10-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

(Mark One)

x ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended January 26, 2003

OR

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from                              to                             

Commission file number 1-6395

SEMTECH CORPORATION

(Exact name of registrant as specified in its charter)

Delaware	95-2119684
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

200 Flynn Road, Camarillo, California, 93012-8790

(Address of principal executive offices, Zip Code)

Registrant’s telephone number, including area code: (805) 498-2111

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Name of each exchange on which registered
None	None

Securities registered pursuant to Section 12(g) of the Act:

Common Stock par value $.01 per share

Rights to Purchase Series X Junior Participating Preferred Stock

(Title of Class)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes  x    No ¨

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. ¨

Indicate by check mark whether the registrant is an accelerated filer (as defined in Exchange Act Rule 12b-2.) Yes  x    No ¨

        The aggregate market value of the voting stock held by non-affiliates of the registrant as of July 26, 2002 (the last business day of the Company’s most recently completed second fiscal quarter) was approximately $942,003,742. Stock held by directors, officers and shareholders owning 5% or more of the outstanding common stock (as reported on Schedules 13D and 13G) were excluded as they may be deemed affiliates. This determination of affiliate status is not a conclusive determination for any other purpose.

The number of shares of the Registrant’s common stock outstanding at April 1, 2003 was 73,256,493.

DOCUMENTS INCORPORATED BY REFERENCE

Portions of the following documents are incorporated by reference in Part III of this report: Definitive Proxy Statement in connection with registrant’s annual meeting of shareholders to be held on June 5, 2003.

SEMTECH CORPORATION

INDEX TO FORM 10-K

FOR THE YEAR ENDED JANUARY 26, 2003

		Page
PART I
Item 1	Business	2
Item 2	Properties	17
Item 3	Legal Proceedings	18
Item 4	Submission of Matters to a Vote of Security Holders	18
PART II
Item 5	Market for the Registrant’s Common Equity and Related Shareholder Matters	18
Item 6	Selected Financial Data	20
Item 7	Management’s Discussion and Analysis of Financial Condition and Results of Operations	21
Item 7A	Quantitative and Qualitative Disclosures About Market Risks	30
Item 8	Financial Statements and Supplementary Data	31
Item 9	Changes in or Disagreements with Accountants on Accounting and Financial Disclosure	52
PART III
Item 10	Directors and Executive Officers of the Registrant	53
Item 11	Executive Compensation	53
Item 12	Security Ownership of Certain Beneficial Owners and Management	53
Item 13	Certain Relationships and Related Transactions	53
Item 14	Controls and Procedures	53
PART IV
Item 15	Exhibits, Financial Statement Schedules and Reports on Form 8-K	53
	Signatures	56

PART I

This Annual Report on Form 10-K for the year ended January 26, 2003 (the “Form 10-K”) contains certain “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Forward-looking statements are statements other than historical information or statements of current condition and relate to future events or the future financial performance of the Company. Some forward-looking statements may be identified by use of such terms as “expects,” “anticipates,” “intends,” “estimates,” “believes” and words of similar import. These forward-looking statements relate to plans, objectives and expectations for future operations.

In light of the risks and uncertainties inherent in all such projected operational matters, the inclusion of forward-looking statements in this Form 10-K should not be regarded as a representation by the Company or any other person that the objectives or plans of the Company will be achieved or that any of the Company’s operating expectations will be realized. Net sales and results of operations are difficult to forecast and could differ materially from those projected in the forward-looking statements contained in this Form 10-K for the reasons detailed in the “Risk Factors” section of this Form 10-K, beginning on page 10 or elsewhere in this Form 10-K. We assume no obligation to update any of the forward- looking statements after the date of this Form 10-K.

ITEM 1.  BUSINESS

General

We are a leading supplier of analog and mixed-signal semiconductors and were incorporated in Delaware in 1960. We design, produce and market a broad range of products that are sold principally to customers in the computer, communications and industrial markets. Our products are designed into a wide variety of end applications, including notebook and desktop computers, computer gaming systems, personal digital assistants (PDAs), cellular phones, wireline networks, wireless base stations and test systems. Our end customers are primarily original equipment manufacturers and their suppliers, including Agilent, Cisco, Compal Electronics, Dell, Hewlett Packard, IBM, Intel, Lucky Goldstar, Microsoft, Motorola, Quanta Computer, Samsung, Sony and Unisys.

Overview of the Semiconductor Industry

The semiconductor industry is broadly divided into analog and digital semiconductor products. Analog semiconductors condition and regulate “real world” functions such as temperature, speed, sound and electrical current. Digital semiconductors process binary information, such as that used by computers. Mixed-signal devices incorporate both analog and digital functions into a single chip and provide the ability for digital electronics to interface with the outside world.

The market for analog and mixed-signal semiconductors differs from the market for digital semiconductors. The analog and mixed-signal industry is characterized by significantly longer product life cycles than the digital industry. In addition, analog semiconductor manufacturers tend to have lower capital investment requirements for manufacturing because their facilities tend to be less dependent than digital producers on state-of-the-art production equipment. The end-product markets for analog and mixed-signal semiconductors are smaller, more varied and more specialized than the relatively standardized digital semiconductor product markets.

Another difference between the analog and digital markets is the amount of available talented labor. The analog industry relies more heavily than the digital industry on design and applications talent to distinguish its products from one another. While digital expertise is extensively taught in universities due to its overall market size, analog and mixed-signal expertise tends to be learned over time based on experience and hands-on training. Consequently, personnel with this training are scarce, a fact that makes it difficult for new suppliers to quickly gain significant market share.

The markets for computer and communications products today are characterized by several trends that we believe are driving demand for our products. Electronic systems are being designed to operate at increasingly lower operating voltages, battery-powered devices such as handheld computers and cellular telephones are proliferating, and devices are becoming smaller and requiring higher levels of integration. We have designed our products to

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address these needs by providing solutions that extend battery life, meet tighter voltage requirements, improve the human interface of systems, and support higher transmission and processor speeds. As communications functions are increasingly integrated into a range of systems and devices, these products require analog processing capabilities and the number and size of our end-markets grows. Finally, industrial, medical, consumer and other end-market applications have increasingly incorporated data processing and communications features into their finished system, which in turn has broadened the opportunities for selling our analog and mixed-signal devices.

Advancements in digital processing technology typically drive the need for corresponding advancements in analog and mixed-signal solutions. We believe that the diversity of our applications allows us to take advantage of areas of relative market strength and limits our vulnerability to competitive pressure in any one area.

Semtech End-markets

A majority of our products are sold to customers in the computer, communications and industrial markets. Until eight years ago, we had largely been focused on serving the military and aerospace market. We used the desktop segment of the computer market as our first major entry into the commercial marketplace for our circuits. Five years ago, approximately half of our revenues were derived from desktop computer related applications. In recent years, we have seen relative growth from the communications and industrial markets as a percentage of the total. We have also seen a greater diversification within our computer market segment, beyond our initial focus on desktop computer applications. For the fiscal year ended January 26, 2003, our revenues from the computer, communications and industrial end-markets were 49%, 30% and 17%, respectively. The remaining balance of 4% was made up of various other end-markets, including military and aerospace.

Computer market applications include notebook and desktop computers, computer gaming systems, and PDAs. End-product applications for our products within the communication market include local area networks, wide area networks, cellular phones and base stations. Industrial applications include automated test equipment (ATE), medical devices and factory automation systems. We believe that our diversity in the end-markets provides stability to our business and opportunity for growth.

The following table depicts our main product lines and their end-product applications:

Semtech’s Main Product Lines	Specific End-Product Applications
	Computer	Communications	Industrial
Power Management	Desktop PCs, servers, workstations, notebook computers, add-on cards, PDAs, computer gaming systems	Cellular phones, network cards, routers and hubs, telecom network boards	Power supplies, industrial systems
Protection	Notebook computers, PDAs, USB ports, LAN cards	Cellular phones, base stations, DSL equipment, routers and hubs	Handled measurement or instrumentation devices
Test and Measurement	Workstations	Cellular base stations, routers and hubs, SONET networks	Automated test equipment
Advanced Communications		SONET networks, routers, hubs, switches, fiber modems
Human Input Devices	Notebook computers, PDAs	Cellular phones, web phones	Touch screen, consumer appliances and security systems

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Business Strategy

Our objective is to be the leading supplier of analog and mixed-signal devices to the fastest growing segments of our target markets, particularly within the computer, communications and industrial segments. We intend to leverage our pool of skilled technical personnel to develop new products, or, where appropriate, use acquisitions, to serve the fastest growing segments of these markets. In order to capitalize on our strengths in analog and mixed-signal processing design, developing and marketing, we intend to pursue the following strategies:

Maintain our leading analog design expertise

We have developed a strategy to invest heavily in human resources needed to define and market high-performance products. We have been able to add to our engineering design talent through acquisitions. In general, our staff engineers have work experience in the analog and the mixed-signal industry ranging from 10 to 15 years. We have built a team of experienced engineers who combine industry expertise with advanced semiconductor design expertise to meet customer requirements and enable our customers to get their products to market rapidly. We intend to leverage this strategy to achieve new levels of integration, power reduction and miniaturization, enabling our customers to achieve leading performance in their products.

Leverage outsourced semiconductor fabrication capacity

We outsource most of our production and manufacturing in order to focus more of our resources on defining, developing and selling our products. We use outside wafer foundries that are based in Asia, the United States and Europe. Our largest wafer source is a foundry based in China. We believe that outsourcing provides us numerous benefits including capital efficiency, the flexibility to adopt and leverage emerging process technologies without significant investment risk and a more variable cost of goods, which provides us with greater operating flexibility.

Focus on fast-growing market segments

We have chosen to target the analog segments of the fastest growing end-markets. We intend to enhance this growth potential by focusing on specific products within the analog and mixed-signal market, including high-end personal computers, notebook computers, PDAs, cellular phones, wide area and local area networks and test systems. These products are characterized by their need for leading-edge, high-performance analog and mixed-signal semiconductor technology.

Continue to release unique new products and achieve new design wins

We are focused on developing unique, new, high-margin products to serve our target markets. These markets have experienced growing consumer demand for increased product performance at competitive price points. We also focus on achieving design wins for our products with current and future customers. Design wins are indications by the customers that they intend to incorporate our products into new designs. Our technical talent works closely with our customers in securing design wins, developing new products and in implementing and integrating our products into their systems.

Diversify into new markets

We intend to enter new markets that complement our existing operations through internal development of new products and by strategic acquisitions. Our focus during calendar year 2002 was to expand our presence within the broad markets of portable devices, computer gaming systems, networking and more broad-based industrial applications. A large amount of design and marketing talent was focused on developing products for these markets. We believe strategic acquisitions will allow us to expand our pool of skilled technical personnel, as well as expand the range of complementary products that we offer. We have acquired four companies over the past seven years that have permitted us to successfully enter new market segments and develop new products.

Concentrate on cross-selling our products and services

We consider the ability to sell additional products and services to our existing customers as a major opportunity. Many of our large customers produce a wide variety of end-products that require analog and mixed-signal products. By leveraging existing relationships, we believe that we will be able to sell a wider variety of our products to these organizations. In addition, we believe the high level of our technical expertise in our marketing department permits it to identify and capitalize on cross-selling opportunities.

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Product Segments

The following is a description of our two product segments. As of fiscal year 2003, the Other Product segment has been combined with the Rectifier and Assembly Products segment, and is now referred to as the Rectifier, Assembly and Other Products segment. This combined segment has represented less than 10% of net sales and operating income for the last three fiscal years.

Standard Semiconductor Products. Included in Standard Semiconductor Products are integrated circuits (ICs) and discrete components designed for use in standard and application specific applications. Standard Semiconductor Products represented approximately 95% of our overall net sales for fiscal year 2003. The main product lines within our Standard Semiconductor Products are described below.

• Power Management Circuits. Power management circuits control, alter, regulate and condition the electrical pulses that flow through electronics. The highest volume product types within the power management product line are switching voltage regulators, combination switching and linear regulators, smart regulators and charge pumps. The primary application for these products is power regulation for computer, communications and industrial systems. In fiscal year 2003, power management represented more than half of the Standard Semiconductor Products segment. Internally, we divide the power management product line into three sub-product groups, entitled portable power management, desktop/server power management and networking/industrial power management.

• Protection Products. The highest volume type of protection products we design and market are transient voltage suppressors (TVS). TVS devices provide protection for electronic systems where large voltage spikes (called transients), such as electrostatic discharge generated by the human body, can permanently damage voltage-sensitive components. We also have developed filter and termination devices that can be sold as a complement to TVS devices. Specific protection product applications are found in computer, data-communications, telecommunications and industrial markets.

• Test and Measurement Circuits (formerly called High Performance Circuits). We design and market a wide variety of test and measurement products, namely pin electronics, timing, clock distribution, parametric measurement, and ECL clock/logic products for use in ATE, workstations and communication infrastructure equipment.

• Human Input Devices (HID). We offer a line of human input devices that include touch-screen and touch-pad controllers, pointing stick devices and battery management circuits. Some of these products, including our MicroBuddy^™ product family, also perform a system management function in the end products they are used in. These products are designed to handle human input and battery functions in portable systems, such as notebook computers, PDAs and cellular phones. They also have applications in security, consumer appliances and other industrial applications.

• Advanced Communication Circuits. Through internal investment and several acquisitions, we have developed a line of highly proprietary advanced communication ICs which perform specialized timing and synchronization functions in high-speed networks. Our primary product offering in this area is our “SETS” product family. Our Advanced Communication ICs are used in metropolitan, wide area, and wireless networks.

Rectifier, Assembly and Other Products. Rectifiers, assemblies and other products are older-technology products. As of fiscal year 2003, the Other Product Category has been combined with the Rectifier and Assembly Products segment, and is now referred to as the Rectifier, Assembly and Other Products segment. Rectifier, Assembly and Other Products represented approximately 5% of our overall net sales for fiscal year 2003.

• Rectifiers. We have several different categories of silicon rectifiers, which are primarily used to convert alternating current to direct current. These products are sold mainly to military, aerospace, industrial equipment and medical equipment customers.

• Assemblies. A rectifier assembly is a package of rectifiers of one or more types, sometimes encased in epoxy or silicon by various molding techniques, constituting one or more basic rectifier circuits. The Company also offers some non-rectifier assemblies, such as voltage multipliers.

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Assemblies are used in x-ray scanners, microwave ovens, aircraft engines, avionics equipment, airport radar and other specialized applications.

• Other Products. We produce and sell other products that are not part of our main product segment. Included in the other products are custom and application specific integrated circuits (ASICs) and wafer foundry services for other semiconductor manufacturers.

Prior Year Product Segments

In fiscal year 2003, we combined the Other Product and Rectifier and Assembly Products segments, and now refer to it as the Rectifier, Assembly and Other Products segment. Under our old product segmentation, Rectifier and Assembly Products would have represented 4% and 6% of net sales, respectively, in fiscal years 2003 and fiscal year 2002. We have not amended our fiscal year 2002 annual report on Form 10-K to reflect the restated segment data since the Other Product segment was only 0.5% and 2% of net sales, respectively, in fiscal years 2003 and fiscal year 2002.

For further financial information on these segments, refer to the information contained in Note 15. “Business Segments and Concentrations of Risk”, in the Notes to Consolidated Financial Statements included in Item 8.

Intellectual Capital and Product Development

We believe that our emphasis on the development of our intellectual capital and introduction of new proprietary product designs are key to our success. Recruiting and retaining technical talent is the foundation for developing and selling new products into the marketplace. In the past, we have added experienced engineers through the acquisitions of companies. We have recruited additional talent through our strategy of establishing multiple design center locations throughout the United States and the world.

Circuit design engineers are our most valuable engineers. Circuit designers perform the critical task of designing and laying out integrated circuits. As of January 26, 2003, we employed more than 80 circuit designers. A majority of these individuals have senior-level expertise in the design, development and layout of circuits targeted for use in power management, protection, test, measurement and communication applications. We also employ a limited number of engineers that specialize in the development of software, sometimes referred to as firmware, that is incorporated into certain of our HID and advanced communications products. We intend to make further investments in research and development in the future, including increasing our employee headcount, investing in design and development equipment and supporting our development efforts overall.

We have dedicated design centers in Santa Clara, California; Raleigh, North Carolina; Austin, Texas; Glasgow, Scotland; and Southampton, England. In addition, dedicated test and measurement circuit design occurs at our San Diego location, and HID design and protection product design occurs at our Camarillo, California, headquarters.

We spent $31.3 million or 16% of net sales on product development and engineering in fiscal year 2003. Product development and engineering costs were $29.7 million or 16% of net sales and $32.0 million or 13% of net sales in fiscal years 2002 and 2001, respectively.

Sales and Marketing

Sales made directly to original equipment manufacturers during fiscal year 2003 were approximately 56% of net sales. The remaining 44% of net sales were made through independent distributors. We have direct sales personnel located throughout the United States which manage the sales activities of independent sales representative firms and independent distributors within North America. We operate internationally through our wholly-owned subsidiary Semtech International and have sales offices in France, Germany and the United Kingdom, as well as independent sales representative firms and independent distributors to serve the European markets. Semtech International maintains branch sales offices in Taiwan, Korea and Japan; along with independent representatives and distributors for serving the Asia-Pacific territory. Semtech International has a small representative office located in Shanghai China and is also represented outside the United States, Europe and Asia by other independent sales organizations. Some of our distributors and sales representatives may also offer products from our competitors, as is customary in the industry.

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Customers, Sales Data and Backlog

For fiscal year 2003, we estimate that more than 1,000 customers purchased our products either directly from us or through our authorized distributors. The following is a representative sample of our customers by end-markets:

Representative Customers by End-markets:

Computer	Communications	Industrial
Dell	Cisco	Agilent Tech.
HP/Compaq	Motorola	LTX
IBM	Nortel	Siemens
Intel	Samsung	Teradyne
Microsoft	Sony	Unisys

Our customers include major computer and peripheral manufacturers and their subcontractors, ATE manufacturers, data communications and telecommunications equipment vendors, and a variety of large and small companies serving the industrial, automotive, aerospace and military markets.

During fiscal years 2003, 2002 and 2001, foreign sales constituted 67%, 62% and 58%, respectively, of our net sales. Approximately 90% of foreign sales in fiscal year 2003 were to customers located in the Asia-Pacific region, as compared to approximately 85% in fiscal year 2002 and approximately 78% in fiscal year 2001. The remaining foreign sales were to customers in Europe.

No end-customer accounted for 10% or more of net sales in fiscal year 2003. In fiscal year 2002, Agilent Technologies, one of our ATE end customers, and its subcontractors, accounted for approximately 13%, respectively, of net sales. For fiscal year 2003 and fiscal year 2002, one of our Asian distributors accounted for approximately 14% and 12%, respectively, of net sales.

Our backlog of orders as of the end of fiscal years 2003, 2002 and 2001 were approximately $23.4 million, $40.1 million and $61.7 million, respectively. Nearly all backlog is deliverable within six months; experience has shown that short-delivery lead times are required by most customers. A backlog analysis at any given time gives little indication of our future business except on a short-term basis, principally within the next 45 days. We do not have any significant contracts with our customers calling for shipments over a period of more than 18 months.

Manufacturing Capabilities

As part of our business strategy, we outsource a majority of our manufacturing functions to third-party contractors that fabricate silicon wafers and package and test our products. We perform a very limited amount of test and probe activities in our Camarillo and San Diego, California facilities. On April 23, 2001, we sold our Santa Clara, California wafer fabrication facility. In December of 2002, we stopped production at our last remaining commercial wafer fabrication facility that is located in Corpus Christi, Texas. Our Reynosa, Mexico facility now fabricates a very small amount of silicon, and performs the packaging activity needed to support our rectifier and assembly products. In fiscal year 2003, we purchased wafers from eight different third-party wafer foundries and utilized more than 20 different manufacturing processes, including various Bipolar, High-Speed Bipolar, CMOS, and Bi-CMOS processes.

For fiscal year 2003, we supported approximately 24% of our end product sales with wafers that were fabricated internally. The remaining 76% of our end products were supported with finished silicon wafers purchased from outside wafer foundries. Only our protection, rectifier and assembly products were supported by internal wafer production in fiscal year 2003. All of our products, with the exception of the rectifier and assembly product lines, are packaged and tested by outside subcontractors.

Unlike digital products, our products are less reliant on state-of-the-art manufacturing and more on design and applications support. As a result, our outside wafer foundries tend to be significantly less costly than state-of-the-art digital fabrication facilities and likewise utilize equipment that is less subject to obsolescence.

