Semiconductor, Inc., Mitel Corporation, RF
Micro Devices, Inc., Conexant Systems, Inc., Anadigics, Inc. and Alpha
Industries, Inc. We may not be able to compete successfully in the future or
competitive pressures may harm our financial condition or our operating
results.

New technologies could result in the development of competing products and a
decrease in demand for our products.

Our failure to develop new technologies or to react to changes in existing
technologies could materially delay our development of new products, which
could result in product obsolescence, decreased revenues and/or

4
<PAGE>

a loss of our market share to competitors. Rapidly changing technologies and
industry standards, along with frequent new product introductions, characterize
much of the semiconductor industry. Our financial performance depends on our
ability to design, develop, manufacture, assemble, test, market and support new
products and enhancements on a timely and cost-effective basis. A fundamental
shift in technologies in our product markets could have a material adverse
effect on our competitive position within the industry.

Failure to protect our proprietary technologies or maintain the right to use
certain technologies may negatively affect our ability to compete.

We rely heavily on our proprietary technologies. Our future success and
competitive position may depend in part upon our ability to obtain or maintain
protection of certain proprietary technologies used in our principal products.
We generally do not have, nor do we generally intend to apply for, patent
protection on any aspect of our technology. Our reliance upon protection of
some of our technology as "trade secrets" will not necessarily protect us from
the use by other persons of our technology, or their use of technology that is
similar or superior to that which is embodied in our trade secrets. Others may
be able to independently duplicate or exceed our technology in whole or in
part. We cannot assure you that we will be able to maintain the confidentiality
of our technology, dissemination of which could have a material adverse effect
on our business. In addition, litigation may be necessary to determine the
scope and validity of our proprietary rights. In instances in which we hold any
patents or patent licenses, any patents held by us may be challenged,
invalidated or circumvented, or the rights granted under any patents may not
provide us competitive advantages. Patents often provide only narrow protection
and require public disclosure of information that may otherwise be subject to
trade secret protection. Also patents expire and are not renewable. Obtaining
or protecting our proprietary rights may require us to defend claims of
intellectual property infringement by our competitors. While we are not
currently engaged as a defendant in intellectual property litigation that we
believe will have a material adverse effect, we could become subject to
lawsuits in which it is alleged that we have infringed upon the intellectual
property rights of others.

If any such infringements exist, arise or are claimed in the future, we may
be exposed to substantial liability for damages and may need to obtain licenses
from the patent owners, discontinue or change our processes or products or
expend significant resources to develop or acquire non-infringing technologies.
We cannot assure you that we would be successful in such efforts or that such
licenses would be available under reasonable terms. Our failure to develop or
acquire non-infringing technologies or to obtain licenses on acceptable terms
or the occurrence of related litigation itself could have a material adverse
effect on our operating results and financial condition.

Our future business could be adversely affected by delays in our development of
compound semiconductor technology.

We are developing process technology to manufacture compound semiconductors
such as gallium arsenide (GaAs), indium gallium phosphide (InGaP), silicon
germanium (SiGe), indium gallium arsenide phosphide (InGaAsP) and silicon
carbide (SiC) primarily to manufacture power amplifiers and certain other
components. We are pursuing this development effort with a third party foundry.
We cannot guarantee that our efforts will result in commercially successful
products. Certain of our competitors are already offering this capability and
our customers may purchase their requirements for these products from our
competitors. The third party foundries that we use may delay or fail to deliver
to us technology and products. Our business and prospects could be materially
and adversely affected by delay or our failure to develop this technology.

Future compound semiconductor products may not successfully compete with
silicon-based products.

Our choices of technologies for development and future implementation may
not reflect future market demand. The production of GaAs, InGaP, SiGe, InGaAsP
or SiC integrated circuits is more costly than the production of silicon
circuits, and we believe it will continue in the future to be more costly. The
costs differ

5
<PAGE>

because of higher costs of raw materials, lower production yields and higher
unit costs associated with lower production volumes. Silicon semiconductor
technologies are widely used process technologies for integrated circuits, and
these technologies continue to improve in performance. As a result, we must
offer products that provide vastly superior performance to that of silicon for
specific applications in order for them to be competitive with silicon
products. If we do not offer products that provide sufficiently superior
performance to offset the cost differential and otherwise successfully compete
with silicon-based products, our operating results may be materially and
adversely affected. In addition, other alternatives exist and are being
developed, and may have superior performance or lower cost.

We may not be able to develop new products to satisfy changes in demand.

We cannot assure you that we will successfully identify new product
opportunities and develop and bring products to market in a timely and cost-
effective manner, or that products or technologies developed by others will not
render our products or technologies obsolete or noncompetitive. In addition, to
remain competitive, we must continue to reduce package sizes, improve
manufacturing yields and expand our sales. We may not be able to accomplish
these goals.

We must commit resources to product production prior to receipt of purchase
commitments and could lose some or all of the associated investment.

We sell products primarily pursuant to purchase orders for current delivery,
rather than pursuant to long-term supply contracts. Many of these purchase
orders may be revised or canceled without penalty. As a result, we must commit
resources to the production of products without any advance purchase
commitments from customers. Our inability to sell products after we devote
significant resources to them could have a material adverse effect on our
business, financial condition and results of operations.

Variability of our manufacturing yields may affect our gross margins.

Our manufacturing yields vary significantly among products, depending on the
complexity of a particular integrated circuit's design and our experience in
manufacturing that type of integrated circuit. We have in the past experienced
difficulties in achieving planned yields, which have adversely affected our
gross margins.

The fabrication of integrated circuits is a highly complex and precise
process. Problems in the fabrication process can cause a substantial percentage
of wafers to be rejected or numerous integrated circuits on each wafer to be
nonfunctional, thereby reducing yields. These difficulties include:

. defects in masks, which are used to transfer circuit patterns onto our
wafers;

. impurities in the materials used;

. contamination of the manufacturing environment; and

. equipment failure.

Because a large portion of our costs of manufacturing are relatively fixed,
and average selling prices for our products tend to decline over time, it is
critical for us to improve the number of shippable integrated circuits per
wafer and increase the production volume of wafers in order to maintain and
improve our results of operations. Yield decreases can result in substantially
higher unit costs, which could materially and adversely affect our operating
results and have done so in the past. Moreover, our process technology has
primarily used standard silicon semiconductor manufacturing equipment, and
production yields of compound integrated circuits have been relatively low
compared with silicon integrated circuit devices. We cannot assure you that we
will be able to continue to improve yields in the future or that we will not
suffer periodic yield problems, particularly during the early production of new
products or introduction of new process technologies. In either case, our
results of operations could be materially and adversely affected.

6
<PAGE>

Our inventories may become obsolete.

The life cycles of some of our products depend heavily upon the life cycles
of the end products into which our products are designed. We estimate that
current life cycles for cellular and PCS telephone handsets, and in turn our
cellular and PCS products, are approximately 12 to 24 months. Products with
short life cycles require us to manage closely our production and inventory
levels. Inventory may also become obsolete because of adverse changes in end-
market demand. For instance, in fiscal year 1999, we recorded a charge of $6.0
million for obsolete inventory. We may in the future be adversely affected by
obsolete or excess inventories which may result from unanticipated changes in
the estimated total demand for our products or the estimated life cycles of the
end products into which our products are designed.

Our international operations and sales expose us to material risks.

Sales to customers for delivery outside of the United States represented
approximately 22%, 23% and 35% of net sales for fiscal 1997, 1998 and 1999,
respectively. We expect revenues from foreign markets to continue to represent
a significant portion of total revenues. We maintain facilities or contract
with entities in Thailand, the Philippines, Taiwan, Ireland, Hong Kong, India,
Mexico and China. There are risks inherent in doing business internationally,
including:

. changes in, or impositions of, legislative or regulatory requirements,
including tax laws in the United States and in the countries in which we
manufacture or sell our products;

. trade restrictions;

. transportation delays;

. work stoppages;

. economic and political instability;

. changes in import/export regulations, tariffs and freight rates;

. difficulties in collecting receivables and enforcing contracts
generally; and

. currency exchange rate fluctuations.

In addition, the laws of certain foreign countries may not protect our
products or intellectual property rights to the same extent as do U.S. laws.
Therefore, the risk of piracy of our technology and products may be greater in
these foreign countries. Although we have not experienced any material adverse
effect on our operating results as a result of these and other factors, we may
experience a material adverse effect on our financial condition and operating
results in the future.

Delays in beginning production at new facilities, implementing new production
techniques or resolving problems associated with technical equipment
malfunctions could adversely affect our manufacturing efficiencies.

Our manufacturing efficiency will be an important factor in our future
profitability, and we cannot assure you that we will be able to maintain or
increase our manufacturing efficiency. Our manufacturing processes are highly
complex, require advanced and costly equipment and are continually being
modified in an effort to improve yields and product performance. We have from
time to time experienced difficulty in beginning production at new facilities
or in effecting transitions to new manufacturing processes. As a consequence,
we have experienced delays in product deliveries and reduced yields. We may
experience manufacturing problems in achieving acceptable yields or experience
product delivery delays in the future as a result of, among other things,
capacity constraints, construction delays, upgrading or expanding existing
facilities or changing our process technologies, any of which could result in a
loss of future revenues. Our operating results also could be adversely affected
by the increase in fixed costs and operating expenses related to increases in
production capacity if revenues do not increase proportionately.

7
<PAGE>

Interruptions, delays or cost increases affecting our materials, parts,
equipment or subcontractors may impair our competitive position.

Our manufacturing operations depend upon obtaining adequate supplies of
materials, parts and equipment, including silicon, mold compounds and
leadframes, on a timely basis from third parties. Our results of operations
could be adversely affected if we are unable to obtain adequate supplies of
materials, parts and equipment in a timely manner or if the costs of materials,
parts or equipment increase significantly. From time to time, suppliers may
extend lead times, limit supplies or increase prices due to capacity
constraints or other factors. Although we generally use materials, parts and
equipment available from multiple suppliers, we have a limited number of
suppliers for some materials, parts and equipment. While we believe that
alternate suppliers for these materials, parts and equipment are available, an
interruption could materially impair our operations.

Some of our products are assembled and tested by third-party subcontractors.
We do not have any long-term agreements with these subcontractors. As a result,
we may not have assured control over our product delivery schedules or product
quality. Due to the amount of time typically required to qualify assemblers and
testers, we could experience delays in the shipment of our products if we are
forced to find alternate third parties to assemble or test them. Any product
delivery delays in the future could have a material adverse effect on our
operating results and financial condition. Our operations and ability to
satisfy customer obligations could be adversely affected if our relationships
with these subcontractors were disrupted or terminated.

We depend on third party subcontractors in Asia for assembly and packaging
of a portion of our products. The packaging of our products is performed by a
limited group of subcontractors and some of the raw materials included in our
products are obtained from a limited group of suppliers. Although we seek to
reduce our dependence on our sole and limited source suppliers, disruption or
termination of any of these sources could occur and such disruptions or
terminations could harm our business and operating results. In the event that
any of our subcontractors were to experience financial, operational, production
or quality assurance difficulties resulting in a reduction or interruption in
supply to us, our operating results would suffer until alternate
subcontractors, if any, became available.

Our fixed costs may reduce operating results if our sales fall below
expectations.

Our expense levels are based, in part, on our expectations as to future
sales. Many of our expenses, particularly those relating to our capital
equipment and manufacturing overhead, are relatively fixed. The decreasing lead
times between orders and shipments in our customers' ordering practices could
adversely affect our ability to project future sales. We may be unable to
reduce spending quickly enough to compensate for reductions in sales.
Accordingly, shortfalls in sales may materially and adversely affect our
operating results.

Our reliance on government contracts for a portion of our sales could have a
material adverse effect on our results of operations.

Some of our sales in fiscal year 1999 were derived from customers whose
principal sales were to the United States Government. If we experience
significant reductions or delays in procurements of our products by the United
States Government or terminations of government contracts or subcontracts, our
operating results could be materially and adversely affected. Generally, the
United States Government and its contractors and subcontractors may terminate
their contracts with us for cause or for convenience. We have in the past
experienced terminations of government contracts. Certain contracts are also
subject to price renegotiation in accordance with U.S. Government procurement
provisions. We cannot guarantee that we will not experience terminations or
renegotiations of government contracts in the future. A portion of our sales
are to military and aerospace markets, which are subject to the uncertainties
of governmental appropriations and national defense policies and priorities.
These sales are derived from direct and indirect business with the U.S.
Department of Defense, or DOD, and other U.S. government agencies. Since fiscal
year 1990, we have experienced declining defense-related sales, primarily as a
result of contract award delays and reduced military program funding.
Furthermore, on August 22, 1994, the DOD adopted acquisition reform.
Thereafter, the policy has been to utilize best commercial practices instead of
mandatory use of military standard parts. Military-related business has
declined as a percentage of net sales since fiscal year 1990.

8
<PAGE>

There may be unanticipated costs associated with increasing our capacity.

We anticipate that any future growth of our business will require increased
manufacturing capacity. We expect to convert a portion of our existing silicon
device manufacturing capacity to compound semiconductor production capability.
Expansion activities such as these are subject to a number of risks, including:

. unavailability or late delivery of the advanced, and often customized,
equipment used in the production of our products;

. delays in bringing new production equipment on-line;

. delays in supplying products to our existing customers; and

. unforeseen environmental or engineering problems relating to existing or
new facilities.

These and other risks may affect the ultimate cost and timing of our present
expansion or any future expansion of our capacity.

We may fail to attract or retain the qualified technical, sales, marketing and
managerial personnel required to operate our business successfully.

Our future success depends, in part, upon our ability to attract and retain
highly qualified technical, sales, marketing and managerial personnel.
Personnel with the necessary expertise are scarce and competition for personnel
with these skills is intense. Also, attrition in personnel can result from,
among other things, changes related to acquisitions, as well as retirement or
disability. We may not be able to retain existing key technical, sales,
marketing and managerial employees or be successful in attracting, assimilating
or retaining other highly qualified technical, sales, marketing and managerial
personnel in the future. If we are unable to retain existing key employees or
are unsuccessful in attracting new highly qualified employees, our business,
financial condition and results of operations could be materially and adversely
affected.

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

Our ability to successfully offer our products in the semiconductor market
requires effective planning and management processes. We continue to increase
the scope of our operations and have increased our headcount. Our past growth,
and our expected future growth, may place a significant strain on our
management systems and resources, including our financial and managerial
controls, reporting systems and procedures. In addition, we will need to
continue to train and manage our workforce worldwide.

We may engage in future acquisitions that dilute the ownership interests of our
stockholders, cause us to incur debt and assume contingent liabilities.

As part of our business strategy, we expect to review acquisition prospects
that would complement our current product offerings, enhance our design
capability or offer other growth opportunities. While we have no current
agreements and no active negotiations underway with respect to any
acquisitions, we may acquire businesses, products or technologies in the
future. In the event of future acquisitions, we could:

. use a significant portion of our available cash, including the cash
proceeds remaining from this offering;

. issue equity securities, which would dilute current stockholders'
percentage ownership;

. incur substantial debt;

. incur or assume contingent liabilities, known or unknown;

9
<PAGE>

. incur amortization expenses related to goodwill or other intangibles;
and

. incur large, immediate accounting write-offs.

Such actions by us could harm our operating results and/or the price of our
common stock.

We have acquired and may continue to acquire other companies and may be unable
successfully to integrate such companies with our operations.

During fiscal years 1998, 1999 and 2000, we acquired six businesses or
companies, and we acquired additional product lines and assets. We may continue
to expand and diversify our operations with additional acquisitions. If we are
unsuccessful in integrating these companies or product lines with our
operations, or if integration is more difficult than anticipated, we may
experience disruptions that could have a material adverse effect on our
business, financial condition and results of operations. Some of the risks that
may affect our ability to integrate or realize any anticipated benefits from
companies we acquire include those associated with:

. unexpected losses of key employees or customers of the acquired company;

. conforming the acquired company's standards, processes, procedures and
controls with our operations;

. coordinating our new product and process development;

. hiring additional management and other critical personnel;

. increasing the scope, geographic diversity and complexity of our
operations;

. difficulties in consolidating facilities and transferring processes and
know-how;

. other difficulties in the assimilation of acquired operations,
technologies or products;

. diversion of management's attention from other business concerns; and

. adverse effects on existing business relationships with customers.

You will be relying on the judgment of our management regarding our use of a
portion of our proceeds.

We will use approximately $39.5 million of the net proceeds of this offering
to repay outstanding debt. We have not designated any specific uses for the
balance of the net proceeds from this offering. We expect to use the balance of
the net proceeds for general corporate purposes, including working capital and
potential acquisitions. Consequently, our management will have significant
flexibility in applying the net proceeds of this offering and will have the
ability to change the application of the proceeds of this offering.

Our products may be found to be defective, product liability claims may be
asserted against us and we may not have sufficient liability insurance.

One or more of our products may be found to be defective after we have
already shipped the products in volume, requiring a product replacement or
recall. We may also be subject to product returns that could impose substantial
costs and have a material and adverse effect on our business, financial
condition and results of operations. Our aerospace (including aircraft),
military, medical and satellite businesses in particular expose us to potential
liability risks that are inherent in the manufacturing and marketing of high
reliability electronic components for critical applications.

We may be subject to product liability claims with respect to our products.
Our product liability insurance coverage may be insufficient to pay all such
claims. Product liability insurance may become too costly for us or may become
unavailable to us in the future. We may not have sufficient resources to
satisfy any product liability claims not covered by our insurance.

10
<PAGE>

Environmental liabilities could adversely impact our financial position.

Federal, state and local laws and regulations impose various restrictions
and controls on the discharge of materials, chemicals and gases used in our
semiconductor manufacturing processes. In addition, under some laws and
regulations, we could be held financially responsible for remedial measures if
our properties are contaminated or if we send waste to a landfill or recycling
facility that becomes contaminated, even if we did not cause the contamination.
Also, we may be subject to common law claims if we release substances that
damage or harm third parties. Further, future changes in environmental laws or
regulations may require additional investments in capital equipment or the
implementation of additional compliance programs in the future. Any failure to
comply with environmental laws or regulations could subject us to serious
liabilities and could have a material adverse effect on our operating results
and financial condition.

In the conduct of our manufacturing operations we have handled and do handle
materials that are considered hazardous, toxic or volatile under federal, state
and local laws. The risk of accidental release of such materials cannot be
completely eliminated. In addition, we operate or own facilities located on or
near real property that was formerly owned and operated by others. These
properties were used in ways that involved such hazardous materials.
Contaminants may migrate from or within or through property. These risks may
give rise to claims. Where third parties are responsible for contamination, the
third parties may not have funds, or make funds available when needed, to pay
remediation costs imposed under environmental laws and regulations.

In Broomfield, Colorado, we have an agreement with prior owners of our
property concerning clean-up costs associated with TCE and other contaminants
present in the soil and groundwater. We have agreed to pay 10% and they have
agreed to pay 90% of these costs. They have also agreed to indemnify us from
claims by third parties. We are not yet able to predict a possible range of the
total costs that may be incurred in connection with this property.

Some of our facilities are located near major earthquake fault lines.

Our corporate headquarters, two of our major operating facilities, and
certain other critical business operations are located near major earthquake
fault lines. We could be materially and adversely affected in the event of a
major earthquake. Although we maintain earthquake insurance, the insurance
coverage may be insufficient, and in the future our insurance coverage may be
limited or discontinued.

Delaware law and our charter documents contain provisions that could discourage
or prevent a potential takeover of our company that might otherwise result in
our stockholders receiving a premium over the market price for their shares.

Provisions of Delaware law and our certificate of incorporation and bylaws
could make more difficult the acquisition of our company by means of a tender
offer, a proxy contest, or otherwise, and the removal of incumbent officers and
directors. These provisions include:

. Section 203 of the Delaware General Corporation Law, which prohibits a
merger with a 15%-or-greater stockholder, such as a party that has
completed a successful tender offer, until three years after that party
became a 15%-or-greater stockholder; and

. the authorization in the certificate of incorporation of undesignated
preferred stock, which could be issued without stockholder approval in a
manner designed to prevent or discourage a takeover.

The volatility of our stock price could affect your investment in our stock and
our future financial position.

The market price of our stock has fluctuated widely. Between November 11,
1998 and November 23, 1999 our common stock price dropped from approximately
$13.75 to $6.25 per share. Between November 23, 1999

11
<PAGE>

and March 13, 2000, the price of our common stock rose from approximately $6.25
to an intra-day high of $51.00 per share. At the close of business on May 19,
2000, the price of our common stock was $26.875 per share. The current market
price of our common stock may not be indicative of future market prices, and we
may not be able to sustain or increase the value of your investment in our
common stock.

Declines in the market price of our stock would adversely affect our ability
to retain personnel with higher-priced stock incentives, to acquire businesses
or assets in exchange for stock and/or to conduct future financing activities
with the sale of stock.

We may not make the sales that are indicated by our order backlog and our
backlog number may become less meaningful.

Lead times for the release of purchase orders depend upon the scheduling
practices of individual customers, and delivery times of new or non-standard
products can be affected by scheduling factors and other manufacturing
considerations. The rate of booking new orders can vary significantly from
month to month. Customers frequently change their delivery schedules or cancel
orders. For these various reasons, our order backlog may not be an indication
of future sales.

As the percentage of our business represented by space/satellite and
military products declines, we anticipate that backlog will become less
meaningful. Our space/satellite business was characterized by long lead times;
however our other end markets tend to place orders with short lead times.
Prospective investors should not place undue reliance on our backlog numbers or
changes in backlog numbers. We determine backlog based on firm orders which are
scheduled for delivery within 12 months.

There may be some potential effects of system outages.

