Exhibit 99.1

PRESS RELEASE

Contact:

Kevin S. Bauer Sr. Vice President and CFO 510-668-7100 For Release July 26, 2011

Exar Corporation Reports Fiscal 2012 First Quarter Results

• Non-GAAP Net Results Improve $5.3 million quarter on quarter

Fremont, California, July 26, 2011 – Exar Corporation (Nasdaq: EXAR), today reported financial results for the first quarter of fiscal 2012 ending July 3, 2011.

Net sales for the first quarter of fiscal 2012 were $37.0 million compared to net sales of $33.8 million for the prior quarter and $39.6 million for the first quarter of fiscal 2011.

The GAAP gross margin for the first quarter of fiscal 2012 was 45.5% compared to 35.0 % for the prior quarter and 47.5% in the first quarter of fiscal 2011.

On a non-GAAP basis, the gross margin for the first quarter of fiscal 2012 was 48.6% compared to 46.1% for the prior quarter and 52.1% in the first quarter of fiscal 2011.

The GAAP net loss for the first quarter of fiscal 2012 was $1.4 million, or $0.03 net loss per share, compared to a net loss of $18.8 million, or $0.42 net loss per share in the prior quarter, and a net loss of $7.4 million, or $0.17 net loss per share, for the first quarter of fiscal 2011.

On a non-GAAP basis, the net income was $0.7 million for the first quarter of fiscal 2012 or $0.02 diluted earnings per share, compared to the net loss of $4.6 million in the prior quarter, or $0.10 net loss per share, and a net loss of $0.8 million, or $0.02 net loss per share, in the first quarter of fiscal 2011.

The Company generated $2.0 million in cash from operations during the first quarter of fiscal 2012 and ended with $202.4 million of cash, cash equivalents and short-term marketable securities.

“We are focused on accelerating profitable growth starting with the current quarter, after having just attained our initial goal of non-GAAP operating profitability,” said Pete Rodriguez, the Company’s president and chief executive officer. “This quarter we shipped samples of MXP2, critical to value creation, for the fast growing OTN space. This solution, the Company’s most complex design ever, is the industry’s first ODU0/ODU flex OTN Muxponder, supporting the broadest range of client ports with the lowest power consumption.”

For the second quarter of fiscal 2012 ending October 2, 2011, the Company projects that net sales will be between $37 million and $39 million. The non-GAAP gross margin is currently expected to be between 49% and 51%. Operating expenses are currently expected to be between $17 million and $18 million on a non-GAAP basis. On a GAAP basis, gross margin is currently expected to be between 46.5% and 48.5% and operating expenses are currently expected to be between $18.5 million and $20.5 million.

The Company’s statements about its future financial performance or operating plans are based on current information and expectations and the Company undertakes no duty to update such statements. These statements are forward-looking and actual results could differ materially due to various risks and uncertainties, some of which are described herein.

Results Conference Call

The Company invites investors, financial analysts, and the general public to listen to its conference call discussing the Company’s financial results for the first quarter of fiscal 2012, today, Tuesday, July 26, 2010 at 1:30 p.m. PDT. To access the conference call, please dial (888) 428-4474 by 1:20 p.m. PDT and use conference ID number 210689. In addition, a live webcast will also be available.

To access the webcast, please go to the Company’s Investors’ Relations Homepage at: http://www.exar.com/news/investornews.aspx. A replay of the call will be available starting at 3:00 p.m. PDT on July 26, 2011 until 11:59 p.m. PDT on August 2, 2011. To access the replay, please dial (800) 475-6701 and use conference ID number 210689.