We use outside wafer foundries that are based in Asia, the United States and Europe. Our largest wafer source is a foundry based in China. In fiscal year 2003, this foundry based in China provided 66% our total silicon

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requirements in terms of wafers purchased. We expect that the percentage sourced from this China foundry could increase in fiscal year 2004. Virtually all the silicon we use will be sourced from outside foundries in fiscal year 2004 in order to utilize the best available technology, leverage the capital investment of others and reduce our operating costs associated with manufacturing assets and increase the variable component of our cost of goods sold.

Despite the divestiture of our own internal wafer fab facilities in favor of outside wafer foundries for sourcing a majority of our silicon needs, we do maintain internal process development capabilities. These departments work closely with our outside foundry partners on the improvement and development of process capabilities.

We use third-party contractors to perform assembly and test operations. A majority of our assembly and test activity is conducted by third-party contractors that are based in Malaysia, the Philippines and China.

Our products are made from basic materials (principally silicon, metals and plastics), all of which are widely available from a number of suppliers.

Competition

The analog and mixed-signal semiconductor industry is highly competitive, and we expect competitive pressures to continue. Our ability to compete effectively and to expand our business will depend on our ability to continue to recruit applications and design talent, our ability to introduce new products and the rate at which we introduce these new products to offset the generally short product life cycles. Our industry is characterized by decreasing unit selling prices over the life of a product. We believe we compete effectively based upon our ability to capitalize on efficiencies and economies of scale in production and sales, and our ability to maintain or improve our productivity and product yields to reduce manufacturing costs.

We are in direct and active competition, with respect to one or more of our product lines, with at least 30 manufacturers of such products, of varying size and financial strength. A number of these competitors are dependent on semiconductor products as their principal source of income, and some are much larger than we are. The number of our competitors has grown due to expansion of the market segments in which we participate. We consider our primary competitors to include Texas Instruments, National Semiconductor, Linear Technology, Maxim Integrated Products, Fairchild Semiconductor and Intersil Semiconductor, all with respect to our power management products; ST Microelectronics N.V. and Microsemi with respect to our protection products; Analog Devices, Maxim Integrated Products, ON Semiconductors and Micrel Semiconductor, all with respect to our test and measurement products; Silicon Laboratories and Zarlink Semiconductor with respect to our advanced communications products; and Philips Semiconductors and Synaptics Inc. with respect to our HID products.

Intellectual Property and Licenses

Our business is highly reliant on the design talents, technical abilities, applications knowledge, and creativity of our employees. We attempt to protect our intellectual property by filing patent applications, trademark applications, and copyright registrations. We consider these actions to be helpful in maintaining a competitive advantage, but do not believe that patents and other intellectual property rights create definitive competitive barriers to entry.

At this time, we do not license our patents or products. We do, however, license certain technology from others companies. We do not consider any of the licensed technology to be material in terms of royalties payable, and we believe the duration and other terms of the licenses are appropriate for our needs.

Environmental Matters

On February 7, 2000, we were notified by the United States Environmental Protection Agency (EPA) with respect to the Casmalia Disposal Site in Santa Barbara, California. We have been included in the Superfund program to clean up this disposal site as a result of our involvement in utilizing this site for waste disposal. We have accepted a settlement offer from the EPA and certain State agencies under which are required to pay approximately $783,000 with respect to the wastes at the Casmalia Disposal Site attributable to us. We recorded $765,000 of the proposed settlement amount as an accrued liability in fiscal year 2002 and recorded an accrued liability to cover the remainder in fiscal year 2003. In April of 2003, we paid approximately $732,000 into escrow for the EPA portion of the

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settlement. The funds in escrow will be released to the EPA, and we will pay the remainder of the settlement, when the settlement becomes final after the public comment period required by law.

On June 22, 2001, we were notified by the California Department of Toxic Substances Control that we may have liability associated with the clean up of the one-third acre Davis Chemical Company site in Los Angeles, California. We have been included in the clean-up program, because we are one of the companies that are believed to have used the Davis Chemical Company site for waste recycling and/or disposal between 1949 and 1990. The Company has joined with other potentially responsible parties in an effort to resolve this matter with the State. The group is sharing the cost of an evaluation of the site prior to development of any remediation plan. The Company’s share of the estimated cost for this study is not material and the cost to date has been expensed. At this time there is not a specific proposal or budget with respect to the clean-up of the site. Thus, no reserve has been established for this matter.

We used an environmental firm, specializing in hydrogeology, to perform periodic monitoring of the groundwater at our previously leased facility in Newbury Park, California. We vacated the building in May of 2002. Certain contaminants have been found in the local groundwater. Monitoring results over a number of years indicate that contaminants are coming from adjacent facilities. Although it is currently not possible to determine the ultimate amount of our possible future clean-up costs, if any, we do not believe we would be materially adversely impacted by this condition. Accordingly, no reserve for clean-up has been provided at this time.

Employees

As of January 26, 2003, we had 555 full-time employees. There were 124 employees in research and development, 104 in sales, marketing and field services, and 68 in general, administrative and finance. The remaining 259 employees support operational activities, including product and test engineering, manufacturing, distribution and quality functions. We have never had a work stoppage, and our domestic and European employees are not unionized. Our Mexican operation has unionized employees. Our employee relations have been, and are, satisfactory. Competition for key design and application engineers is significant.

During fiscal year 2003, we did reduce a limited amount of headcount associated with the closure of our Corpus Christi, Texas wafer fabrication facility. We hired more engineers during fiscal year 2003, resulting in an increase in the overall number of engineers employed by us.

Government Regulations

We are required to comply with numerous government regulations that are normal and customary to manufacturing businesses that operate in our markets and operating locations. Our sales that serve the military and aerospace markets primarily consist of products from the Rectifier, Assembly, and Other Products segment that have been qualified to be sold in these markets by the U.S. Department of Defense (DOD). In order to maintain these qualifications, we must comply with certain specifications promulgated by the DOD. As part of maintaining these qualifications, we are routinely audited by DOD personnel. Based on current specifications, we believe we can maintain our qualifications for the foreseeable future. However, these specifications could be modified by the DOD in the future or we could become subject to other government requirements, which could make the manufacturing of these products more difficult and thus, could adversely impact our profitability in those product lines.

Available Information

We maintain a website at www.semtech.com. We make available free of charge, either by direct access or a link to the SEC website, our annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended, as soon as reasonably practicable after such reports are electronically filed with, or furnished to, the SEC. Our reports filed with, or furnished to, the SEC are also available directly at the SEC’s website at www.sec.gov.

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RISK FACTORS

You should carefully consider and evaluate all of the information in this Form 10-K, including the risk factors listed below. The risks described below are not the only ones facing our company. Additional risks not now known to us or that we currently deem immaterial may also impair our business operations.

If any of these risks actually occur, our business could be materially harmed. If our business is harmed, the trading price of our common stock could decline.

This Form 10-K also contains forward-looking statements that involve risks and uncertainties. Our actual results could differ materially from those anticipated in these forward looking statements as a result of certain factors, including the risks faced by us described below and elsewhere in this Form 10-K. We undertake no duty to update any of the forward-looking statements after the date of this Form 10-K.

Economic decline may have adverse consequences for our business

We sell our products into several commercial markets, primarily the computer, communication and industrial end-markets, whose performance is tied to the overall economy. Many of these industries have been impacted in the calendar years 2001 and 2002 due to an economic slowdown in the United States and globally. If the economic conditions continue to worsen or a wider global slowdown occurs, the demand for our products may be reduced. In addition, these economic slowdowns may also affect our customers’ ability to pay for our products. Accordingly, economic slowdowns may harm our business.

The cyclical nature of the electronics and semiconductor industries may limit our ability to maintain or increase revenue and profit levels during industry downturns

The semiconductor industry is highly cyclical and has experienced significant downturns, which are characterized by reduced product demand, production overcapacity, increased levels of inventory, industry-wide fluctuations in the demand for semiconductors and an erosion in average prices. The occurrence of these conditions has adversely affected our business in the past. During the calendar years 1999 and 2000, high consumption levels by electronics manufacturers was a major driver of demand for semiconductors, including the products we sell. However, calendar year 2001 was a year of significant decline for the overall semiconductor and electronics industries and, consequently, our business suffered. In calendar year 2002, semiconductor and electronic industry conditions remained weak, with declines in average selling prices offsetting gains in unit shipment growth. Past downturns in the semiconductor industry have resulted in a sudden impact on the semiconductor and capital equipment markets. Consequently, a continuation of the current downturn and any future downturns in the semiconductor industry may harm our business. In addition, the semiconductor manufacturing industry is currently experiencing conditions of manufacturing overcapacity. If these conditions persist, they could lead to excess production in the industry and result in an underutilization of our internal manufacturing capacity and a decrease in the prices of our products.

We compete against larger, more established entities and our market share may be reduced if we are unable to respond to our competitors effectively

The semiconductor industry is intensely competitive and is characterized by price erosion, rapid technological change and design and other technological obsolescence. We compete with domestic and international semiconductor companies, many of which have substantially greater financial and other resources with which to pursue engineering, manufacturing, marketing and distribution of their products. Some of these competitors include: Texas Instruments, National Semiconductor, Linear Technology, Maxim Integrated Products, Fairchild Semiconductor and Intersil Semiconductor, with respect to our power management products; ST Microelectronics N.V., with respect to our protection products; Analog Devices, Maxim Integrated Products, ON Semiconductor and Micrel Semiconductor, with respect to our test and measurement products; Zarlink Semiconductor and Silicon Laboratories, with respect to our advanced communications products; and Philips Semiconductors and Synaptics

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Inc., with respect to our HID products. We expect continued competition from existing competitors as well as competition from new entrants in the semiconductor market. Our ability to compete successfully in the rapidly evolving area of integrated circuit technology depends on several factors, including:

• success in designing and manufacturing new products that implement new technologies;

• protection of our processes, trade secrets and know-how;

• maintaining high product quality and reliability;

• pricing policies of our competitors;

• performance of competitors’ products;

• ability to deliver in large volume on a timely basis;

• marketing, manufacturing and distribution capability; and

• financial strength.

To the extent that our products achieve market success, competitors typically seek to offer competitive products or lower prices, which, if successful, could harm our business.

Fluctuations and seasonality in the personal computer industry and economic downturns in our end-markets may have adverse consequences for our business

Many of our products are used in personal computers and related peripherals. For the fiscal year ended January 26, 2003, approximately 49% of our sales are used in computer applications. Industry-wide fluctuations in demand for desktop computers have in the past, and may in the future, harm our business. In addition, our past results have reflected some seasonality, with demand levels being higher in computer segments during the third and fourth quarters of the year in comparison to the first and second quarters.

A decline in any of our end-markets, particularly the computer, cellular phone and automated test equipment (ATE) markets, could also harm our business. For the fiscal year ended January 26, 2003, shipment of our products to the ATE customers represented approximately 13% of our net sales. Consequently, a downturn in the ATE market may adversely affect our business.

In fiscal year 2003, we saw demand from cellular phone manufacturers increase throughout the year, and we estimated 24% of our sales in the fourth quarter of fiscal year 2003 were tied to this end-market application. Any decline in the number of cellular phones made, especially feature-rich phones with color displays, could adversely affect our business.

We obtain certain essential components and materials and certain manufacturing services from a limited number of suppliers and subcontractors, including foreign-based entities

Our reliance on a limited number of outside subcontractors and suppliers for silicon wafers, packaging, test and certain other processes involves several risks, including potential inability to obtain an adequate supply of required components and reduced control over the price, timely delivery, reliability and quality of components. These risks may be attributable to several factors including limitation on resources, labor problems, equipment failures or the occurrence of natural disasters. There can be no assurance that problems will not occur in the future with suppliers or subcontractors. Disruption or termination of our supply sources or subcontractors could significantly delay our shipments and harm our business. Delays could also damage relationships with current and prospective customers. Any prolonged inability to obtain timely deliveries or quality manufacturing or any other circumstances that would require us to seek alternative sources of supply or to manufacture or package certain components internally could limit our growth and harm our business.

Most of our outside subcontractors and suppliers, including third-party foundries that supply silicon wafers, are located in foreign countries, including China, Malaysia, the Philippines and Germany. For fiscal year 2003, approximately 66% of our silicon in terms of finished wafers, was supplied by a third-party foundry in China, and this percentage could be even higher in fiscal year 2004. A majority of our package and test operations are

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performed by third-party contractors that are based in Malaysia, the Philippines and China. Our international business activities, in general, are subject to a variety of potential risks resulting from certain political and economic uncertainties. Any political turmoil or trade restrictions in these countries, particularly China, could limit our ability to obtain goods and services from these suppliers and subcontractors. The effect of an economic crisis or a political turmoil on our suppliers located in these countries may impact our ability to meet the demands of our customers. If we find it necessary to transition the goods and services received from our existing suppliers or subcontractors to other firms, we would likely experience an increase in production costs and a delay in production associated with such a transition, both of which could have a significant negative effect on our operating results, as these risks are substantially uninsured.

We may be unsuccessful in developing and selling new products required to maintain or expand our business

We operate in a dynamic environment characterized by price erosion, rapid technological change and design and other technological obsolescence. Our competitiveness and future success depend on our ability to achieve design wins for our products with current and future customers and introduce new or improved products that meet customer needs while achieving favorable margins. A failure to achieve design wins, to introduce these new products in a timely manner or to achieve market acceptance for these products, could harm our business.

The introduction of new products presents significant business challenges because product development commitments and expenditures must be made well in advance of product sales. The success of a new product depends on accurate forecasts of long-term market demand and future technological developments, as well as on a variety of specific implementation factors, including:

• timely and efficient completion of process design and development;

• timely and efficient implementation of manufacturing and assembly processes;

• product performance;

• the quality and reliability of the product; and

• effective marketing, sales and service.

The failure of our products to achieve market acceptance due to these or other factors could harm our business.

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 shipment, requiring a product replacement, recall or a software fix which would cure the defect but impede performance of the product. We may also be subject to product returns which could impose substantial costs and harm our business.

Product liability claims may be asserted with respect to our technology or products. Although we currently have insurance, there can be no assurance that we have obtained a sufficient amount of insurance coverage, that asserted claims will be within the scope of coverage of the insurance, or that we will have sufficient resources to satisfy any asserted claims.

Our share price could be subject to extreme price fluctuations, and shareholders could have difficulty trading shares

The markets for high technology companies in particular have been volatile, and the market price of our common stock has been and may continue to be subject to significant fluctuations. Fluctuations could be in response to operating results, announcements of technological innovations and market conditions for technology stocks in general. Additionally, the stock market in recent years has experienced extreme price and volume fluctuations that often have been unrelated to the operating performance of individual companies. These market fluctuations, as well as general economic conditions, may adversely affect the price of our common stock.

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In the past, securities class action litigation has often been instituted against a company following periods of volatility in the company’s stock price. This type of litigation, if filed against us, could result in substantial costs and divert our management’s attention and resources.

In addition, the future sale of a substantial number of shares of common stock by us or by our existing stockholders may have an adverse impact on the market price of the shares of common stock. There can be no assurance that the trading price of our common stock will remain at or near its current level.

We sell and trade with foreign customers, which subjects our business to increased risks applicable to international sales

Sales to foreign customers accounted for approximately 67% of net sales in the fiscal year ended January 26, 2003. Sales to our customers located in Taiwan and Korea constituted 28% and 13%, respectively, of net sales for fiscal year 2003. International sales are subject to certain risks, including unexpected changes in regulatory requirements, tariffs and other barriers, political and economic instability, difficulties in accounts receivable collection, difficulties in managing distributors and representatives, difficulties in staffing and managing foreign subsidiary operations and potentially adverse tax consequences. These factors may harm our business. Our use of the Semtech name may be prohibited or restricted in some countries, which may negatively impact our sales efforts. In addition, substantially all of our foreign sales are denominated in U.S. dollars and currency exchange fluctuations in countries where we do business could harm us by resulting in pricing that is not competitive with prices denominated in local currencies.

Reductions in communications infrastructure investments could adversely affect our business

The overall semiconductor industry, and our business in particular, has benefited from the build-out of voice, data, and mobile networks and the related demand for communications infrastructure equipment that supports higher-speed (higher bandwidth) networks. The electronics needed to support this trend within the communications market rely heavily on companies such as ours to develop the circuits used in these systems.

Much of our sales growth and margin expansion in fiscal year 2001 and fiscal year 2000 was the result of product sales into wireless, local area networks, wide area networks and long-haul communications applications. This market saw a dramatic decline in total carrier spending throughout calendar years 2001 and 2002. Moreover, carrier spending on telecom equipment could decline further in the future. Although we believe that the communication equipment market has not been characterized by cyclicality to date, this market may in the future exhibit general cyclical characteristics similar to the market for semiconductor capital equipment. Any major reduction in communications infrastructure investment will have a negative impact on the overall industry and our sales into these end-market segments.

Our foreign currency exposures may change over time as the level of activity in foreign markets grows and could have an adverse impact upon financial results

As a global enterprise, we face exposure to adverse movements in foreign currency exchange rates. Certain of our assets, including certain bank accounts and accounts receivable, exist in nondollar-denominated currencies, which are sensitive to foreign currency exchange rate fluctuations. The nondollar-denominated currencies are principally the Euro, Swiss Francs, and British Pounds Sterling. Additionally, certain of our current and long-term liabilities are denominated principally in British Pounds Sterling currency, which are also sensitive to foreign currency exchange rate fluctuations. With the growth of our international business, our foreign currency exposures may grow and under certain circumstances could harm our business.

Our future operating results may fluctuate, fail to match past performance or fail to meet expectations

Our operating results may fluctuate in the future, may fail to match our past performance or fail to meet the expectations of analysts and investors. Our operating results may fluctuate as a result of:

• general economic conditions in the countries where we sell our products;

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• seasonality and variability in the computer market and our other end-markets;

• the timing of new product introductions by us and our competitors;

• product obsolescence;

• the scheduling, rescheduling or cancellation of orders by our customers;

• the cyclical nature of demand for our customers’ products;

• our ability to develop new process technologies and achieve volume production

• changes in manufacturing yields;

• movements in exchange rates, interest rates or tax rates;

• the availability of adequate supply commitments from our outside suppliers; and

• the manufacturing and delivery capabilities of our subcontractors.

As a result of these factors, our past financial results are not necessarily indicative of our future results.

We receive a significant portion of our revenues from a small number of customers and the loss of any one of these customers or failure to collect a receivable from them could adversely affect our operations and financial position

Historically, we have had significant customers that individually accounted for 10% or more of consolidated revenues in certain quarters or represented 10% or more of net accounts receivables at any given date. The identity of our largest customers has varied from year to year. In fiscal year 2002, one of our ATE end customers, including its subcontractors, accounted for approximately 13% of net sales. For fiscal year 2003 and fiscal year 2002, one of our Asian distributors accounted for approximately 14% and 12%, respectively, of net sales. As of the end of fiscal years 2003 and 2002, one of our Asian distributors accounted for approximately 11% and 17%, respectively, of net accounts receivable. Receivables from our customers are not secured by any type of collateral, and likewise are subject to the risk of being uncollectable.

We primarily conduct our sales on a purchase order basis, rather than pursuant to long-term supply contracts. The loss of any significant customer, any material reduction in orders by any of our significant customers, the cancellation of a significant customer order or the cancellation or delay of a customer’s significant program or product could harm our business.

We have acquired and may continue to acquire other companies and may be unable to successfully integrate these companies into our operations

In the past, we have expanded our operations through strategic acquisitions, and we may continue to expand and diversify our operations with additional acquisitions. If we are unsuccessful in integrating these companies into our operations or if integration is more difficult than anticipated, then we may experience disruptions that could harm our business. Some of the risks that may affect our ability to integrate acquired companies 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; and

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

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

Sales are made primarily on a current delivery basis pursuant to purchase orders that may be revised or cancelled by our customers without penalty, rather than pursuant to long-term supply contracts. Some contracts require that we maintain inventories of certain products at levels above the anticipated needs of our customers. As a result, we must commit resources to the production of products without binding purchase commitments from customers. Our inability to sell products after we devote significant resources to them could harm our business.