Risks are presented by electrical or telecommunications outages, computer
hacking or other general system failure. To try to manage our operations
efficiently and effectively, we rely heavily on our internal information and
communications systems and on systems or support services from third parties.
Any of these are subject to failure. For instance, we believe that our Y2K
project teams identified all of our material Y2K issues in the course of our
assessments, and we believe that no material Y2K failures will be uncovered in
the future. However, given the pervasiveness and the complexity of the issues,
both internal and external, problems may exist or arise. System-wide or local
failures that affect our information processing could have material adverse
effects on our business, financial condition, results of operations and cash
flows. In addition, insurance coverage for the risks described above may be
unavailable.

There may be potential U.S. tax effects on foreign purchasers of common stock.

Each prospective purchaser should consult a tax advisor with respect to
current and possible future tax consequences of acquiring, holding and
disposing of common stock as well as any tax consequences that may arise under
the laws of the U.S., any state in the U.S., or of any municipality or other
local taxing jurisdiction. In addition, if you are not a citizen or resident of
the U.S., or a corporation or partnership created in or organized under the
laws of the U.S., or any political subdivision thereof, then you should consult
your tax advisor about U.S. federal income and estate taxes, as well as
foreign, state and local tax consequences that may be relevant to you in light
of your personal circumstances.

Special note regarding forward looking statements.

Some of the statements in this prospectus or incorporated by reference are
forward-looking, including, without limitation, the statements under the
captions "Prospectus Summary," "Risk Factors," "Management's Discussion and
Analysis of Financial Condition and Results of Operations" and "Business." You
can identify these statements by the use of words like "may," "will," "could,"
"should," "project," "believe," "anticipate," "expect," "plan," "estimate,"
"forecast," "potential," "intend," "continue" and variations of

12
<PAGE>

these words or comparable words. In addition, all of the non-historical
information herein is forward-looking. Forward-looking statements do not
guarantee future performance and involve risks and uncertainties. Actual
results may differ substantially from the results that the forward-looking
statements suggest for various reasons, including those discussed under "Risk
Factors." These forward-looking statements are made only as of the date of this
prospectus. We do not undertake to update or revise the forward-looking
statements, whether as a result of new information, future events or otherwise.

The forward-looking statements included in this prospectus are based on,
among other items, current assumptions that we will be able to meet our current
operating cash and debt service requirements, that we will be able to
successfully resolve disputes and other business matters as anticipated, that
competitive conditions within the semiconductor, integrated circuit and custom
diode assembly industries will not affect us materially or adversely, that we
will retain existing key personnel, that our forecasts will reasonably
anticipate market demand for our products, and that there will be no other
material adverse change in our operations or business. Other factors that could
cause results to vary materially from current expectations are discussed
elsewhere in this prospectus. Assumptions relating to the foregoing involve
judgments that are difficult to make and future circumstances that are
difficult to predict accurately or correctly. Forecasting and other management
decisions are subjective in many respects and thus susceptible to
interpretations and periodic revisions based on actual experience and business
developments, the impact of which may cause us to alter our forecasts, which
may in turn affect our results. Readers are cautioned against giving undue
weight to any of our forward-looking statements.

13
<PAGE>

USE OF PROCEEDS

Our net proceeds from this offering will be approximately $50.3 million,
based on an estimated public offering price of $26.875 per share and after
deducting the estimated underwriting discount and offering expenses. If the
underwriters exercise their over-allotment option in full, our net proceeds are
estimated to be $58.8 million. We will not receive any of the proceeds from the
sale of shares by the selling stockholders.

We anticipate using the net proceeds to us from this offering to:

. repay all of the indebtedness outstanding under our bank credit
agreement, approximately $39.5 million; and

. provide funds for general corporate purposes, including capital
expenditures and possible acquisitions.

Our bank credit agreement requires us to use a portion of our net proceeds
from this offering to repay all of our indebtedness under this agreement. In
any event, we must repay our indebtedness under this agreement in full by March
2003. After repayment, the revolving portion of our bank credit agreement would
continue to be available for our use. Indebtedness under our bank credit
agreement accrues interest at variable rates. At April 2, 2000, the weighted
average interest rate on our bank credit agreement borrowings was 8.70%.
Amounts borrowed from the bank within the past twelve months were used to
acquire LinFinity Microelectronics, Microsemi Microwave Products and Micro
WaveSys, Inc.

We currently have no agreements and are not in active negotiations with
respect to any future acquisitions. Until we use the net proceeds as described
above, we intend to invest the net proceeds in short-term government securities
or other investment grade interest-bearing obligations.

14
<PAGE>

PRICE RANGE OF COMMON STOCK AND DIVIDEND POLICY

Our common stock is traded on the Nasdaq National Market under the symbol
"MSCC." The following table sets forth the high and low closing prices at which
our common stock has traded, as reported on the Nasdaq National Market.

<TABLE>
<CAPTION>
Price Range
------------------
High Low
-------- ---------
<S> <C> <C>
Fiscal Year Ended September 27, 1998
1st Quarter................................................ $17 3/4 $13 7/8
2nd Quarter................................................ 22 15 1/2
3rd Quarter................................................ 16 1/2 9 15/16
4th Quarter................................................ 11 1/2 6 5/8

Fiscal Year Ended October 3, 1999
1st Quarter................................................ $12 7/8 $ 7 3/8
2nd Quarter................................................ 12 3/4 7
3rd Quarter................................................ 9 7/8 7 1/4
4th Quarter................................................ 10 1/4 7 1/16

Fiscal Year Ending October 1, 2000
1st Quarter................................................ $ 8 7/8 $ 6 11/16
2nd Quarter................................................ 48 8 7/16
3rd Quarter (through May 19, 2000)......................... 34 1/16 18 11/16
</TABLE>

On May 19, 2000, the last reported sale price of the common stock on the
Nasdaq National Market was $26.875 per share. There were approximately 465
record holders of our common stock as of October 3, 1999.

We have not paid dividends in the last five years and have no current plans
to do so.

15
<PAGE>

CAPITALIZATION

The following table sets forth our unaudited cash and cash equivalents and
capitalization as of April 2, 2000, as adjusted to give effect to our sale and
issuance of 2,000,000 shares of common stock in this offering at an assumed
price of $26.875 per share and application of our net proceeds from the sale.
You should read this table in conjunction with "Selected Consolidated Financial
Data," "Management's Discussion and Analysis of Financial Condition and Results
of Operations" and our consolidated financial statements, all of which are
included elsewhere in this prospectus.

<TABLE>
<CAPTION>
April 2, 2000
------------------
As
Actual Adjusted
-------- --------
(in thousands)
<S> <C> <C>
Cash and cash equivalents.................................. $ 6,236 $ 17,030
======== ========
Total debt, including current portion...................... $ 55,119 $ 15,619
-------- --------
Stockholders' equity:
Common stock, $0.20 par value; authorized 20,000,000
shares; 11,452,000 shares issued, actual; 13,452,000
shares issued, as adjusted ............................. 2,291 2,691
Capital in excess of par value of common stock .......... 57,788 107,682
Retained earnings........................................ 35,721 35,721
Accumulated other comprehensive loss..................... (998) (998)
-------- --------
Total stockholders' equity................................. 94,802 145,096
-------- --------
Total capitalization....................................... $149,921 $160,715
======== ========
</TABLE>

16
<PAGE>

SELECTED CONSOLIDATED FINANCIAL DATA
(in thousands, except per share data)

You should read the following selected consolidated financial data along
with "Management's Discussion and Analysis of Financial Condition and Results
of Operations" and our consolidated financial statements and the related notes,
each of which is included in this prospectus. We derived the income statement
data for the three years in the period ended October 3, 1999 and the balance
sheet data as of September 27, 1998 and October 3, 1999 from our consolidated
financial statements, which have been audited by PricewaterhouseCoopers LLP,
independent accountants, and are included in this prospectus. We derived the
income statement data for the two years in the period ended September 29, 1996
and the balance sheet data as of September 30, 1995, September 29, 1996 and
September 28, 1997 from our audited consolidated financial statements, which
are not included in this prospectus. We derived the income statement data for
the six months ended April 4, 1999 and April 2, 2000 and the balance sheet data
as of April 2, 2000 from our unaudited consolidated financial statements, which
are included in this prospectus, and the balance sheet data as of April 4, 1999
from our unaudited consolidated financial statements, which are not included in
this prospectus. In the opinion of our management, the unaudited financial
information includes all adjustments, consisting of only normal recurring
adjustments, considered necessary for a fair presentation of such information.
Our results of operations for the six-month period ended April 2, 2000 are not
necessarily indicative of the results that we may achieve for the full fiscal
year.

<TABLE>
<CAPTION>
Fiscal Years Ended Six Months Ended
------------------------------------------------------------------ ------------------
September 30, September 29, September 28, September 27, October 3, April 4, April 2,
1995 1996 1997 1998 1999 1999 2000
------------- ------------- ------------- ------------- ---------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
Income Statement Data:
Net sales............... $133,881 $157,435 $163,234 $164,710 $185,081 $ 78,908 $115,560
Cost of sales........... 97,331 114,300 117,274 117,425 144,211 57,702 84,833
-------- -------- -------- -------- -------- -------- --------
Gross profit........... 36,550 43,135 45,960 47,285 40,870 21,206 30,727
-------- -------- -------- -------- -------- -------- --------
Operating expenses:
Selling................ 7,864 9,027 9,226 10,939 14,010 6,500 9,127
General and
administrative........ 12,352 13,916 12,833 13,839 14,424 5,684 9,021
Amortization of
goodwill and
intangible assets..... 63 221 221 516 1,395 570 903
Research and
development........... 755 1,020 1,161 1,532 4,002 755 5,075
Acquired in-process
research and
development........... -- -- -- -- 1,950 -- 2,510
-------- -------- -------- -------- -------- -------- --------
Total operating
expenses............... 21,034 24,184 23,441 26,826 35,781 13,509 26,636
-------- -------- -------- -------- -------- -------- --------
Income from operations.. 15,516 18,951 22,519 20,459 5,089 7,697 4,091
-------- -------- -------- -------- -------- -------- --------
Other income (expenses):
Interest expense....... (5,022) (4,440) (3,684) (2,148) (3,112) (963) (2,381)
Other.................. (234) (545) (329) (50) (36) 50 22
-------- -------- -------- -------- -------- -------- --------
Total other (expenses).. (5,256) (4,985) (4,013) (2,198) (3,148) (913) (2,359)
-------- -------- -------- -------- -------- -------- --------
Income before income
taxes.................. 10,260 13,966 18,506 18,261 1,941 6,784 1,732
Provision for income
taxes.................. 4,207 5,866 7,455 6,939 442 2,510 572
-------- -------- -------- -------- -------- -------- --------
Net income.............. $ 6,053 $ 8,100 $ 11,051 $ 11,322 $ 1,499 $ 4,274 $ 1,160
======== ======== ======== ======== ======== ======== ========
Earnings per share:
Basic.................. $ 0.79 $ 1.03 $ 1.30 $ 1.05 $ 0.13 $ 0.38 $ 0.11
Diluted................ $ 0.64 $ 0.80 $ 1.03 $ 0.98 $ 0.13 $ 0.37 $ 0.10
Shares used in per share
calculation:
Basic.................. 7,659 7,828 8,493 10,735 11,131 11,337 11,019
Diluted................ 11,606 11,772 11,901 11,956 11,244 11,449 11,418

<CAPTION>
September 30, September 29, September 28, September 27, October 3, April 4, April 2,
1995 1996 1997 1998 1999 1999 2000
------------- ------------- ------------- ------------- ---------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
Balance Sheet Data:
Cash and cash
equivalents............ $ 3,965 $ 4,059 $ 6,145 $ 9,610 $ 7,624 $ 5,800 $ 6,236
Working capital......... 45,714 49,556 55,813 57,063 43,050 53,924 44,627
Total assets............ 103,534 113,014 135,194 145,088 181,601 144,012 191,465
Long-term debt.......... 48,398 46,420 47,621 18,667 31,381 17,716 30,215
Stockholders' equity.... 21,110 29,408 41,909 87,017 82,444 85,547 94,802
</TABLE>

17
<PAGE>

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

We were incorporated in 1960 and operated as a supplier of high reliability
discrete semiconductor products to the military and aerospace markets. In the
mid-1980's, we began to apply these capabilities to supply high reliability
products to the implantable medical market. In 1987, we raised $40 million
through the issuance of convertible debentures to fund internal growth and
acquisitions in these markets. In recent years, we have made acquisitions and
established alliances to enter the mobile connectivity and communications
markets.

In April 1999, we completed the acquisition of LinFinity Microelectronics,
Inc., or LinFinity, a supplier of analog and mixed signal ICs for power
management applications. In June 1999, we completed the acquisition of L3 Narda
Microwave Semiconductor, a supplier of varactor tuning diodes which serves
communications products OEMs. We now call this business Microsemi Microwave
Products, or MMP. In February 2000, we completed the acquisition of the HBT
Business Products Group of Infinesse, which facilitates our entry into the
mobile handset power amplifier business. We call this business Micro WaveSys.

Our sales are derived principally from sales of our semiconductor products
to electronic systems OEMs. In fiscal year 1999, sales to our eighty largest
customers accounted for 70% of our total revenues, and no single customer
represented more than 6% of our total sales.

We sell our products, through our direct sales force, manufacturers'
representatives and distributors, to our domestic and international customers.
We recognize revenues at the time of shipment. The evaluation and qualification
cycle prior to the initial sale for our military, space and medical products
may span up to a year or more, while the sales cycle for our other products is
usually considerably shorter. Sales to customers for delivery outside the
United States represented approximately 22%, 23% and 35% of net sales for
fiscal years 1997, 1998 and 1999, respectively. We expect revenues from foreign
markets to continue to represent a significant portion of total revenues. We
maintain facilities in or contract with significant operations in Thailand, the
Philippines, Taiwan, Ireland, Hong Kong, India, Mexico and China.

Our cost of sales consists of purchased products, materials, salaries and
related expenses for manufacturing personnel, manufacturing overhead and
warranty expense. We outsource a portion of our assembly and testing
operations, and we conduct wafer fabrication, engineering, quality assurance,
test and assembly at our domestic plants.

Our gross profit margins vary among our product families. Our gross margins
are generally lower for low cost commodity products. Our overall gross margins
have fluctuated from period to period as a result of shifts in product mix, the
introduction of new products, decreases in average selling prices and our
ability to reduce product costs.

Selling expenses consist primarily of commissions paid to manufacturers'
representatives, salaries and related expenses for personnel engaged in sales,
marketing and field support activities and other costs associated with the
promotion of our products. We intend to pursue aggressive selling and marketing
campaigns. We expect that our sales and marketing expenses will increase in
future periods.

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General and administrative expenses consist primarily of salaries and
related expenses for administrative, finance and human resources personnel,
professional fees and other corporate expenses. We expect that, in support of
our continued growth and our operations as a public company, general and
administrative expenses will continue to increase, in absolute terms, for the
foreseeable future.

Research and development expenses consist primarily of salaries and related
expenses for design engineers and other technical personnel, the costs of
developing prototypes and fees paid to consultants. We charge all research and
development expenses to operations as incurred. Additionally, research and
development acquired through acquisitions is charged to operations in the
period the acquisition is completed. We believe that continued investment in
research and development is critical to our long-term success. We expect that
our research and development expenses will increase from present levels.

The following table sets forth items included in selected income statement
data as percentages of net sales.

<TABLE>
<CAPTION>
Fiscal Years Ended Six Months Ended
-------------------------------------- ------------------
September 28, September 27, October 3, April 4, April 2,
1997 1998 1999 1999 2000
------------- ------------- ---------- -------- --------
<S> <C> <C> <C> <C> <C>
Net sales............... 100.0 % 100.0 % 100.0 % 100.0 % 100.0 %
Cost of sales........... 71.8 71.3 77.9 73.1 73.4
Gross profit............ 28.2 28.7 22.1 26.9 26.6

Operating expenses:
Selling............... 5.7 6.6 7.6 8.2 7.9
General and
administrative....... 7.9 8.4 7.8 7.2 7.8
Amortization of
goodwill and
intangible assets.... 0.1 0.3 0.8 0.7 0.8
Research and
development.......... 0.7 0.9 2.2 1.0 4.4
Acquired in-process
research and
development.......... -- -- 1.1 -- 2.2
Total operating
expenses............. 14.4 16.3 19.3 17.1 23.0
Income from operations.. 13.8 12.4 2.7 9.8 3.5

Other income (expenses):
Interest expense...... (2.3) (1.3) (1.7) (1.2) (2.2)
Other................. (0.2) -- -- 0.1 --
Total other expenses.. (2.5) (1.3) (1.7) (1.2) (2.0)

Income before income
taxes.................. 11.3 11.1 1.0 8.6 1.5
Provision for income
taxes.................. 4.6 4.2 0.2 3.2 0.5
Net income.............. 6.8 6.9 0.8 5.4 1.0
</TABLE>

Results of Operations for the Six Months Ended April 2, 2000 Compared to the
Six Months Ended April 4, 1999

The six months ended April 2, 2000 comprised 26 weeks, and the six months
ended April 4, 1999 comprised 27 weeks.

Net sales for the first six months of fiscal year 2000 increased $36.7
million to $115.6 million from $78.9 million for the first six months of
fiscal year 1999. This increase was attributable primarily to higher sales of
our power management and RF products to the mobile connectivity,
telecommunications and computers/peripherals markets. The increase in sales
for the first six months of fiscal year 2000 included $36.1 million from the
LinFinity and MMP divisions, which we acquired in April and June of 1999,
respectively.

Gross profit increased $9.5 million to $30.7 million, or 26.6% of sales,
for the first six months of fiscal year 2000 from $21.2 million, or 26.9% of
sales, for the first six months of fiscal year 1999. The increase in

19
<PAGE>

gross profit was due to higher total sales. Gross profit for the first six
months of fiscal year 2000 included $13.3 million from the LinFinity and MMP
divisions. Gross profit for the first six months of fiscal 2000 (excluding
LinFinity and MMP) decreased $3.8 million compared to the same period of the
prior fiscal year. This decrease and the decline in gross profit percentage to
21.9% (excluding LinFinity and MMP) were due to lower capacity utilization and
lower shipments in the space/satellite business at certain subsidiaries.

Selling and general and administrative expenses increased $6.0 million to
$18.1 million for the first six months of fiscal year 2000, compared to the
corresponding period of the prior year. The increase was primarily due to the
additions of LinFinity and MMP.

Research and development for the first six months of fiscal year 2000
increased $4.3 million to $5.1 million from $0.8 million for the corresponding
period of fiscal year 1999. The increase was due to higher spending to develop
our power management and RF products for the mobile connectivity,
telecommunications, medical and computers/peripherals markets.

The charge for acquired in-process research and development of $2.5 million
in the first six months of fiscal year 2000 was related to our acquisition of
the assets of the HBT Business Products Group (now called Micro WaveSys, Inc.)
of Infinesse Corporation in February 2000.

Interest expense for the first six months of fiscal year 2000 increased by
$1.4 million to $2.4 million due to increases in borrowings to finance the
LinFinity and MMP acquisitions, as compared with the corresponding period in
fiscal year 1999.

Our effective income tax rates of 37.0% and 33.0% in the six months ended
April 4, 1999 and April 2, 2000, respectively, were the combined result of
taxes computed on consolidated income. The lower effective tax rate in the
current year period is primarily attributable to adjustments to accrual rates,
due in significant part to a higher proportion of income earned within lower
tax rate jurisdictions.

Results of Operations for Fiscal Year 1999 Compared to Fiscal Year 1998

Net sales for fiscal year 1999 increased $20.4 million to $185.1 million
from $164.7 million for fiscal year 1998. Our total sales included $27.3
million from our LinFinity and MMP divisions, which we acquired in April and
June 1999, respectively. Excluding sales from LinFinity and MMP, net sales for
the 1999 fiscal year decreased $6.9 million compared to fiscal year 1998.
During fiscal year 1999, the demand for space/satellite products was lower than
in prior years; however, the decrease was partially offset by an increase in
other commercial products.

Gross profit decreased $6.4 million to $40.9 million for the 1999 fiscal
year from $47.3 million for the prior year. Gross profit in fiscal year 1999
included $8.5 million from the LinFinity and MMP divisions. As a percentage of
sales, gross profit decreased to 22.1% for fiscal year 1999 from 28.7% for
fiscal year 1998. The decrease was due to change of product sales mix, with
lower sales of space/satellite products, which typically have higher margins
than other commercial products, the effects of pricing pressure and lower
utilization of plant capacity. Gross profit was also adversely affected by a
$6.0 million inventory charge to cost of sales. The charge was made because of
reductions in estimates of utilization and realizable value of certain
inventories which resulted from recent changes in market conditions and
customer requirements. We have experienced heightened competition and
commercialization of our military business, lower demands for our commercial
space/satellite products and recent initiatives by space/satellite customers to
use lower cost parts in their programs.

Selling and general and administrative expenses increased $3.6 million to
$28.4 million for fiscal year 1999 compared to $24.8 million in fiscal year
1998. The increase was primarily due to the addition of the LinFinity and MMP
divisions and two design centers located in San Jose and San Diego, California.

Research and development increased $2.5 million to $4.0 million for fiscal
year 1999 compared to $1.5 million in fiscal year 1998. The increase was
primarily due to our acquisition of LinFinity in April 1999.

The charge for acquired in-process research and development of $2.0 million
was also related to our LinFinity acquisition.

20
<PAGE>

Interest expense increased $1.0 million to $3.1 million for fiscal year 1999
from $2.1 million in fiscal year 1998, due to increases in borrowings to
finance our acquisitions.

Our effective income tax rates of 23% and 38% for fiscal years 1999 and
1998, respectively, were the combined results of taxes computed on foreign and
domestic income. The decrease in our fiscal year 1999 effective tax rate was
primarily attributable to changes in the proportion of income earned within
various taxing jurisdictions and the tax rates applicable to such taxing
jurisdictions, the benefit of a foreign sales corporation and the benefit of
tax credits.