Product Line Highlights:

DataCom and Storage

http://www.exar.com/Common/Content/News.aspx?id=9356

http://www.exar.com/Common/Content/News.aspx?id=9292

Power Management

http://www.exar.com/Common/Content/News.aspx?id=9418

Safe Harbor Statement

The Company’s statements about its future financial performance, changes in gross margins, net sales and operating expenses, resource allocation and its impact on future performance and product development initiatives, design win conversion, distribution and OEM trends, supply chain issues among others, are forward-looking statements that involve risks and uncertainties. These risks and uncertainties include global financial volatility, economic recession, and industry and market conditions, such as customer and distributor relationships; limited visibility associated with customer or distributor demand for the Company’s products; the possible loss of, or decrease in orders from, an important customer; cash balances; vendor capacity, quality or throughput constraints; successful integration of acquired businesses; possible disruption in commercial activities as a consequence of terrorist activity, natural disasters, armed conflict or

health issues; successful development, market acceptance and demand for the Company’s products, including those for which the Company has achieved design wins; competitive factors, such as pricing or competing solutions; customer ordering patterns; accounting considerations related to impairment analyses or acquisition related issues; the level of inventories maintained at the Company’s OEMs and distributors; and the Company’s successful execution of internal performance plans, as well as the other risks detailed from time to time in the Company’s SEC reports, including the Annual Report on Form 10-K for the year ended March 27, 2011.

Generally Accepted Accounting Principles

The Company reports its financial results in accordance with GAAP. Additionally, the Company supplements reported GAAP financials with non-GAAP measures which are included in related press releases and reports furnished to the SEC, copies of which are available at the Company’s website: http://www.exar.com or the SEC’s website at: http://www.sec.gov. For the periods presented, we are disclosing non-GAAP gross profit, non-GAAP gross margin, non-GAAP research and development expenses, non-GAAP selling, general and administrative expenses, non-GAAP operating expenses, non-GAAP operating income (loss), non-GAAP net income (loss), and non-GAAP diluted earnings (loss) per share, which are adjusted to exclude from our GAAP results all stock-based compensation expense, amortization of acquired intangible assets, fair value adjustment of acquired inventories, acquisition-related costs, exit costs, impairment of purchased intangible assets, and income tax effects. These non-GAAP measures are presented in part to enhance the understanding of the Company’s historical financial performance and comparability between reporting periods. The Company believes the non-GAAP presentation, when shown in conjunction with the corresponding GAAP measures, provide relevant and useful information to analysts, investors, management and other interested parties following the semiconductor industry. For its internal purposes, the Company uses the foregoing non-GAAP measures to evaluate performance across reporting periods, determine certain employee benefits as well as plan for and forecast the Company’s future periods. These non-GAAP measures are not in accordance with, or an alternative for measures prepared in accordance with GAAP, and may be different from non-GAAP measures used by other companies. In addition, these non-GAAP measures are not based on any comprehensive set of accounting rules or principles. The Company believes that non-GAAP measures have limitations in that they do not reflect all of the amounts associated with the Company’s results of operations as determined in accordance with GAAP. These measures should only be used to evaluate the Company’s results of operations in conjunction with the corresponding GAAP measures.

About Exar

Exar Corporation delivers highly differentiated silicon, software and subsystem solutions for industrial, consumer, and enterprise applications. For over 40 years, Exar’s comprehensive knowledge of end-user markets along with the underlying analog/mixed signal and digital technologies has enabled innovative solutions that meet the needs of the evolving connected world. Exar’s technology portfolio includes solutions for power management, serial interfaces, packet-based and TDM wireline communications, enterprise storage optimization, and data security. Exar has locations worldwide providing real-time customer support to drive rapid product development. For more information about Exar, visit: www.exar.com.