The loss of any of our key personnel or the failure to attract or retain the specialized technical and management personnel could impair our ability to grow our business

Our future success depends upon our ability to attract and retain highly qualified technical, marketing and managerial personnel. We are particularly dependent upon the continued services of John D. Poe, our Chief Executive Officer, although this has been mitigated by the addition of Jason Carlson as President and Chief Operating Officer in fiscal year 2003. We are also dependent on a relatively small group of key technical personnel with analog and mixed-signal expertise. Personnel with highly skilled managerial capabilities, analog and mixed-signal design expertise are scarce and competition for personnel with these skills is intense. There can be no assurance that we will be able to retain existing key employees or that we will be successful in attracting, integrating or retaining other highly qualified personnel in the future. If we are unable to retain the services of Mr. Poe or existing key employees or are unsuccessful in attracting new highly qualified employees, our business could be harmed.

We are subject to environmental regulations which may require us to incur significant expenditures

The Company and its suppliers are subject to a variety of United States federal, foreign, state and local governmental laws, rules and regulations related to the use, storage, handling, discharge or disposal of certain toxic, volatile or otherwise hazardous chemicals used in the manufacturing process. Any of these regulations could require the acquisition of equipment or other substantial expenditures to comply with environmental regulations. If we or our suppliers were to incur substantial additional expenses, product costs could significantly increase, thus harming our business. Any failure to comply with present or future environmental laws, rules and regulations could result in fines, suspension of production or cessation of operations, any of which could harm our business.

Major earthquakes may cause us significant losses

Our corporate headquarters, a portion of our assembly and research and development activities and certain other critical business operations are located near major earthquake fault lines. We do not maintain earthquake insurance and could be harmed in the event of a major earthquake.

Terrorist attacks, war and other acts of violence may negatively affect our operations and your investment

Terrorist attacks, such as the attacks that took place on September 11, 2001, wars, such as the current war in Iraq, and other acts of violence, such as those that may result from the increasing tension in the Middle East and the Korean Peninsula, or any other national or international crisis, calamity or emergency, may result in interruption to the business activities of many entities, business losses and overall disruption of the U.S. economy at many levels. These events or armed conflicts may directly impact our physical facilities or those of our customers and suppliers. Additionally, these events or armed conflicts may cause some of our customers or potential customers to reduce the level of expenditures on their services and products that ultimately may reduce our revenue. The consequences of these reductions are unpredictable, and we may not be able to foresee events that could have an adverse effect on our business. For example, as a result of these events, insurance premiums for businesses may increase and the scope of coverage may be decreased. Consequently, we may not be able to obtain adequate insurance coverage for our business and properties. A “high” or “Orange” or “severe” or “Red” threat condition announced by the Homeland

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Security Advisory System or similar agency and any consequent effect on the transportation industry may adversely affect our ability to timely import materials from our suppliers located outside the United States or impact our ability to deliver our products to our customers without incurring significant delays. To the extent that these disruptions result in delays or cancellations of customer orders, a general decrease in corporate spending, or our inability to effectively market our services and products, our business and results of operations could be harmed.

We may be unable to adequately protect our intellectual property rights

We pursue patents for some of our new products and unique technologies, but we rely primarily on a combination of nondisclosure agreements and other contractual provisions, as well as our employees’ commitment to confidentiality and loyalty, to protect our know-how and processes. We intend to continue protecting our proprietary technology, including through trademark and copyright registrations and patents. Despite this intention, we may not be successful in achieving adequate protection. Our failure to adequately protect our material know-how and processes could harm our business. There can be no assurance that the steps we take will be adequate to protect our proprietary rights, that our patent applications will lead to issued patents, that others will not develop or patent similar or superior products or technologies, or that our patents will not be challenged, invalidated, or circumvented by others. Furthermore, the laws of the countries in which our products are or may be developed, manufactured or sold may not protect our products and intellectual property rights to the same extent as laws in the United States.

The semiconductor industry is characterized by frequent claims of infringement and litigation regarding patent and other intellectual property rights. Due to the number of competitors, patent infringement is an ongoing risk since other companies in our industry could have patent rights that may not be identifiable when we initiate development efforts. Litigation may be necessary to enforce our intellectual property rights and we may have to defend ourselves against infringement claims. Any such litigation could be very costly and may divert our management’s resources. If one of our products is found to infringe, we may have liability for past infringement and may need to seek a license going forward. If a license is not available or if we are unable to obtain a license on terms acceptable to us, we would either have to change our product so that it does not infringe or stop making the product.

We could be required to register as an investment company and become subject to substantial regulation that would interfere with our ability to conduct our business

The Investment Company Act of 1940 requires the registration of companies which are engaged primarily in the business of investing, reinvesting or trading in securities, or which are engaged in the business of investing, reinvesting, owning, holding or trading in securities and which own or propose to acquire investment securities with a value of more than 40% of the company’s assets on an unconsolidated basis (other than U.S. government securities and cash). We are not engaged primarily in the business of investing, reinvesting or trading in securities, and we intend to invest our cash and cash equivalents in U.S. government securities to the extent necessary to take advantage of the 40% safe harbor. To manage our cash holdings, we invest in short-term instruments consistent with prudent cash management and the preservation of capital and not primarily for the purpose of achieving investment returns. U.S. government securities generally yield lower rates of income than other short-term instruments in which we have invested to date. Accordingly, investing substantially all of our cash and cash equivalents in U.S. government securities could result in lower levels of interest income and net income.

If we were deemed an investment company and were unable to rely upon a safe harbor or exemption under the Investment Company Act, we would among other things be prohibited from engaging in certain businesses or issuing certain securities. Certain of our contracts might be voidable, and we could be subject to civil and criminal penalties for noncompliance.

We are subject to review by taxing authorities, including the Internal Revenue Service

We are subject to review by domestic and foreign taxing authorities, including the Internal Revenue Service (IRS). The IRS is currently performing a routine review of our open-year tax filings and has raised the issue of whether the value of compensatory stock options must be included in our cost sharing agreement with our Swiss subsidiary. The issue is currently being litigated before the U.S. Tax Court by another tazpayer. If the IRS prevails in the courts, our tax loss carryforwards could be materially reduced, resulting in a tax provision charge in a future period.

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SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

Some of the information in this Form 10-K and in the documents that are incorporated by reference, including the risk factors in this section, contains forward-looking statements that involve risks and uncertainties. These statements relate to future events or our future financial performance. In many cases, you can identify forward-looking statements by terminology such as “may,” “will,” “should,” “expect,” “plan,” “anticipate,” “believe,” “estimate,” “predict,” “potential,” or continue,” or the negative of these terms and other comparable terminology. These statements are only predictions. Our actual results could differ materially from those anticipated in these forward-looking statements as a result of a number of factors including the risks faced by us described above and elsewhere in this Form 10-K.

ITEM 2. PROPERTIES

Our headquarters facility is located in Camarillo, California where we built and own an approximately 85,000 square foot building that was completed in March 2002. The original parcel on which the headquarters is located will accommodate substantial expansion and we purchased a vacant lot adjacent to the headquarters when it became available in fiscal year 2003. Prior to occupying the Camarillo headquarters, we had occupied a facility in Newbury Park, California, under a lease that terminated in May 2002. The Camarillo facility supports a very limited amount of test and probe activity, as well as all of our inside sales, marketing and administrative offices. The Camarillo facility serves as the business headquarters for our Rectifier, Assembly and Other Products segment and all the product lines that make up the Standard Semiconductor Products segment, with the exception of our test and measurement product line that is headquartered in San Diego, California.

We also own a 22,000 square foot building in Reynosa, Mexico that supports the production needs of our Rectifier and Assembly product lines.

A 13,250 square foot facility in Santa Clara, California, that houses design engineering, test and administration, is leased until September 2003. The Santa Clara facility is a design center for our power management product line (part of the Standard Semiconductor Products segment).

We also lease a 44,000 square foot facility in Corpus Christi, Texas, which housed a wafer fabrication line, production testing and certain engineering functions for our protection product line (part of the Standard Semiconductor Products segment). In December 2002, we stopped production in the Corpus Christi facility as part of the strategic move to obtain nearly all of our silicon wafers from outside sources. The Corpus Christi lease runs through December of 2021, but we have the ability to terminate it in 2011. We are investigating sublease opportunities and exploring other alternatives with respect to this property.

Our San Diego, California facility is an approximately 25,000 square foot building that houses design, test and administrative functions and serves as the business headquarters for our test and measurement product line (part of the Standard Semiconductor Product segment). The lease on this facility runs through April 2004.

We also lease space to house certain of our other design, sales and marketing facilities in Raleigh, North Carolina; Austin, Texas; France; Germany; Taiwan; Korea; Japan; China; Southampton, England; St. Gallen, Switzerland; and Glasgow, Scotland. Some space in New York City that previously housed our HID product group has been sublet and we are seeking subtenants for the remaining space.

In December 2000, we purchased a parcel of land in San Diego, California for approximately $7.9 million and began exploring plans to build a facility to support our test and measurement product line. We deferred the project due to the significant downturn in the product line’s business. We are currently exploring the possible sale of this parcel of land.

We believe that our existing leased and owned space is more than adequate for our current operations, and that suitable replacement and additional space will be available in the future on commercially reasonable terms.

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ITEM 3. LEGAL PROCEEDINGS

We periodically become subject to legal proceedings in the ordinary course of our business. We are not currently involved in any legal proceedings that we believe will materially and adversely affect our business.

On February 7, 2000, we were notified by the United States Environmental Protection Agency (EPA) with respect to the Casmalia Disposal Site in Santa Barbara, California. We have been included in the Superfund program to clean up this disposal site as a result of our involvement in utilizing this site for waste disposal. We have accepted a settlement offer from the EPA and certain State agencies under which are required to pay approximately $783,000 with respect to the wastes at the Casmalia Disposal Site attributable to us. We recorded $765,000 of the proposed settlement amount as an accrued liability in fiscal year 2002 and recorded an accrued liability to cover the remainder in fiscal year 2003. In April 2003, we paid approximately $732,000 into escrow for the EPA portion of the settlement. The funds in escrow will be released to the EPA, and we will pay the remainder of the settlement, when the settlement becomes final after the public comment period required by law.

On June 22, 2001, we were notified by the California Department of Toxic Substances Control that we may have liability associated with the clean up of the one-third acre Davis Chemical Company site in Los Angeles, California. We have been included in the clean-up program, because we are one of the companies that are believed to have used the Davis Chemical Company site for waste recycling and/or disposal between 1949 and 1990. The Company has joined with other potentially responsible parties in an effort to resolve this matter with the State. The group is sharing the cost of an evaluation of the site prior to development of any remediation plan. The Company’s share of the estimated cost for this study is not material and the cost to date has been expensed. At this time there is not a specific proposal or budget with respect to the clean-up of the site. Thus, no reserve has been established for this matter.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

During the fourth quarter of the fiscal year covered by this report, no matter was submitted to a vote of the security holders through the solicitation of proxies or otherwise.

PART II

ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY AND RELATED SHAREHOLDER MATTERS

Market Information

Our common stock is traded on the Nasdaq National Market under the symbol “SMTC.” The following table sets forth, for the periods indicated, the high and low closing prices of our common stock, as reported on the Nasdaq National Market, giving effect to all stock splits through the date hereof.

	High		Low
Fiscal Year Ending January 27, 2002
First Quarter	$	34.75	$	23.44
Second Quarter		37.31		24.34
Third Quarter		40.70		25.67
Fourth Quarter	$	43.38	$	32.31
Fiscal Year Ending January 26, 2003
First Quarter	$	39.00	$	29.11
Second Quarter		37.41		18.65
Third Quarter		23.09		9.05
Fourth Quarter	$	18.11	$	10.89

Holders

On April 18, 2003, the reported last sale price of our common stock on the Nasdaq National Market was $16.29 per share. As of April 18, 2003, we had approximately 9,640 common stockholders of record.

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Dividends

The payment of dividends on our common stock is within the discretion of our board of directors. Currently, we intend to retain earnings to finance the growth of our business. We have not paid cash dividends on our common stock during the two most recent fiscal years and the board of directors does not expect to declare cash dividends on the common stock in the foreseeable future. We declared two-for-one stock splits in fiscal years 2001, 2000 and 1998 in the form of 100% stock dividends to stockholders. We do not anticipate another stock split being declared in the foreseeable future.

Securities Authorized for Issuance under Equity Compensation Plans

The following table sets forth information with respect to shares of common stock that may be issued under our equity compensation plans as of January 26, 2003.

Plan Category	Number of securities to be issued upon exercise of outstanding options, warrants and rights (a)	Weighted-average exercise price of outstanding options, warrants and rights (b)		Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in the issued column (a)) (c)
Equity compensation plans approved by security holders	8,842,632	$	7.28	3,753,151
Equity compensation plans not approved by security holders	6,076,949	$	19.56	2,055,974
Total	14,919,581	$	12.28	5,809,125

Equity compensation plans not approved by security holders include the Non-Director and Non-Executive Officer Long-Term Stock Incentive Plan that was approved by our board of directors in fiscal year 2000. The Non-Director and Non-Executive Officer Long-Term Stock Incentive Plan allows for the issuance of options for up to 8,000,000 shares of the Company’s common stock to non-directors and non-executive officers of the Company. This number has been adusted for stock splits and under the terms of the plan is subject to further adjustment in the event that the number of outstanding shares of the Company’s common stock are adjusted by reason of a stock split, stock dividend, or the like. Further, any shares granted under the plan that are forfeited back to the Company because of a failure to meet an award contingency or condition are available for delivery pursuant to new awards granted under the plan. All securities remaining available for future issuance under equity compensation plans not approved by security holders are related to the Non-Director and Non-Executive Officer Long-Term Stock Incentive Plan.

Included in the outstanding options portion of equity compensation plans not approved by security holders are non-plan grants of options to our non-employee directors that occurred in fiscal year 1998 and a non-plan grant of inducement options, within the meaning of Nasdaq rules, to Jason Carlson, our President and Chief Operating Officer, as a recruitment incentive in fiscal year 2003.

The material features of the Non-Director and Non-Executive Officer Long-Term Stock Incentive Plan and the non-plan grants referred to above are substantially similar to the material features of the plans that have been approved by shareholders. See Note 12. “Stockholders’ Equity” to the financial statements included in this Form 10-K.

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ITEM 6. SELECTED FINANCIAL DATA

The selected historical financial data for each of the fiscal years in the five-year period ended January 26, 2003 have been derived from our audited financial statements. Such information for the three fiscal years ended January 26, 2003 is contained in and should be read in conjunction with our audited financial statements and accompanying notes included in this Form 10-K.

	Fiscal Year Ended
	January 31, 1999		January 30, 2000		January 28, 2001		January 27, 2002		January 26, 2003
	(in thousands, except per share data)
Consolidated Statement of Income Data:
Net sales	$	114,519	$	173,768	$	256,685	$	191,210	$	192,958
Cost of sales		60,241		82,731		111,819		97,920		83,097
Gross profit		54,278		91,037		144,866		93,290		109,861
Operating costs and expenses
Selling, general and administrative		20,091		27,206		36,164		33,798		34,426
Product development and engineering		14,026		20,342		32,008		29,744		31,336
One-time charges		1,585		531		—		2,727		13,202
Total operating costs and expenses		35,702		48,079		68,172		66,269		78,964
Operating income		18,576		42,958		76,694		27,021		30,897
Interest and other income, net		786		1,146		9,334		9,095		15,187
Income before taxes		19,362		44,104		86,028		36,116		46,084
Provision for taxes		6,467		14,709		25,808		10,113		11,903
Net income	$	12,895	$	29,395	$	60,220	$	26,003	$	34,181
Earnings per share:
Basic	$	0.22	$	0.48	$	0.91	$	0.37	$	0.47
Diluted	$	0.20	$	0.42	$	0.79	$	0.33	$	0.44
Weighted average number of shares:
Basic		58,688		61,670		66,247		69,983		73,013
Diluted		63,568		70,630		76,527		77,747		77,789
	As of
	January 31, 1999		January 30, 2000		January 28, 2001		January 27, 2002		January 26, 2003
	(in thousands)
Consolidated Balance Sheet Data:
Cash, cash equivalents and investments	$	42,683	$	63,291	$	530,979	$	543,502	$	489,047
Working capital		65,844		96,687		530,737		402,970		420,912
Total assets		92,556		149,350		677,288		690,401		620,546
Convertible subordinated notes		—		—		400,000		364,320		241,570
Total stockholders’ equity		79,771		125,482		242,357		298,795		341,440

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ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with “Selected Consolidated Financial Data” and our consolidated financial statements and related notes included elsewhere in this Form 10-K. In addition to historical information, the discussion in this Form 10-K contains certain forward-looking statements that involve risks and uncertainties. Our actual results could differ materially from those anticipated by these forward-looking statements due to factors, including but not limited to, those set forth under “Risk Factors” and elsewhere in this Form 10-K. We assume no obligation to update any of the forward-looking statements after the date of this Form 10-K.

Overview

We design, produce and market a broad range of products that are sold principally to customers in the computer, communications and industrial markets. Our products are designed into a wide variety of end applications, including notebook and desktop computers, computer gaming systems, personal digital assistants (PDAs), cellular phones, wireline networks, wireless base stations and automated test equipment (ATE). Products within the communications market include products for local area networks, metro and wide area networks, cellular phones and base stations. Industrial applications include ATE, medical devices and factory automation systems. Our end customers are primarily original equipment manufacturers and their suppliers, including Agilent, Cisco, Compal Electronics, Dell, Hewlett Packard, IBM, Intel, Lucky Goldstar, Microsoft, Motorola, Quanta Computer, Samsung, Sony and Unisys.

We recognize product revenue when persuasive evidence of an arrangement exists, delivery has occurred, receipt by the customer has been confirmed, the fee is fixed or determinable and collectibility is probable. Product design and engineering revenue is recognized during the period in which services are performed. We defer revenue recognition on shipment of certain products to distributors where return privileges exist until the products are sold through to end users. Gross profit is equal to our net sales less our cost of sales. Our cost of sales includes materials, direct labor and overhead. We determine the cost of inventory by the first-in, first-out method. Our operating costs and expenses generally consist of selling, general and administrative (SG&A), product development and engineering costs (R&D), costs associated with acquisitions, and other operating related charges.

Most of our sales to customers are made on the basis of individual customer purchase orders. Many large commercial customers include terms in their purchase orders, which provide liberal cancellation provisions. Trends within the industry toward shorter lead-times and “just-in-time” deliveries have resulted in our reduced ability to predict future shipments. As a result, we rely on orders received and shipped within the same quarter for a significant portion of our sales. Sales made directly to original equipment manufacturers during fiscal year 2003 were 56% of net sales. The remaining 44% of net sales were made through independent distributors.

We divide and operate our business based on two reportable segments: Standard Semiconductor Products and Rectifier, Assembly and Other Products. We evaluate segment performance based on net sales and operating income of each segment. We do not track segment data or evaluate segment performance on additional financial information. We do not track balance sheet items by individual reportable segments. As such, there are no separately identifiable segment assets nor are there any separately identifiable statements of income data (below operating income). The Standard Semiconductor Products segment makes up the vast majority of overall sales and includes our power management, protection, test and measurement (formerly called high performance), advanced communications and human input device product lines. The Rectifier, Assembly and Other Products segment includes our line of assembly and rectifier devices, which are the remaining products from our founding as a supplier into the military and aerospace market. It also includes other products made up of custom integrated circuits and foundry sales.

Our business involves reliance on foreign-based entities. Most of our outside subcontractors and suppliers, including third-party foundries that supply silicon wafers, are located in foreign countries, including China, Malaysia, the Philippines and Germany. For the fiscal year ended January 27, 2002, approximately 28% (calculated based on acquisition cost) of our silicon was manufactured in China. For the fiscal year ended January 26, 2003,

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approximately 66% of our silicon in terms of wafers purchased was manufactured in China. Foreign sales for fiscal year 2003 constituted approximately 67% of our net sales. Approximately 90% of foreign sales in fiscal year 2003 were to customers located in the Asia-Pacific region, as compared to approximately 85% in fiscal year 2002 and approximately 78% in fiscal year 2001. The remaining sales were to customers in Europe.

In the past, we have made several small acquisitions in order to increase our pool of skilled technical personnel and penetrate new market segments, such as test and measurement, advanced communications and system management devices. These acquisitions include: USAR Systems Incorporated; Practical Sciences, Inc.; Acapella Limited; and Edge Semiconductor. The acquisitions of USAR, Acapella and Edge were accounted for as poolings of interests.

Critical Accounting Policies and Estimates

The preparation of financial statements in accordance with accounting principles generally accepted in the United States requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period.