Results of Operations for Fiscal Year 1998 Compared to Fiscal Year 1997

Net sales for fiscal year 1998 increased $1.5 million to $164.7 million,
from $163.2 million for fiscal year 1997. The increase in sales was primarily
due to our acquisition of BKC Semiconductors, Inc., or BKC, partially offset by
our sale of General Microcircuits, Inc., or GMI. We acquired BKC and Power
Products Corporation, or PPC, in fiscal year 1998. We also sold GMI in fiscal
year 1998. Total sales included $16.0 million generated by GMI, PPC and BKC in
fiscal year 1998. Revenues generated by GMI in fiscal year 1997 were $13.5
million. During fiscal year 1998, the demand for commercial space products was
lower than in prior years; however, the decrease was partially offset by an
increase in other commercial products and military sales.

Gross profit increased $1.3 million to $47.3 million for fiscal year 1998
from $46.0 million for the prior fiscal year due to higher sales. As a
percentage of sales, gross profit increased to 28.7% for fiscal year 1998 from
28.2% for fiscal year 1997. The increase was primarily due to higher gross
profit from PPC and BKC sales compared to lower gross profit for GMI sales in
fiscal year 1997.

Selling and general and administrative expenses increased $2.7 million to
$24.8 million for fiscal year 1998 compared to $22.1 million in fiscal year
1997. The increase was primarily due to the addition of PPC and BKC, partially
offset by the decrease in selling and general and administrative expenses
resulting from the sale of GMI in December 1997.

Research and development expenses increased $0.3 million to $1.5 million for
fiscal year 1998 compared to fiscal year 1997.

Interest expense decreased $1.6 million to $2.1 million for fiscal year 1998
from $3.7 million in fiscal year 1997, due to lower borrowings, principally due
to the conversions of debentures and notes payable into shares of common stock.

Our effective income tax rates of 38% and 40% for fiscal years 1998 and
1997, respectively, were the combined results of taxes computed on foreign and
domestic income. The decrease in our fiscal year 1998 effective tax rate was
primarily attributable to expected changes in the proportion of income earned
within various taxing jurisdictions and the tax rates applicable to such taxing
jurisdictions.

Liquidity & Capital Resources

Net cash provided by operating activities was $15.6 million, $12.6 million
and $16.1 million for fiscal years 1997, 1998 and 1999, respectively. The
increase in cash provided by operating activities in 1999 compared to 1998 was
primarily attributable to increases in non-cash charges for depreciation,
inventories and acquired in-process research and development. The decrease in
cash provided by operating activities in 1998 compared to 1997 was primarily
attributable to increases in inventories and a decrease in accounts payable.

Net cash provided by operating activities was $3.2 million and $11.7 million
for the first six months of fiscal years 1999 and 2000, respectively. The
increase in cash provided by operating activities in fiscal year 2000 compared
to fiscal year 1999 was primarily attributable to non-cash charges for
depreciation, acquired in-process research and development, and changes in
accounts receivable, inventories, other assets, accrued liabilities and income
taxes payable.

Net cash used in investing activities was $11.3 million, $15.6 million and
$40.3 million in 1997, 1998 and 1999, respectively. The increase in fiscal year
1999 compared to fiscal year 1998 was primarily due to our

21
<PAGE>

acquisitions of LinFinity and MMP. The increase in fiscal year 1998, compared
to fiscal year 1997, was primarily due to the acquisition of BKC, partially
offset by the sale of GMI.

Net cash used in investing activities was $2.3 million and $6.9 million for
the first six months of fiscal years 1999 and 2000, respectively. The increase
was primarily due to increased purchases of property and equipment and the
Micro WaveSys acquisition.

Net cash provided by financing activities in 1999 was $6.7 million and $22.3
million for fiscal years 1998 and 1999, respectively. Net cash used in
financing activities was $2.2 million in fiscal year 1997. The net cash
provided by financing activities in fiscal years 1999 and 1998 was proceeds
from bank loans to finance acquisitions, partially offset by payments of our
debt. The net cash used in financing activities in fiscal year 1997 was
primarily a result of payments on our debt.

Net cash used in financing activities was $4.6 million and $5.6 million for
the first six months of fiscal years 1999 and 2000, respectively. The net cash
used in financing activities in the first six months of fiscal year 1999 was
primarily a result of our repurchases of our common stock. The net cash used in
financing activities in the first six months of fiscal year 2000 was primarily
a result of payments on our debt, partially offset by proceeds received from
exercises of stock options.

Our operations in fiscal year 1999 and in the six months ended April 2,
2000, were funded with internally generated funds and borrowings under our
revolving line of credit, which expires in March 2003. Under this line of
credit, we can borrow up to $30.0 million. As of April 2, 2000, $13.5 million
was borrowed, $4.4 million was utilized under an outstanding letter of credit
and $12.1 million was available under this credit facility. At April 2, 2000,
we had $6.2 million in cash and cash equivalents.

In June 1999, we finalized a lease agreement for a building located in Santa
Ana, California. The lease requires a current rental payment of $23,217 per
month. This transaction was recorded as a purchase at the present value of the
lease payments.

In February 2000, we acquired certain assets of the HBT Products Group of
Infinesse Corporation for cash of $1.5 million, common stock of the Company and
debt of $4.5 million. We now call this business Micro WaveSys. Of a total
1,000 authorized shares, we own 800 shares of Micro WaveSys; another 100 shares
are owned by Infinesse Corporation; and there are 100 shares reserved for
future option grants.

Based upon information currently available, we believe that we can meet our
current operating cash and debt service requirements with internally generated
funds together with available borrowings.

Recently Issued Accounting Standard

In June 1998, the FASB issued Statement of Financial Accounting Standards
No. 133, "Accounting for Derivative Instruments and Hedging Activities" ("SFAS
133"), which will become effective for us in fiscal year 2001. SFAS 133
establishes accounting and reporting standards for derivative instruments,
including certain derivative instruments embedded in other contracts
(collectively referred to as derivatives), and for hedging activities. We do
not expect SFAS 133 to materially affect our financial position or results of
operations.

22
<PAGE>

BUSINESS

We are a leading designer, manufacturer and marketer of analog, mixed-signal
and discrete semiconductors. Our semiconductors manage and regulate power,
protect against transient voltage spikes and transmit, receive and amplify
signals. Our products include individual components as well as complete circuit
solutions that enhance our customers' end products by providing battery
optimization, reducing size or protecting circuits. Our commercial products are
used in dynamic high growth mobile connectivity applications, including mobile
phones and handheld Internet devices, and broadband communications applications
such as base stations, wireless LAN, cable and fiber optic systems. These high
growth opportunities have emerged from our ongoing capabilities in designing
and manufacturing semiconductors for military, satellite and medical
applications. Our diverse customer base includes Motorola, Lockheed Martin,
Seagate, Mitsubishi, Guidant, Samsung, Medtronic, Boeing, Palm, Dell and
Compaq.

Industry

The major drivers for these markets include:

. Growth in wireless Internet connectivity and wireless broadband systems
(W-CDMA, IMT-2000, CMDA2000). The build out of multiple wireless
broadband systems increases the need for multiple semiconductor
solutions in both base stations and mobile handsets. These systems also
have the ability to transmit data at higher rates enabling additional
services such as mobile Internet connectivity and other data
applications.

. Growth in sales of mobile phones. According to Strategies Unlimited,
unit sales of mobile phones are expected to grow approximately 25% on a
compound annual basis from 1998 through 2004. Manufacturers continue to
increase the breadth of services available and to reduce the size of
their mobile phones. These factors, combined with lower cost wireless
service, increase the demand for mobile phones.

. Growth in consumer demand for highly sophisticated multipurpose handheld
devices. PDAs and wireless web tablets are allowing consumers to
conveniently take computing with them wherever they travel. According to
International Data Corporation, the demand for PDAs is expected to grow
approximately 27% on a compound annual basis from 1998 through 2003.

. New and emerging wireless or battery-operated applications. Improvements
in semiconductor technologies have created opportunities for other
mobile industrial and commercial applications, such as portable medical
diagnostic equipment, point-of-sale readers and electric vehicles.

. The convergence of voice, video, and data transmission. As voice, video
and data converge into one digital stream, the demands placed on
traditional and emerging transmission systems will change. Service
providers and equipment manufacturers are looking to modify and
supplement existing infrastructures to address these new demands.
Specialized semiconductors, used to increase switching speeds, handle
high power levels and sense multiple optical wavelengths, will enable
the expansion of additional functionalities over the current
infrastructure.

The military and aerospace markets have similar needs for high reliability
semiconductor products to address high performance applications. In these
markets, customers generally have the most stringent requirements for product
robustness and reliability due to their respective end uses, for example in
electronic systems of satellites, missiles and aircraft.

23
<PAGE>

Our Solutions

We offer leading products combining innovative semiconductor design, process
and product packaging solutions that are optimized for a given application
utilizing our system engineering expertise. Many of our customers produce or
develop products in mobile connectivity, communication infrastructure and
computers/peripherals. We first developed our technology and expertise for
military and aerospace, satellite, communications and implantable medical
applications. We have created innovative product solutions that we believe
increase efficiency and play time, reduce component size and costs, enable high
speeds, provide high reliability and robustness, reduce power consumption or
offer other increased functionality relative to competing products in the
marketplace today.

We categorize our product solutions into four general groups:

Our Strategy

. Provide System-Engineered Product Solutions. We continue to identify and
solve circuit and application problems with innovative circuit and
process technologies for power management, RF/microwave and opto
electronic, transient protection and power conditioning. In power
management our existing application-specific standard products, such as
our RangeMAX line of LCD Lamp Drivers, give us a competitive advantage
in power management, size, efficiency and cost effectiveness. Color
PDAs, notebooks, in-flight entertainment, AutoPC and wireless web
tablets are examples of the end applications that benefit from these
features.

. Leverage and Enhance Expertise in Innovative Package Technologies. We
intend to continue our development of packaging technologies that
improve the performance of semiconductor devices. Our proprietary
technologies enable us to meet demanding industry requirements for
significant size reduction and battery optimization. Our packaging
expertise is applied to developing application specific solutions that
enhance our existing and future silicon and compound technology product
solutions. Our Powermite family of products for mobile phone
applications is at least 30% smaller than today's alternative solutions,
while having at least the same power handling capability.

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<PAGE>

. Pursue Strategic Technology Acquisitions and Alliances. We intend to
expand our production capacity, new product development, process
technologies, industry expertise and customer base through acquisitions
and alliances. In recent years we have accelerated and supplemented our
internal growth in commercial markets through key acquisitions of and
alliances with companies that are leaders in the wireless, computing and
mobile connectivity markets. Examples of this strategy include our
acquisition of LinFinity, which provided us with expertise in managing
light, sound and power for computers and peripherals, and our alliance
with Advanced Power Technology, which expanded our implantable medical
product portfolio.

. Develop New Process Technologies for High Growth Markets. We intend to
leverage our core competencies in silicon semiconductor processes to
develop process technologies in advanced compound semiconductors. We are
currently developing compound semiconductors, such as gallium arsenide,
indium gallium phosphide, silicon germanium, indium gallium arsenide
phosphide and silicon carbide to develop products that have superior
performance characteristics versus silicon in wireless, broadband cable
and fiber optic systems.

. Leverage Internal and External Manufacturing Capability. We have strong
internal manufacturing capability as well as access to numerous merchant
market foundries and contract manufacturers. As a result we are able to
optimize the manufacturing model for a given product, end market or
application.

Strategy in Action

The following examples illustrate the effective implementation of our
strategy:

. Development of a Key Product Solution for Palm IIIC and Other PDAs. We
are a manufacturer of pulse width modulator (PWM) integrated circuits
used to vary electric pulses to control the speed of an electric motor.
We are a leader in supplying PWMs to military applications as our
products are capable of withstanding extreme temperatures and delivering
power more efficiently than competitive products. These products were
developed initially to serve military motor control applications in
tanks, planes and missiles. We recently modified this product technology
to vary electric pulses to Cold Cathode Fluorescent Lamps that light TFT
Color LCD Displays (or flat panel displays) in consumer applications.
Our product solution, called RangeMAX, is a system-engineered technology
that optimizes display efficiency, offers full-range lamp dimming and
extends working temperature range. Today, the RangeMAX is used by
companies such as Palm Computing in their handheld Palm IIIC color PDAs
and by Ford Visteon in their Auto PC multimedia and navigational
computers.

. Development of Powermite PIN Diode for Consumer Two-Way Radio
Products. We are a leading supplier of products used to detect
radiation. Our devices, called PIN diodes, are used in sensing the
potentially damaging effects of radiation and turn military electronic
systems on or off. We modified this product technology for use in a
similar sensing circuit required in military mobile communications where
it switched high power radio antennas from transmit to receive. We
enhanced the product offering by combining our chip used in the
radiation detector with our patented high density Powermite packaging
technology. By doing so, we developed a "must have" product solution for
handheld consumer mobile radios that require the power of a military
radio antenna in a fraction of the size. Today, companies such as
Motorola, Research in Motion, Maxon and Yaesu use Powermite PIN Diodes
in their handheld consumer mobile radios and two-way pagers. To
complement this product offering and to build on our success in this end
market, we signed an agreement with Motorola's Semiconductor Components
Group (which later became ON Semiconductor L.L.C.) in December 1999 to
provide additional RF transistor products that are used to generate the
RF transmission signal.

25
<PAGE>

. Development of Undersea Fiber Optic Repeater Products. We have been a
major supplier to global wireless satellite communication programs such
as Teledesic, ICO and GlobalStar. We identified fiber optic systems as
having similarly stringent demands for product quality, reliability and
lifecycle. We supply transient protection devices, high voltage diodes
or opto couplers to Alcatel Submarine Networks, Tyco, Pirelli Lightwave
Transmission Systems and Mitsubishi Electric for undersea fiber optic
repeater networks. With our recent acquisition of the Micro WaveSys
business, we are adding photo-detectors for this market.

Products

We categorize our broad product solutions into power management,
RF/microwave and opto electronic, transient protection and power conditioning.
Significant product families from each category are represented below.

Power Management Products

. RangeMAX Backlight Control Integrated Circuits (ICs). These devices
control the power that lights lamps in handheld and desktop liquid
crystal displays (LCDs). Our patented technology extends dimming range,
saves power and reduces the size of backlight modules. We have developed
specific versions for automotive, computing and handheld applications.

. Class D (Digital) Audio Products. Class D Audio amplifier ICs are used
in energy conscious applications where heat dissipation and high
fidelity sound are important. This product line is based on our proven
PWM technology, which creates a high power amplifier without the need
for heatsinks. This product is ideal for portable audio and automotive
audio applications. Our system engineers have extensive expertise in
optimizing battery efficiency and are developing low power versions of
these amplifiers in order to serve the hearing aid market.

. Low Drop Out (LDO) Regulators. These devices are primarily used to
efficiently step down voltages from a power source to the voltages
required to run a microprocessor and associated circuitry. These devices
integrate, into one system-engineered solution, the functions of
numerous discrete components. Our success with these products has been
primarily in notebook and desktop computers where the integration
provided by these products reduces board-level cost as compared with
discrete component solutions.

. Small Computer Standard Interface (SCSI) Terminators. These integrated
circuits provide industry standard connectivity for cables used between
computing devices and their peripheral devices such as printers,
scanners and keyboards. They match the data rates established to allow
simple interconnection of computing hardware. We offer a broad range of
single and dual termination devices that meet the SCSI specifications.

. Battery Bypass Modules for Satellites. We have developed an industry
standard concept for bypassing faulty satellite batteries while in
orbit. Our patented concept eliminates the need for cooling systems,
which reduces overall satellite weight and lowers launch cost. The
device, which uses a semiconductor element to create a permanent
mechanical battery shut off switch in a weightless environment, is used
by most next generation satellite programs.

. Implantable Cardio Defibrillator Phase Modules. We have provided
individual components to the implantable cardio pacemaker and
defibrillator market for more than 15 years. Using our extensive
knowledge of the system requirements, including circuit topologies and
innovative packaging, we are now offering functional blocks to
defibrillator manufacturers. These manufacturers are increasingly
relying on component manufacturers to provide solutions. Pacemakers and
defibrillators are required to last as long as seven to ten years while
implanted in the human body.

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<PAGE>

RF/Microwave and Opto Electronic Products

. Indium Gallium Phosphide (InGaP) Hetero Junction Bipolar Transistor
(HBT) Power Amplifiers. These devices are monolithic high frequency
integrated circuits that are used to amplify wireless signals. We added
this product group with our acquisition of the Micro WaveSys business.
This subset of products is typically known as radio frequency integrated
circuits (RFICs). Our expertise in this area is in the development of
these high frequency devices used in mobile phones. A combination of
design and process expertise will allow us to provide these products to
3G wireless handset manufacturers.

. Power PIN Diodes. PIN Diodes are used most commonly to switch high
frequency signals. They are typically used in antenna "transmit/receive"
applications where they act as the switch that flips back and forth
between transmit and receive for full duplexing communication. Our high
power PIN diodes allow mobile radio manufacturers to incorporate these
functions into a small package size.

. RF Power Transistors. RFICs and advanced composite semiconductor
materials were developed to allow mobile phone and radio manufacturers
to transmit signals above 1GHz with higher reliability and lower power
consumption. There are several other radio applications that require
much lower frequency devices that take advantage of the low cost of
silicon based structures. Our RF power transistors are silicon devices
used in low frequency mobile radio, portable phone and base station
applications.

. Opto Electronic Products. These products are typically used to isolate
low voltage from high voltage circuits or to convert light to electrical
signals. We have developed a line of opto couplers (photo sensing
elements coupled with a switching element such as a transistor or SCR),
photo voltaic arrays (photo sensing circuits that outputs a high
voltage), and photodetectors (circuits that sense different wavelengths
of light). We supply silicon-based opto electronic products and are now
diversifying our products into compound semiconductor versions for high
speed fiber optic applications.

Transient Protection Products

. Transient Voltage Suppressor (TVS) Arrays. We have taken our IC
packaging expertise acquired with our acquisition of LinFinity and used
it to offer multiple individual TVS devices into one package. System
engineers have opted to use one device that houses two to four dice per
package as opposed to individually packaged components that consume more
circuit board space. Our breadth of TVS offering and packaging expertise
has positioned us to be a leader in this sector of the market.

. Universal Serial Bus (USB) and Gigabit Ethernet Products. These devices
are a subset of our TVSArray products and protect communication ICs used
in high speed communications applications. Our devices can allow
transmission speeds far in excess of available bandwidth today and allow
designers to integrate TVS functions without impeding system
performance.

. TVS Lightning Protection Modules. These products combine as many as 50
TVS devices into one integrated module. These modules are designed to
handle extremely large currents induced by direct lightning strikes or
power surges induced by nearby strikes. The main application for our
high reliability products in this group is protection of avionics
electronics.

. Pacemaker Protection Products. This product group combines two
technologies, TVS and Thyristors, into an integrated solution called a
Thyristor Surge Protection Device. These devices are designed to protect
implanted electronics from destruction during external defibrillation.
These devices allow implantable device manufacturers to reduce this
portion of the circuit by as much as 50%. In implantable electronics,
device size is a key factor in selecting products.

27
<PAGE>

Power Conditioning Products

. Rectifiers. Rectifiers conduct electricity in one direction and block it
in the "reverse" direction. They are used to convert AC into DC which is
used to power electronic equipment. The current carried over power lines
and into homes, offices and factories is alternating current; however,
most electronic equipment requires direct current to operate. We offer a
wide selection of rectifier products including bridge rectifiers, fast
efficient rectifiers, glass-passivated rectifiers, plastic rectifiers
and Schottky rectifiers.

. Small Signal Diodes. Small signal diodes perform various functions such
as signal blocking, routing and switching at lower current levels. These
components are used in a variety of products, including
telecommunications equipment, personal computer motherboards, power
supplies and consumer electronics.

. Small Signal Transistors. Small signal transistors provide amplification
and switching functions. These products provide the critical signal
switching and amplification functions that are essential to most modern
electronic systems.

. Zener Diodes. Zener products are used in a wide variety of specialized
functions for complex electronic circuits. These devices are used as
voltage regulators, voltage reference and voltage suppressors against
electrostatic discharge threats.

. Power Metal Oxide Silicon Field Effect Transistors (MOSFETs). MOSFETs
provide voltage controlled efficient switching functions that are
essential in battery powered applications. We have established alliances
with Advanced Power Technology and Intersil Corporation to offer these
products.

28
<PAGE>

Markets and Customers

We maintain a diversified customer base in the markets we serve. No single
customer accounted for more than 6% of our revenue in fiscal year 1999.
Outlined in the table below are our end markets, end applications and major
customers.

<TABLE>
<CAPTION>
End Markets End Applications Major Customers
- ------------------------------------------------------------------------------------
<S> <C> <C>
Mobile Connectivity Mobile Phones Motorola
Web Tablets Samsung
PDAs Mitsubishi
Pagers Palm
Mobile Radios

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

Telecommunications Fiber Optic Repeaters Alcatel
Base Stations Ericsson
Routers/Hubs Nokia
Telecom Switches Nortel

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

Computers/Peripherals Notebook Computers Compaq
Desktop Computers Dell
Modems Seagate
USB Peripherals Gigabyte
Hard Drives

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

Industrial/Commercial Power Supplies Magnetek
Generators Delco
Welders Mercury Marine
Automotive Lucent

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

Military/Aerospace Avionics Lockheed Martin
Missiles Boeing
Radar Honeywell
Communications Raytheon

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

Space/Satellite Solar Panel Protection Lockheed Martin
Battery Bypass Switches Boeing
Power Distribution Tecstar
Launch Vehicles Bosch
Communications

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

Medical Pacemakers Medtronic
Defibrillators Guidant
Hearing Aids St. Jude Medical
Medical Imaging GE Medical
</TABLE>

Our products are marketed through our direct sales force and domestic
electronic component sales representatives to original equipment manufacturers.
We employ industrial distributors to service our customers' needs for standard
catalog products. For fiscal year 1999, our domestic shipments accounted for
approximately 65% of sales, of which sales representatives and distributors
accounted for approximately 30% and 24%, respectively. We have nine domestic
and three international direct sales offices in metropolitan areas. Shipments
to customers for delivery outside the United States accounted for approximately
35% of fiscal year 1999 sales.