# # # #

EXAR CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands, except share amounts)

(Unaudited)

	JULY 3, 2011			MARCH 27, 2011
ASSETS
Current assets:
Cash and cash equivalents	$	23,352		$	15,039
Short-term marketable securities		179,070			185,960
Accounts receivable (net of allowances of $926 and $1,165)		11,236			9,776
Accounts receivable, related party (net of allowances of $154 and $358)		5,991			3,194
Inventories		20,165			21,962
Other current assets		4,510			3,562
Total current assets		244,324			239,493
Property, plant and equipment, net		24,509			38,009
Goodwill		3,184			3,184
Intangible assets, net		13,969			15,390
Other non-current assets		1,922			2,139
Total assets	$	287,908		$	298,215
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	10,312		$	8,794
Accrued compensation and related benefits		5,649			6,069
Deferred income and allowances on sales to distributors		4,306			4,632
Deferred income and allowances on sales to distributors, related party		13,148			10,680
Other accrued expenses		6,055			7,062
Total current liabilities		39,470			37,237
Long-term lease financing obligations		—			12,558
Other non-current obligations		3,865			3,841
Total liabilities		43,335			53,636
Total stockholders’ equity
Preferred stock, $.0001 par value; 2,250,000 shares authorized; no shares outstanding		—			—
Common stock, $.0001 par value; 100,000,000 shares authorized; 44,681,870 and 44,519,663 shares issued and outstanding at July 3, 2011 and March 27, 2011, respectively (net of treasury shares)		4			4
Additional paid-in capital		729,259			728,139
Accumulated other comprehensive income (loss)		13			(287	)
Treasury stock at cost, 19,924,369 shares at July 3, 2011 and March 27, 2011		(248,983	)		(248,983	)
Accumulated deficit		(235,720	)		(234,294	)
Total stockholders’ equity		244,573			244,579
Total liabilities and stockholders’ equity	$	287,908		$	298,215

EXAR CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share amounts)

(Unaudited)

	THREE MONTHS ENDED
	JULY 3, 2011			MARCH 27, 2011			JUNE 27, 2010
Net sales	$	25,073		$	22,579		$	28,365
Net sales, related party		11,905			11,192			11,271
Total net sales		36,978			33,771			39,636
Cost of sales:
Cost of sales		13,489			14,966			14,079
Cost of sales, related party		5,743			5,555			5,188
Amortization of purchased intangible assets		905			1,443			1,553
Total cost of sales		20,137			21,964			20,820
Gross profit		16,841			11,807			18,816
Operating expenses:
Research and development		9,395			12,744			14,443
Selling, general and administrative		9,600			11,094			12,957
Impairment of purchased intangible assets		—			7,485			—
Total operating expenses		18,995			31,323			27,400
Loss from operations		(2,154	)		(19,516	)		(8,584	)
Other income and expense, net:
Interest income and other, net		711			1,157			1,613
Interest expense		(60	)		(311	)		(318	)
Total other income and expense, net		651			846			1,295
Loss before income taxes		(1,503	)		(18,670	)		(7,289	)
Provision for (benefit from) income taxes		(77	)		166			125
Net loss	$	(1,426	)	$	(18,836	)	$	(7,414	)
Loss per share:
Basic loss per share	$	(0.03	)	$	(0.42	)	$	(0.17	)
Diluted loss per share	$	(0.03	)	$	(0.42	)	$	(0.17	)
Shares used in the computation of loss per share:
Basic		44,599			44,503			43,897
Diluted		44,599			44,503			43,897

EXAR CORPORATION AND SUBSIDIARIES

SUPPLEMENTAL RECONCILIATION OF GAAP TO NON-GAAP RESULTS

(In thousands, except per share amounts)

(Unaudited)