On an ongoing basis, we evaluate and discuss with our audit committee our estimates, including those related to our allowance for doubtful accounts and sales returns, inventory reserves, asset impairments and income taxes. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities. Our critical accounting policies and estimates do not vary between our two reportable segments. Actual results may differ from these estimates under different assumptions or conditions.

We believe the following critical accounting policies, among others, affect the significant judgments and estimates we use in the preparation of our consolidated financial statements:

Accounting for Temporary and Long-Term Investments

Our temporary and long-term investments consist of government, bank and corporate obligations. Temporary investments have original maturities in excess of three months, but mature within twelve months of the balance sheet date. Long-term investments have maturities in excess of one year from the date of the balance sheet. In fiscal year 2002, we changed our investment classification from “hold to maturity” to “available for sale” because we expected to sell some securities prior to maturity. We included $1.4 million and $3.8 million of unrealized gain, net of tax, in the comprehensive income portion of our Consolidated Statements of Stockholders’ Equity and Comprehensive Income for fiscal year 2003 and fiscal year 2002, respectively.

Allowance for Doubtful Accounts

We evaluate the collectibility of our accounts receivable based on a combination of factors. If we are aware of a customer’s inability to meet its financial obligations to us, we record an allowance to reduce the net receivable to the amount we reasonably believe we will be able to collect from the customer. For all other customers, we recognize allowances for doubtful accounts based on the length of time the receivables are past due, the current business environment and our historical experience. If the financial condition of our customers were to deteriorate or if economic conditions worsen, additional allowances may be required in the future.

Revenue Recognition

We recognize product revenue when persuasive evidence of an arrangement exists, delivery has occurred, receipt by the customer has been confirmed, the fee is fixed or determinable and collectibility is probable. Product design and engineering revenue is recognized during the period in which services are performed. We defer revenue recognition on shipment of certain products to distributors where return privileges exist until the products are sold through to end-users. In addition, we record a provision for estimated sales returns in the same period as the related revenues are recorded. We base these estimates on historical sales returns and other known factors. Actual returns could be

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different from our estimates and current provisions for sales returns and allowances, resulting in future charges to earnings.

Inventory Valuation

Our inventories are stated at lower of cost or market and consist of materials, labor and overhead. We determine the cost of inventory by the first-in, first-out method. At each balance sheet date, we evaluate our ending inventories for excess quantities and obsolescence. This evaluation includes analyses of sales levels by product and projections of future demand. In order to state our inventory at lower of cost or market, we maintain reserves against our inventory. If future demand or market conditions are less favorable than our projections, a write-down of inventory may be required, and would be reflected in cost of goods sold in the period the revision is made.

Contingencies and Litigation

We are involved in various disputes and litigation matters as a claimant and as defendant. We record any amounts recovered in these matters when collection is certain. We record liabilities for claims against us when the losses are probable and estimable. Any amounts recorded are based on reviews by outside counsel, in-house counsel and management. Actual results may differ from estimates.

Accounting for Income Taxes

As part of the process of preparing our consolidated financial statements, we are required to estimate our income taxes in each of the jurisdictions in which we operate. This process involves us estimating our actual current tax exposure together with assessing temporary differences resulting from differing treatment of items, such as deferred revenue, for tax and accounting purposes. These differences result in deferred tax assets and liabilities, which are included in our consolidated balance sheet. We must then assess the likelihood that our deferred tax assets will be recovered from future taxable income and to the extent we believe that recovery is not likely, we must establish a valuation allowance. To the extent we establish a valuation allowance or increase this allowance in a period, we must include an expense within the tax provision in the statement of operations.

Significant management judgment is required in determining our provision for income taxes, deferred tax assets and liabilities and any valuation allowance recorded against our net deferred tax assets. Management continually evaluates its deferred tax asset as to whether it is likely that the deferred tax assets will be realized. If management ever determined that its deferred tax asset was not likely to be realized, a write-down of that asset would be required and would be reflected as a cost in the accompanying period.

Reclassifications

Certain prior year balances have been reclassified to be consistent with our current year presentation and to reflect changes in recently issued accounting standards. In the prior year, gain on the extinguishment of debt was originally classified as an extraordinary item. In compliance with a recently issued accounting standard, gain on the extinguishment of debt is included in “Interest and Other Income, Net” in fiscal year 2003 and all prior year amounts have been reclassified as such (see Recently Issued Accounting Standards for more information).

Results of Operations

Fiscal Year 2003 Compared With Fiscal Year 2002

Net Sales. Net sales for fiscal year 2003 were $193.0 million, an increase of 1% compared to $191.2 million for fiscal year 2002. Semiconductor and electronics industry conditions, as well as overall macro economic conditions remained weak during fiscal year 2003, following difficult market conditions in fiscal year 2002. Weak unit demand coupled with declines in average selling prices impacted the ability to grow net sales, especially in the desktop computer end-market segment. Sales into the capital equipment end-markets, specifically the automated test equipment (ATE) and telecommunications segments, were also down compared to prior years.

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Standard Semiconductor Products represented 95% of net sales in fiscal year 2003, while 5% were represented by the Rectifier, Assembly and Other Products segment. Sales of our Standard Semiconductor Products segment increased 4% in fiscal year 2003, while Rectifier, Assembly and Other Products’ sales declined 37%. Increased sales of Standard Semiconductor Products reflected strength in computer gaming applications and portable applications, such as notebook computers and cellular phones. Strength in these end-applications was partially offset by weakness in the desktop computer, ATE and other capital intensive end-market segments. Our power management product line has benefited from strength in portable applications, while being negatively impacted by weakness in desktop computers. Weakness in the capital equipments markets has negatively impacted our test and measurement and advanced communications product lines.

Sales of our Rectifier, Assembly and Other Products segment shrank in fiscal year 2003 due to declining demand for these older technology products and other non-strategic product offerings which we have de-emphasized due to their lower growth and profit margin opportunities.

Sales of our Standard Semiconductor Products and Rectifier, Assembly and Other Products segments were both weak and declined dramatically from the prior year. The decline in sales in the Standard Semiconductor Products segment was due to both weak industry conditions and weak demand from customers. Only the power management product line within the Standard Semiconductor Products segment grew in fiscal year 2002, while all other product lines in the segment declined. Sales of our Rectifier, Assembly and Other Products segment declined due to weak industry conditions, a strategic focus on proprietary products and a strategic de-emphasis of custom and foundry services.

Gross Profit. Gross profit for fiscal year 2003 was $109.9 million, compared to $93.3 million for the prior year. This increase was due to slightly higher sales and higher gross margin due in part to the absence of a write-down of inventory and discontinuation of certain products that occurred in fiscal year 2002. Our gross margin was 57% for fiscal year 2003, compared to a gross margin of 49% for fiscal year 2002.

The write-down of inventory and discontinuation of certain products during fiscal year 2002 was the result of a critical review we conducted during that year. A severe industry downturn and a related drop in demand from end customers made certain inventories excess and obsolete, and certain product lines non-strategic. Of the $14.0 million write-down of inventory and discontinuation of certain products, $13.4 million was associated with the Standard Semiconductor Products segment and $550,000 with the Rectifier, Assembly and Other Products segment. In fiscal year 2003 and fiscal year 2002, we sold $1.3 million and $68,000, respectively, of inventory of the Standard Semiconductor Products segment that had been reserved during the second quarter of fiscal year 2002.

Operating Costs and Expenses. Operating costs and expenses were $79.0 million, or 41% of net sales, for the fiscal year 2003. Operating costs and expenses for fiscal year 2002 were $66.3 million, or 35% of net sales. The increase in absolute dollars of operating costs and expenses was the result of modest increases in spending in the areas of sales, general and administration, and research and development. The increase in absolute dollars of operating costs and expenses was also impacted by higher one-time costs in fiscal year 2003.

Operating costs and expenses for fiscal year 2003 include one-time costs of $13.2 million; which included $12.0 million of cost associated with the Standard Semiconductor Products segment for the settlement of a customer dispute, $852,000 of cost not assigned to a reportable segment for an expected loss on the future sub-lease of the our New York office and $350,000 of cost assigned to a reportable segment for asset impairment at the Corpus Christi, Texas wafer fabrication facility.

Operating costs and expenses for fiscal year 2002 include one-time cost not assigned to a reportable segment of $2.0 million associated with an approximate 200-person reduction in headcount made in the first half of the year and one-time cost not assigned to a reportable segment of $765,000 associated with a pending Superfund settlement. As of January 26, 2003, substantially all of the one-time headcount reduction costs have been paid out in cash.

Operating Income. Operating income was $30.9 million in fiscal year 2003, up from operating income of $27.0 million in fiscal year 2002. Operating income was impacted by a slight increase in net sales and improvement in gross margin.

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We evaluate segment performance based on net sales and operating income of each segment. Operating income for the Standard Semiconductor Products segment increased 18% in fiscal year 2003, having benefited by a 4% increase in sales and higher gross margin. Standard Semiconductor Products segment operating income in fiscal year 2003 was negatively impacted by a one-time cost of $12.0 million for the settlement of a customer dispute. Gross margin and operating income for the Standard Semiconductor Products segment was negatively impact in fiscal year 2002 by a $13.4 million write-down of inventory and discontinuation of certain products within the Standard Semiconductor Products segment.

Operating income for the Rectifier, Assembly and Other Products segment declined by 50% in fiscal year 2003. The Rectifier, Assembly and Other Products operating income decline reflected poor efficiencies associated with a lower sales level.

Operating income for the Standard Semiconductor Products segment was weak in fiscal year 2002. Operating income for the Standard Semiconductor Products in fiscal year 2002 was hurt by a large decline in sales and lower gross and operating margins. Operating income for the Rectifier, Assembly and Other Products segment declined in fiscal year 2002, reflecting poor efficiencies associated with a lower sales level.

Interest and Other Income, Net. Net interest and other income of $15.2 million was realized in fiscal year 2003, up from $9.1 million in fiscal year 2002. Other income and expenses includes interest income from investments, interest expense associated with our outstanding convertible subordinated notes, and gain on the extinguishment of debt. The increase in interest and other income in fiscal year 2003 was mostly due to $12.7 million of gain on the extinguishment of debt. The interest income portion of Interest and Other Income for fiscal year 2003 was down due to lower rates of return on our investments as compared to the prior year. Interest and other income in fiscal year 2002 included $2.3 million of gain on the extinguishment of debt.

Provision for Taxes. Provision for income taxes was $11.9 million for the fiscal year ended January 26, 2003, compared to $10.1 million in the fiscal year ended January 27, 2002. The effective tax rate for fiscal year 2003 and fiscal year 2002 were 26% and 28%, respectively. The decline is due to increased sales by our foreign-based subsidiaries that are in lower tax jurisdictions.

Fiscal Year 2002 Compared With Fiscal Year 2001

Net Sales. Net sales for fiscal year 2002 were $191.2 million, a decline of 26% compared to $256.7 million for fiscal year 2001. Overall semiconductor industry conditions were very weak during fiscal year 2002, as were the end-markets that we serve. The weakest end-markets for fiscal year 2002 were the industrial market and the wireline portion of the communications market.

Standard Semiconductor Products represented about 92% of net sales in fiscal year 2002, while Rectifier, Assembly and Other Products’ sales made up the balance. Sales of our Standard Semiconductor Products segment shrank 24% in fiscal year 2002. Rectifier, Assembly and Other Products’ sales declined 36% in fiscal year 2002. The decline in sales in the Standard Semiconductor Products segment was due to both weak industry conditions and weak demand from customers. Only the power management product line within the Standard Semiconductor Products segment grew in the year, while all other product lines in the segment declined. The power management product line benefited from strength in computer and wireless applications. The largest absolute dollar declines in net sales within the segment were in our protection and test and measurement product lines. The protection product line was hurt by weakness in the wireline segment of the communications market and price declines in portable applications. Test and measurement product line sales were impacted by a severe downturn in the ATE portion of the industrial market.

Sales of our Rectifier, Assembly and Other Products segment declined due to weak industry conditions, a strategic focus on proprietary products and a strategic de-emphasis of custom and foundry services. We plan to eventually exit the custom and foundry product offerings.

In fiscal year 2001, favorable market conditions benefited our two reportable segments. The Standard Semiconductor Products segment was most benefited by a large increase in sales of our test and measurement and

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protection product lines. On an absolute dollar basis, these two product lines had the largest impact on our increase in net sales. Sales of these two product lines were benefited by strength in the communications end-market and the test equipment area of the industrial end-market. Our power management product line (also part of our Standard Semiconductor Products segment) sales’ grew only slightly in fiscal year 2001 due in part to weak demand from computer related customers.

Gross Profit. Gross profit for fiscal year 2002 was $93.3 million, compared to $144.9 million for the prior year. This decrease was due to lower sales levels in both of our reportable segments and one-time cost of $14.0 million for the write-down of inventory and discontinuation of certain products during the second quarter. Our gross margin was 49% for fiscal year ended January 27, 2002, compared to a gross margin of 56% for fiscal year ended January 28, 2001.

The write-down of inventory and discontinuation of certain products during the second quarter was the result of a critical review we conducted during that quarter. A severe industry downturn and a related drop in demand from end customers made certain inventories excess and obsolete, and certain product lines non-strategic. Of the $14.0 million write-down of inventory and discontinuation of certain products, $13.4 million was associated with the Standard Semiconductor Products segment and $550,000 with the Rectifier, Assembly and Other Products segment. In the fourth quarter of fiscal year 2002, we recorded a one-time gain of $68,000 on the sale of inventory of the Standard Semiconductor Products segment that had been reserved during the second quarter.

Operating Costs and Expenses. Operating costs and expenses were $66.3 million, or 35% of net sales, for the fiscal year 2002. Operating costs and expenses for fiscal year 2001 were $68.2 million, or 27% of net sales. The decline in absolute dollars of operating costs and expenses was the result of cost cutting measures, which included headcount reductions and declines in variable expense items. Despite an absolute drop in operating costs and expenses, these costs went up as a percent of net sales due to the much lower revenue base.

Operating costs and expenses for fiscal year 2002 include one-time costs of $2.0 million associated with an approximate 200-person reduction in headcount made in the first half of the year and one-time costs of $765,000 associated with a pending Superfund settlement.

Operating Income. Operating income was $27.0 million in fiscal year 2002, down from operating income of $76.7 million in fiscal year 2001. Operating income was impacted by a 26% decline in net sales, a drop to 49% gross margin and one-time costs of $2.7 million related to headcount reductions and a pending Superfund settlement.

We evaluate segment performance based on net sales and operating income of each segment. Operating income for the Standard Semiconductor Products segment declined 64% in fiscal year 2002. Operating income in the Standard Semiconductor Products segment was benefited by an increase in power management product line sales and was most hurt by large declines in our protection, and test and measurement product lines. In fiscal year 2001, the test and measurement product line had operating margins above our consolidated average.

Operating income for the Rectifier, Assembly and Other Products segment declined by 21% in fiscal year 2002. Rectifier, Assembly and Other Products operating income decline reflected poor efficiencies associated with a lower sales level.

Operating income for the Standard Semiconductor Products segment in fiscal year 2001 was benefited by a significant increase in our protection and test and measurement product line sales, which had above corporate average operating margins. Operating income for the Rectifier, Assembly and Other Products segment increased in fiscal year 2001 due to a shift in manufacturing to our lower-cost facility in Mexico and reduced overhead.

Interest and Other Income. Net interest and other income of $9.1 million was realized in fiscal year 2002. For fiscal year 2001, interest and other income was $9.3 million. Other income and expenses includes interest income from investments, interest expense associated with our outstanding convertible subordinated notes, and gain on the extinguishment of debt. The decline in interest and other income in fiscal year 2002 was mostly due to lower rates of return on our investments as compared to the prior year, partially offset by $2.3 million of gain on the extinguishment of debt.

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Provision for Taxes. Provision for income taxes was $10.1 million for the fiscal year ended January 27, 2002, compared to $25.8 million in the fiscal year ended January 28, 2001. The effective tax rate for fiscal years 2002 and 2001 were 28% and 30%, respectively. The decline is due to increased sales by our foreign-based subsidiaries that are in lower tax jurisdictions.

Selected Quarterly Financial Data (Unaudited)

The following tables set forth our unaudited consolidated statements of income data for each of the eight quarterly periods ended January 26, 2003, as well as that data expressed as a percentage of our net sales for the quarters presented. You should read this information in conjunction with our consolidated financial statements and related notes appearing in this Form 10-K. We have prepared this unaudited consolidated information on a basis consistent with our audited consolidated financial statements, and, in the opinion of our management, it reflects all normal recurring adjustments that we consider necessary for a fair presentation of our financial position and operating results for the quarters presented. You should not draw any conclusions about our future results from the operating results for any quarter.

	Quarter Ended
	Apr. 29, 2001		July 29, 2001			Oct. 28, 2001		Jan. 27, 2002		Apr. 28, 2002		July 28, 2002		Oct. 27, 2002		Jan. 26, 2003
Net Sales	$	60,528	$	40,532		$	43,745	$	46,405	$	49,188	$	52,071	$	47,168	$	44,531
Cost of Sales		25,442		32,537			19,616		20,325		21,108		21,739		20,736		19,514
Gross Profit		35,086		7,995			24,129		26,080		28,080		30,332		26,432		25,017
Operating costs and expenses:
Selling, general & engineering		9,922		8,008			7,982		7,886		8,412		8,816		8,790		8,408
Product development & engineering		8,048		7,319			7,150		7,227		7,524		8,273		7,912		7,627
One-time charges		951		1,776			—		—		—		—		1,202		12,000
Total operating costs and expense		18,921		17,103			15,132		15,113		15,936		17,089		17,904		28,035
Operating income (loss)		16,165		(9,108	)		8,997		10,967		12,144		13,243		8,528		(3,018	)
Interest and other income, net		2,451		1,799			3,670		1,175		1,179		1,540		10,649		1,819
Income (loss) before taxes		18,616		(7,309	)		12,667		12,142		13,323		14,783		19,177		(1,199	)
Provisions (benefit) for taxes		5,398		(2,232	)		3,547		3,400		3,331		3,696		6,137		(1,261	)
Net income (loss)	$	13,218	$	(5,077	)	$	9,120	$	8,742	$	9,992	$	11,087	$	13,040	$	62
Earnings (loss) per share:
Basic	$	0.19	$	(0.07	)	$	0.13	$	0.12	$	0.14	$	0.15	$	0.18	$	0.00
Diluted	$	0.17	$	(0.07	)	$	0.12	$	0.11	$	0.13	$	0.14	$	0.17	$	0.00
Weighted average number of shares:
Basic		68,467		69,446			70,605		71,425		72,681		73,348		73,389		73,056
Diluted		77,120		69,446			78,338		78,792		78,997		78,627		76,721		76,243

	Quarter Ended
	April 29, 2001		July 29, 2001		Oct. 28, 2001		Jan. 27, 2002		April 28, 2002		July 28, 2002		Oct. 27, 2002		Jan. 26, 2003
As a Percentage of Net Sales:
Net sales	100.0	%	100.0	%	100.0	%	100.0	%	100.0	%	100.0	%	100.0	%	100.0	%
Cost of sales	42.0		80.3		44.8		43.8		42.9		41.8		44.0		43.8
Gross profit	58.0		19.7		55.2		56.2		57.1		58.3		56.0		56.2
Operating costs and expenses:
Selling, general and administrative	16.4		19.8		18.2		17.0		17.1		16.9		18.6		18.9
Product development & engineering	13.3		18.1		16.3		15.6		15.3		15.9		16.8		17.1
One-time charges	1.6		4.4		—		—		—		—		2.5		26.9
Total operating costs & expenses	31.3		42.2		34.6		32.6		32.4		32.8		38.0		63.0
Operating income (loss)	26.7		(22.5	)	20.6		23.6		24.7		25.4		18.1		(6.8	)
Interest and other income, net	4.0		4.4		8.4		2.5		2.4		3.0		22.6		4.1
Income (loss) before taxes	30.2		(18.0	)	29.0		26.2		27.1		28.4		40.7		(2.7	)
Provision (benefit) for taxes	8.9		(5.5	)	8.1		7.3		6.8		7.1		13.0		(2.8	)
Net income	21.8	%	(12.5	)%	20.8	%	18.8	%	20.3	%	21.3	%	27.6	%	0.1	%

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Liquidity and Capital Resources

We evaluate segment performance based on net sales and operating income of each segment. We do not track segment data or evaluate segment performance on additional financial information. As such, there are no separately identifiable segment assets and liabilities.