29
<PAGE>

Research and Development

We believe that timely development and introduction of new products are
essential to maintaining our competitive position. The principal focus of our
research and development activities has been to improve processes and to
develop product solutions for high growth markets. We currently conduct most of
our product development efforts in-house. We also employ outside consultants in
order to expand our product design capabilities.

We incurred expense of approximately $1,161,000, $1,532,000 and $4,002,000,
in fiscal years 1997, 1998 and 1999, respectively, for research and
development, none of which was customer sponsored.

During fiscal year 1999, we expended approximately $2,611,000 to develop new
products for computing, wireless and medical applications. In these
applications, we focus our product development on solutions for next generation
handheld computing and mobile connectivity devices as well as implanted medical
products. We have expanded our design engineering base from two to more than 30
experienced analog/mixed signal design engineers in the last year to address
these fast growing markets.

In the satellite and military and aerospace markets minimal amounts (less
than 2% of the total revenues) are spent on research and development. Most of
the research and development expenditures for these markets are targeted at
cost reduction initiatives.

Manufacturing Facilities

Our principal manufacturing operations are located in Santa Ana and Garden
Grove, California; Broomfield, Colorado; Scottsdale, Arizona and Watertown,
Massachusetts. Each facility operates its own wafer processing, assembly,
testing and screening departments. The following table lists our facilities.

<TABLE>
<CAPTION>
Sq. ISO
MSCC Division Location Feet Certifications Type
- ---------------------- ------------------- ------- -------------- ------------------------------
<S> <C> <C> <C> <C>
Corporate Headquarters Santa Ana, CA 123,000 ISO9001 Manufacturer/Wafer Fab
Microsemi LinFinity Garden Grove, CA 115,000 ISO9001 Manufacturer/Wafer Fab/Fabless
Microsemi Scottsdale Scottsdale, AZ 139,000 ISO9001 Manufacturer/Wafer Fab
Microsemi Chatsworth Chatsworth, CA 15,000 Sales Office
Microsemi Colorado Broomfield, CO 110,000 ISO9001 Manufacturer/Wafer Fab
Microsemi PPC Riviera Beach, FL 41,000 ISO9001 Manufacturer/Wafer Fab
Microsemi RF Products Montgomeryville, PA 20,000 Manufacturer/Wafer Fab
Microsemi Watertown Watertown, MA 168,000 ISO9001 Manufacturer/Wafer Fab
Microsemi Microwave
Products Lowell, MA 47,000 Manufacturer/Wafer Fab
Micro Power Products Carlsbad, CA 6,000 Design Center/Fabless
Microsemi Europe Ennis, Ireland 80,000 ISO9002 Assembly
Microsemi Bombay Bombay, India 40,000 Assembly
Microsemi Hong Kong Hong Kong, P.R.C. 38,000 ISO9002 Assembly
</TABLE>

Competition

We encounter differing degrees of competition for our various products,
depending upon the nature of the product and the particular market served.
Generally, the semiconductor industry is highly competitive and subject to
price erosion, and many of our competitors are larger companies with greater
financial resources. We believe that we are distinguished from our competitors
by our comprehensive line of products and our ability to combine these products
into compact, cost-effective packages and system-level solutions. We compete on
the bases of breadth of product line, quality, price, reliability,
service (including technical advice and support), overall performance of the
products and the delivery time to the customer. Some of our current major
competitors are Motorola, Inc., Dallas Semiconductor Corporation, General
Semiconductor, Inc., National Semiconductor Corporation, Texas Instruments,
Inc., Philips Electronics, ON Semiconductor, L.L.C., Fairchild Semiconductor
Corporation, Micrel Incorporated, International Rectifier Corporation, Semtech
Corporation, Linear Technology Corp., Alpha Industries, Inc., Diodes,

30
<PAGE>

Inc., Vishay Intertechnology, Inc. and its subsidiary Siliconix Incorporated.
Some of our competitors in developing markets are Triquint Semiconductor, Inc.,
Mitel Corporation, RF Micro Devices, Inc., Conexant Systems, Inc., Anadigics,
Inc. and Alpha Industries, Inc. We expect intensified competition from existing
competitors and new entrants.

Employees

On April 2, 2000, we employed 1,845 persons domestically including 151 in
engineering, 1,443 in manufacturing, 122 in marketing and 129 in general
management and administration. Additionally, we employ an aggregate of 555
persons in our international operations. None of our employees are represented
by a labor union. We have not experienced a work stoppage, and we believe our
employee relations are good.

Environmental Regulation

While we believe that we have the environmental permits necessary to conduct
our business and that our operations conform to present environmental
regulations, increased public attention has been focused on the environmental
impact of semiconductor operations. In the conduct of our manufacturing
operations, we have handled and do handle materials that are considered
hazardous, toxic or volatile under federal, state and local laws; and
therefore, we are subject to regulations related to the use, storage, discharge
and disposal of the materials. The risk of accidental release of such materials
cannot be completely eliminated. Along with the rest of the semiconductor
industry, we are subject to variable interpretations and governmental
priorities concerning environmental laws and regulations. Environmental
statutes have been interpreted to provide for joint and several liability and
strict liability regardless of actual fault. We may be required to incur costs
to comply with current or future environmental laws or regulations, and our
operations, business, or financial condition could be adversely affected by
such requirements.

In Broomfield, Colorado, the owner of a property located adjacent to a
manufacturing facility owned by one of our subsidiaries had filed suit against
the subsidiary and other parties, claiming that contaminants migrated to his
property, thereby diminishing its value. In August 1995, the subsidiary,
together with former owners of the manufacturing facility, agreed to settle the
claim and to indemnify the owner of the adjacent property for remediation
costs. Although TCE and other contaminants previously used at the facility are
present in soil and groundwater on the subsidiary's property, we vigorously
contest any assertion that the subsidiary caused the contamination. In November
1998, we signed an agreement with three former owners of this facility whereby
the former owners agreed to reimburse us for $530,000 of past costs, assume
responsibility for 90% of all future clean-up costs, and indemnify and protect
us against any and all third-party claims relating to the contamination of the
facility. State and local agencies in Colorado are reviewing current data and
considering study and cleanup options, and it is not yet possible to predict
costs for remediation. In the opinion of management, the final outcome of the
Broomfield, Colorado environmental matter will not have a material adverse
effect on our financial position or results of operations.

In addition, we operate or own other facilities located on or near real
properties that formerly were, or might have been, used in ways that involved
toxic and hazardous materials. In the event of a violation of environmental
laws, we could be held liable for damages and the costs of remediation.

Legal Proceedings

We are involved in various pending or threatened litigation matters arising
out of the normal conduct of our business, including those relating to
commercial transactions, contracts and environmental matters. In the opinion of
management, the final outcome of these matters will not have a material adverse
effect on our financial position or results of operations.

31
<PAGE>

MANAGEMENT

The following table sets forth the name, age and position of each of our
executive officers and directors and certain key employees as of March 31,
2000.

<TABLE>
<CAPTION>
Name Age Title
---- --- -----
<C> <C> <S>
Philip Frey, Jr. 72 Chairman of the Board, President and Chief Executive
Officer

David R. Sonksen 54 Vice President-Finance, Chief Financial Officer,
Treasurer and Secretary

Lane Jorgensen 58 Vice President and General Manager of Microsemi
Santa Ana

Harold R. McKeighan 57 Vice President and General Manager of Microsemi
Scottsdale

James J. Peterson 44 Vice President and General Manager of LinFinity

James R. Shiring 59 Vice President, East Coast Operations

Angelo Santamaria 37 Vice President and General Manager of Microsemi
Watertown

James M. Thomas 62 Vice President Human Resources

Andy T.S. Yuen, Ph.D. 47 Vice President International Operations

Manuel F. Lynch 32 Director of Worldwide Marketing and Business
Development

Ronald Courtois 48 Vice President and General Manager of MicroPower
Products Division

Michael E. Kim, Ph.D. 54 Vice President and General Manager of Micro WaveSys

Brad Davidson 44 Director

H.K. Desai 54 Director

Martin H. Jurick 62 Director

Robert B. Phinizy 73 Director

Joseph M. Scheer 73 Director
</TABLE>

Executive Officers

Philip Frey, Jr. has served as our Chairman of the Board since 1987 and
President and Chief Executive Officer since 1971.

David R. Sonksen has served as our Vice President-Finance, Chief Financial
Officer, Treasurer and Secretary since 1986. Prior to joining us, he was Vice
President and Controller of Western Digital from 1981 to 1986.

Lane Jorgensen has served as our Vice President and General Manager of
Microsemi Santa Ana since 1992. Prior to joining us, he was President of ST
Semiconductor from 1986 to 1992. Prior to that he held management positions
with TRW Semiconductor and Corning Glass.

Harold R. McKeighan has served as our Vice President and General Manager of
Microsemi Scottsdale since 1985 and in 1987 also assumed responsibility for
Microsemi Colorado. Prior to 1985, he held various management positions with
us.

James J. Peterson has served as our Vice President and General Manager of
LinFinity since 1999. Prior to joining us, he was President of LinFinity
Microelectronics from 1997 to 1999 (when we acquired LinFinity); he served as
Vice President of Sales of LinFinity Microelectronics from 1996 to 1997 and
Senior Vice President, Worldwide Sales & Corporate Communications of Texas
Instruments Storage Products Group-Tustin from 1984 to 1996.

32
<PAGE>

James R. Shiring has served as our Vice President, East Coast Operations
since 1998. Prior to joining us, he was President of BKC Semiconductors Inc.
from 1996 to 1998 (when we acquired BKC). Prior to that he was Managing
Director, European Operations of CP Clare Corporation from 1982 to 1995.

Angelo Santamaria has served as our Vice President and General Manager of
Microsemi Watertown since 1997. Prior to assuming his present position, he
served as Operations Manager from 1995 to 1997. He started in 1985 as a process
engineer with the SPD division of Unitrode Corporation, which we acquired in
1992.

James M. Thomas has served as our Vice President Human Resources since 1989
and he was Director of Human Resources from 1981 to 1989. Prior to 1981, he
worked in human resource positions at Silicon Systems.

Dr. Andy T.S. Yuen has served as our Vice President International Operations
since 1989 and previously was manager of our Hong Kong and Bombay facilities
from 1976 to 1989.

Key Employees

Manuel F. Lynch has served as our Director of Worldwide Marketing and
Business Development since 1997. Prior to that he was our Director of Sales
from 1996 to 1997 and Manager of Information Systems and marketing
communications from 1995 to 1996. Prior to joining us, he was Director of
Marketing Communications for Solid State Devices, Inc. from 1990 to 1995.

Ronald Courtois has been Vice President and General Manager of our
MicroPower Products Division since 1999. He was a private consultant from 1998
to 1999. He was Vice President and General Manager of Mitel Semiconductor's
Medical ASIC business (previously operated as ABB HAFO) from 1990 to 1998. From
1980 to 1990, Mr. Courtois held various sales and marketing management
positions with TRW's LSI Products Division, a maker of high performance analog
and digital integrated circuits.

Dr. Michael E. Kim has been the Vice President and General Manager of our
Micro WaveSys business since its formation in February 2000. This business is
based on the RFIC business group from Infinesse Corp. (which was acquired by
Microsemi in February 2000), which was developing voice/data systems and GaAs
HBT RFIC components for commercial wireless applications. Prior to co-founding
Infinesse Corp., Dr. Kim worked at TRW from 1983 to 1992, where he led their
development efforts in GaAs HBT ICs. In addition, from 1978 until joining TRW,
he worked with Rockwell International Science Center in compound semiconductor
process development. Dr. Kim received his Ph.D. in Electrical Engineering and
Computer Science from M.I.T. in 1977.

Directors

Brad Davidson has been a director since 1984. Mr. Davidson has also been
President of Securities Pricing and Research, Inc. since 1986.

H.K. Desai has been a director since March 2000. Mr. Desai has been Chairman
of the Board of QLogic Corporation since 1999, its CEO since 1996, and its
President since 1995. QLogic Corporation is a leading designer and supplier of
semiconductor and board-level input/output, or I/O, and enclosure management
products. From May 1995 to August 1995, he was Vice President, Engineering
(Systems Products) at Western Digital Corporation, a manufacturer of disk
drives. From July 1990 until May 1995, he served as Director of Engineering,
and subsequently Vice President of Engineering of Emulex Corp. From 1980 until
joining Emulex in 1990, Mr. Desai was an Engineering Section manager at Unisys
Corporation, a computer system manufacturer.

33
<PAGE>

Martin H. Jurick has been a director since 1995 and is a private investor
and consultant. He was the Senior Vice President of Corporate Planning and a
director of Silicon Systems, Inc., later a division of Texas Instruments, from
1978 to 1999. He served as a director of Level One Communications from 1991 to
1999.

Robert B. Phinizy has been a director since 1992 and is a private investor
and consultant. He has been a director and the Corporate Secretary of
Genisco/Solaris since 1997. He was formerly Chairman, Chief Executive Officer
and President of Genisco Technology Corp. from 1972 to 1986. He has served as a
director and the Corporate Secretary of BioSonics, Inc. since 1993 and is also
a Retired Captain, United States Navy.

Joseph M. Scheer has been a director since 1994 and is a private investor
and consultant. He served as a director of Rawson-Koenig Inc., Houston, Texas,
from 1991 to 1997. He has served as a Member of the Advisory Board Soligen
Inc., Northridge, California since 1994. He served as a Director of Laserform,
Inc., Auburn Hills, Michigan from 1989 to 1994.

34
<PAGE>

PRINCIPAL AND SELLING STOCKHOLDERS

The following provides certain information with respect to the beneficial
ownership of our common stock as of March 31, 2000, both before and after
giving effect to the sale of shares of common stock in this offering. The
information relates to all of our directors and the named executive officers;
all of our directors and executive officers as a group; and anyone known to us
to be beneficial owner of more than 5% of our common stock.

The table below has been prepared on the assumption that the underwriters
do not exercise their over-allotment option. Some of the information is based
on holders' filings with the SEC, reporting information as of December 31,
1999.

<TABLE>
<CAPTION>
Number of Percentage Percentage
Shares Owned Owned
Beneficially Shares Before After
Name of Beneficial Owner Owned (1) Offered Offering Offering
- ------------------------ ------------ ------- ---------- ----------
<S> <C> <C> <C> <C>
Norman J. Wechsler.............. 1,376,786(2) -- 12.0% 10.2%
Wellington Management Company,
LLP............................ 1,030,300(3) -- 9.0% 7.7%
Philip Frey, Jr. ............... 963,803(4) 194,000 8.4% 5.7%
Brinson Partners, Inc........... 912,645(5) -- 8.0% 6.8%
Dimensional Fund Advisors Inc... 637,634(6) -- 5.6% 4.7%
FMR Corp........................ 606,140(7) -- 5.3% 4.5%
David R. Sonksen................ 47,743(8) 10,000 * *
Lane Jorgensen.................. 44,200(9) -- * *
Harold R. McKeighan............. 28,250(10) -- * *
Andy T.S. Yuen.................. 48,400(11) -- * *
Brad Davidson................... 26,000(12) 8,000 * *
Martin H. Jurick................ 21,000(13) 3,000 * *
Robert B. Phinizy............... 22,000(14) 5,000 * *
Joseph M. Scheer................ 18,000(15) -- * *
All executive officers and
directors as a group........... 1,261,111(16) 220,000 10.9% 7.6%
</TABLE>
- --------
* Less than 1%.
(1) Includes any shares held by or for a spouse or minor child or as a
trustee. Unless otherwise indicated, the person possesses sole investment
and sole voting power. Includes the right to acquire shares of our common
stock under options that are exercisable on, or become exercisable within
60 days after, March 31, 2000.

(2) Includes 1,130,286 shares owned by Wechsler & Co., Inc. His mailing
address is 105 South Bedford Road, Suite 310, Mount Kisco, NY 10549.

(3) Wellington is an investment adviser and shares the power to dispose of all
the shares with its clients and has shared voting power as to 647,900 of
the shares. Wellington's mailing address is 75 State Street Boston, MA
02109.

(4) Includes 36,950 shares under options. Mr. Frey's mailing address is P. O.
Box 26890, Santa Ana, CA 92799-6890.

(5) Brinson has shared dispositive power with respect to all of its shares.
Brinson's mailing address is 209 South LaSalle Street, Chicago, IL 60604-
1295.

(6) Dimensional is an investment advisor and in this role possesses voting and
investment power for shares owned by clients for whom Dimensional acts as
investment manager. Dimensional's mailing address is 1299 Ocean Avenue,
11th Floor, Santa Monica, CA 90401.

(7) FMR Corp.'s mailing address is 82 Devonshire Street, Boston, MA 02109.

35
<PAGE>

(8) Includes 9,800 shares under options.

(9) Includes 38,200 shares under options.

(10) Includes 9,750 shares under options.

(11) Includes 22,150 shares under options.

(12) Includes 16,000 shares under options.

(13) Includes 21,000 shares under options.

(14) Includes 22,000 shares under options.

(15) Includes 16,000 shares under options.

(16) Includes 213,075 shares under options.

Our Relationships with the Selling Stockholders

Philip Frey, Jr. is our Chairman of the Board, President and Chief
Executive Officer and holds the office of President of each of our
subsidiaries, and holds other executive offices and directorships with all of
our various subsidiaries. As shown in the preceding table, Mr. Frey is also an
owner of more than 5% of our common stock. As a participant in our stock
option plans, he owns some shares of our common stock that are registered for
resale. In addition, he was a purchaser of our convertible notes in 1992, and
his shares received upon conversion of the notes have been registered for
resale. Mr. Frey has signed a lock-up agreement and agreed not to sell any
shares of our common stock during the 90 days after this offering, except to
the extent that A.G. Edwards & Sons, Inc. approves, in its sole discretion.

David R. Sonksen is our Vice President-Finance, Chief Financial Officer,
Treasurer and Secretary and holds the office of Vice President and Secretary
of each of our subsidiaries, and holds other executive offices and
directorships with all of our various subsidiaries. As a participant in our
stock option plans, he beneficially owns some shares of our common stock that
are registered for resale. He has signed a lock-up agreement and agreed not to
sell any shares of our common stock during the 90 days after this offering,
except to the extent A.G. Edwards & Sons, Inc. approves, in its sole
discretion.

Martin H. Jurick, Brad Davidson and Robert B. Phinizy are directors.
Messrs. Jurick and Phinizy also have consulting relationships with us. As
participants in our stock option plans, they beneficially own some shares of
our common stock that are registered for resale. They have signed lock-up
agreements and have agreed not to sell any shares of our common stock during
the 90 days after this offering, except to the extent A.G. Edwards & Sons,
Inc. approves, in its sole discretion.

Each selling stockholder's mailing address is Post Office Box 26890, Santa
Ana, California 92799-6890.

36
<PAGE>

DESCRIPTION OF CAPITAL STOCK

We are authorized to issue 20,000,000 shares of Common Stock, $.20 par value
("Common Stock"), of which 11,462,356 shares were issued and outstanding at
April 24, 2000, and 1,000,000 shares of Preferred Stock, $1.00 par value
("Preferred Stock"), of which none was issued and outstanding at the date of
this prospectus.

Common Stock

Each stockholder is entitled to one vote for each share of Common Stock held
of record on all matters to be voted on by stockholders, and stockholders are
not entitled to cumulate votes for the election of directors. Stockholders have
no preemptive rights or other subscription rights. There are no conversion
rights or redemption rights with respect to shares of Common Stock. All
outstanding shares of Common Stock are, and those that we offer hereby will be,
when issued, validly issued, fully paid and nonassessable. Holders of Common
Stock are entitled to such dividends as may be declared by the Board of
Directors out of funds legally available therefor. On our liquidation,
dissolution or winding up, the holders of Common Stock are entitled to receive
pro rata our net assets remaining after the payment of debts, expenses and the
liquidation preference of any outstanding shares of Preferred Stock. The Common
Stock is quoted on the Nasdaq National Market under the symbol "MSCC."

Registration Rights

In June 1992, we granted registration rights with respect to shares of our
common stock that were issuable upon conversion of convertible subordinated
promissory notes. We have filed a registration statement on Form S-3 in order
to register the resale of those shares. Through the present we have maintained
the effectiveness of the Form S-3 registration. We estimate that 325,000 shares
of common stock remain unsold under the Form S-3. Of these shares, 80,000 are
subject to a lock-up agreement as described in "Principal and Selling
Stockholders."

Preferred Stock

Our Board of Directors, pursuant to the Certificate of Incorporation as
amended, is authorized to issue the Preferred Stock in one or more series and
to fix the voting rights, liquidation preferences, dividend rights, conversion
rights, redemption rights and terms, including sinking fund provisions, and
certain other rights and preferences of the Preferred Stock. The Board of
Directors, without stockholder approval, can therefore, issue Preferred Stock
with voting, conversion and other rights that could adversely affect the voting
power and other rights of, and amounts payable with respect to, the Common
Stock. This may be deemed to have a potential anti-takeover effect because the
issuance of Preferred Stock in accordance with such provision may delay, defer
or prevent a change of control regarding us and could adversely affect the
price of our Common Stock.

Delaware Law

We are subject to the provisions of Section 203 of the Delaware General
Corporation 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 after the date of the transaction in
which the person became an interested stockholder, unless either (i) prior to
the date on which the person becomes an interested stockholder, the Board of
Directors approves such transaction or business combination, (ii) the
stockholder acquires more than 85% of the outstanding voting stock of the
corporation (excluding shares held by directors who are officers or held in
certain employee stock plans) upon consummation of such transaction, or (iii)
the business combination is approved by the Board of Directors and by two-
thirds of the outstanding voting stock of the corporation (excluding shares
held by the interested stockholder) at a meeting of stockholders (and not by
written consent). A "business combination" includes a merger, asset sale or
other transaction resulting in a financial benefit to such interested
stockholder. For purposes of Section 203, "interested stockholder" is a person
who, together with affiliates and associates, owns (or within three years
prior, did own) 15% or more of the corporation's voting stock.