	THREE MONTHS ENDED
	JULY 3, 2011			MARCH 27, 2011			JUNE 27, 2010
Net Sales	$	36,978		$	33,771		$	39,636
GAAP gross profit	$	16,841		$	11,807		$	18,816
GAAP gross margin		45.5	%		35.0	%		47.5	%
Stock-based compensation		59			93			220
Amortization of acquired intangible assets		905			1,443			1,553
Fair value adjustment of acquired inventories		—			—			42
Exit costs		152			2,212			—
Non-GAAP gross profit		17,957			15,555			20,631
Non-GAAP gross margin		48.6	%		46.1	%		52.1	%
GAAP research and development expenses	$	9,395		$	12,744		$	14,443
Stock-based compensation		302			375			1,556
Amortization of acquired intangible assets		—			72			1,074
Exit costs		115			1,210			—
Non-GAAP research and development expenses	$	8,978		$	11,087		$	11,813
GAAP selling, general and administrative expenses	$	9,600		$	11,094		$	12,957
Stock-based compensation		523			769			1,546
Amortization of acquired intangible assets		174			254			298
Acquisition-related costs		—			—			328
Exit costs		58			165			—
Non-GAAP selling, general and administrative expenses	$	8,845		$	9,906		$	10,785
GAAP operating expenses	$	18,995		$	31,323		$	27,400
Stock-based compensation		825			1,144			3,102
Amortization of acquired intangible assets		174			326			1,372
Acquisition-related costs		—			—			328
Exit costs		173			1,375			—
Impairment of purchased intangible assets		—			7,485			—
Non-GAAP operating expenses	$	17,823		$	20,993		$	22,598
GAAP operating loss	$	(2,154	)	$	(19,516	)	$	(8,584	)
Stock-based compensation		884			1,237			3,322
Amortization of acquired intangible assets		1,079			1,769			2,925
Fair value adjustment of acquired inventories		—			—			42
Acquisition-related costs		—			—			328
Exit costs		325			3,587			—
Impairment of purchased intangible assets		—			7,485			—
Non-GAAP operating income (loss)	$	134		$	(5,438	)	$	(1,967	)
GAAP net loss	$	(1,426	)	$	(18,836	)	$	(7,414	)
Stock-based compensation		884			1,237			3,322
Amortization of acquired intangible assets		1,079			1,769			2,925
Fair value adjustment of acquired inventories		—			—			42
Acquisition-related costs		—			—			328
Exit costs		325			3,587			—
Impairment of purchased intangible assets		—			7,485			—
Income tax effects		(142	)		129			33
Non-GAAP net income (loss)	$	720		$	(4,629	)	$	(764	)
GAAP loss per share	$	(0.03	)	$	(0.42	)	$	(0.17	)
Stock-based compensation		0.02			0.03			0.08
Amortization of acquired intangible assets		0.02			0.04			0.07
Fair value adjustment of acquired inventories		—			—			0.00
Acquisition-related costs		—			—			0.01
Exit costs		0.01			0.08			—
Impairment of purchased intangible assets		—			0.17			—
Income tax effects		(0.00	)		0.00			0.00
Non-GAAP diluted earnings (loss) per share	$	0.02		$	(0.10	)	$	(0.02	)
Shares used in earnings (loss) per share — GAAP		44,599			44,503			43,897
The effect of dilutive potential common shares due to reporting Non-GAAP net income		206			—			—
The effect of removing stock-based compensation expense under SFAS 123R for Non-GAAP presentation purpose		(183	)		—			—
Shares used in diluted earnings per share — Non-GAAP		44,622			44,503			43,897

Notes: Exit costs are primarily excess inventory and severance charges in connection with exiting the 10GbE virtualization market. Certain amounts may not total due to rounding.

EXAR CORPORATION AND SUBSIDIARIES

SUPPLEMENTAL RECONCILIATION OF GAAP TO NON-GAAP GUIDANCE

(In millions)

	GUIDANCE FOR THE QUARTER ENDING OCTOBER 2, 2011
		ADJUSTMENTS
	NON-GAAP	STOCK BASED COMPENSATION	AMORTIZATION OF ACQUIRED INTANGIBLE ASSETS	GAAP
Net Sales	$37.0 - $39.0			$37.0 - $39.0
Gross Margin	49% - 51%	<0.1%	2.5%	46.5% - 48.5%
Operating expenses	$17.0 - $18.0	$1.3 - $2.3	$0.2	$18.5 - $20.5