On February 14, 2000, we completed a private offering of $400.0 million principal amount of convertible subordinated notes that bear interest at the rate of 4½% per annum and are convertible into our common stock at a conversion price of $42.23 per share. The notes are due in 2007 and callable beginning in February of 2003. Pursuant to a registration rights agreement, we were obligated to register the resale of the notes on behalf of the holders and to maintain the effectiveness of the registration until the holders could otherwise resell the notes under exemptions from registration. Our obligation to keep the registration statement effective has terminated, and on August 30, 2002, we filed a post-effective amendment to de-register the notes and conversion shares that had not been sold under the prospectus contained in the registration statement. The post-effective amendment was effective on September 5, 2002. We have used the net proceeds of the notes offering, in part, for general corporate purposes, including working capital, expansion of sales, marketing and customer service capabilities, and product development. In addition, we may use a portion of the net proceeds from the notes offering to acquire or invest in complementary businesses, technologies, services or products.

As of January 26, 2003, we had working capital of $420.9 million, compared with $403.0 million as of January 27, 2002. The ratio of current assets to current liabilities as of January 26, 2003 was 12.2 to 1, compared to 15.8 to 1 as of January 27, 2002. The increase in working capital as of January 26, 2003 was mostly the result of an increase in cash and cash equivalents, partially offset by an increase in accrued liabilities and other items.

Cash provided by operating activities was $62.6 million for fiscal year 2003, compared to $64.7 million for fiscal year 2002. Net operating cash flows were impacted by non-cash charges for depreciation and amortization of $9.6 million and $10.3 million in fiscal years 2003 and 2002, respectively.

Net operating cash flows in fiscal year 2003 were positively impacted by net income of $34.2 million and by a decrease in inventories and receivables, increases in accrued liabilities, tax benefit from stock option exercises, income taxes payable, loss on the disposition of property, plant and equipment and other assets. These were partially offset by increases in gains on repurchase of long-term debt, accounts payable, deferred revenue and other liabilities.

Investing activities provided $132.9 million in fiscal year 2003 compared to a use of $305.7 million in the prior year. Investing activities for both periods consist of changes in temporary investments and long-term investments, and cash used for capital expenditures. Investing activities for fiscal year 2002 included proceeds of $731,000 from the sale of assets.

Our financing activities used $105.0 million during fiscal year 2003 and $36.2 million in the prior year period. Financing activities in fiscal year 2003 reflect the proceeds from stock option exercises, which were more than offset by cash used to repurchase long-term debt and common stock. Financing activities for fiscal year 2002 reflect the proceeds from stock options exercises and the reissuance of treasury stock, more than offset by cash used to repurchase long-term debt and common stock.

In order to develop, design and manufacture new products, we have incurred significant expenditures during the past five years. We expect to continue these investments aimed at developing new products, including the hiring of many design and applications engineers and related purchase of equipment. Our intent is to continue to invest in those areas that have shown potential for viable and profitable market opportunities. Certain of these expenditures, particularly the addition of design engineers, do not generate significant payback in the short-term. We plan to finance these expenditures with cash generated by operations and investments.

Purchases of new capital equipment were made to complete our corporate headquarters in Camarillo, California, expand our test capacity and support other engineering functions, including product design and qualification. These purchases were funded from our operating cash flows and cash reserves. We believe that operating cash flows, together with the proceeds of the notes offering and cash reserves, are sufficient to fund operations and capital expenditures for the foreseeable future.

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Off Balance Sheet Arrangements

We do not have any transactions, arrangements and other relationships with unconsolidated entities that are reasonably likely to affect our liquidity or capital resources. We have no special purpose or limited purpose entities that provided off-balance sheet financing, liquidity or market or credit risk support, engage in leasing, hedging, research and development services, or other relationships that expose us to liability that is not reflected on the face of the financial statements.

Contractual Obligations

As of January 26, 2003, we have approximately $7.8 million in operating lease commitments that extend over an eight-year period. The portion of these operating lease payments due during fiscal year fiscal 2004 is approximately $1.6 million. Presented below is a comprehensive summary of contractual obligations.

	Payments due by period
(in thousands)	Total		Less than 1 year		2-3 years		4-5 years		After 5 years
Long-term debt	$	241,570	$	—	$	—	$	241,570	$	—
Operating leases		7,803		1,599		2,118		1,555		2,531
Purchase obligations		16,000		10,000		6,000		—		—
Total contractual cash obligations	$	265,373	$	11,599	$	8,118	$	243,125	$	2,531

We have a contract (“Purchase obligations” in table above) with one of our third-party wafer foundries in which we guarantee that wafer foundry a certain minimum level of quarterly business. Under the contract, which runs from April of 2003 until June of 2004, we have agreed to buy approximately $3.0 million of fabricated silicon wafers on a calendar quarter basis from this foundry. If we do not meet this minimum obligation on a quarterly basis, we are obligated to pay the difference. We can earn back any shortfall in a given quarter by purchasing more wafers in a subsequent quarter.

Inflation

Inflationary factors have not had a significant effect on our performance over the past several years. A significant increase in inflation would affect our future performance.

Recently Issued Accounting Standards

In August 2001, the Financial Accounting Standards (FASB) issued Statement of Financial Accounting Standards (SFAS) No. 144, “Accounting for the Impairment of Disposal of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of” that revises the accounting and reporting provision of Accounting Principles Board (APB) Opinion No. 30 “Reporting the Results of Operations – Reporting the Effects of Disposal of a Segment of a Business, and Extraordinary, Unusual and Infrequently Occurring Events and Transactions”, for the disposal of a business (as previously defined in that Opinion). SFAS No. 144 also resolves significant implementation issues related to Statement No. 121. We adopted these standards effective with the fiscal year that began on January 28, 2002. The adoption of these standards has not had a material impact on our results of operations and financial position.

In April 2002, the FASB issued SFAS No. 145, “Rescission of FASB Statements No. 4, 44, and 64, Amendment of FASB Statement No. 13, and Technical Corrections”. This statement is effective for fiscal years beginning after May 15, 2002. For certain provisions, including the rescission of Statement No. 4, early application is encouraged. We have applied this statement to fiscal year 2003, and as a result the gains on the extinguishment of debt was not classified as an extraordinary item.

In June 2002, the FASB approved SFAS No. 146, “Accounting for Costs Associated with Exit or Disposal Activities.” This statement addresses financial accounting and reporting for costs associated with exit or disposal activities and nullifies Emerging Issues Task Force Issue No. 94-3, “Liability Recognition for Certain Employee

29

Termination Benefits and Other Costs to Exit an Activity.” The provisions of this statement are effective for exit or disposal activities that are initiated after December 31, 2002, with early application encouraged. We have early adopted SFAS No. 146 and it has not had a material impact on our financial statements.

In December 2002, the FASB issued SFAS No. 148, “Accounting for Stock-Based Compensation – Transition and Disclosure, an Amendment of FASB Statement No. 123.” This statement amends SFAS No. 123, “Accounting for Stock-Based Compensation,” to provide alternative methods of transition for a voluntary change to the fair value based method of accounting for stock-based employee compensation. In addition, this Statement amends the disclosure requirement of SFAS No. 123 to require prominent disclosure in both annual and interim financial statements about the method of accounting for stock-based employee compensation and the effect of the method used on reported results. We adopted this statement and included the prominent disclosure. Since we continued to use the intrinsic value method, the adoption did not have a material impact on our financial position, results of operations or cash flows.

Internet Access to Semtech Financial Documents

We maintain a website at www.semtech.com. We make available free of charge, either by direct access or a link to the SEC website, our annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended, as soon as reasonably practicable after such reports are electronically filed with, or furnished to, the SEC. Our reports filed with, or furnished to, the SEC are also available directly at the SEC’s website at www.sec.gov.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKS

Foreign Currency Risk

As a global enterprise, we face exposure to adverse movements in foreign currency exchange rates. Because of the relatively small size of each individual currency exposure, we do not employ hedging techniques designed to mitigate foreign currency exposures. Likewise, we could experience unanticipated currency gains or losses. Our foreign currency exposures may change over time as the level of activity in foreign markets grows and could have an adverse impact upon our financial results.

Certain of our assets, including certain bank accounts and accounts receivable, exist in nondollar-denominated currencies, which are sensitive to foreign currency exchange rate fluctuations. The nondollar-denominated currencies are principally the Euro, Swiss Francs and British Pounds Sterling. Additionally, certain of our current and long-term liabilities are denominated principally in British Pounds Sterling currency, which are also sensitive to foreign currency exchange rate fluctuations.

Substantially all of our foreign sales are denominated in United States dollars. Currency exchange fluctuations in countries where we do business could harm our business by resulting in pricing that is not competitive with prices denominated in local currencies.

Interest Rate Risk

As of January 26, 2003, we had $241.6 million in long-term debt outstanding at a fixed interest rate of 4½% per annum. We do not currently hedge any potential interest rate exposure. Interest rates affect our return on excess cash and investments. A significant decline in interest rates would reduce the amount of interest income generated from our excess cash and investments.

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ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

SEMTECH CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME

THREE YEARS ENDED JANUARY 26, 2003

(In thousands, except earnings per share data)

	2003			2002			2001
NET SALES	$	192,958		$	191,210		$	256,685
Cost of Sales		83,097			97,920			111,819
Gross Profit		109,861			93,290			144,866
Operating costs and expenses:
Selling, general and administrative		34,426			33,798			36,164
Product development and engineering		31,336			29,744			32,008
One-time charges		13,202			2,727			—
Operating costs and expenses		78,964			66,269			68,172
Operating Income		30,897			27,021			76,694
Interest expense		(15,125	)		(18,917	)		(18,718	)
Interest and other income, net		30,312			28,012			28,052
Income before provision for taxes		46,084			36,116			86,028
Provision for taxes		11,903			10,113			25,808
NET INCOME	$	34,181		$	26,003		$	60,220
Earnings per share –
Basic	$	0.47		$	0.37		$	0.91
Diluted	$	0.44		$	0.33		$	0.79
Weighted average number of shares –
Basic		73,013			69,983			66,247
Diluted		77,789			77,747			76,527

See accompanying notes.

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SEMTECH CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

AS OF JANUARY 26, 2003 AND JANUARY 27, 2002

(In thousands, except share data)

	2003			2002
ASSETS
Current assets:
Cash and cash equivalents	$	137,041		$	46,300
Temporary investments		273,382			324,870
Receivables, less allowances of $619 in 2003 and $973 in 2002		17,676			19,181
Inventories		16,351			22,728
Income taxes refundable		—			2,019
Deferred income taxes		11,731			11,786
Other current assets		2,267			3,372
Total current assets		458,448			430,256
Property, plant and equipment, net		51,547			51,516
Investments with maturities in excess of 1 year		78,624			172,332
Deferred income taxes		27,143			27,659
Other assets		4,784			8,638
TOTAL ASSETS	$	620,546		$	690,401
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	5,725		$	7,341
Accrued liabilities		26,596			16,845
Deferred revenue		1,583			1,936
Income taxes payable		3,593			1,099
Other current liabilities		39			65
Total current liabilities		37,536			27,286
Convertible subordinated debentures		241,570			364,320
Commitments and contingencies
Stockholders’ equity:
Common stock, $0.01 par value, 250,000,000 authorized 74,006,614 issued and 73,165,414 outstanding in 2003 and 72,148,573 issued and outstanding in 2002		740			722
Treasury stock, 841,200 at cost in 2003		(9,072	)		—
Additional paid-in capital		182,524			162,856
Retained earnings		165,640			131,459
Accumulated other comprehensive income		1,608			3,758
Total stockholders’ equity		341,440			298,795
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	620,546		$	690,401

See accompanying notes.

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SEMTECH CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY AND COMPREHENSIVE INCOME

THREE YEARS ENDED JANUARY 26, 2003

(In thousands, except share amounts)

	Common Stock						Retained Earnings			Treasury Stock, at Cost			Accumulated Other Comprehensive Income (Loss)			Stockholders’ Equity
	Number of Shares (#)		Amount		Additional Paid-in Capital
Balance at January 30, 2000	64,096,504		$	641	$	53,564	$	71,498		$	—		$	(221	)	$	125,482
Comprehensive income:
Net income	—			—		—		60,220			—			—			60,220
Translation adjustment	—			—		—		—			—			(107	)		(107	)
Comprehensive income	—			—		—		—			—			—			60,113
Treasury stock repurchase	(42,500	)		—		—		—			(1,018	)					(1,018	)
Exercise of stock options	4,062,378			41		16,946		—			—			—			16,987
Tax benefit from exercised stock options	—			—		40,793		—			—			—			40,793
Balance at January 28, 2001	68,116,382		$	682	$	111,303	$	131,718		$	(1,018	)	$	(328	)	$	242,357
Comprehensive income:
Net income	—			—		—		26,003			—			—			26,003
Change in unrealized gains on investments, net of taxes	—			—		—		—			—			3,782			3,782
Translation adjustment	—			—		—		—			—			304			304
Comprehensive income	—			—		—		—			—			—			30,089
Treasury stock repurchase	(1,187,500	)		—		—		—			(32,226	)		—			(32,226	)
Treasury stock reissued	1,230,000			—		—		(26,262	)		33,244			—			6,982
Exercise of stock options	3,989,691			40		21,575		—			—			—			21,615
Tax benefit from exercised stock options	—			—		29,978		—			—			—			29,978
Balance at January 27, 2002	72,148,573		$	722	$	162,856	$	131,459		$	—		$	3,758		$	298,795
Comprehensive income:
Net income	—			—		—		34,181			—			—			34,181
Change in unrealized gains on investments, net of taxes	—			—		—		—			—			(2,388	)		(2,388	)
Translation adjustment	—			—		—		—			—			238			238
Comprehensive income	—			—		—		—			—			—			32,031
Treasury stock repurchase	(841,200	)		—		—		—			(9,072	)		—			(9,072	)
Exercise of stock options	1,858,041			18		11,660		—			—			—			11,678
Tax benefit from exercised stock options	—			—		8,008		—			—			—			8,008
Balance at January 26, 2003	73,165,414		$	740	$	182,524	$	165,640		$	(9,072	)	$	1,608		$	341,440

See accompanying notes.

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SEMTECH CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

THREE YEARS ENDED JANUARY 26, 2003

(In thousands)	2003			2002			2001
Cash flows from operating activities:
Net income	$	34,181		$	26,003		$	60,220
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		9,581			10,327			8,837
Deferred income taxes		571			(18,516	)		(13,776	)
Loss (gain) on disposition of property, plant and equipment		557			(302	)		—
Gain on extinguishment of debt		(12,718	)		(2,283	)		—
Provision for doubtful accounts		29			160			760
Tax benefit from stock option exercises		8,008			29,978			40,793
Changes in assets and liabilities, net of effect of acquisition:
Receivables		1,476			18,594			(13,472	)
Inventories		6,377			9,742			(5,014	)
Income taxes refundable		2,019			(2,019	)		—
Other assets		2,298			681			(3,407	)
Accounts payable		(1,616	)		(5,593	)		2,211
Accrued liabilities		9,751			(2,080	)		10,056
Deferred revenue		(353	)		(113	)		(506	)
Income taxes payable		2,494			343			(633	)
Other liabilities		(26	)		(202	)		(65	)
Net cash provided by operating activities		62,629			64,720			86,004
Cash flows from investing activities:
Temporary investments, net		49,700			(173,370	)		(130,516	)
Investments, maturing in excess of 1 year, net		93,108			(112,253	)		(59,215	)
Proceeds from sale of property, plant and equipment		—			731			—
Purchases of property, plant and equipment		(9,914	)		(20,812	)		(22,667	)
Net cash provided by (used in) investing activities		132,894			(305,704	)		(212,398	)
Cash flows from financing activities:
Issuance of long-term debt, net of fees		—			—			388,489
Exercise of stock options		11,678			21,615			16,987
Repurchase of treasury stock		(9,072	)		(32,226	)		(1,018	)
Reissuance of treasury stock		—			6,982			—
Repurchase of subordinated debentures		(107,626	)		(32,573	)		—
Net cash provided by (used in) financing activities		(105,020	)		(36,202	)		404,458
Effect of exchange rate changes on cash and cash equivalents		238			304			(107	)
Net increase (decrease) in cash and cash equivalents		90,741			(276,882	)		277,957
Cash and cash equivalents at beginning of year		46,300			323,182			45,225
Cash and cash equivalents at end of year	$	137,041		$	46,300		$	323,182

See accompanying notes.

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SEMTECH CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. Summary of Significant Accounting Policies

Business

Semtech Corporation and its wholly owned subsidiaries (Semtech International, Semtech Corpus Christi, Semtech Limited, Semtech Santa Clara, Semtech San Diego and Semtech New York, together, the Company) is a leading supplier of analog and mixed-signal semiconductors. The Company designs, manufacturers and markets a wide range of products for commercial applications, the majority of which are sold into the communications, industrial and computer markets. The end customers for the Company’s products are primarily original equipment manufacturers, or OEMs, that produce and sell electronics. The Company’s primary facilities are in Camarillo, Santa Clara and San Diego, California; Corpus Christi, Texas; St. Gallen, Switzerland; Reynosa, Mexico; and Glasgow and Southampton, United Kingdom.

Fiscal Year

The Company reports results on the basis of fifty-two and fifty-three week periods. The fiscal years ended January 26, 2003, January 27, 2002 and January 28, 2001 each consisted of fifty-two weeks.

Principles of Consolidation

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

Translation

The assets and liabilities of the Company’s foreign subsidiaries are translated using currency exchange rates at fiscal year end. Income statement items are translated at average exchange rates prevailing during the period. The translation gains or losses are included in accumulated other comprehensive income (loss) in the accompanying consolidated financial statements. Transaction gains and losses are included in the determination of net income and have been insignificant.

Cash, Cash Equivalents and Investments

The Company considers all highly liquid investments with an original maturity of 90 days or less to be cash equivalents. The Company maintains cash balances and investments in highly qualified financial institutions. At various times such amounts are in excess of insured limits. The Company has small amounts of restricted cash that is pledged or subject to withdrawal restrictions; these amounts are not material to cash and cash equivalents balances. The Company accounts for its investments, which are all available for sale securities, under the provisions of Statement of Financial Accounting Standards (SFAS) No. 115, “Accounting for Certain Investments in Debt and Securities.” Investments consist of government and corporate obligations.

Inventories

Inventories are stated at the lower of cost or market and consist of materials, labor and overhead. Cost is determined by the first-in, first-out method.

Property, Plant and Equipment

Property, plant and equipment are stated at cost. Depreciation is computed primarily using the straight-line method over the following estimated useful lives: buildings for thirty years; leasehold improvements for the lesser of estimated useful life or lease term; machinery and equipment for two to six years; and furniture and office equipment for three to six years. Maintenance and repairs are charged to expense as incurred and the costs of

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additions and betterments that increase the useful lives of the assets are capitalized. When property or equipment are disposed of, the cost and related accumulated depreciation and amortization are removed from the accounts and any gain or loss is included in operations.

Software Development Costs

In accordance with SFAS No. 86, “Accounting for the Costs of Computer Software to be Sold, Leased, or Otherwise Marketed,” development costs related to software products are expensed as incurred until the technological feasibility of the product has been established. The cost of purchased software is capitalized when related to a product which has achieved technological feasibility or that has an alternative future use. Software development costs incurred prior to achieving technological feasibility as well as certain licensing costs are charged to product development and engineering expense as incurred.

Capitalized software development costs are reported at the lower of unamortized cost or net realizable value. Commencing upon initial product release, these costs are amortized based on the straight-line method over the estimated life, or a ratio of current revenues to total anticipated revenues, generally three years. Fully amortized software costs are removed from the financial records. As of January 26, 2003 and January 27, 2002, $246,000 and $501,000, respectively, of capitalized software costs are included in “Other assets” in the accompanying consolidated balance sheets. Amortization expense of capitalized software costs totaled $255,000, $550,000 and $426,000 in fiscal years 2003, 2002 and 2001, respectively, and are included in “Cost of Sales” in the accompanying consolidated statements of income.

Income Taxes

Deferred income tax assets or liabilities are computed based on the temporary differences between the financial statement and income tax bases of assets and liabilities using the statutory marginal income tax rate in effect for the years in which the differences are expected to reverse. Deferred income tax expense or benefit is based on the changes in the deferred income tax assets or liabilities from period to period.