Transfer Agent and Registrar

The transfer agent and registrar for our Common Stock is ChaseMellon
Shareholder Services, 400 South Hope Street, 4th Floor, Los Angeles, California
90071, Attention: Stock Transfer Administration.

37
<PAGE>

UNDERWRITING

Subject to the terms and conditions of the underwriting agreement among
Microsemi, the selling stockholders and the representatives on behalf of the
underwriters, the underwriters have agreed severally to purchase from Microsemi
the following number of shares of common stock at the offering price less the
underwriting discounts and commissions set forth on the cover page of this
prospectus.

<TABLE>
<CAPTION>
Number of
Underwriter Shares
----------- ---------
<S> <C>
A.G. Edwards & Sons, Inc............................................
CIBC World Markets Corp.............................................
Needham & Company, Inc..............................................
---------
Total............................................................. 2,220,000
</TABLE>

The underwriting agreement provides that the obligations of the several
underwriters to purchase the shares included in this offering are subject to
certain conditions precedent, and that the underwriters are obligated to take
and pay for all of the shares of common stock offered hereby (other than those
covered by the over-allotment option described below) if any are taken.

The representatives of the underwriters have advised us that they propose to
offer such shares of common stock to the public at the offering price set forth
on the cover page of this prospectus and to certain dealers at such price less
a concession not in excess of $ per share. The underwriters may allow, and
such dealers may re-allow, a concession not in excess of $ per share to
certain other dealers. After the offering, the offering price and other selling
terms may be changed by the underwriters.

We have granted to the underwriters an option, exercisable for 30 days after
the date of this prospectus, to purchase up to 333,000 additional shares of
common stock at the offering price, less the underwriting discounts and
commissions set forth on the cover page of this prospectus, solely to cover
over-allotments. To the extent that the underwriters exercise such option, the
underwriters will become obligated, subject to certain conditions, to purchase
approximately the same percentage of such additional shares as the number set
forth next to such underwriter's name in the preceding table bears to the total
number of shares in such table, and Microsemi will be obligated, pursuant to
the option, to sell such shares to the underwriters.

Microsemi and each of its directors and executive officers, including the
selling stockholders, have agreed not to sell or otherwise dispose of any
shares of common stock for a period of 90 days after the date of this
prospectus without the prior written consent of A.G. Edwards & Sons, Inc. A.G.
Edwards & Sons, Inc. may, in its sole discretion, allow any of these parties to
dispose of common stock or other securities prior to the expiration of such 90-
day period. Except as discussed above, there are, however, no agreements
between A.G. Edwards & Sons, Inc. and these parties that would allow them to do
so as of the date of this prospectus.

The lock-up agreements do not apply to the selling stockholders' sales to
the underwriters contemplated by the underwriting agreement.

38
<PAGE>

The following table summarizes the discounts and commissions that Microsemi
and the selling stockholders will pay to the underwriters in the offering.
These amounts assume both no exercise and full exercise of the underwriters'
option to purchase additional shares of common stock.

<TABLE>
<CAPTION>
Paid by Selling
Paid By Microsemi Stockholders
----------------- -----------------
No Full No Full
Exercise Exercise Exercise Exercise
-------- -------- -------- --------
<S> <C> <C> <C> <C>
Per Share................................ $ $ $ $
Total....................................
</TABLE>

Microsemi expects to incur expenses of approximately $500,000 in connection
with this offering. Microsemi and the selling stockholders have agreed to
indemnify the underwriters against certain liabilities, including liabilities
under the Securities Act.

Until the distribution of the common stock is completed, rules of the SEC
may limit the ability of the underwriters and certain selling group members to
bid for and purchase the common stock. As an exception to these rules, the
underwriters are permitted to engage in certain transactions that stabilize,
maintain or otherwise affect the price of the common stock.

If the underwriters create a short position in the common stock in
connection with the offering, i.e., if they sell a greater aggregate number of
shares of common stock than is set forth on the cover page of this prospectus,
the underwriters may reduce the short position by purchasing shares of common
stock in the open market. This is known as a "syndicate covering transaction."
The underwriters may also elect to reduce any short position by exercising all
or part of the over-allotment option described above.

The underwriters may also impose a penalty bid on certain selling group
members. This means that if the underwriters purchase common stock in the open
market to reduce the selling group members' short position or to stabilize the
price of the common stock, it may reclaim the amount of the selling concession
from the selling group members who sold those shares of common stock as part of
the offering.

In general, purchases of a security for the purpose of stabilization or to
reduce a short position could cause the price of the security to be higher than
it might be in the absence of such purchases. The imposition of a penalty bid
might also have an effect on the price of a security to the extent that it were
to discourage resales of the security.

Neither Microsemi nor the representatives make any representation or
prediction as to the direction or magnitude of any effect that the transactions
described above may have on the price of the common stock. In addition, neither
Microsemi nor the representatives make any representation that the underwriters
will engage in these transactions or that these transactions, once commenced,
will not be discontinued without notice.

A.G. Edwards & Sons, Inc. has provided, and A.G. Edwards & Sons, Inc., CIBC
World Markets Corp. and Needham & Company, Inc. may in the future provide,
financial advisory and investment banking services to Microsemi from time to
time.

CIBC World Markets Corp. is affiliated with Canadian Imperial Bank of
Commerce. Canadian Imperial Bank of Commerce will be repaid by Microsemi from
proceeds of this offering. See "Use of Proceeds."

39
<PAGE>

CERTAIN UNITED STATES FEDERAL TAX CONSEQUENCES
TO NON-U.S. HOLDERS OF COMMON STOCK

We recommend that each prospective purchaser of common stock should consult
a tax advisor with respect to current and possible future tax consequences of
acquiring, holding or disposing of common stock as well as any tax consequences
that may arise under the laws of any nation or nations, state, municipality or
other taxing jurisdiction, whether inside or outside the United States.

The following is a general discussion of certain United States federal
income and estate tax consequences of the purchase, ownership and disposition
of common stock by a Non-U.S. Holder. When we use the term "Non-U.S. Holder,"
we mean any person or entity that is not a United States Holder ("U.S.
Holder").

A U.S. Holder is any beneficial owner of common stock that is:

. a citizen or resident of the United States,

. a corporation or partnership created in or organized
under the laws of the United States or any political
subdivision thereof,

. an estate the income of which is subject to United States
federal income taxation regardless of its source, or

. a trust, (x) that is subject to the supervision of a
court within the United States and the control of one or
more United States persons as described in
section 7701(a)(30) of the U.S. Internal Revenue Code of
1986, as amended (the "Code"), or (y) that has a valid
election in effect under applicable United States
Treasury regulations to be treated as a United States
person.

This discussion does not address all aspects of United States federal income
and estate taxes and does not deal with other foreign, state and local tax
consequences that may be relevant to Non-U.S. Holders.

Also, special rules may apply to some Non-U.S. Holders, such as foreign
insurance companies, "controlled foreign corporations," "passive foreign
investment companies," "foreign personal holding companies," companies that
accumulate earnings for the purpose of avoiding tax, and expatriate United
States citizens, each of which is subject to special treatment under the Code.
All Non-U.S. Holders should consult their own tax advisors to determine the
United States federal tax consequences that may be relevant to them in light of
their own circumstances.

Although certain countries are parties to tax treaties with the United
States, the Code restricts the applicability of tax treaties strictly to
qualified residents, as defined in the Code, of the country that is a party to
the tax treaty. Non-U.S. Holders should consult their own tax advisors to
determine whether tax treaties apply to them in light of their own
circumstances.

Furthermore, this discussion is based on provisions, each of which is
subject to change, of the Code, of existing and proposed regulations
promulgated under the Code and of administrative and judicial interpretations
of the Code and such regulations, as they have existed prior to the date of
this prospectus.

Dividends

Dividends paid to a Non-U.S. Holder of common stock generally will be
subject to a United States federal income tax that is withheld by the payer, at
a 30% rate or a lower rate that may be specified by an applicable income tax
treaty. However, dividends that are effectively connected with the conduct of a
trade or business by the Non-U.S. Holder within the United States and, where a
tax treaty applies, are attributable to a United States permanent establishment
of the Non-U.S. Holder, are not subject to this withholding, but they are
subject instead to United States federal income tax on a net income basis at
applicable graduated individual or corporate rates, as applicable. Certain
certification and disclosure requirements must be complied with in order for
effectively connected income to be exempt from withholding. Any such
effectively connected dividends received by a foreign corporation may be
subject to an additional "branch profits tax" at a 30% rate or a lower rate as
may be specified by an applicable income tax treaty.

40
<PAGE>

Through December 31, 2000, dividends paid to an address outside the United
States are presumed to be paid to a resident of that country (unless the payer
has knowledge to the contrary) for purposes of the withholding tax discussed
above and, under the current interpretation of United States Treasury
regulations, for purposes of determining the applicability of a tax treaty
rate. However, United States Treasury regulations (the "Final Regulations")
provide that a Non-U.S. Holder of common stock who wishes to claim the benefit
of an applicable treaty rate (and avoid back-up withholding as discussed below)
for dividends paid after December 31, 2000, will be required to satisfy
applicable certification and other requirements.

A Non-U.S. Holder of common stock eligible for a reduced rate of United
States withholding tax pursuant to an income tax treaty may obtain a refund of
any excess amounts withheld by filing an appropriate claim for refund with the
Internal Revenue Service (the "IRS").

Gain on Disposition of Common Stock

A Non-U.S. Holder generally will not be subject to United States federal
income tax with respect to gain recognized on a sale or other disposition of
common stock unless (1) the gain is effectively connected with the conduct of a
trade or business of the Non-U.S. Holder in the United States, and, where a tax
treaty applies, is attributable to a United States permanent establishment of
the Non-U.S. Holder, (2) in the case of a Non-U.S. Holder who is an individual
and holds the common stock as a capital asset, such holder is present in the
United States for an aggregate of 183 days or more in the taxable year of the
sale or other disposition, as determined under the Code, and certain other
conditions are met, or (3) we are or had been a "United States real property
holding corporation" for United States federal income tax purposes.

An individual Non-U.S. Holder described in clause (1) above will be subject
to tax on the net gain derived from the sale under regular graduated United
States federal income tax rates. An individual Non-U.S. Holder described in
clause (2) above will be subject to a flat 30% tax on the gain derived from the
sale, which may be offset by United States source capital losses (even though
the individual is not considered a resident of the United States). If a Non-
U.S. Holder that is a foreign corporation falls under clause (1) above, it will
be subject to tax on its gain under regular graduated United States federal
income tax rates and, in addition, may be subject to a branch profits tax equal
to 30% of its effectively connected earnings and profits (within the meaning of
the Code) for the taxable year, as adjusted for certain items, unless it
qualifies for a lower rate or an exemption under an applicable income tax
treaty.

We believe that we are not, and we do not presently anticipate becoming, a
"United States real property holding corporation" for United States federal
income tax purposes.

Information Reporting and Backup Withholding

We must report annually to the IRS and to each Non-U.S. Holder the amount of
any dividends paid to such holder and any tax withheld with respect to such
dividends, regardless of whether withholding was required. Copies of the
information returns that report such dividends and withholding may also be made
available to the tax authorities in the country in which the Non-U.S. Holder
resides, under the provisions of an applicable income tax treaty.

Under current law, backup withholding at the rate of 31% (as opposed to the
general withholding tax rate of 30% described above) generally will not apply
to dividends paid to a Non-U.S. Holder at an address outside the United States
(unless the payer has knowledge that the payee is a United States person).
Under the Final Regulations, however, a Non-U.S. Holder will be subject to
backup withholding unless applicable certification requirements are met.

Payment of the proceeds of a sale of common stock within the United States
or conducted through certain United States-related financial intermediaries is
subject to both backup withholding and information reporting unless the
beneficial owner certifies under penalties of perjury that it is a Non-U.S.
Holder (and the payer does not have actual knowledge that the beneficial owner
is a United States person) or the holder otherwise establishes an applicable
exemption.

41
<PAGE>

Any amounts withheld under the backup withholding rules may be allowed as a
refund or a credit against such holder's United States federal income tax
liability provided that the required information is furnished to the IRS.

Federal Estate Tax

Common stock beneficially held by an individual Non-U.S. Holder at the time
of his or her death, as determined under the Code, will be included in such
Non-U.S. Holder's gross estate for United States federal estate tax purposes,
unless an applicable estate tax treaty provides otherwise.

42
<PAGE>

LEGAL MATTERS

The validity of the shares of Common Stock offered hereby will be passed
upon for us by Stradling, Yocca, Carlson & Rauth, a Professional Corporation,
Newport Beach, California. All attorneys who are members of, employed by or of
counsel with Stradling, Yocca, Carlson & Rauth, participating in such matter on
behalf of such firm beneficially owned as of April 14, 2000 an aggregate of
approximately 5,000 shares of our Common Stock. O'Melveny & Myers LLP, Irvine,
California, will pass upon certain legal matters for the underwriters.

EXPERTS

The consolidated financial statements as of October 3, 1999 and September
27, 1998 and for each of the three years in the period ended October 3, 1999,
included or incorporated by reference in this prospectus have been so included
or incorporated by reference 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 MORE INFORMATION

We file annual, quarterly and special reports, proxy statements and other
information with the SEC. You may read and copy any document we file at the
SEC's public reference room at 450 Fifth Street, N.W., Washington, D.C. 20549.
Please call the SEC at 1-800-SEC-0330 for further information on the public
reference room. You may also obtain our SEC filings from the SEC's website at
http://www.sec.gov/.

The SEC allows us to "incorporate by reference" the information we file with
them, which means that we can disclose important information to you by
referring you to those documents. Statements made in this prospectus as to the
contents of any contract, agreement or other documents are not necessarily
complete, and, in each instance, we refer you to a copy of such document filed
as an exhibit to the registration statement or otherwise filed with the SEC.
The information incorporated by reference is considered to be part of this
prospectus. When we file information with the SEC in the future, that
information will automatically update and supersede this information. We
incorporate by reference the documents listed below and any future filings we
will make with the SEC under Sections 13(a), 13(c), 14 or 15(d) of the
Securities Exchange Act of 1934:

a. Our Annual Report on Form 10-K for the fiscal year ended October 3,
1999 including portions of our definitive Proxy Statement for the 2000
Annual Meeting of Stockholders incorporated therein by reference;

b. Our Quarterly Reports on Form 10-Q for the quarterly periods ended
January 2, 2000 and April 2, 2000, respectively; and

c. Our Current Report on Form 8-K filed on March 15, 2000 reporting
under Item 2 and Item 7 regarding the acquisition of assets from Infinesse
Corporation.

You may request a copy of these filings, at no cost, by writing or
telephoning us at:

Microsemi Corporation
Attention: David R. Sonksen, Secretary
2830 South Fairview Street
Santa Ana, California 92704
Telephone (714) 979-8220

43
<PAGE>

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
MICROSEMI CORPORATION AND SUBSIDIARIES

<TABLE>
<CAPTION>
Page
----

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

Consolidated Balance Sheets at September 27, 1998, October 3, 1999 and
April 2, 2000 (unaudited).............................................. F-3

Consolidated Income Statements for each of the three fiscal years in the
period ended October 3, 1999 and the six months ended April 4, 1999 and
April 2, 2000 (unaudited).............................................. F-4

Consolidated Statements of Stockholders' Equity for each of the three
fiscal years in the period ended October 3, 1999 and the six months
ended April 2, 2000 (unaudited)........................................ F-5

Consolidated Statements of Cash Flows for each of the three fiscal years
in the period ended October 3, 1999 and the six months ended April 4,
1999 and April 2, 2000 (unaudited)..................................... F-6

Notes to Consolidated Financial Statements.............................. F-7
</TABLE>

F-1
<PAGE>

REPORT OF INDEPENDENT ACCOUNTANTS

To the Board of Directors and Stockholders of
Microsemi Corporation

In our opinion, the accompanying consolidated balance sheets and the related
consolidated income statements, statements of stockholders' equity and
statements of cash flows present fairly, in all material respects, the
financial position of Microsemi Corporation and its subsidiaries at October 3,
1999 and September 27, 1998, and the results of their operations and their cash
flows for each of the three fiscal years in the period ended October 3, 1999,
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 audits 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.

/s/ PricewaterhouseCoopers LLP
PricewaterhouseCoopers LLP

Costa Mesa, California
November 22, 1999

F-2
<PAGE>

MICROSEMI CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS
(amounts in thousands, except per share amounts)

<TABLE>
<CAPTION>
September 27, October 3, April 2,
1998 1999 2000
------------- ---------- ----------
(unaudited)
<S> <C> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents............... $ 9,610 $ 7,624 $ 6,236
Accounts receivable, less allowance for
doubtful accounts, $2,457 at September
27, 1998, $3,805 at October 3, 1999 and
$4,693 at April 2, 2000................ 23,094 31,775 32,597
Inventories............................. 54,433 56,925 56,531
Deferred income taxes................... 6,049 7,282 7,282
Other current assets.................... 1,319 2,128 1,796
-------- -------- --------
Total current assets.................. 94,505 105,734 104,442
-------- -------- --------
Property and equipment, net............... 35,554 54,946 55,808
-------- -------- --------
Deferred income taxes..................... -- 862 862
-------- -------- --------
Goodwill and other intangible assets,
net...................................... 9,729 12,218 23,966
-------- -------- --------
Other assets.............................. 5,300 7,841 6,387
-------- -------- --------
TOTAL ASSETS.......................... $145,088 $181,601 $191,465
======== ======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Notes payable to banks and others....... $ 6,172 $ 18,545 $ 15,538
Current maturities of long-term debt.... 4,339 8,422 9,366
Accounts payable........................ 6,656 11,247 11,642
Accrued liabilities..................... 14,401 17,292 17,479
Income taxes payable.................... 5,874 7,178 5,790
-------- -------- --------
Total current liabilities............. 37,442 62,684 59,815
-------- -------- --------
Long-term debt............................ 18,667 31,381 30,215
-------- -------- --------
Other long-term liabilities............... 1,962 5,092 6,633
-------- -------- --------
Commitments and contingencies
Stockholders' equity:
Common stock, $0.20 par value;
authorized 20,000 shares; issued 11,666
in 1998, 10,920 in 1999 and 11,452 in
2000................................... 2,333 2,184 2,291
Capital in excess of par value of common
stock.................................. 49,896 46,695 57,788
Retained earnings....................... 35,734 34,561 35,721
Accumulated other comprehensive loss.... (946) (996) (998)
-------- -------- --------
Total stockholders' equity............ 87,017 82,444 94,802
-------- -------- --------
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY............................... $145,088 $181,601 $191,465
======== ======== ========
</TABLE>

The accompanying notes are an integral part of these statements.

F-3
<PAGE>

MICROSEMI CORPORATION AND SUBSIDIARIES

CONSOLIDATED INCOME STATEMENTS
(amounts in thousands, except earnings per share)

<TABLE>
<CAPTION>
Fiscal years ended Six months ended
-------------------------------------- -------------------
September 28, September 27, October 3, April 4, April 2,
1997 1998 1999 1999 2000
------------- ------------- ---------- ---------- ---------
(unaudited)
<S> <C> <C> <C> <C> <C>
Net sales............... $163,234 $164,710 $185,081 $78,908 $115,560
Cost of sales........... 117,274 117,425 144,211 57,702 84,833
-------- -------- -------- ------- --------
Gross profit.......... 45,960 47,285 40,870 21,206 30,727
-------- -------- -------- ------- --------
Operating expenses:
Selling............... 9,226 10,939 14,010 6,500 9,127
General and
administrative....... 12,833 13,839 14,424 5,684 9,021
Amortization of
goodwill and
intangible assets.... 221 516 1,395 570 903
Research and
development.......... 1,161 1,532 4,002 755 5,075
Acquired in-process
research and
development.......... -- -- 1,950 -- 2,510
-------- -------- -------- ------- --------
Total operating
expenses........... 23,441 26,826 35,781 13,509 26,636
-------- -------- -------- ------- --------
Income from
operations......... 22,519 20,459 5,089 7,697 4,091
-------- -------- -------- ------- --------
Other income (expenses):
Interest expense...... (3,684) (2,148) (3,112) (963) (2,381)
Other................. (329) (50) (36) 50 22
-------- -------- -------- ------- --------
Total other
expenses........... (4,013) (2,198) (3,148) (913) (2,359)
-------- -------- -------- ------- --------
Income before income
taxes.................. 18,506 18,261 1,941 6,784 1,732
Provision for income
taxes.................. 7,455 6,939 442 2,510 572
-------- -------- -------- ------- --------
Net income.............. $ 11,051 $ 11,322 $ 1,499 $ 4,274 $ 1,160
======== ======== ======== ======= ========
Basic earnings per
share.................. $ 1.30 $ 1.05 $ 0.13 $ 0.38 $ 0.11
======== ======== ======== ======= ========
Diluted earnings per
share.................. $ 1.03 $ 0.98 $ 0.13 $ 0.37 $ 0.10
======== ======== ======== ======= ========
</TABLE>

The accompanying notes are an integral part of these statements.