As of January 26, 2003 and January 27, 2002, approximately $38.2 million and $25.1 million, respectively, of unremitted income related to the Company’s wholly-owned European subsidiaries are not subject to U.S. Federal and state income taxes except when such income is paid to the parent company. U.S. Federal and state income taxes have not been provided on this income as it is management’s intention that these amounts will not be distributed in a taxable transaction.

Revenue Recognition

The Company generally recognizes product revenue when persuasive evidence of an arrangement exists, delivery has occurred, receipt by the customer has occurred, the fee is fixed or determinable and collectibility is probable. Product design and engineering revenue is recognized during the period in which services are performed. The Company defers revenue recognition on shipment of certain products to distributors where return privileges exist until the products are sold through to end users.

Product Development and Engineering

Product development and engineering costs are charged to expense as incurred.

Earnings per Share

Basic earnings per common share are computed using the weighted average number of common shares outstanding during the period. Diluted earnings per common share incorporate the incremental shares issuable upon the assumed exercise of stock options. The weighted average number of shares used to compute basic earnings per share in fiscal years 2003, 2002 and 2001 were 73,013,000, 69,983,000 and 66,247,000, respectively. Diluted earnings per share is computed by dividing net income for the period by the weighted average number of common shares outstanding

36

plus the dilutive effect of its outstanding stock options (“common stock equivalents”), or 77,789,000, 77,747,000 and 76,527,000 in fiscal years 2003, 2002 and 2001, respectively.

Options to purchase approximately 3,092,990, 215,000, and 84,000 shares were not included in the computation of fiscal years 2003, 2002, and 2001 diluted net income per share because such options were considered anti-dilutive. Shares associated with the Company’s outstanding convertible subordinated debentures are not included in the computation of net income per share as they are anti-dilutive.

Stock-Based Compensation

The Company accounts for its employee stock plan under the intrinsic value method prescribed by Accounting Principles Board Opinion (“APB”) No. 25, “Accounting for Stock Issued to Employees,” and related interpretations, and has adopted the disclosure-only provisions of SFAS No. 123, “Accounting for Stock-Based Compensation” and as amended by SFAS No. 148, “Accounting for Stock-Based Compensation – Transition and Disclosure, an amendment of FASB Statement No. 123.”

SFAS No. 123, and as amended by SFAS No. 148, permits companies to recognize, as expense over the vesting period, the fair value of all stock-based awards on the date of grant. The Black-Scholes option valuation model was developed for use in estimating the fair value of traded options, which have no vesting restrictions and are fully transferable. Because the Company’s stock-based compensation plans have characteristics significantly different from those of traded options and because changes in the subjective input assumptions can materially affect the fair value estimate, management believes that the existing option valuation models do not necessarily provide a reliable single measure of the fair value of awards from the plan. Therefore, as permitted, the Company applies the existing accounting rules under APB No. 25 and provides pro forma net income and pro forma net income per share disclosures for stock-based awards made during the year as if the fair value method defined in SFAS No. 123, as amended, had been applied. Net income and net income per share for each of the three years ended January 26, 2003 would have been reduced to the following pro forma amounts.

	2003			2002			2001
	(in thousands, except per share amounts)
Net income as reported	$	34,181		$	26,003		$	60,220
Additional pro forma compensation expense		34,370			33,529			31,737
Tax benefit of pro forma compensation expense		(8,867	)		(9,388	)		(9,520	)
Pro forma net income	$	8,678		$	1,862		$	38,003
Pro forma earnings per share – basic	$	0.12		$	0.03		$	0.57
Pro forma earnings per share – diluted	$	0.11		$	0.02		$	0.50

The pro forma effect on net income for fiscal years 2003, 2002, and 2001, may not be representative of the pro forma effect on net income of future years because the SFAS No. 123 method of accounting for pro forma compensation expense has not been applied to options granted prior to January 30, 1995.

The Black-Scholes option valuation model was developed for use in estimating the fair value of traded options which have no vesting restrictions and are fully transferable. Option valuation models also require the input of highly subjective assumptions such as expected option life and expected stock price volatility. The following assumptions were applied: (i) expected dividend yields of 0% for all periods, (ii) expected volatility rates of 88% for 2003, 86% for 2002 and 82% for 2001, (iii) expected lives of 4 to 6 years for all years, and (iv) risk-free interest rates ranging from 2.68% to 7.01% for all years.

Stock Distribution

On September 26, 2000, the Company effected a two-for-one stock split in the form of a 100% stock dividend which was payable to shareholders of record as of September 5, 2000. All shares, per share data, common stock, and stock option amounts herein have been restated to reflect the effect of this split.

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Fair Value of Financial Instruments

The Company’s financial instruments, including cash and cash equivalents, accounts receivable, accounts payable and accrued liabilities are carried at cost, which approximate their fair market value due to the short-term nature of those instruments. The fair value of long-term debt obligations is estimated based on current interest rates available to the Company for debt instruments with similar terms, degrees of risk and remaining maturities. The carrying value of these obligations approximate their fair values.

Recently Issued Accounting Standards

In August 2001, the Financial Accounting Standards (FASB) issued Statement of Financial Accounting Standards (SFAS) No. 144, “Accounting for the Impairment of Disposal of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of” that revises the accounting and reporting provision of Accounting Principles Board (APB) Opinion No. 30, “Reporting the Results of Operations – Reporting the Effects of Disposal of a Segment of a Business, and Extraordinary, Unusual and Infrequently Occurring Events and Transactions”, for the disposal of a business (as previously defined in that Opinion). SFAS No. 144 also resolves significant implementation issues related to SFAS No. 121. The Company adopted these standards effective with the fiscal year beginning January 28, 2002. The adoption of these standards did not have a material impact on fiscal year 2003 results of operations or financial position.

In April 2002, the FASB issued SFAS No. 145, “Rescission of FASB Statements No. 4, 44, and 64, Amendment of FASB Statement No. 13, and Technical Corrections”. This statement is effective for fiscal years beginning after May 15, 2002. For certain provisions, including the rescission of Statement No. 4, early application is encouraged. The Company has applied this statement as of fiscal year 2003, and as a result the gain on the extinguishment of debt was not classified as an extraordinary item.

In June 2002, the FASB approved SFAS No. 146, “Accounting for Costs Associated with Exit or Disposal Activities.” This statement addresses financial accounting and reporting for costs associated with exit or disposal activities and nullifies Emerging Issues Task Force Issue No. 94-3, “Liability Recognition for Certain Employee Termination Benefits and Other Costs to Exit an Activity.” The provisions of this statement are effective for exit or disposal activities that are initiated after December 31, 2002, with early application encouraged. The Company has early adopted SFAS No. 146 and it has not had a material impact on the financial statements.

In December 2002, the FASB issued SFAS No. 148, “Accounting for Stock-Based Compensation – Transition and Disclosure, an Amendment of FASB Statement No. 123.” This statement amends SFAS No. 123, “Accounting for Stock-Based Compensation,” to provide alternative methods of transition for a voluntary change to the fair value based method of accounting for stock-based employee compensation. In addition, this Statement amends the disclosure requirement of SFAS No. 123 to require prominent disclosure in both annual and interim financial statements about the method of accounting for stock-based employee compensation and the effect of the method used on reported results. The Company adopted this statement and included the prominent disclosure. Since the Company continued to use the intrinsic value method, the adoption did not have a material impact on the Company’s financial position, results of operations or cash flows.

Reclassifications

Certain prior year balances have been reclassified to be consistent with current year presentation.

Estimates Used by Management

The preparation of financial statements in conformity with accounting principles generally accepted in the United States 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 reporting period. Actual results could differ from those estimates.

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2. Stock and Convertible Subordinated Debt Repurchase Programs

On January 4, 2001, the Company announced that its Board of Directors had approved a program to repurchase up to $50.0 million of its common stock and registered convertible subordinated notes. In fiscal year 2002, the Company indicated that its Board had authorized an additional $50.0 million in buybacks, increasing the total amount authorized under the buyback program to $100.0 million. In fiscal year 2003, the Company indicated that its Board had authorized an additional $100.0 million in buybacks, increasing the total amount authorized under the buyback program to $200.0 million. As of January 26, 2003, the Company had repurchased 2,071,200 shares of its common stock at a cost of $42.3 million under this program. Of these repurchased shares of common stock, all but 841,200 shares have been reissued as a result of stock options exercises. As of January 26, 2003, the Company had repurchased 158,430 convertible subordinated debentures (face value of $1,000 each) for $140.2 million in cash in open market transactions. The Company recognized a pre-tax net gain on the repurchase of these convertible subordinated notes of $12.7 million in fiscal year 2003 and $2.3 million in fiscal year 2002. Reported gains on the repurchase of convertible subordinated notes are net of prepaid issuance costs. The Company has retired these repurchased debentures.

3. One-Time Charges

Operating income for fiscal year 2003 includes one-time charges of $13.2 million. A one-time charge of $12.0 million associated with the Standard Semiconductor Products segment was recorded in the fourth quarter of fiscal year 2003 to settle a customer dispute. Under the terms of the settlement, the Company agreed to pay the customer $12.0 million in cash in two equal annual installments, plus rebates on the future purchase of certain products. The $12.0 million expense for the cash portion of the settlement was reflected in the Company’s income statement as a one-time charge under “Operating costs and expenses” in the fourth quarter of fiscal year 2003. (See Note 16. “Subsequent Event” for additional information).

In the third quarter of fiscal year 2003, the Company recorded a one-time charge of $1.2 million, which included $852,000 of cost for an expected loss on the future sub-lease of the Company’s New York office and $350,000 of cost for asset impairment at the Corpus Christi, Texas wafer fabrication facility.

Operating income for fiscal year 2002 includes one-time charges of: $14.0 million for the write-down of inventory and discontinuation of certain products; approximately $2.0 million associated with headcount reductions; and $765,000 associated with a pending Superfund settlement.

The write-down of inventory and discontinuation of certain products in fiscal year 2002 was the result of a critical review conducted during the second quarter. A severe industry downturn and a related drop in demand from end customers made certain inventories excess and obsolete, and certain product lines non-strategic. Of the $14.0 million write-down of inventory and discontinuation of certain products, $13.4 million was associated with the Standard Products segment, $550,000 with the Rectifier, Assembly and Other Products segment.

Headcount reductions in fiscal year 2002 were associated with the sale of our Santa Clara, California wafer fabrication facility and general reductions in response to lower sales levels.

4. Disposition of Assets

On April 23, 2001, the Company sold its Santa Clara, California wafer fab facility to STI Foundry, Inc. In exchange for approximately $1.6 million of assets associated with the facility, the Company received $1.0 million in cash and approximately a $1.4 million receivable for either future inventory or cash. The Company expected to eventually recognize $855,000 of gain on the sale of the wafer fab as compensation was received from the buyer. As of January 26, 2003, only $551,000 of this expected gain has been realized and reported as a gain, with the remainder of the gain still unrecognized as the Company is uncertain of the ultimate collectibility of the receivable.

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5. Temporary and Long-Term Investments

Temporary and long-term investments consist of government, bank and corporate obligations. Temporary investments have original maturities in excess of three months, but mature within twelve months of the balance sheet date. Long-term investments have maturities in excess of one year from the date of the balance sheet.

In fiscal year 2002, the Company changed its investment classification from “hold to maturity” to “available for sale” because it expects to sell some securities prior to maturity. The Company included $1.4 million and $3.8 million of unrealized gain, net of tax, in the comprehensive income portion of the Consolidated Statements of Stockholders’ Equity and Comprehensive Income for fiscal year 2003 and fiscal year 2002, respectively.

Temporary and long-term investments consist of the following security types, stated at fair market value:

	2003		2002
	(thousands)
Government Issues	$	235,881	$	112,321
Corporate issues		116,125		384,881
Total investments	$	352,006	$	497,202

For fiscal year 2003, investments generated interest income of $18.1 million and in fiscal year 2002, investments generated interest income of $25.5 million. In fiscal year 2003, investments generated interest income of $6.2 million from government issues and $11.9 million from corporate issues. As of January 26, 2003, all of the Company’s investments mature on various dates through fiscal year 2005.

6. Inventories

Inventories consisted of the following:

	2003		2002
	(thousands)
Raw materials	$	536	$	854
Work in process		9,449		14,648
Finished goods		6,366		7,226
Total inventories	$	16,351	$	22,728

7. Property, Plant and Equipment

Property, plant and equipment consisted of the following:

	2003			2002
	(thousands)
Property	$	14,213		$	13,477
Buildings		17,429			1,097
Leasehold improvements		1,855			1,969
Machinery and equipment		39,275			36,522
Furniture and office equipment		12,614			12,211
Construction in progress		564			16,245
Property, plant and equipment, gross		85,950			81,521
Less accumulated depreciation and amortization		(34,403	)		(30,005	)
Property, plant and equipment, net	$	51,547		$	51,516

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8. Convertible Subordinated Debentures

On February 14, 2000, the Company completed a private offering of $400.0 million principal amount of convertible subordinated notes that pay interest semiannually at a rate of 4½% and are convertible into common stock at a conversion price of $42.23 per share. The notes are due on February 1, 2007 and are callable by the Company on or after February 6, 2003. Pursuant to a registration rights agreement, the Company was obligated to register the resale of the notes on behalf of the holders and to maintain the effectiveness of the registration until the holders could otherwise resell the notes under exemptions from registration. The Company’s obligation to keep the registration statement effective has terminated, and on August 30, 2002, it filed a post-effective amendment to de-register the notes and conversion shares that had not been sold under the prospectus contained in the registration statement. The post-effective amendment became effective on September 5, 2002.

In connection with these convertible subordinated notes, the Company incurred $11.5 million in underwriter fees and other costs. The underwriter fees and other costs are amortized as interest expense using the effective interest method for outstanding notes and written off against the gain for those notes repurchased and retired prior to maturity. The Company has used the net proceeds of the offering for general corporate purposes, including working capital, expansion of sales, marketing and customer service capabilities, and product development. In addition, the Company may use a portion of the net proceeds to acquire or invest in complementary businesses, technologies, services or products.

For fiscal year 2003 and fiscal year 2002, the Company incurred $15.1 million and $18.9 million, respectively, in interest expense associated with these convertible subordinated notes. As of January 26, 2003, $241.6 million of the convertible subordinated notes were still outstanding, reflecting the Company’s repurchase of 158,430 of its convertible subordinated notes (face value of $1,000 each) for $140.2 million in cash in open market transactions. The Company recognized a pre-tax net gain on the repurchase of these convertible subordinated notes of $12.7 million in fiscal year 2003 and $2.3 million in fiscal year 2002. Reported gains on the repurchase of convertible subordinated notes are net of prepaid issuance costs.

9. Accrued Liabilities

Accrued liabilities consisted of the following:

(thousands)	2003		2002
Accrued interest	$	5,417	$	8,190
Payroll and related		4,798		3,190
Commissions		766		633
Due customer		12,000		—
Other		3,615		4,832
Accrued liabilities	$	26,596	$	16,845

10. Income Taxes

The provision for taxes consisted of the following:

	2003			2002			2001
	(thousands)
Current:
Federal	$	8,948		$	5,412		$	23,772
State		357			3,446			706
Foreign		3,666			506			545
Subtotal		12,971			9,364			25,023
Deferred:
Federal		(1,685	)		3,424			(1,833	)
State		317			(2,274	)		680
Foreign		300			(401	)		1,938
Subtotal		(1,068	)		749			785
Provision for taxes	$	11,903		$	10,113		$	25,808

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The change in the net deferred tax asset differs from the deferred tax provision to the extent of tax deductions obtained for non-qualified stock options in excess of the current tax liabilities, which has been offset by an entry to additional paid-in capital.

The components of the net deferred income tax assets at January 26, 2003 and January 27, 2002 are as follows:

Net current deferred income taxes:

	2003		2002
	(thousands)
Deferred tax assets:
Payroll and related	$	1,091	$	395
Deferred revenue		1,121		1,645
Inventory reserve		3,233		3,071
Bad debt reserve		158		300
NOL carryforward		6,011		6,251
Other deferred assets		118		124
Net current deferred income taxes	$	11,732	$	11,786

Net long-term deferred income taxes:

	2003			2002
	(thousands)
Deferred tax assets:
Inventory valuation	$	(540	)	$	122
Research and development charges		2,864			3,309
Research credit carryforward		14,997			14,516
Manufacturing investment credit carryforward		627			535
AMT credit carryforward		383			383
NOL carryforward		35,387			17,343
Environmental		314			400
Dispute settlement charges		4,805			—
Other deferred assets		92			—
Total long-term deferred assets		58,929			36,608
Deferred tax liabilities:
Depreciation and amortization		(776	)		(1,327	)
Total long-term deferred liabilities		(776	)		(1,327	)
Subtotal		58,153			35,281
Valuation reserve		(31,010	)		(7,622	)
Net long-term deferred income taxes	$	27,143		$	27,659

Realization of the net deferred tax assets is dependent on generating sufficient taxable income during the periods in which temporary differences will reverse. Although realization is not assured, management believes it is more likely than not that the net deferred tax assets will be realized. The amount of the net deferred tax assets is considered realizable, however, could be adjusted in the near term if estimates of future taxable income during the reversal periods are revised. The change in valuation reserve reflected in the following reconciliation excludes valuation reserves that have been setup against deferred tax assets that were generated from stock option exercise activity.

As of January 26, 2003, the Company had net operating loss carryforwards available of approximately $115.0 million and $24.0 million for federal and state income tax purposes, respectively, which can be used to offset taxable income, expiring though 2023.

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The provision for taxes reconciles to the amount computed by applying the statutory federal rate to income before taxes as follows:

	2003			2002			2001
	(thousands)
Federal income tax at statutory rate	$	17,326		$	13,015		$	30,110
State income taxes, net of federal benefit		1,181			1,384			3,078
Foreign taxes at rates less than domestic rates		(9,792	)		(2,944	)		(4,412	)
Tax credits generated		(1,630	)		(5,639	)		(6,756	)
Changes in valuation reserve		3,885			3,241			4,381
Permanent differences		1,392			872			43
Other		(459	)		184			(636	)
Provision for taxes	$	11,903		$	10,113		$	25,808

As of January 26, 2003, the Company had federal and state research credits available of approximately $9.4 million and $8.5 million for federal and state income tax purposes, respectively, which can be used to offset taxable income, expiring through 2023.

11. Commitments and Contingencies

The Company leases facilities and certain equipment under operating lease arrangements expiring in various years through fiscal year 2015. The aggregate minimum annual lease payments under leases in effect on January 26, 2003 were as follows:

Fiscal Year Ending
(thousands)
2004	$	1,599
2005		1,175
2006		943
2007		806
2008		749
Thereafter		2,531
Total minimum lease commitments	$	7,803

Annual rent expense was $2.1 million, $1.4 million, and $1.7 million for fiscal years 2003, 2002, and 2001, respectively.

On March 28, 2003, the Company announced that it had resolved a customer dispute. Under the terms of the settlement, the Company agreed to pay the customer $12.0 million in cash in two equal annual installments, plus rebates on the future purchase of certain products by the customer over a two year period. The rebates, which can be up to 10%, are dependent upon the amount of eligible products the customer purchases. The Company is vigorously pursuing insurance coverage for the full value of the settlement, although it is too early to estimate the size of, if any, eventual insurance settlement or to give a tentative date for when an insurance settlement might be reached. (See Note 16. “Subsequent Event” for additional information).

On June 22, 2001, the Company was notified by the California Department of Toxic Substances Control (“State”) that it may have liability associated with the clean up of the one-third acre Davis Chemical Company site in Los Angeles, California. The Company has been included in the clean-up program, because it is one of the companies believed to have used the Davis Chemical Company site for waste recycling and/or disposal between 1949 and 1990. The Company has joined with other potentially responsible parties in an effort to resolve this matter with the

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State. The group is sharing the cost of an evaluation of the site prior to development of any remediation plan. The Company’s share of the estimated cost for this study is not material and the cost to date has been expensed. At this time there is not a specific proposal or budget with respect to the clean up of the site. Thus, no reserve has been established for this matter.

On February 7, 2000, the Company was notified by the United States Environmental Protection Agency with respect to the Casmalia Disposal Site in Santa Barbara, California. The Company has been included in the Superfund program to clean up this disposal site, because it used this site for waste disposal. During the second quarter of fiscal year 2002, the Company recorded a one-time cost of $765,000 for the pending settlement of this matter with federal and state agencies.

The Company used an environmental consulting firm, specializing in hydrogeology, to perform periodic monitoring of the groundwater at its previously leased facility in Newbury Park, California. Certain contaminants have been found in the groundwater. Monitoring results over a number of years indicate that contaminants are coming from an adjacent facility. It is currently not possible to determine the ultimate amount of possible future clean-up costs, if any, that may be required of the Company at this site. Accordingly, no reserve for clean up has been provided at this time.

Effective June 11, 1998, the Company’s Board of Directors approved a Stockholder Protection Agreement to issue a Right for each share of common stock outstanding on July 31, 1998 and each share issued thereafter (subject to certain limitations). These Rights, if not cancelled by the Board of Directors, can be exercised into a certain number of Series X Junior Participating Preferred Stock after a person or group of affiliated persons acquire 25% or more of the Company’s common stock and subsequently allow the holder to receive certain additional Company or acquirer common stock if the Company is acquired in a hostile takeover.

From time to time, the Company is approached by persons seeking payment based on the Company’s alleged use of their intellectual property. The Company is also periodically named as a defendant in lawsuits involving intellectual property and other matters that are routine to the nature of its business. Management is of the opinion that the ultimate resolution of all such pending matters will not have a material adverse effect on the accompanying consolidated financial statements.

12. Stockholders’ Equity

On June 8, 2000, stockholders approved an increase in the number of authorized shares of the Company’s common stock from 100,000,000 to 250,000,000.

The Company has various stock option plans that provide for granting options to purchase shares of the Company’s common stock to employees, directors and consultants of the Company. The plans provide for the granting of options which meet the Internal Revenue Code qualifications to be incentive stock options, as well as nonstatutory options. Under these plans, the option price must be at least equal to the fair market value of the Company’s common stock at the date of the grant for incentive stock options. Most incentive stock options expire within ten years from the date of grant. Generally, the options vest in equal annual increments over three to four years from the date of grant.

The plans provide for the issuance of 12,800,000 shares over the remaining life of the plans. The plans also provide for the further issuance of up to 8,000,000 additional shares, if authorized by the Board, which are reacquired in the open market or in a private transaction.

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Stock option information with respect to the Company’s stock option plans is as follows (in thousands), except share exercise prices:

	2003				2002				2001
	Shares Under Option		Weighted Average Exercise Price		Shares Under Option		Weighted Average Exercise Price		Shares Under Option		Weighted Average Exercise Price
Options outstanding, beginning of year	14,643		$	11.11	19,162		$	8.54	20,440		$	5.76
Granted	3,017			16.38	1,638			25.90	3,196			21.12
Cancelled	(882	)		19.54	(937	)		15.88	(412	)		10.89
Exercised	(1,858	)		6.28	(5,220	)		5.49	(4,062	)		4.18
Options outstanding, end of year	14,920		$	12.28	14,643		$	11.11	19,162		$	8.54
Options exercisable at the end of year	9,574		$	8.72	9,051		$	6.78	9,720		$	4.95
Weighted average fair value of options granted during year			$	11.71			$	20.83			$	14.58

Information about stock options outstanding at January 26, 2003 is summarized as follows (share amounts in thousands):

Exercise Prices	Number Outstanding 1/26/03	Weighted Average Exercise Price		Weighted Average Remaining Contract Life	Number Exercisable 1/26/03	Weighted Average Exercise Price
$   0.31-$   4.60	4,078	$	2.86	4.5 Years	3,985	$	2.86
$   4.61-$   9.20	3,026	$	6.42	5.2 Years	2,898	$	6.40
$   9.21-$ 13.80	746	$	12.72	9.0 Years	155	$	12.34
$ 13.81-$ 18.40	3,661	$	14.59	8.3 Years	1,192	$	14.85
$ 18.41-$ 23.00	316	$	19.90	6.0 Years	288	$	19.88
$ 23.01-$ 27.60	2,335	$	25.41	7.7 Years	895	$	25.53
$ 27.61-$ 32.20	567	$	29.64	8.4 Years	77	$	30.93
$ 32.21-$ 36.80	126	$	33.61	8.2 Years	41	$	33.92
$ 36.81-$ 41.40	59	$	38.30	5.5 Years	40	$	38.28
$ 41.41-$ 46.00	6	$	41.59	7.5 Years	3	$	41.59
$   0.31-$ 46.00	14,920	$	12.28	6.5 Years	9,574	$	8.72

13. Interest and Other Income, Net

Interest and other income, net, consisted of the following:

	2003			2002			2001
	(thousands)
Interest income	$	18,140		$	25,458		$	28,158
Gain (loss) on sale assets		(207	)		302			—
Gain on the repurchase of debt		12,719			2,284			—
Foreign currency transaction losses		(229	)		(30	)		(32	)
Miscellaneous expense		(111	)		(2	)		(74	)
Interest and other income, net	$	30,312		$	28,012		$	28,052

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14. Statements of Cash Flows

In connection with the sale of the Santa Clara wafer fab facility (see Note 4. “Disposition of Assets”), the Company has utilized $875,000 in discounts for the purchase of inventory from STI Foundry, Inc. during fiscal year 2002. Income taxes paid in fiscal years 2003, 2002, and 2001, were $1.7 million, $349,000 and $59,000, respectively. For those same periods, the Company paid interest in the amounts of $15.1 million, $18.0 million and $9.1 million, respectively.

15. Business Segments and Concentrations of Risk

As of January 26, 2003, the Company operates in two reportable segments: Standard Semiconductor Products and Rectifier, Assembly and Other Products. In previous years, the Company had a segment entitled Other Products, which in fiscal year 2003 and fiscal year 2002 were 0.5% and 2%, respectively, of net sales. The Other Product Category has been combined with the Rectifier and Assembly Products segment, and is now referred to as the Rectifier, Assembly and Other Products segment. The Rectifier, Assembly and Other Products segment has represented less than 10% of net sales for the last three fiscal years.

The Standard Semiconductor Products segment makes up the vast majority of overall sales and includes the power management, protection, test and measurement (formerly called high performance), advanced communications and human input device product lines. The Rectifier, Assembly and Other Products segment includes the Company’s line of assembly and rectifier devices, which are the remaining products from our original founding as a supplier into the military and aerospace market. It also includes other products made up of custom integrated circuit and foundry sales.

The accounting policies of the segments are the same as those described above in the summary of significant accounting policies. The Company evaluates segment performance based on net sales and operating income of each segment. Management does not track segment data or evaluate segment performance on additional financial information. As such, there are no separately identifiable segment assets nor is there any separately identifiable statements of income data (below operating income).

The Company does not track or assign assets to individual reportable segments. Likewise, depreciation expense and capital additions are also not tracked by reportable segments.

Net Sales	2003			2002			2001
	(in thousands)
Standard Semiconductor Products	$	183,235		$	175,881		$	232,550
Rectifier, Assembly and Other Products		9,723			15,329			24,135
Total Net Sales	$	192,958		$	191,210		$	256,685
Operating Income	2003			2002			2001
	(in thousands)
Standard Semiconductor Products	$	29,927		$	25,439		$	71,208
Rectifier, Assembly and Other Products		2,172			4,310			5,486
One-time charges		(1,202	)		(2,728	)		—
Total Operating Income	$	30,897		$	27,021		$	76,694

One-time charges of $13.2 million were recorded in fiscal year 2003. One-time cost of $12.0 million for the settlement of a customer dispute was associated with the Standard Semiconductor Product segment. One-time costs of $1.2 million in fiscal year 2003 that are not assigned to a reportable segment included $852,000 of cost for an

46

expected loss on the future sub-lease of the Company’s New York office and $350,000 of cost for asset impairment at the Corpus Christi, Texas wafer fabrication facility.

Of the $14.0 million write-down of inventory and discontinuation of certain products that occurred in fiscal year 2002, $13.4 million was associated with the Standard Products segment, $550,000 with the Rectifier, Assembly and Other Products segment.

The one-time charges of $2.7 million in fiscal year 2002 not assigned to a reportable segment included one-time costs of $2.0 million associated with headcount reductions and one-time costs of $765,000 associated with a pending Superfund settlement.

No end-customer accounted for 10% or more of net sales in fiscal year 2003. In fiscal year 2002, Agilent Technologies, one of the Company’s ATE end-customers, and its subcontractors, accounted for approximately 13% of net sales. For fiscal year 2003 and fiscal year 2002, one of the Company’s Asian distributors accounted for approximately 14% and 12%, respectively, of net sales.

As of the end of fiscal years 2003 and 2002, one of the Company’s Asian distributors accounted for approximately 11% and 17%, respectively, of net accounts receivable. Receivables from customers are not secured by any type of collateral.

A summary of net external sales by region follows. The Company does not track customer sales by region for each individual reporting segment.

Net Sales	2003		2002		2001
	(in thousands)
Domestic	$	62,901	$	73,025	$	107,906
Asia-Pacific		117,220		100,426		116,133
European		12,837		17,759		32,646
Total Net Sales	$	192,958	$	191,210	$	256,685

Long-lived assets located outside the United States as of the end of fiscal years 2003, 2002 and 2001 were approximately $9.3 million, $7.2 million and $1.2 million, respectively.

The Company relies on a limited number of outside subcontractors and suppliers for silicon wafers, packaging and certain other tasks. Disruption or termination of supply sources or subcontractors could delay shipments and could have a material adverse effect on the Company. Several of the Company’s outside subcontractors and suppliers, including third-party foundries that supply silicon wafers, are located in foreign countries, including China, Malaysia, the Philippines and Germany. A significant amount of the Company’s assembly and test operations are conducted by third-party contractors in Malaysia and the Philippines, and the largest source of silicon wafers come from an outside foundry located in China.

16. Subsequent Event

The Company issued a press release on August 27, 2002, stating that it was in discussions with a customer to resolve a dispute over whether a Semtech integrated circuit (IC) caused failures in some units of two models of the customer’s products. The customer, without providing documentation of its technical or financial contentions, indicated it suffered damages in the range of $42.0 million and projected that they may exceed $115.0 million. The customer purchased approximately $550,000 of the IC at issue.

On March 28, 2003, the Company announced that it had resolved the customer dispute. Under the terms of the confidential settlement, the Company agreed to pay the customer $12.0 million in cash in two equal annual installments, plus rebates on future purchase of certain products over a two year period. The rebates, which can be

47

up to 10%, are dependent upon the amount of eligible Semtech products the customer purchases. The Company is vigorously pursuing insurance coverage for the full value of the settlement, although it is too early to estimate the size of any eventual insurance settlement or to give a tentative date for when an insurance settlement might be reached.

In accordance with accounting principles generally accepted in the United States, the expense for the cash portion of the settlement was reflected in the Company’s income statement as a one-time cost under “Operating costs and expenses” in the fourth quarter of fiscal year 2003, resulting in a net-of-tax charge of $8.0 million or $0.10 per diluted share for that period. Rebates will be recorded as they are made and are not expected to have a material impact on future results. Any insurance settlement will be reported in the financial statements for the period in which the recovery occurs.

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REPORT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS

To the Stockholders and Board of Directors of Semtech Corporation

We have audited the accompanying consolidated balance sheet of Semtech Corporation (a Delaware corporation) and subsidiaries as of January 26, 2003 and the related consolidated statements of income, stockholders’ equity and comprehensive income and cash flows for the year ended January 26, 2003. Our audit also included the financial statement schedule listed in the Index at Item 15(a). These financial statements and the financial statement schedule are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements and schedule based on our audit. The consolidated financial statements and financial statement schedule of Semtech Corporation, for the fiscal years ended January 27, 2002 and January 28, 2001, were audited by other auditors who have ceased operations. Those auditors expressed an unqualified opinion on those statements in their report dated April 2, 2002.

We conducted our audit in accordance with auditing standards generally accepted in the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the 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. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the consolidated financial position of Semtech Corporation and subsidiaries as of January 26, 2003 and the consolidated results of their operations and their cash flows for the year ended January 26, 2003 in conformity with accounting principles generally accepted in the United States. Also, in our opinion, the related fiscal year 2003 financial statement schedule, when considered in relation to the basic consolidated financial statements taken as a whole, presents fairly in all material respects the information set forth therein.

/s/    ERNST & YOUNG LLP        

ERNST & YOUNG LLP

Los Angeles, California

March 28, 2003

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This is a copy of the audit report previously issued by Arthur Andersen LLP in connection with Semtech Corporation filing on Form 10-K for the year ended January 27, 2002. This audit report has not been reissued by Arthur Andersen LLP in connection with this filing on Form 10-K. See Exhibit 23.3 for further discussion. The balance sheet as of January 28, 2001, referred to in this report has not been included in the accompanying financial statements.

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To the Stockholders and Board of Directors of Semtech Corporation:

We have audited the accompanying consolidated balance sheets of Semtech Corporation (a Delaware corporation) and subsidiaries as of January 27, 2002 and January 28, 2001, and the related consolidated statements of income, stockholders’ equity and comprehensive income, and cash flows for each of the three years in the period ended January 27, 2002. These financial statements and the schedule referred to below are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements and schedule based on our audits.

We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards 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. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Semtech Corporation and subsidiaries as of January 27, 2002 and January 28, 2001, and the results of their operations and their cash flows for each of the three years in the period ended January 27, 2002, in conformity with accounting principles generally accepted in the United States of America.

Our audits were made for the purpose of forming an opinion on the basic financial statements taken as a whole. Schedule II - Valuation and Qualifying Accounts is presented for purposes of additional analysis and is not a required part of the basic financial statements. This information has been subjected to the auditing procedures applied in our audits of the basic financial statements and, in our opinion, is fairly stated in all material respects in relation to the basic financial statements taken as a whole.

/s/    ARTHUR ANDERSEN LLP         

ARTHUR ANDERSEN LLP

Los Angeles, California

April 2, 2002

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SCHEDULE II

SEMTECH CORPORATION AND SUBSIDIARIES

SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS

THREE YEARS ENDED JANUARY 26, 2003

	Balance at Beginning of Year		Charged to Costs and Expenses		Deductions			Balance at End of Year
Year Ended January 28, 2001
Allowance for doubtful Accounts	$	750,000	$	760,000	$	(410,000	)	$	1,100,000
Year Ended January 27, 2002
Allowance for doubtful Accounts	$	1,100,000	$	160,000	$	(287,000	)	$	973,000
Year Ended January 26, 2003
Allowance for doubtful Accounts	$	973,000	$	29,000	$	(383,000	)	$	619,000

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ITEM 9. CHANGES IN OR DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

On June 18, 2002, the Company dismissed Arthur Andersen LLP (“Arthur Andersen”) and engaged Ernst & Young LLP to serve as the Company’s independent auditors for the fiscal year 2003. These decisions were authorized and directed by the Company’s Board of Directors upon recommendation of its Audit Committee.

Arthur Andersen’s reports on the Company’s consolidated financial statements for each of the fiscal years ended January 27, 2002 and January 28, 2001 did not contain any adverse opinion or disclaimer of opinion, nor were they qualified or modified as to uncertainty, audit scope or accounting principles.

During the fiscal years ended January 27, 2002 and January 28, 2001 and through June 18, 2002, there were no disagreements with Arthur Andersen on any matter of accounting principle or practice, financial statement disclosure, or auditing scope or procedure which, if not resolved to Arthur Andersen’s satisfaction, would have caused it to make reference to the subject matter in connection with its reports; and there were no reportable events as defined in Item 304(a)(1)(v) of Regulation S-K.

During the fiscal years ended January 27, 2002 and January 28, 2001 and through June 18, 2002, the Company did not consult Ernst & Young LLP with respect to the application of accounting principles to a specified transaction, either completed or proposed, the type of audit opinion that might be rendered on our consolidated financial statements, or any other matter or reportable event as set forth in Items 304(a)(2)(i) and (ii) of Regulation S-K.

The Company provided Arthur Andersen a copy of the foregoing disclosures, and Arthur Andersen provided a letter, dated June 24, 2002, stating that it has found no basis for disagreement with such statements. See Exhibit 16.1 hereto.

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PART III

Items 10, 11, 12 and 13 are incorporated by reference from the Company’s Definitive Proxy Statement in connection with registrant’s annual meeting of shareholders to be held on June 5, 2003.

ITEM 14. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

Disclosure controls and procedures are designed to ensure that information required to be disclosed in our periodic reports filed or submitted under the Securities Exchange Act of 1934, as amended, is recorded, processed, summarized and reported within required time periods. Within 90 days prior to the date of this report (the “Evaluation Date”), the Company carried out an evaluation under the supervision and with the participation of the Chief Executive Officer and Chief Financial Officer of the effectiveness of the Company’s disclosure controls and procedures.

Based on that evaluation, the Company’s Chief Executive Officer and Chief Financial Officer have concluded that, as of the Evaluation Date, such controls and procedures were effective in timely alerting them to material information relating to the Company (and its consolidated subsidiaries) required to be included in the Company’s Exchange Act Filings.

Changes in Internal Controls

Subsequent to the Evaluation Date, there have been no significant changes in the Company’s internal controls or in other factors that could significantly affect internal controls.

PART IV

ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K

(1) The financial statements and the Report of Ernst & Young LLP are included in Part II of this Form 10-K on the pages indicated.

	Page
Index of Financial Statements:
Report of Ernst & Young LLP, Independent Auditors	49
Consolidated statements of income, three years ended January 26, 2003	31
Consolidated balance sheets, January 26, 2003 and January 27, 2002	32
Consolidated statements of stockholders’ equity and comprehensive income, three years ended January 26, 2003	33
Consolidated statements of cash flows, three years ended January 26, 2003	34
Notes to consolidated financial statements	35
Schedule II - Valuation and Qualifying Accounts	51

Schedules other than those listed above are omitted since they are not applicable, not required, or the information required to be set forth herein is included in the consolidated financial statements or notes thereto.

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(3) Exhibits

Exhibit No.	Description
3.1(1)	- Restated Certificate of Incorporation of Semtech Corporation
3.2	- Bylaws of Semtech Corporation
4.1(2)	- Indenture between Semtech Corporation and State Street Bank and Trust Company of California, N.A.
4.2(2)	- Form of Debenture
4.3(2)	- Registration Rights Agreement by and among Semtech Corporation as issuer, and Morgan Stanley & Co. Incorporated and Banc of America Securities LLC, as initial purchasers dated as of February 14, 2000.
10.1(3)	- Agreement of sublease executed on December 23, 1991, effective January 1, 1991, by the Company and the Corpus Christi Airport Development Corporation for a portion of the Company’s plant and facilities
10.2(4)	- The Company’s 1994 Long-term Stock Incentive Plan, as amended
10.3(5)	- The Company’s 1994 Non-Employee Directors Stock Option Plan, as amended
10.4(6)	- Form of Non-Statutory Stock Option Agreement
10.5(7)	- The Company’s Long-term Stock Incentive Plan, as amended
10.6(8)	- The Company’s Non-Director and Non-Executive Officer Long-Term Stock Incentive Plan, as amended
10.7(9)	- Option Award Agreement dated November 4, 2002 with respect to inducement options granted to Jason Carlson
10.8(9)	- Form of Option Agreement for Options Awarded to Non-Employee Directors on December 5, 2002
10.9(8)	- Executive Compensation Arrangement
10.10(10)	- Arrangement Regarding Form of Bonuses
10.11	- Arrangement with Jason Carlson
10.12(11)	- Stockholder Protection Agreement, dated June 25, 1998, between Semtech Corporation and Chasemellon Shareholder Services as rights agent
16.1(12)	- Letter regarding change in the Company’s Certifying Accountant
21.1	- Subsidiaries of the Company
23.1	- Consent of Ernst & Young LLP
23.2	- Notice regarding Consent of Arthur Andersen LLP
99.1	- Certifications pursuant to 18 U.S.C. Section 1350 as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act Of 2002

(1) Incorporated by reference to the Company’s Amendment to Annual Report on Form 10-K/A for the fiscal year ended January 28, 2001.

(2) Incorporated by reference to the Company’s Annual Report on Form 10-K for the fiscal year ended January 30, 2000.

(3) Incorporated by reference to the Company’s Annual Report on Form 10-K for the fiscal year ended February 2, 1992.

(4) Incorporated by reference to the Company’s Registration Statement on Form S-8 (333-44033) filed January 9, 1998.

(5) Incorporated by reference to the Company’s Registration Statement on Form S-8 (333-00599) filed January 31, 1996.

(6) Incorporated by reference to the Company’s Registration Statement of Form S-8 (333-60396) filed May 8, 2001

(7) Incorporated by reference to the Company’s Quarterly Report on Form 10-Q for the quarterly period ended

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April 28, 2002.