F-4
<PAGE>

MICROSEMI CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
(amounts in thousands)

<TABLE>
<CAPTION>
Common Stock
--------------------------------
Capital in
excess of par Accumulated
value Retained other compre-
Shares Amount of common stock earnings hensive loss Total
------ ------- --------------- -------- ------------- --------
<S> <C> <C> <C> <C> <C> <C>
Balance at September 29,
1996................... 7,908 $ 1,582 $ 14,895 $ 13,691 $ (760) $ 29,408
Exercise of employee
stock options........ 228 45 442 -- -- 487
Treasury stock
repurchased and
canceled............. (15) (3) (187) -- -- (190)
Conversion of debt.... 615 123 1,047 -- -- 1,170
Comprehensive income.. -- -- -- 11,051 (17) 11,034
------ ------- -------- -------- ------ --------
Balance at September 28,
1997................... 8,736 1,747 16,197 24,742 (777) 41,909
Exercise of employee
stock options........ 191 38 519 -- -- 557
Treasury stock
repurchased and
canceled............. (114) (22) (488) (330) -- (840)
Conversion of debt.... 2,853 570 33,668 -- -- 34,238
Comprehensive income.. -- -- -- 11,322 (169) 11,153
------ ------- -------- -------- ------ --------
Balance at September 27,
1998................... 11,666 2,333 49,896 35,734 (946) 87,017
Exercise of employee
stock options........ 14 3 49 -- -- 52
Treasury stock
repurchased and
canceled............. (760) (152) (3,250) (2,672) -- (6,074)
Comprehensive income.. -- -- -- 1,499 (50) 1,449
------ ------- -------- -------- ------ --------
Balance at October 3,
1999................... 10,920 2,184 46,695 34,561 (996) 82,444
Exercise of employee
stock options........ 220 44 2,093 -- -- 2,137
Issuance of common
stock as payment for
acquisition.......... 312 63 9,000 -- -- 9,063
Comprehensive income.. -- -- -- 1,160 (2) 1,158
------ ------- -------- -------- ------ --------
Balance at April 2, 2000
(unaudited)............ 11,452 $ 2,291 $ 57,788 $ 35,721 $ (998) $ 94,802
====== ======= ======== ======== ====== ========
</TABLE>

The accompanying notes are an integral part of these statements.

F-5
<PAGE>

MICROSEMI CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS
(amounts in thousands)

<TABLE>
<CAPTION>
Six months
Fiscal years ended ended
-------------------------------------- ----------------
September 28, September 27, October 3, April April
1997 1998 1999 4, 1999 2, 2000
------------- ------------- ---------- ------- -------
(unaudited)
<S> <C> <C> <C> <C> <C>
Cash flows from
operating activities
Net income.............. $ 11,051 $ 11,322 $ 1,499 $ 4,274 $ 1,160
Adjustments to reconcile
net income to net cash
provided by operating
activities
Depreciation and
amortization......... 4,257 5,281 8,818 3,386 5,747
Allowance for doubtful
accounts............. 506 (182) (611) (470) 888
Provision for excess
and obsolete
inventories.......... -- -- 5,951 -- --
Loss on disposition
and retirement of
assets............... 9 93 -- -- --
Acquired in-process
research and
development.......... -- -- 1,950 -- 2,510
Deferred income
taxes................ (712) (212) (2,095) -- --
Change in assets and
liabilities, net
of acquisitions and
disposition:
Accounts receivable.. (215) 72 179 1,477 (1,710)
Inventories.......... (1,719) (3,656) (2,069) (2,520) 394
Other current
assets.............. (3,098) 2,662 381 (509) 332
Other assets......... 786 1,301 -- (1,749) --
Accounts payable..... 2,853 (3,210) 1,017 (326) 395
Accrued liabilities.. 820 (915) (194) (2,330) 1,247
Income taxes
payable............. 1,049 13 1,304 1,929 112
-------- -------- -------- ------- -------
Net cash provided by
operating
activities.......... 15,587 12,569 16,130 3,162 11,075
-------- -------- -------- ------- -------
Cash flows from
investing activities
Purchases of property
and equipment.......... (6,052) (5,905) (7,932) (2,349) (5,454)
Proceeds from
disposition and sale of
assets................. -- 5,029 -- -- --
Other assets............ -- -- (2,837) -- 392
Payments for
acquisitions, net of
cash acquired.......... (5,201) (13,740) (29,570) -- (1,548)
Investment in an
unconsolidated
affiliate.............. -- (1,000) -- -- (251)
-------- -------- -------- ------- -------
Net cash used in
investing
activities.......... (11,253) (15,616) (40,339) (2,349) (6,861)
-------- -------- -------- ------- -------
Cash flows from
financing activities
Increase (decrease) in
notes payable to
banks and others....... 81 (66) 12,373 2,635 (5,007)
Proceeds from long-term
debt................... -- 10,000 30,800 -- --
Payments of long-term
debt................... (2,571) (3,848) (14,003) (1,508) (2,722)
Increase (decrease) in
other long-term
liabilities............ (38) 38 (35) (6) (9)
Repurchases of common
stock.................. (190) -- (6,914) (5,764) --
Exercise of employee
stock options.......... 487 557 52 27 2,138
-------- -------- -------- ------- -------
Net cash provided by
(used in) financing
activities............. (2,231) 6,681 22,273 (4,616) (5,600)
-------- -------- -------- ------- -------
Effect of exchange rate
changes on cash........ (17) (169) (50) (7) (2)
-------- -------- -------- ------- -------
Net increase (decrease)
in cash and cash
equivalents............ 2,086 3,465 (1,986) (3,810) (1,388)
Cash and cash
equivalents at
beginning of period.... 4,059 6,145 9,610 9,610 7,624
-------- -------- -------- ------- -------
Cash and cash
equivalents at end of
period................. $ 6,145 $ 9,610 $ 7,624 $ 5,800 $ 6,236
======== ======== ======== ======= =======
</TABLE>

The accompanying notes are an integral part of these statements.

F-6
<PAGE>

MICROSEMI CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Description of Business

Microsemi Corporation is a leading designer, manufacturer and marketer of
analog, mixed-signal and discrete semiconductors serving the mobile
connectivity, telecommunications, computers/peripherals, military and
aerospace, satellites/space, and medical markets.

Fiscal Year

The Company reports results of operations on the basis of fifty-two and
fifty-three week periods. The Company's 1999 fiscal year ended on October 3,
1999 and consisted of fifty-three weeks. Fiscal years 1998 and 1997 consisted
of fifty-two weeks.

Principles of Consolidation

The consolidated financial statements include the accounts of Microsemi
Corporation and its wholly-owned subsidiaries. All significant intercompany
transactions have been eliminated.

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 the reported amounts of revenues and expenses during the
respective reporting periods. Actual results could differ from those estimates.

Interim Financial Statements (unaudited)

The consolidated financial statements for the six months ended April 4, 1999
and April 2, 2000 are unaudited and should be read in conjunction with the
Company's annual financial statements for the fiscal year ended October 3,
1999. Such interim financial statements have been prepared in conformity with
the rules and regulations of the Securities and Exchange Commission. Certain
disclosures normally included in financial statements prepared in accordance
with generally accepted accounting principles have been condensed or omitted
pursuant to such rules and regulations pertaining to interim financial
statements. In the opinion of management, all adjustments (consisting of normal
recurring adjustments) necessary for a fair presentation have been included.
The results of operations of any interim period are not necessarily indicative
of the results of operations for the full year.

Fair Value of Financial Instruments

The carrying values of cash equivalents, accounts receivable, accrued
liabilities and notes payable approximate their fair values because of the
short maturity of these instruments. The carrying value of the Company's long-
term debt approximates fair value based upon the current rate offered to the
Company for obligations of the same remaining maturities.

Concentration of Credit Risk and Foreign Sales

The Company is potentially subject to concentrations of credit risk
consisting principally of trade receivables. Concentrations of credit risk
exist because the Company relies on a significant portion of customers whose
principal sales are to the U.S. Government. In addition, sales to foreign
customers represented

F-7
<PAGE>

MICROSEMI CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

approximately 22%, 23% and 35% of net sales for fiscal years 1997, 1998 and
1999, respectively. These sales were principally to customers in Europe and
Asia. The Company maintains reserves for potential credit losses and such
losses have been within management's expectations.

Investments

The Company's investments in certain unconsolidated affiliates are stated at
the lower of cost or estimated net realizable value.

Inventories

Inventories are stated at the lower of cost or market. Cost is determined by
the first-in, first-out method, except for cost of inventories at the
Scottsdale, Arizona subsidiary, which cost is determined using the last-in,
first-out method (see Note 2).

Property and Equipment

Property and equipment are stated at cost. Depreciation is computed on the
straight-line method over the estimated useful lives of the assets. Leasehold
improvements are amortized over the shorter of the lease terms or the estimated
useful lives. Maintenance and repairs are charged to expense as incurred and
the costs of additions and betterments that increase the useful lives of the
assets are capitalized.

Intangible Assets

Intangible assets, arising principally from differences between the cost of
acquired companies and the underlying values at dates of acquisition
(goodwill), are amortized on a straight-line basis over periods not exceeding
ten years.

Impairment of Long-Lived Assets

In accordance with the provisions of Statement of Financial Accounting
Standards No. 121, "Accounting for the Impairment of Long-Lived Assets and for
Long-Lived Assets to be Disposed Of" ("SFAS 121"), the Company reviews long-
lived assets, including property and equipment, for impairment whenever events
or changes in business circumstances indicate that the carrying amount of the
assets may not be fully recoverable. Under SFAS 121, an impairment loss is
recognized when estimated undiscounted future cash flows expected to result
from the use of the asset and its eventual disposition are less than its
carrying amount. Impairment, if any, is determined as the amount by which the
carrying value of an asset exceeds its fair value.

Revenue Recognition

Revenue is recognized at the time of product shipment. The Company, under
specific conditions, permits its customers to return or exchange products. A
provision for estimated sales returns is recorded concurrently with the
recognition of revenue, based on historical experience.

Research and Development

The Company expenses the cost of research and development as incurred.
Research and development expenses principally comprise payroll and related
costs and the cost of prototypes.

Stock-Based Compensation

The Company accounts for its stock based compensation plans under Accounting
Principles Board Opinion No. 25, "Accounting for Stock Issued to Employees",
and related interpretations. The disclosures required under Statement of
Financial Accounting Standards No. 123, "Accounting for Stock-based
Compensation" ("SFAS 123"), have been included in Note 8.

F-8
<PAGE>

MICROSEMI CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

Income Taxes

Deferred tax assets and liabilities are recorded for the expected future tax
consequences of events that have been recognized in the Company's financial
statements or tax returns. In estimating future tax consequences, all expected
future events, including enactment of changes in tax laws or rates are
considered. A valuation allowance is provided for deferred tax assets when it
is more likely than not that such assets will not be realized through future
operations.

Preferred Stock

The Company's certificate of incorporation authorizes the board of directors
to issue up to 1,000,000 shares of Preferred Stock and to designate the rights
and terms of any such issuances. The Company has not issued any Preferred
Stock.

Earnings Per Share

In February 1997, the Financial Accounting Standards Board issued SFAS No.
128, "Earnings Per Share". This Statement establishes standards for computing
and requires the presentation of basic and diluted earnings per share ("EPS").
The company adopted this statement in the first quarter of fiscal year 1998 and
has restated the EPS for the prior year periods presented, as required.

Basic earnings per share have been computed based upon the weighted average
number of common shares outstanding during the respective periods. Diluted
earnings per share have been computed, when the result is dilutive, using the
treasury stock method for stock options outstanding during the respective
periods and based upon the assumption that the convertible subordinated
debentures had been converted into common stock as of the beginning of the
respective periods, with a corresponding increase in net income to reflect a
reduction in related interest expense, net of applicable taxes.

Earnings per share were calculated as follows:

<TABLE>
<CAPTION>
Six months
Fiscal years ended ended
-------------------------------------- -------------
April April
September 28, September 27, October 3, 4, 2,
1997 1998 1999 1999 2000
------------- ------------- ---------- ------ ------
(unaudited)
(amounts in 000's except per share data)
<S> <C> <C> <C> <C> <C>
BASIC
Net income.............. $11,051 $11,322 $1,499 $4,274 $1,160
======= ======= ====== ====== ======
Weighted-average common
shares outstanding..... 8,493 10,735 11,131 11,337 11,019
======= ======= ====== ====== ======
Basic earnings per
share.................. $ 1.30 $ 1.05 $ 0.13 $ 0.38 $ 0.11
======= ======= ====== ====== ======
DILUTED
Net income.............. $11,051 $11,322 $1,499 $4,274 $1,160
Interest savings from
assumed conversions of
Convertible debt, net
of income taxes........ 1,244 383 -- -- --
------- ------- ------ ------ ------
Net income assuming
conversions............ $12,295 $11,705 $1,499 $4,274 $1,160
======= ======= ====== ====== ======
Weighted-average common
shares outstanding for
basic.................. 8,493 10,735 11,131 11,337 11,019
Dilutive effect of stock
options................ 387 235 113 112 399
Dilutive effect of
convertible debt....... 3,021 986 -- -- --
------- ------- ------ ------ ------
Weighted-average common
shares outstanding on a
Diluted basis.......... 11,901 11,956 11,244 11,449 11,418
======= ======= ====== ====== ======
Diluted earnings per
share.................. $ 1.03 $ 0.98 $ 0.13 $ 0.37 $ 0.10
======= ======= ====== ====== ======
</TABLE>

F-9
<PAGE>

MICROSEMI CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

There were approximately 442,000 and 631,000 options in fiscal years 1998
and 1999, respectively, that were not included in the computation of diluted
earnings per share because the exercise price was greater than the average
market price of the common stock, thereby resulting in an antidilutive effect.

Comprehensive Income

Effective in the first quarter of fiscal 1999, the Company adopted Statement
of Financial Accounting Standards No. 130, "Reporting Comprehensive Income"
("SFAS 130"). SFAS 130 establishes standards for reporting and displaying of
comprehensive income and its components in the Company's consolidated financial
statements. Comprehensive income is defined in SFAS 130 as the change in equity
(net assets) of a business enterprise during the period from transactions and
other events and circumstances from all non-owner sources. Accumulated other
comprehensive loss in the accompanying Statements of Stockholders' Equity
consists of the change in the cumulative translation adjustment. Total
comprehensive income for fiscal years 1997, 1998 and 1999 was $11,034,000,
$11,153,000 and $1,449,000 respectively.

Segments

In fiscal year 1999, the Company adopted Statement of Financial Accounting
Standards No. 131 ("SFAS 131"), "Disclosure about Segments of an Enterprise and
Related Information". SFAS 131 superseded SFAS 14, "Financial Reporting for
Segments of a Business Enterprise", replacing the "industry segment" approach
with the "management" approach. The management approach designates the internal
organization that is used by management for making operating decisions and
assessing performance as the source of the Company's reportable segments. SFAS
131 also requires disclosures about products and services, geographic areas,
and major customers. The adoption of SFAS 131 did not affect results of
operations or consolidated financial position, but did affect the disclosure of
segment information (see note 11).

Recently Issued Accounting Standard

In June 1998, the FASB issued Statement of Financial Accounting Standards
No. 133, "Accounting for Derivative Instruments and Hedging Activities" ("SFAS
133"), which will become effective for the Company in fiscal year 2001. SFAS
133 establishes accounting and reporting standards for derivative instruments,
including certain derivative instruments embedded in other contracts
(collectively referred to as derivatives), and for hedging activities. SFAS 133
is not expected to materially affect the Company's financial position or
results of operations.

Reclassifications

Certain reclassifications have been made to the fiscal year 1997 and 1998
balances to conform with the fiscal year 1999 presentation.

2. INVENTORIES

Inventories are summarized as follows (in thousands):

<TABLE>
<CAPTION>
September 28, September 27, October 3, April 2,
1997 1998 1999 2000
------------- ------------- ---------- -----------
(unaudited)
<S> <C> <C> <C> <C>
Raw materials................ $15,954 $14,759 $14,002 $12,944
Work in process.............. 23,774 18,282 22,244 19,425
Finished goods............... 13,520 21,392 20,679 24,162
------- ------- ------- -------
$53,248 $54,433 $56,925 $56,531
======= ======= ======= =======
</TABLE>

F-10
<PAGE>

MICROSEMI CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

Inventories in the amount of $9,013,000 at Microsemi Scottsdale at October
3, 1999 are stated at cost under the last-in, first-out ("LIFO") method. Had
the first-in, first-out method been used, total inventories would have been
approximately $27,000 higher at September 28, 1997, $615,000 lower at September
27, 1998 and $19,000 higher at October 3, 1999. The LIFO valuation method had
the effect of increasing gross profit by $23,000 in fiscal year 1997,
decreasing gross profit by $642,000 in fiscal year 1998 and increasing gross
profit by $634,000 in fiscal year 1999.

3. PROPERTY AND EQUIPMENT

Property and equipment consisted of the following:

<TABLE>
<CAPTION>
September 27, October 3, April 2,
Asset Life 1998 1999 2000
------------- ------------- ---------- -----------
(unaudited)
(amounts in 000's)
<S> <C> <C> <C> <C>
Buildings................... 20-40 years $17,896 $27,605 $28,834
Property and equipment...... 3-10 years 48,160 63,304 64,126
Furniture and fixtures...... 5-10 years 1,044 1,299 1,329
Leasehold improvements...... Life of lease 2,713 2,078 1,903
------- ------- -------
69,813 94,286 96,192
Accumulated depreciation.... (42,113) (47,732) (51,833)
Land........................ 5,004 5,419 5,419
Construction in progress.... 2,850 2,973 6,030
------- ------- -------
$35,554 $54,946 $55,808
======= ======= =======
</TABLE>

Depreciation expense was $4,036,000, $4,765,000 and $7,423,000 in fiscal
years 1997, 1998 and 1999, respectively. Depreciation expense for the six
months ended April 2, 2000 was $4,842,000 (unaudited).

At October 3, 1999, land and buildings located at the Santa Ana, California
manufacturing and headquarters facility were pledged to the City of Santa Ana
under the provisions of a loan agreement with the Santa Ana Industrial
Development Authority. The land and building of the Microsemi Colorado
subsidiary were pledged to the City of Broomfield, Colorado under the
provisions of a loan agreement with the Colorado Industrial Development
Authority. The land and buildings in Watertown, Massachusetts and in Ennis,
Ireland are pledged to Unitrode Corporation under the provisions of the related
acquisition agreement. The building and land in Riviera Beach, Florida are
pledged to the former owner under the provisions of the related acquisition
agreement.

4. GOODWILL AND OTHER INTANGIBLE ASSETS, NET AND OTHER ASSETS

<TABLE>
<CAPTION>
September 27, October 3, April 2,
1998 1999 2000
------------- ---------- -----------
(unaudited)
(amounts in 000's)
<S> <C> <C> <C>
Goodwill and other intangible assets,
net..................................... $9,729 $12,218 $23,966
====== ======= =======
</TABLE>

Accumulated amortization for goodwill and other intangible assets amounted
to $1,869,000, $2,484,000, and $3,298,000 (unaudited) as of September 27, 1998,
October 3, 1999 and April 2, 2000, respectively. Amortization expense for
fiscal years 1997, 1998 and 1999 was $36,000, $393,000 and $1,231,000,
respectively. Amortization expense for the six months ended April 2, 2000 was
$814,000 (unaudited).

F-11
<PAGE>

MICROSEMI CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

Other assets consisted of the following:

<TABLE>
<CAPTION>
September 27, October 3, April 2,
1998 1999 2000
------------- ---------- -----------
(unaudited)
(amounts in 000's)
<S> <C> <C> <C>
Investments in
unconsolidated
affiliates............. $ 1,878 $2,126 $1,025
Deferred financing
expenses, net.......... 375 693 587
Cash surrender value of
life insurance......... 443 467 502
Notes receivable........ 2,320 2,229 1,995
Property held for sale.. -- 2,075 1,952
Others.................. 284 251 326
------- ------ ------
$ 5,300 $7,841 $6,387
======= ====== ======
</TABLE>

Accumulated amortization for deferred financing expenses amounted to
$883,000, $1,047,000 and $1,138,000 (unaudited) as of September 27, 1998,
October 3, 1999 and April 2, 2000, respectively. Amortization expense for
fiscal years 1997, 1998 and 1999 was $185,000, $123,000 and $164,000,
respectively. Amortization expense for the six months ended April 2, 2000 was
$91,000 (unaudited).

5. ACCRUED LIABILITIES

Accrued liabilities consisted of the following:

<TABLE>
<CAPTION>
September 27, October 3, April 2,
1998 1999 2000
------------- ---------- -----------
(unaudited)
(amounts in 000's)
<S> <C> <C> <C>
Accrued payroll, profit sharing, benefits
and related taxes....................... $ 8,018 $ 8,331 $ 9,528
Accrued interest......................... 2,314 2,387 2,516
Other accrued expenses................... 4,069 6,574 5,435
-------- ------- -------
$ 14,401 $17,292 $17,479
======== ======= =======
</TABLE>

F-12
<PAGE>

MICROSEMI CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

6. INCOME TAXES

Pretax income from continuing operations was taxed under the following
jurisdictions:

<TABLE>
<CAPTION>
Fiscal year
----------------------
1997 1998 1999
------- ------- ------
(amounts in 000's)
<S> <C> <C> <C>
Domestic................................................. $15,929 $14,010 $ 547
Foreign.................................................. 2,577 4,251 1,394
------- ------- ------
Total.................................................... $18,506 $18,261 $1,941
======= ======= ======
</TABLE>

The provision for income taxes consisted of the following components:

<TABLE>
<CAPTION>
Fiscal year
-----------------------
1997 1998 1999
------- ------ -------
(amounts in 000's)
<S> <C> <C> <C>
Current
Federal.............................................. $ 6,525 $4,320 $ 1,986
State................................................ 1,332 918 301
Foreign.............................................. 310 490 250
Deferred............................................... (712) 1,211 (2,095)
------- ------ -------
$ 7,455 $6,939 $ 442
======= ====== =======
</TABLE>

The tax effected deferred tax assets (liabilities) comprise the following:

<TABLE>
<CAPTION>
September 27, October 3,
1998 1999
------------- ----------
(amounts in 000's)
<S> <C> <C>
Tax effects arising from:
Accounts receivable.................................. $ 1,384 $ 720
Inventories.......................................... 418 4,946
Other assets......................................... 1,434 1,506
Fixed asset bases.................................... 1,007 931
Accrued employee benefit expenses.................... 2,417 1,371
Accrued other expenses............................... 2,140 1,393
Amortization of intangible assets.................... -- 690
------- -------
Gross deferred tax assets............................ 8,800 11,557
------- -------
Inventory bases...................................... (753) (1,491)
Depreciation......................................... (1,998) (1,922)
------- -------
Gross deferred tax liabilities....................... (2,751) (3,413)
------- -------
Net deferred tax asset............................... $ 6,049 $ 8,144
======= =======
</TABLE>

F-13
<PAGE>

MICROSEMI CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

The following is a reconciliation of income tax computed at the federal
statutory rate to the Company's actual tax expense:

<TABLE>
<CAPTION>
Fiscal year
---------------------
1997 1998 1999
------- ------ ----
(amounts in 000's)
<S> <C> <C> <C>
Tax computed at statutory rate........................... $ 6,477 $6,392 $660
State taxes, net of federal benefit...................... 850 916 62
Foreign income taxed at different rates.................. 339 (997) (224)
Non-deductible goodwill amortization..................... -- 115 335
Non-deductible interest.................................. -- 310 --
Foreign Sales Corporation benefit........................ -- -- (211)
Tax credits.............................................. -- -- (174)
Other differences, net................................... (211) 203 (6)
------- ------ ----
$ 7,455 $6,939 $442
======= ====== ====
</TABLE>

No provision has been made for future U.S. income taxes on the undistributed
earnings of foreign operations since they have been, for the most part,
indefinitely reinvested in these operations. Determination of the amount of
unrecognized deferred tax liability for temporary differences related to the
undistributed earnings of the Company's foreign operations is not practicable.
At the end of fiscal year 1999, the undistributed earnings aggregated
approximately $19,725,000.

7. DEBT

Long-term debt consisted of:

<TABLE>
<CAPTION>
September 27, October 3, April 2,
1998 1999 2000
------------- ---------- -----------
(unaudited)
(amounts in 000's)
<S> <C> <C> <C>
Industrial Development Bond, bearing
interest at 7.875%, due May 2000;
secured by first deed of trust.......... $ 2,305 $ 2,075 $ 2,075
Industrial Development Bond, bearing
interest at 6.75%, due February 2005;
secured by first deed of trust.......... 4,300 4,200 4,100
Note payable, bearing interest at 5.93%,
payable monthly through July 2002....... 2,070 1,530 1,260
Notes payable (PPC Acquisition), bearing
interest at 7%, payable monthly through
September 2009.......................... 2,092 1,794 1,691
Notes payable to a bank, bearing interest
at the bank's prime rate payable in
monthly installments through July 2003.. 9,667 -- --
Notes payable to a bank, bearing interest
at variable rates, (8.69% at April 2,
2000), payable in quarterly installments
through March 2003...................... -- 28,000 26,000
Subordinated Convertible Debenture, due
on February 14, 2002, interest only is
payable quarterly at 7%, starting June
1, 2000................................. -- -- 2,500
Notes payable, bearing interest ranging
from 5% to 9.75%, due between October
1999 and September 2014................. 2,572 2,204 1,955
------- ------- -------
23,006 39,803 39,581
Less current portion..................... (4,339) (8,422) (9,366)
------- ------- -------
$18,667 $31,381 $30,215
======= ======= =======
</TABLE>

F-14
<PAGE>

MICROSEMI CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

Long-term debt maturities at October 3, 1999, including the current portion,
during the next five years are as follows (amounts in 000's):

<TABLE>
<CAPTION>
Fiscal year ending on or about September 30
-------------------------------------------
<S> <C>
2000.......................................... $ 8,422
2001.......................................... 8,224
2002.......................................... 11,070
2003.......................................... 6,202
2004.......................................... 212
Thereafter.................................... 5,673
--------
$ 39,803
========
</TABLE>

A $4,150,000 Industrial Revenue Bond was issued in November 1975 through the
City of Broomfield, Colorado and carries an interest rate of 7.875% per annum.
The balance of $2,075,000 is due in May 2000.

A $6,500,000 Industrial Development Revenue Bond was originally issued in
April 1985, through the City of Santa Ana, California for the construction of
improvements and new facilities at the Company's Santa Ana plant. Of this loan,
$4,200,000 remained outstanding at October 3, 1999. It was remarketed in 1995
and carries an average interest rate of 6.75% per annum. The terms of the bond
require principal payments of $100,000 annually from 2000 to 2004 and
$3,700,000 in 2005. A $4,466,000 letter of credit is carried by a bank to
guarantee the repayment of this bond. There are no compensating balance
requirements. An annual commitment fee of 2% is charged on this letter of
credit. In addition, the agreement contains covenants regarding net worth and
working capital. The Company was in compliance with the aforementioned
covenants at October 3, 1999.

In June 1997, the Company entered into a $2,700,000 equipment loan
agreement, providing for monthly principal payments through July 2002 of
$45,000 plus interest at 5.93% per annum. $1,530,000 of this loan remained
outstanding at October 3, 1999. This loan is secured by the related equipment.

In September 1997, the Company issued and assumed notes payable of
$2,370,000 related to the PPC acquisition. These notes are payable to the
former owners, bear an interest rate of 7%, and are due in monthly installments
of principal and interest over various periods through September 2009.
$1,794,000 of these notes remained outstanding at October 3, 1999. One of these
notes is secured by the related acquired building.

In June 1998, the Company finalized an amendment to its then-existing bank
credit facility, which added a $10,000,000 term loan. $9,667,000 of this loan
was outstanding at September 27, 1998, used by Microsemi to finance a portion
of the BKC acquisition. This term loan was paid in full when the Company
obtained new credit arrangements with its banks in April 1999.

In April 1999, the Company obtained a new credit agreement with its banks,
which included a term loan of $30,000,000 and a revolving line of credit of
$30,000,000 to finance the acquisition of LinFinity Microelectronics, Inc.
("LinFinity"), a subsidiary of Symmetricom, Inc., and to pay off the existing
term loan and the revolving line of credit.

As to the new $30,000,000 term loan, $28,000,000 of this loan remained
outstanding at October 3, 1999 and is secured by substantially all of the
assets of the Company. It bears interest at the bank's prime rate plus .75% to
1.5% per annum or, at the Company's option, at the Eurodollar rate plus 1.75%
to 2.5% per annum. The interest rate is determined by the ratio of total funded
debt to Earnings before Interest Expense (net of interest income), Income
Taxes, Depreciation and Amortization ("EBITDA"). It requires monthly interest

F-15
<PAGE>

MICROSEMI CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

payments and quarterly principal payments of $1,000,000 from June 1999 to March
2000, $1,500,000 from June 2000 to March 2001, $2,000,000 from June 2001 to
March 2002 and $3,000,000 from June 2002 to March 2003. The terms of the term
loan contain covenants regarding net worth and working capital and restricting
payment of cash dividends or share repurchases. The Company was in compliance
with these covenants at October 3, 1999.

Concurrent with the new term loan, the Company obtained a new $30,000,000
revolving line of credit, which expires in March 2003. This line of credit
replaced its then-existing $15,000,000 credit line. The new line of credit is
secured by substantially all of the assets of the Company. It bears interest at
the bank's prime rate plus .75% to 1.5% per annum or, at the Company's option,
at the Eurodollar rate plus 1.75% to 2.5% per annum. The interest rate is
determined by the ratio of total funded debt to EBITDA. The terms of the
revolving line of credit contain covenants regarding net worth and working
capital and restricting payment of cash dividends or share repurchases. The
Company was in compliance with these covenants at October 3, 1999. At October
3, 1999, the interest rate applicable to the line of credit was 7.94%, and
$18,500,000 was outstanding. At October 3, 1999, $7,100,000 was available under
the line of credit.

In February 2000, the Company issued a subordinated convertible debenture of
$2,500,000 related to the Micro WaveSys acquisition. This debenture is payable
to Infinesse Corporation on February 14, 2002 and is convertible into the
Company's common stock within two years at $15 per share (not to exceed
166,667 shares). Interest only is payable quarterly, at 7% per annum, starting
June 1, 2000.

Other debts consist of various loans bearing interest at ranges from 5% to
9.75% and require periodic principal payments through September 2014. At
October 3, 1999, totals of $2,204,000 remained outstanding for these loans.

The Company occupies a building in Santa Ana, California, which is under a
long-term capital lease obligation that is included in other long-term
liabilities at October 3, 1999. Future annual payments due under this capital
lease obligation are as follows (amounts in 000's):

<TABLE>
<CAPTION>
<S> <C>
2000.......................................... $ 279
2001.......................................... 279
2002.......................................... 279
2003.......................................... 279
2004.......................................... 279
Thereafter.................................... 6,870
-------
Total minimum lease payments.................. 8,265
Less imputed interest......................... (5,100)
-------
Present value of capitalized lease
obligation................................... $ 3,165
=======
</TABLE>

The building under this capital lease obligation is reflected in property
and equipment, net.

8. STOCK OPTIONS AND EMPLOYEE BENEFIT PLANS

Stock Options

Under the terms of an incentive stock option plan adopted in fiscal year
1982 and amended in fiscal year 1985, nontransferable options to purchase
common stock may be granted to certain key employees. The Company reserved
750,000 shares for issuance under the terms of the plan. The options may be
exercised within ten years from the date they are granted, subject to early
termination upon death or cessation of

F-16
<PAGE>

MICROSEMI CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

employment, and are exercisable in installments determined by the Board of
Directors. For certain significant shareholders, the exercise period is limited
to five years and the exercise price is higher.

In December 1986, the Board of Directors adopted another incentive stock
option plan (the "1987 Plan") which reserved an additional 750,000 shares of
common stock for issuance. The 1987 Plan was approved by the shareholders in
February 1987 and is for the purpose of securing for the Company and its
shareholders the benefits arising from stock ownership by selected officers,
directors and other key executives and management employees. The plan provides
for the grant by the Company of stock options, stock appreciation rights,
shares of common stock or cash. As of October 3, 1999, the Company only granted
options under the 1987 Plan. The options may be exercised within ten years from
the date they are granted, subject to early termination upon death or cessation
of employment, and are exercisable in installments determined by the Board of
Directors. For certain significant shareholders, the exercise period is limited
to five years and the exercise price is higher.

At their annual meetings on February 25, 1994 and February 29, 2000, the
shareholders approved several amendments to the 1987 Plan which, cumulatively,
1) extended its termination date to December 15, 2009; 2) increased to
2,420,814 the number of shares available as of October 4, 1999 for grants; 3)
will increase on the first day of each fiscal year, the number of shares
available for grant in increments of 4% of the Company's issued and outstanding
shares of common stock; 4) set a limit on the number of options or shares which
may be granted to any one individual in any year; 5) eliminate limitations on
the Board of Directors' designating one or more committees of any size or
composition to administer the 1987 Plan; 6) provide for automatic grants of
stock options to non-employee directors; and 7) allow discretionary grants to
be made to non-employees.

Activity and price information regarding the plans are as follows:

<TABLE>
<CAPTION>
Stock Options
------------------------
Weighted
Average Price
Shares per Share
--------- -------------
<S> <C> <C>
Outstanding September 29, 1996......................... 740,515 $ 4.48
=========
Granted.............................................. 191,300 $11.45
Exercised............................................ (227,551) $ 1.97
---------
Outstanding September 28, 1997......................... 704,264 $ 7.12
=========
Granted.............................................. 189,500 $15.84
Exercised............................................ (191,669) $ 4.31
Expired or canceled.................................. (64,705) $10.05
---------
Outstanding September 27, 1998......................... 637,390 $10.44
=========
Granted.............................................. 416,000 $10.06
Exercised............................................ (13,688) $ 3.76
Expired or canceled.................................. (66,075) $10.81
---------
Outstanding October 3, 1999............................ 973,627 $10.35
=========
Granted.............................................. 641,500 $17.92
Exercised............................................ (219,703) $ 9.73
---------
Outstanding April 2, 2000 (unaudited).................. 1,395,424 $13.92
=========
</TABLE>

Stock options exercisable were 308,164, 263,590, 453,240 and 333,099
(unaudited) at September 28, 1997, September 27, 1998, October 3, 1999 and
April 2, 2000, respectively, at weighted average exercise prices of $4.34,
$7.24, $10.40 and $10.83 (unaudited), respectively. Remaining shares available
for grant at

F-17
<PAGE>

MICROSEMI CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

September 28, 1997, September 27, 1998, October 3, 1999 and April 2, 2000 under
the plans were 262,473, 307,613, 203,013 and 310,312 (unaudited), respectively.
All options were granted at the fair market value of the Company's shares of
common stock on the date of grant.

The following table (unaudited) summarizes information about stock options
outstanding and exercisable at April 2, 2000, as required by SFAS 123:

<TABLE>
<CAPTION>
Options
Options Outstanding Exercisable
--------------------- -------------------
Weighted Average Weighted
--------------------- Average
Range of Exercise Remaining Exercise
Exercise Prices Shares Price Life Shares Price
---------------- --------- -------- --------- ------- --------
<S> <C> <C> <C> <C> <C>
$ 1.00 -- $ 3.88 32,800 $ 2.72 2.1 years 32,800 $ 2.72
$ 4.44 -- $ 5.00 58,774 $ 4.73 4.5 years 58,774 $ 4.73
$ 6.75 -- $ 7.38 306,300 $ 6.78 9.6 years -- $ --
$ 7.44 -- $ 9.88 245,300 $ 8.00 7.5 years 70,300 $ 9.04
$11.25 -- $11.77 101,300 $11.29 6.9 years 63,025 $11.28
$12.38 -- $17.25 328,450 $13.90 8.1 years 88,200 $14.91
$28.88 322,500 $28.88 9.9 years 20,000 $28.88
--------- -------
1,395,424 333,099
========= =======
</TABLE>

The Company accounts for its option plans under APB Opinion No. 25. Had
compensation expense for the Company's option plans been determined based upon
an estimate of the fair value at the grant date consistent with the
requirements of SFAS 123, the Company's net income and earnings per share would
have been reduced to the pro forma amounts in the following table. The SFAS 123
method of accounting was not applied to options granted prior to fiscal 1996.

<TABLE>
<CAPTION>
September 28, September 27, October 3,
1997 1998 1999
------------- ------------- ----------
(amounts in 000's)
<S> <C> <C> <C>
Net income
As reported...................... $11,051 $11,322 $1,499
Pro forma........................ $10,577 $10,404 $ 553
Basic earnings per share
As reported...................... $ 1.30 $ 1.05 $ .13
Pro forma........................ $ 1.25 $ .97 $ .05
Diluted earnings per share
As reported...................... $ 1.03 $ .98 $ .13
Pro forma........................ $ .98 $ .90 $ .05
</TABLE>

The fair value of each stock option grant was estimated pursuant to SFAS 123
on the date of grant using the Black-Scholes option pricing model with the
following weighted average assumptions:

<TABLE>
<CAPTION>
1997 1998 1999
------- ------- -------
<S> <C> <C> <C>
Risk free interest rates....................... 5.98% 5.55% 4.94%
Expected dividend yield........................ None None None
Expected lives................................. 5 years 5 years 5 years
Expected volatility............................ 66.6% 76.4% 67.0%
</TABLE>

The weighted average grant date fair values of options granted during fiscal
years 1997, 1998 and 1999 were $11.45, $15.84 and $10.06, respectively.

F-18
<PAGE>

MICROSEMI CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

Employee Benefit Plans

The Microsemi Corporation Profit Sharing Plan, adopted by the Board of
Directors in fiscal year 1984, covers substantially all full-time employees who
meet certain minimum employment requirements and provides for current bonuses
based upon the Company's earnings. Annual contributions to the plan are
determined by the Board of Directors. Total charges to income were $3,070,000,
$2,509,000 and $1,745,000 in fiscal years 1997, 1998 and 1999, respectively.

401(k) Plan

The Company sponsors a 401(k) Savings Plan whereby participating employees
may elect to contribute up to 15% of their eligible wages. The Company is
committed to match 50% of employee contributions, not exceeding 3% of the
employee's wages. The Company contributed $899,000, $1,005,000 and $1,148,000
to this plan during fiscal years 1997, 1998 and 1999, respectively.

Supplemental Retirement Plan

In fiscal year 1994, the Company adopted a supplemental retirement plan
which provides certain long-term employees with retirement benefits based upon
a certain percentage of the employees' salaries. Included in other long-term
liabilities at September 27, 1998 and October 3, 1999 was $1,400,000 and
$1,327,000, respectively, related to the Company's estimated liability under
the plan.

9. COMMITMENTS AND CONTINGENCIES

The Company occupies premises under operating lease agreements expiring
through 2029. Aggregate future minimum rental payments under these leases are
(amounts in 000's):

<TABLE>
<CAPTION>
Fiscal Year
-----------
<S> <C>
2000.......................................... $ 1,564
2001.......................................... 1,152
2002.......................................... 1,046
2003.......................................... 846
2004.......................................... 813
Thereafter.................................... 9,403
--------
$ 14,824
========
</TABLE>

Rental expense charged to income was $661,000 in fiscal year 1997, $411,000
in fiscal year 1998, and $182,000 in fiscal year 1999. The aforementioned
amounts are net of sublease income amounting to $272,000, $557,000 and $514,000
in fiscal years 1997, 1998 and 1999, respectively.

In Broomfield, Colorado, the owner of a property located adjacent to a
manufacturing facility owned by a subsidiary of the Company had filed suit
against the subsidiary and other parties, claiming that contaminants migrated
to his property, thereby diminishing its value. In August 1995, the subsidiary,
together with former owners of the manufacturing facility, agreed to settle the
claim and to indemnify the owner of the adjacent property for remediation
costs. Although TCE and other contaminants previously used at the facility are
present in soil and groundwater on the subsidiary's property, the Company
vigorously contests any assertion that the subsidiary is the cause of the
contamination. In November 1998, the Company signed an agreement with three
former owners of this facility whereby the former owners 1) reimbursed the
Company for $530,000 of past costs, 2) will assume responsibility for 90% of
all future clean-up costs, and 3) indemnify and protect the

F-19
<PAGE>

MICROSEMI CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

Company against any and all third-party claims relating to the contamination of
the facility. State and local agencies in Colorado are reviewing current data
and considering study and cleanup options, and it is not yet possible to
predict costs for remediation. In the opinion of management, the final outcome
of the Broomfield, Colorado environmental matter will not have a material
adverse effect on the Company's financial position or results of operations.

The Company is involved in various pending litigation arising out of the
normal conduct of its business, including those relating to commercial
transactions, contracts, and environmental matters. In the opinion of
management, the final outcome of these matters will not have a material adverse
effect on the Company's financial position or results of operations.

10. ACQUISITIONS AND DISPOSITION

General Microcircuits, Inc.

In December 1997, the Company sold General Microcircuits, Inc., a wholly
owned subsidiary in Mooresville, North Carolina, for $5,000,000 in cash and a
$2,000,000 note receivable. Microsemi did not realize any material gain or loss
from this transaction.

BKC Semiconductors, Incorporated

In May 1998, the Company acquired BKC Semiconductors, Incorporated ("BKC"),
located in Lawrence, Massachusetts, for approximately $13,740,000 in cash plus
existing indebtedness of BKC of approximately $3,359,000. Microsemi financed
this acquisition with cash on hand and advances under its existing credit
facilities, as amended. BKC was a publicly held company which manufactured
discrete semiconductors. The acquisition was accounted for under the purchase
method. The allocation of the purchase price to the assets and liabilities of
BKC was based upon the Company's estimates of the relative values of the assets
acquired and liabilities assumed. The Company recorded $9,839,000 of goodwill
related to this acquisition. The Company's consolidated results of operations
for the fiscal year ended September 27, 1998 include the operations of BKC
since the date of acquisition. The results of operations of BKC prior to the
date of acquisition were not material.

LinFinity Microelectronics, Inc.

In April 1999, Microsemi acquired all of the outstanding capital stock of
LinFinity Microelectronics, Inc. ("LinFinity"), a subsidiary of Symmetricom,
located in Garden Grove, California. LinFinity manufactures analog and mixed
signal integrated circuits ("ICs"), as well as systems-engineered modules for
use primarily in power management and communication applications in commercial,
industrial, defense and space markets. The purchase price was $24,125,000,
which was funded with cash and bank borrowings. The Company also paid
approximately $385,000 for expenses related to this acquisition. The
acquisition was accounted for under the purchase method. The Company's
consolidated results of operations include those of LinFinity since the date of
acquisition.

F-20
<PAGE>

MICROSEMI CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

in-process R & D project at the date of acquisition, estimating cash flows
resulting from the future release of products employing these technologies, and
discounting the net cash flows back to their present values. At the date of
acquisition, technological feasibility of the in-process R & D projects had not
been reached and the technology had no alternative future uses. Accordingly,
the Company expensed the portion of the purchase price allocated to in-process
R & D of $1,950,000, in accordance with generally accepted accounting
principles, in the year ended October 3, 1999.

The in-process R & D comprises a number of individual technological
development efforts, focusing on the discovery of new, technologically advanced
knowledge and more complete solutions to customers' needs, the conceptual
formulation and design of possible alternatives, as well as the testing of
process and product cost improvements. Specifically, these technologies
included efforts regarding BiCMOS process based products, Backlight Inverters,
and Audio products.

The weighted average stage of completion for all projects, in the aggregate,
was approximately 82% as of the acquisition date. As of that date, the
estimated remaining costs to bring the projects under development to
technological feasibility are over $437,000. Cash flows from sales of products
incorporating those technologies were estimated to commence in the year 2000.
Revenues forecasted in each period were reduced by related expenses, capital
expenditures, and the cost of working capital. The discount rate applied to the
net cash flows was 29%, which reflected the level of risk associated with the
particular technologies and the current return on investment requirements of
the market.

As discussed above, a portion of the LinFinity purchase price was allocated
to completed technology, customer lists, and assembled workforce. The total
allocation approximated $2,610,000 for these other intangible assets.

The following unaudited pro forma results have been prepared for comparative
purposes only and include certain pro forma adjustments. Such pro forma amounts
are not necessarily indicative of what actual consolidated results of
operations might have been if the LinFinity acquisition had been effective at
the beginning of fiscal year 1998.

<TABLE>
<CAPTION>
Year ended Year ended
September 27, October 3,
1998 1999
------------- ----------
(amounts in 000's)
<S> <C> <C>
Revenues............................................... $211,980 $211,584
Cost of sales.......................................... 158,245 162,939
-------- --------
Gross profit........................................... 53,735 48,645
Operating expenses..................................... 43,223 43,100
-------- --------
Income from operations................................. 10,512 5,545
Other expense.......................................... 2,322 3,158
-------- --------
Income before income taxes............................. 8,190 2,387
Provision for income taxes............................. 3,720 544
-------- --------
Net income............................................. $ 4,470 $ 1,843
======== ========
Earnings per share:
Basic................................................ $ 0.42 $ 0.17
======== ========
Diluted.............................................. $ 0.37 $ 0.16
======== ========
</TABLE>

Microsemi Mircowave Products, Inc.

In June 1999, Microsemi Microwave Products, Inc. ("MMP"), a subsidiary of
the Company, acquired, from L-3 Communications Corporation, certain assets of
Narda Microwave East/Semiconductor Operation

F-21
<PAGE>

MICROSEMI CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

("Narda") located in Lowell, Massachusetts. The total cost of this acquisition
was approximately $5,060,000. The assets acquired are used in the manufacture
of semiconductor components including varactor diodes, pin diodes, chip
capacitors and Schottky devices used in telecommunications, wireless, satellite
and industrial test/measurement applications. The results of operations of
Narda prior to June 1999 were not material to the Company's consolidated
results of operations, accordingly, pro forma information is not presented.

Micro WaveSys, Inc. (unaudited)

In February 2000, Microsemi acquired certain assets of the HBT Business
Products Group of Infinesse Corporation ("Infinesse"). This business (now
called Micro WaveSys, Inc.) specializes in RF components utilizing III-V
Compounds (primarily Gallium Arsenide and Indium Gallium Phosphide), and SiGe
semiconductors for advanced cellular, PCS and 3G, BlueTooth, and 5.7 GHz LAN
applications. The cost of this acquisition was approximately $15,110,000, which
was funded with cash, debt, shares of Microsemi's common stock, and the
issuance of a note convertible into shares of Microsemi's common stock. The
acquisition was accounted for under the purchase method of accounting, and
goodwill resulting from this acquisition was approximately $9,860,000.
Microsemi's consolidated results of operations include those of Micro WaveSys
since the date of acquisition. Micro WaveSys, Inc. has 1,000 authorized shares,
of which Microsemi owns 800 shares, Infinesse owns 100 shares, and 100 shares
are reserved for future option grants.

The costs of the acquisition were allocated to the assets acquired and
liabilities assumed based on their estimated fair values to the extent of the
aggregate purchase price. Portions of the purchase price were allocated to
certain intangible assets such as completed technology, assembled workforce,
and in-process research and development ("R & D"). The allocation of the
purchase price to these intangible assets was based on an independent valuation
report. The amount of the purchase price allocated to in-process R & D was
determined by estimating the stage of completion of each in-process R & D
project at the date of acquisition, estimating cash flows resulting from the
future release of products employing these technologies, and discounting the
net cash flows back to their present values. At the date of acquisition,
technological feasibility of the in-process R & D projects had not been reached
and the technology had no alternative future uses without further development.
Accordingly, Microsemi expensed the portion of the purchase price allocated to
in-process R & D of $2,510,000, in accordance with generally accepted
accounting principles, in the quarter ended April 2, 2000.

The in-process R & D comprises a number of individual technological
development efforts, focusing on the discovery of new, technologically advanced
knowledge and more complete solutions to customers' needs, the conceptual
formulation and design of possible alternatives, as well as the testing of
process and product cost improvements. Specifically, these technologies
included efforts regarding Microsemi's strategy of expanding product offerings
into the high growth wireless, broadband, and the analog and mixed signal IC
sectors.

The weighted average stage of completion for all projects, in the aggregate,
was approximately 60% as of the acquisition date. As of that date, the
estimated remaining costs to bring the projects under development to
technological feasibility was over $500,000. Upon completion, cash flows from
sales of products incorporating those technologies were estimated to commence
in the year 2000. Revenues forecasted in each period were reduced by related
expenses, capital expenditures, and the cost of working capital. The discount
rate applied to the net cash flows was 28%, which reflected the level of risk
associated with the particular technologies and the current return on
investment requirements of the market.

As discussed above, a portion of the costs of acquisition was allocated to
completed technology and assembled workforce. The total allocation approximated
$2,490,000 for these intangible assets.

Pro forma results as if the acquisition had taken place in the prior year
would not be materially different from the Company's reported results.

F-22
<PAGE>

MICROSEMI CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

11. SEGMENT INFORMATION

In 1999, the Company adopted SFAS 131. The Company's reportable operating
segments are based on geographic location, and the measure of segment profit is
income from operations. The accounting policies of the segments are the same as
those described in the summary of significant accounting policies.

The Company operates predominantly in a single industry segment as a
manufacturer of discrete semiconductors. Geographic areas in which the Company
operates include the United States, Ireland, Hong Kong, and India.
Intergeographic sales primarily represent intercompany sales which are
accounted for based on established sales prices between the related companies
and are eliminated in consolidation.

Financial information by geographic segments is as follows:

<TABLE>
<CAPTION>
Six months
Fiscal years ended ended
--------------------------------------- ---------------
September 28, September 27, October 3, ended April 2,
1997 1998 1999 2000
------------- ------------- ----------- ---------------
(unaudited)
(amounts in 000's)
<S> <C> <C> <C> <C>
Net sales
United States
Sales to unaffiliated
customers................. $147,094 $145,242 $159,695 $ 55,780
Intergeographic sales...... 10,587 14,484 23,463 4,482
Europe
Sales to unaffiliated
customers.................. 13,885 15,350 17,084 4,330
Intergeographic sales...... 19,039 7,121 3,823 1,042
Asia
Sales to unaffiliated
customers.................. 2,255 4,118 8,302 862
Intergeographic sales...... 8,732 6,548 4,381 835
Eliminations of
intergeographic sales...... (38,358) (28,153) (31,667) (6,359)
-------- -------- -------- --------
$163,234 $164,710 $185,081 $ 60,972
======== ======== ======== ========
Income from operations:
United States.............. $ 20,327 $ 17,210 $ 4,378 $ 1,477
Europe..................... 1,983 1,621 476 218
Asia....................... 209 1,628 235 (7)
-------- -------- -------- --------
Total.................... $ 22,519 $ 20,459 $ 5,089 $ 1,688
======== ======== ======== ========
Identifiable assets:
United States.............. $123,293 $131,663 $166,429 $177,080
Europe..................... 5,148 5,982 8,019 8,110
Asia....................... 6,753 7,443 7,153 6,275
-------- -------- -------- --------
Total.................... $135,194 $145,088 $181,601 $191,465
======== ======== ======== ========
Capital expenditures:
United States.............. $ 5,517 $ 5,302 $ 7,712 $ 5,393
Europe..................... 164 224 160 21
Asia....................... 371 379 60 40
-------- -------- -------- --------
Total.................... $ 6,052 $ 5,905 $ 7,932 $ 5,454
======== ======== ======== ========
Depreciation and
amortization:
United States.............. $ 3,637 $ 4,314 $ 8,334 $ 4,767
Europe..................... 272 618 169 93
Asia....................... 348 349 315 146
-------- -------- -------- --------
Total.................... $ 4,257 $ 5,281 $ 8,818 $ 5,006
======== ======== ======== ========
</TABLE>

F-23
<PAGE>

MICROSEMI CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

12. STATEMENT OF CASH FLOWS

For purposes of the Consolidated Statements of Cash Flows, the Company
considers all short-term, highly liquid investments with maturities of three
months or less at date of acquisition to be cash equivalents.

<TABLE>
<CAPTION>
Six months
Fiscal years ended ended
-------------------------------------- -----------
September 28, September 27, October 3, April 2,
1997 1998 1999 2000
------------- ------------- ---------- -----------
(unaudited)
<S> <C> <C> <C> <C>
Cash paid during the period
for:
Interest.................. $ 3,446 $ 1,858 $ 3,324 $ 2,418
======= ======== ======= ========
Income taxes.............. $ 6,707 $ 7,619 $ 1,840 $ 92
======= ======== ======= ========
Non-cash financing and
investing activities:
Conversion of subordinated
debt into 614,807 and
2,852,829 shares of
common stock in fiscal
years 1997 and 1998,
respectively............. $ 1,170 $ 33,986 $ -- $ --
======= ======== ======= ========
Fixed assets purchased
through issuance of long
term debt:............... $ 3,821 $ -- $ 3,165 $ --
======= ======== ======= ========
Stock options:
Exercises................. $ 487 $ 899 $ -- $ --
Stock surrendered in lieu
of cash.................. (190) (342) -- --
------- -------- ------- --------
Net cash received......... $ 297 $ 557 $ -- $ --
======= ======== ======= ========
Businesses acquired in
purchase transactions (Note
10):
Fair values of assets
acquired................. $ 8,789 $ 7,260 $31,547 $ 250
Goodwill and other
intangible assets........ -- 9,839 5,523 14,860
Less debt issued and
liabilities assumed...... (3,588) (3,359) (7,500) (13,562)
------- -------- ------- --------
Cash paid for
acquisition.............. $ 5,201 $ 13,740 $29,570 $ 1,548
======= ======== ======= ========
</TABLE>

F-24
<PAGE>

MICROSEMI CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

13. UNAUDITED SELECTED QUARTERLY FINANCIAL DATA

Selected quarterly financial data are as follows:

<TABLE>
<CAPTION>
Quarters ended
-------------------------------------------------------
January 3, April 4, July 4, October 3, January 2, April 2,
1999 1999 1999 1999 2000 2000
---------- -------- ------- ---------- ---------- --------
(amounts in 000's, except earnings per share)
<S> <C> <C> <C> <C> <C> <C>
Net sales............... $39,417 $39,491 $48,758 $57,415 $54,588 $60,972
Gross profit............ $10,861 $10,345 $11,968 $ 7,696 $13,568 $17,159
Net income (loss)....... $ 2,280 $ 1,994 $ (670) $(2,105) $ 966 $ 194
Basic earnings (loss)
per share.............. $ 0.20 $ 0.18 $ (0.06) $ (0.19) $ 0.09 $ 0.02
Diluted earnings (loss)
per share.............. $ 0.20 $ 0.18 $ (0.06) $ (0.19) $ 0.09 $ 0.02
</TABLE>

For the quarter ended October 3, 1999, the Company recorded a $5,951,000
charge to cost of sales. The charge was made because of reductions in estimates
of utilization and realizable value of certain inventories resulting from
recent changes in market conditions and customer requirements.

<TABLE>
<CAPTION>
Quarters ended
---------------------------------------------
December 28, March 29, June 28, September 27,
1997 1998 1998 1998
------------ --------- ------- -------------
(amounts in 000's, except earnings per
share)
<S> <C> <C> <C> <C>
Net sales......................... $44,052 $41,194 $39,291 $40,173
Gross profit...................... $12,355 $12,018 $11,315 $11,597
Net income........................ $ 3,092 $ 3,416 $ 2,347 $ 2,467
Basic earnings per share.......... $ 0.35 $ 0.33 $ 0.20 $ 0.21
Diluted earnings per share........ $ 0.28 $ 0.29 $ 0.20 $ 0.21
</TABLE>

F-25
<PAGE>

[Graphic: Chest x-ray picture MEDTRONIC GUIDANT ST JUDE MEDICAL
of a human with GE MEDICAL
heart pacer] medical

[Graphic: Notebook computer] COMPAQ DELL SEAGATE
GIGABYTE
computers/peripherals

[Graphic: Person, wearing a MAGNETEK DELCO MERCURYMARINE
safety suit, welding] LUCENT
industrial/commercial

[Graphic: Man looking at ALCATEL ERICSSON NOKIA NORTEL
PBX monitor] telecommunications

[Graphic: View of cockpit LOCKHEED MARTIN BOEING
instruments at night] HONEYWELL RAYTHEON
military/aerospace

[Graphic: Handheld phone] MOTOROLA SAMSUNG MITSUBISHI
PALM
mobile connectivity

[Graphic: Astronaut on space LOCKHEED MARTIN TECSTAR BOSCH
walk in earth orbit] space/satellites

<PAGE>

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

2,220,000 Shares

[LOGO OF MICROSEMI APPEARS HERE]

Common Stock

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

PROSPECTUS

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

A.G. Edwards & Sons, Inc.

CIBC World Markets

Needham & Company, Inc.

May , 2000

- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>

PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

Item 14. Other Expenses of Issuance and Distribution.

The following sets forth the costs and expenses, all of which shall be borne
by the registrant, in connection with the offering of the shares of Common
Stock pursuant to this Registration Statement:

<TABLE>
<S> <C>
Securities and Exchange Commission Fees........................ $ 17,166
"Blue Sky" Fees................................................ $ 10,000 *
Nasdaq National Market Fees.................................... $ 17,500 *
Accounting Fees and Expenses................................... $ 50,000 *
Legal Fees and Expenses........................................ $150,000 *
Printing Fees.................................................. $100,000 *
Miscellaneous Expenses......................................... $155,334 *
----------
Total...................................................... $500,000 *
</TABLE>
- --------
* Estimated

Item 15. Indemnification of Directors and Officers.

(a) Section 145 of the Delaware General Corporation Law makes provision for
the indemnification of officers and directors in terms sufficiently broad to
include indemnification under certain circumstances for liabilities (including
reimbursement for expenses incurred) arising under the Securities Act of 1933,
as amended (the "Securities Act"). Section 145 of the Delaware General
Corporation Law permits indemnification by a corporation of its officers and
directors against expenses (including attorneys' fees), judgments, fines and
amounts paid in settlement actually and reasonably incurred by them in
connection with actions or proceedings against them if they acted in good faith
and in a manner they reasonably believed to be in or not opposed to the best
interests of the corporation, and, with respect to any criminal action or
proceeding, had no reason to believe their conduct was unlawful. Section 145
provides that no indemnification may be made, however, without court approval,
in respect of any claim as to which the officer or director is adjudged to be
liable to the corporation. Such indemnification provisions of Delaware law are
expressly not exclusive of any other rights which the officers or directors may
have under the corporation's by-laws or agreements, pursuant to the vote of
stockholders or disinterested directors or otherwise.

(b) The Restated Certificate of Incorporation of the registrant provides
that the registrant will, to the maximum extent permitted by law, indemnify
each of its officers and directors against expenses, judgments, fines,
settlements and other amounts actually and reasonably incurred in connection
with any proceeding arising by reason of the fact any such person is or was a
director or officer of the registrant.

(c) The registrant has agreed to indemnify the Selling Stockholders and any
brokers or other persons deemed to be their underwriters, and any persons
deemed to control the Selling Stockholders or such underwriters within the
meaning of Section 15 of the Securities Act, from liabilities arising in
connection with this Registration Statement, excluding liabilities based upon
false or misleading information included in this Registration Statement
provided in writing to the registrant by the Selling Stockholders specifically
for inclusion herein.

II-1
<PAGE>

Item 16. Exhibits and Financial Statement Schedule.

(a) Exhibits.

<TABLE>
<CAPTION>
Exhibit
Number Description
------- -----------
<C> <S>
1.1 Form of Underwriting Agreement./1/

5.1 Opinion of Stradling, Yocca, Carlson & Rauth, a Professional
Corporation./1/

23.1 Consent of Stradling, Yocca, Carlson & Rauth, a Professional
Corporation
(included in Exhibit 5.1)./1/

23.2 Consent of PricewaterhouseCoopers LLP.

24.1 Power of Attorney./1/
</TABLE>
- --------
/1/Incorporated by reference to the Registration Statement on Form S-3 filed by
Microsemi Corporation on April 14, 2000.

(b) Financial Statement Schedule.

Schedule II--Valuation and Qualifying Accounts.

Item 17. Undertakings.

(a) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to Section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
registration statement 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.

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

(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-2
<PAGE>

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this Amendment No. 2 to
registration statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Newport Beach, State of California, on the 19th
day of May, 2000.

MICROSEMI CORPORATION
(Registrant)

/s/ David R. Sonksen
By: _________________________________
David R. Sonksen
Vice President--Finance,
Chief Financial Officer,
Secretary and Treasurer

II-3
<PAGE>

Pursuant to the requirements of the Securities Act of 1933, this Amendment
No. 2 to Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.

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

<S> <C> <C>
/s/ Philip Frey, Jr.* Chairman of the Board, May 19, 2000
____________________________________ President and Chief
Philip Frey, Jr. Executive Officer
(Principal Executive
Officer)

/s/ David R. Sonksen Vice President--Finance, May 19, 2000
____________________________________ Chief Financial Officer,
David R. Sonksen Secretary and Treasurer
(Principal Financial
Officer and Principal
Accounting Officer)

/s/ Brad Davidson* Director May 19, 2000
____________________________________
Brad Davidson

/s/ Robert B. Phinizy* Director May 19, 2000
____________________________________
Robert B. Phinizy

/s/ Joseph M. Scheer* Director May 19, 2000
____________________________________
Joseph M. Scheer

/s/ Martin H. Jurick* Director May 19, 2000
____________________________________
Martin H. Jurick

/s/ H.K. Desai* Director May 19, 2000
____________________________________
H.K. Desai
</TABLE>

* By David R. Sonksen as Attorney in Fact

II-4
<PAGE>

REPORT OF INDEPENDENT ACCOUNTANTS ON
FINANCIAL STATEMENT SCHEDULE

To the Board of Directors and Stockholders
of Microsemi Corporation

Our audits of the consolidated financial statements of Microsemi Corporation
referred to in our report dated November 22, 1999, appearing in the
registration statement on Form S-3 of Microsemi Corporation also included an
audit of the financial statement schedule listed in Item 16 of this Form S-3.
In our opinion, this financial statement schedule presents fairly, in all
material respects, the information set forth therein when read in conjunction
with the related consolidated financial statements.

/s/ PricewaterhouseCoopers LLP
PricewaterhouseCoopers LLP

Costa Mesa, California

November 22, 1999

S-1
<PAGE>

MICROSEMI CORPORATION AND SUBSIDIARIES

SCHEDULE II--VALUATION AND QUALIFYING ACCOUNTS
(amounts in thousands)

<TABLE>
<CAPTION>
Column C Column E Column F
Column B Charged Column D Deductions- Balance
Balance at to costs Charged recoveries at end
beginning and to other and write- of
Column A Classification of period expenses accounts offs period
----------------------- ---------- -------- -------- ----------- --------
<S> <C> <C> <C> <C> <C>
April 2, 2000 (unaudited)
Allowance for doubtful
accounts and reserve for
returns .................. $ 3,805 $ 888 $ -- $ -- $ 4,693
======= ====== ======= ====== =======
Reserve for investments in
and advances to
unconsolidated
affiliates................ $ 1,297 $ -- $ -- $ -- $ 1,297
======= ====== ======= ====== =======
October 3, 1999
Allowance for doubtful
accounts and reserve for
returns................... $ 2,457 $ (230) $ 1,960 $ (382) $ 3,805
======= ====== ======= ====== =======
Reserve for investments in
and advances to
unconsolidated
affiliates................ $ 1,297 $ -- $ -- $ -- $ 1,297
======= ====== ======= ====== =======
September 27, 1998
Allowance for doubtful
accounts and reserve for
returns................... $ 2,665 $ -- $ -- $ (208) $ 2,457
======= ====== ======= ====== =======
Reserve for investments in
and advances to
unconsolidated
affiliates................ $ 1,297 $ -- $ -- $ -- $ 1,297
======= ====== ======= ====== =======
September 28, 1997
Allowance for doubtful
accounts and reserve for
returns................... $ 2,159 $ 506 $ -- $ -- $ 2,665
======= ====== ======= ====== =======
Reserve for investments in
and advances to
unconsolidated
affiliates................ $ 537 $ 760 $ -- $ -- $ 1,297
======= ====== ======= ====== =======
</TABLE>

S-2
<PAGE>

EXHIBIT INDEX

<TABLE>
<CAPTION>
Exhibit
Number Description
------- -----------
<C> <S>
1.1 Form of Underwriting Agreement./1/

5.1 Opinion of Stradling, Yocca, Carlson & Rauth, a Professional
Corporation./1/

23.1 Consent of Stradling, Yocca, Carlson & Rauth, a Professional
Corporation
(included in Exhibit 5.1)./1/

23.2 Consent of PricewaterhouseCoopers LLP.

24.1 Power of Attorney./1/
</TABLE>
- --------
/1/Incorporated by reference to the Registration Statement on Form S-3 filed by
Microsemi Corporation on April 14, 2000.

<PAGE>

EXHIBIT 23.2

CONSENT OF INDEPENDENT ACCOUNTANTS

We hereby consent to the use in this Registration Statement on Form S-3 of
our reports dated November 22, 1999 relating to the consolidated financial
statements and financial statement schedule, which appear in this Registration
Statement. We also consent to the incorporation by reference of our report
dated November 22, 1999 related to the consolidated financial statements of
Microsemi Corporation which appears in the Company's Annual Report on Form 10-K
for the fiscal year ended October 3, 1999. We also consent to the references to
us under the headings "Selected Consolidated Financial Data" and "Experts" in
such Prospectus.

/s/ PricewaterhouseCoopers LLP
PricewaterhouseCoopers LLP

Costa Mesa, California

May 19, 2000