(8) Incorporated by reference to the Company’s Quarterly Report on Form 10-Q/A for the quarterly period ended July 28, 2002.

(9) Incorporated by reference to the Company’s Quarterly Report on Form 10-Q for the quarterly period ended October 27, 2002.

(10) Incorporated by reference to the Company’s Annual Report on Form 10-K for the fiscal year ended January 28, 2002

(11) Incorporated by reference to the Registrants Current Report on Form 8-K filed July 16, 1998.

(12) Incorporated by reference to the Company’s Current Report on Form 8-K filed June 25, 2002

(b) Reports on Form 8-K

(1) The Company filed a Report on Form 8-K on November 4, 2002 in connection with a press release issued to announce the addition of Jason Carlson to serve in the newly created position of President and Chief Operating Officer.

(2) The Company filed a Report on Form 8-K on November 26, 2002 in connection with a press release issued to announce third quarter fiscal year 2003 results and the Company’s outlook for the fourth quarter.

(3) The Company filed a Report on Form 8-K on December 5, 2002 in connection with a press release issued to announce the addition of three new members to the Company’s Board of Directors.

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Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Date:     April 22, 2003	SEMTECH CORPORATION
	By:	/s/    JOHN D. POE
		John D. Poe Chairman of the Board and Chief Executive Officer

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Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.

Date:     April 22, 2003	/s/    JOHN D. POE
	John D. Poe Chairman of the Board and Chief Executive Officer

Date:     April 22, 2003	/s/    DAVID G. FRANZ JR.
	David G. Franz Jr. Vice President, Finance and Chief Financial Officer, and Secretary (Principal Accounting and Financial Officer)

Date:     April 22, 2003	/s/    ROCK N. HANKIN
	Rock N. Hankin Vice Chairman of the Board

Date:     April 22, 2003	/s/    GLEN M. ANTLE
	Glen M. Antle Director

Date:     April 22, 2003	/s/    JAMES P. BURRA
	James P. Burra Director

Date:     April 22, 2003	/s/    JAMES T. LINDSTROM
	James T. Lindstrom Director

Date:     April 22, 2003	/s/    JOHN L. PIOTROWSKI
	John L. Piotrowski Director

Date:     April 22, 2003	/s/    JAMES T. SCHRAITH
	James T. Schraith Director

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CERTIFICATION

I, John D. Poe, certify that:

1. I have reviewed this annual report on Form 10-K of Semtech Corporation;

2. Based on my knowledge, this annual report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this annual report; and

3. Based on my knowledge, the financial statements, and other financial information included in this annual report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this annual report;

4. The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

a.) designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this annual report is being prepared;

b.) evaluated the effectiveness of the registrant’s disclosure controls and procedures as of a date within 90 days prior to the filing date of this annual report (the “Evaluation Date”); and

c.) presented in this annual report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date;

5. The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):

a.) all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant’s ability to record, process, summarize and report financial data and have identified for the registrant’s auditors any material weaknesses in internal controls; and

b.) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal controls; and

6. The registrant’s other certifying officers and I have indicated in this annual report whether there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.

Date: April 22, 2003

/s/    JOHN D. POE        

John D. Poe

Chief Executive Officer

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CERTIFICATION

I, David Franz, certify that:

1. I have reviewed this annual report on Form 10-K of Semtech Corporation;

2. Based on my knowledge, this annual report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this annual report;

3. Based on my knowledge, the financial statements, and other financial information included in this annual report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this annual report;

4. The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:

a.) designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this annual report is being prepared;

b.) evaluated the effectiveness of the registrant’s disclosure controls and procedures as of a date within 90 days prior to the filing date of this annual report (the “Evaluation Date”); and

c.) presented in this annual report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date;

5. The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):

a.) all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant’s ability to record, process, summarize and report financial data and have identified for the registrant’s auditors any material weaknesses in internal controls; and

b.) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal controls; and

6. The registrant’s other certifying officers and I have indicated in this annual report whether there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.

Date: April 22, 2003

/s/    DAVID G. FRANZ        

David G. Franz

Chief Financial Officer

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EX-3.2

Exhibit 3.2

BYLAWS

of

SEMTECH CORPORATION

a Delaware Corporation

ARTICLE I

OFFICES

Section 1.01 REGISTERED OFFICE. The registered office of Semtech Corporation (hereinafter called the “Corporation”) shall be at such place in the State of Delaware as shall be designated by the Board of Directors (hereinafter called the “Board”).

Section 1.02 PRINCIPAL OFFICE. The principal office for the transaction of the business of the Corporation shall be at such location, within or without the State of Delaware, as shall be designated by the Board.

Section 1.03 OTHER OFFICES. The Corporation may also have an office or offices at such other place or places, either within or without the State of Delaware, as the Board may from time to time determine or as the business of the Corporation may require.

ARTICLE II

MEETINGS OF STOCKHOLDERS

Section 2.01 ANNUAL MEETINGS. Annual meetings of the stockholders of the Corporation for the purpose of electing directors and for the transaction of such other proper business as may come before such meetings may be held at such time, date and place as the Board shall determine by resolution.

Section 2.02 SPECIAL MEETINGS. Special meetings of the stockholders of the Corporation for any purpose or purposes may be called at any time by the Board, or by a committee of the Board which has been duly designated by the Board and whose powers and authority, as provided in a resolution of the Board or in the Bylaws, include the power to call such meetings, but such special meetings may not be called by any other person or persons; provided, however, that if and to the extent that any special meeting of stockholders may be called by any other person or persons specified in any provisions of the Certificate of Incorporation or any amendment thereto or any certificate filed under Section 151(g) of the General Corporation Law of the State of Delaware (or its successor statute as in effect from time to time hereafter), then such special meeting may also be called by the person or persons, in the manner, at the time and for the purposes so specified.

Section 2.03 PLACE OF MEETINGS. All meetings of the stockholders shall be held at such places, within or without the State of Delaware, as may from time to time be designated by the person or persons calling the respective meetings and specified in the respective notices or waivers of notice thereof.

Section 2.04 NOTICE OF MEETINGS. Except as otherwise required by law, notice of each meeting of the stockholders, whether annual or special, shall be given not less than ten (10) nor more than sixty (60) days before the date of the meeting to each stockholder of record entitled to vote at such meeting by delivering a typewritten or printed notice thereof to him personally, or by depositing such notice in the United States mail, in a postage prepaid envelope, directed to him at his address furnished by him to the Secretary of the Corporation for such purpose or, if he shall not have furnished to the Secretary his address for such purpose, then at his address last known to the Secretary, or by transmitting a notice thereof to him at such address by telegraph, cable or wireless.

Except as otherwise expressly required by law, no publication of any notice of a meeting of the stockholders shall be required. Every notice of a meeting of the stockholders shall state the place, date and hour of the meeting, and, in the case of a special meeting shall also state the purpose or purposes for which the meeting is called. Except as otherwise expressly required by law, notice of any adjourned meeting of the stockholders need not be given if the time and place thereof are announced at the meeting at which the adjournment is taken.

Whenever notice is required to be given to any stockholder to whom (i) notice of two consecutive annual meetings, and all notices of meetings or of the taking of action by written consent without a meeting to such person during the period between such two consecutive annual meetings, or (ii) all, and at least two, payments (if sent by first class mail) of dividends or interest on securities during a twelve month period, have been mailed addressed to such person at his address as shown on the records of the Corporation and have been returned undeliverable, the giving of such notice to such person shall not be required. Any action or meeting which shall have been taken or held without notice to such person shall the same force and effect as if such notice had been duly given. If any such person shall deliver to the Corporation a written notice setting forth his then current address, the requirement that notice be given to such person shall be reinstated.

No notice need be given to any person with whom communication is unlawful, nor shall there be any duty to apply for any permanent or license to give notice to any such person.

Section 2.05 QUORUM. Except as provided by law, the holders of record of a majority in voting interest of the shares of stock of the Corporation entitled to be voted, present in person or by proxy, shall constitute a quorum for the transaction of business at any meeting of the stockholders of the Corporation or any adjournment thereof. The stockholders present at a duly called or held meeting at which a quorum is present may continue to do business until adjournment, notwithstanding the withdrawal of enough stockholders to leave less than a quorum. In the absence of a quorum at any meeting or any adjournment thereof, a majority in voting interest of the stockholders present in person or by proxy and entitled to vote thereat or, in the absence therefrom of all the stockholders, any officer entitled to preside at or to act as secretary of such meeting may adjourn such meeting from time to time. At any such adjourned meeting at which a quorum is present any business may be transacted which might have been transacted at the meeting as originally called.

Section 2.06 VOTING.

(a) At each meeting of the stockholders, each stockholder shall be entitled to vote in person or by proxy each share or fractional share of the stock of the Corporation which has voting rights on the matter in question and which shall have been held by him and registered in his name on the books of the Corporation:

(i) on the date fixed pursuant to Section 2.10 of these Bylaws as the record date for the determination of stockholders entitled to notice of and to vote at such meeting, or

(ii) if no such record date shall have been so fixed, then (A) at the close of business on the day next preceding the day on which notice of the meeting shall be given or (B) if notice of the meeting shall be waived, at the close of business on the day next preceding the day on which the meeting shall be held.

(b) Shares of its own stock belonging to the Corporation or to another corporation, if a majority of the shares entitled to vote in the election of directors in such other corporation is held, directly or indirectly, by the Corporation, shall neither be entitled to vote nor be counted for quorum purposes. Persons holding stock of the Corporation in a fiduciary capacity shall be entitled to vote such stock. Persons whose stock is pledged shall be entitled to vote, unless in the transfer by the pledgor on the books of the Corporation he shall have expressly empowered the pledgee to vote thereon, in which case only the pledgee, or his proxy, may represent such stock and vote thereon. Stock having voting power standing of record in the names of two or more persons, whether fiduciaries, members of a partnership, joint tenants, tenants in common, tenants by the entirety or otherwise, or with respect to which two or more persons have the same fiduciary relationship, shall be voted in accordance with the provisions of the General Corporation Law of Delaware.

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(c) Any such voting rights may be exercised by the stockholder entitled thereto in person or by his proxy appointed by an instrument in writing, subscribed by such stockholder or by his attorney thereunto authorized and delivered to the secretary of the meeting; provided, however, that no proxy shall be voted or acted upon after three years from its date unless said proxy shall provide for a longer period. The attendance at any meeting of a stockholder who may theretofore have given a proxy shall not have the effect of revoking the same unless he shall in writing so notify the secretary of the meeting prior to the voting of the proxy. At any meeting of the stockholders all matters, except as otherwise provided in the Certificate of Incorporation, in these Bylaws or by law, shall be decided by the vote of a majority in voting interest of the stockholders present in person or by proxy and entitled to vote thereat and thereon. The stockholders present at a duly called or held meeting at which a quorum is present may continue to do business until adjournment, notwithstanding the withdrawal of enough stockholders to leave less than a quorum. The vote at any meeting of the stockholders on any question need not be by ballot, unless so directed by the chairman of the meeting. On a vote by ballot, each ballot shall be signed by the stockholder voting, or by his proxy if there be such proxy, and it shall state the number of shares voted.

Section 2.07 LIST OF STOCKHOLDERS. The Secretary of the Corporation shall prepare and make, at least ten (10) days before every meeting of stockholders, a complete list of the stockholders entitled to vote at the meeting, arranged in alphabetical order, and showing the address of each stockholder and the number of shares registered in the name of each stockholder. Such list shall be open to the examination of any stockholder, for any purpose germane to the meeting, during ordinary business hours, for a period of at least ten (10) days prior to the meeting, at the principal place of business of the Corporation. The list shall also be produced and kept at the time and place of the meeting during the entire duration thereof, and may be inspected by any stockholder who is present.

Section 2.08 INSPECTOR OF ELECTION. If at any meeting of the stockholders a vote by written ballot shall be taken on any question, the chairman of such meeting may appoint an inspector or inspectors of election to act with respect to such vote. Each inspector so appointed shall first subscribe an oath faithfully to execute the duties of an inspector at such meeting with strict impartiality and according to the best of his ability. Such inspectors shall decide upon the qualification of the voters and shall report the number of shares represented at the meeting and entitled to vote on such question, shall conduct and accept the votes, and, when the voting is completed, shall ascertain and report the number of shares voted respectively for and against the question. Reports of the inspectors shall be in writing and subscribed and delivered by them to the Secretary of the Corporation. Inspectors need not be stockholders of the Corporation, and any officer of the Corporation may be an inspector on any question other than a vote for or against a proposal in which he shall have a material interest.

Section 2.09 STOCKHOLDER ACTION WITHOUT MEETINGS. Any action required by the General Corporation Law of the State of Delaware to be taken at any annual or special meeting of the stockholders, or any action which may be taken at any annual or special meeting of the stockholders, may be taken without a meeting, without prior notice and without a vote, if a consent in writing setting forth the action so taken shall be signed by the holders of outstanding stock having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares entitled to vote thereon were present and voted. Prompt notice of the taking of the corporate action without a meeting by less than unanimous written consent shall be given to those stockholders who have not consented in writing.

Section 2.10 RECORD DATE. In order that the Corporation may determine the stockholders entitled to notice of or to vote at any meeting of stockholders or any adjournment thereof, or to express consent to corporate action in writing without a meeting, or entitled to receive payment of any dividend or other distribution or allotment of any rights, or entitled to exercise any rights in respect of any change, conversion or exchange of stock or for the purpose of any other lawful action, the Board may fix a record date, which record date shall not precede the date upon which the resolution fixing the record date is adopted by the Board and which record date: (i) in the case of determination of stockholders entitled to vote at any meeting of stockholders or adjournment thereof, shall, unless otherwise required by law, not be more than sixty nor less than ten days before the date of such meeting; (ii) in the case of determination of stockholders entitled to express consent to corporate action in writing without a

3

meeting, shall not be more than ten days from the date upon which the resolution fixing the record date is adopted by the Board; and (iii) in the case of any other action, shall not be more than sixty days prior to such other action. If no record date is fixed: (i) the record date for determining stockholders entitled to notice of or to vote at a meeting of stockholders shall be at the close of business on the day next preceding the day on which notice is given, or, if notice is waived, at the close of business on the day next preceding the day on which the meeting is held; (ii) the record date for determining stockholders entitled to express consent to corporate action in writing without a meeting when no prior action of the Board is required by law, shall be the first date on which a signed written consent setting forth the action taken or proposed to be taken is delivered to the corporation in accordance with applicable law, or, if prior action by the Board is required by law, shall be at the close of business on the day on which the Board adopts the resolution taking such prior action; and (iii) the record date for determining stockholders for any other purpose shall be at the close of business on the day on which the Board of Directors adopts the resolution relating thereto. A determination of stockholders of record entitled to notice of or to vote at a meeting of stockholders shall apply to any adjournment of the meeting; provided, however, that the Board may fix a new record date for the adjourned meeting.

ARTICLE III

BOARD OF DIRECTORS

Section 3.01 GENERAL POWERS. The property, business and affairs of the Corporation shall be managed by or under the direction of the Board, which may exercise all of the powers of the Corporation, except such as are by the Certificate of Incorporation, by these Bylaws or by law conferred upon or reserved to the stockholders.

Section 3.02 NUMBER AND TERM. The Board shall consist of seven members, until changed from time to time by resolution of the Board. Directors need not be stockholders of the Corporation. Each director shall hold office until a successor is elected and qualified or until the director resigns or is removed.

Section 3.03 ELECTION OF DIRECTORS. The directors shall be elected by the stockholders of the Corporation, and at each election the persons receiving the greatest number of votes, up to the number of directors then to be elected, shall be the persons then elected. The election of directors is subject to any provisions contained in the Certificate of Incorporation relating thereto, including any provisions for a classified board.

Section 3.04 RESIGNATION AND REMOVAL. Any director of the Corporation may resign at any time by giving written notice to the Board or to the Secretary of the Corporation. Any such resignation shall take effect at the time specified therein, or, if the time is not specified, it shall take effect immediately upon its receipt; and, unless otherwise specified therein, the acceptance of such resignation shall not be necessary to make it effective.

Except as otherwise provided by the Certificate of Incorporation or by law, any director or the entire board of directors may be removed, with or without cause, by the holders of a majority of shares then entitled to vote at an election of directors.

Section 3.05 VACANCIES. Except as otherwise provided in the Certificate of Incorporation, any vacancy in the Board, whether because of death, resignation, disqualification, an increase in the number of directors, or any other cause, may be filled by vote of the majority of the remaining directors, although less than a quorum, or by a sole remaining director. Each director so chosen to fill a vacancy shall hold office until his successor shall have been elected and shall qualify or until he shall resign or shall have been removed. No reduction of the authorized number of directors shall have the effect of removing any director prior to the expiration of his term of office.

Upon the resignation of one or more directors from the Board, effective at a future date, a majority of the directors then in office, including those who have so resigned, shall have the power to fill such vacancy or

4

vacancies, the vote thereon to take effect when such resignation or resignations shall become effective, and each director so chosen shall hold office as provided hereinabove in the filling of other vacancies.

Section 3.06 PLACE OF MEETING; TELEPHONE CONFERENCE MEETING. The Board may hold any of its meetings at such place or places within or without the State of Delaware as the Board may from time to time by resolution designate or as shall be designated by the person or persons calling the meeting or in the notice or waiver of notice of any such meeting. Directors may participate in any regular or special meeting of the Board by means of conference telephone or similar communications equipment pursuant to which all persons participating in the meeting of the Board can hear each other, and such participation shall constitute presence in person at such meeting.

Section 3.07 FIRST MEETING. The Board shall meet as soon as practicable after each annual election of directors and notice of such first meeting shall not be required.

Section 3.08 REGULAR MEETINGS. Regular meetings of the Board may be held at such times as the Board shall from time to time by resolution determine. If any day fixed for a meeting shall be a legal holiday at the place where the meeting is to be held, then the meeting shall be held at the same hour and place on the next succeeding business day which is not a legal holiday. Except as provided by law, notice of regular meetings need not be given.

Section 3.09 SPECIAL MEETINGS. Special meetings of the Board may be called at any time by the Chairman of the Board or the Chief Executive Officer or by any two (2) directors, to be held at the principal office of the Corporation, or at such other place or places, within or without the State of Delaware, as the person or persons calling the meeting may designate.

Notice of the time and place of special meetings shall be given to each director either (i) by mailing or otherwise sending to him a written notice of such meeting, charges prepaid, addressed to him at his address as it is shown upon the records of the Corporation, or if it is not so shown on such records or is not readily ascertainable, at the place in which the meetings of the directors are regularly held, at least seventy-two (72) hours prior to the time of the holding of such meeting; (ii) by orally communicating the time and place of the special meeting to him at least forty-eight (48) hours prior to the time of the holding of such meeting, or (iii) by sending an electronic transmission to him at least twenty-four (24) hours prior to the holding of such meeting. An “electronic transmission” is a facsimile, email or other form of communication not directly involving the transmission of paper that creates a record that may be retained, retrieved and reviewed by the recipient and that may be directly reproduced in paper form by the recipient through an automated process. Notice given by electronic transmission shall be deemed given when directed to the most recent facsimile number, electronic mail address, or other relevant contact number or address, as the case may be, on file for the recipient in the Corporation’s records. Any of the notices as above provided shall be due, legal and personal notice to such director.

Section 3.10 QUORUM AND ACTION. Except as otherwise provided in these Bylaws or by law, the presence of a majority of the authorized number of directors shall be required to constitute a quorum for the transaction of business at any meeting of the Board, and all matters shall be decided at any such meeting, a quorum being present, by the affirmative votes of a majority of the directors present. In the absence of a quorum, a majority of directors present at any meeting may adjourn the same from time to time until a quorum shall be present. Notice of any adjourned meeting need not be given. The directors shall act only as a Board, and the individual directors shall have no power as such.

Section 3.11 ACTION BY CONSENT. Any action required or permitted to be taken at any meeting of the Board or of any committee thereof may be taken without a meeting if all members of the Board or of such committee, as the case may be, consent thereto in writing or by electronic transmission and the writing or writings or electronic transmission or transmissions are filed with the minutes of proceedings of the Board or such committee. Such filings shall be in paper form if the minutes are maintained in paper form and shall be in electronic

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form if the minutes are maintained in electronic form. Such action by consent shall have the same force and effect as the unanimous vote of such directors.

Section 3.12 COMPENSATION. No stated salary need be paid to directors, as such, for their services but, as fixed from time to time by resolution of the Board, the directors may receive directors’ fees, compensation and reimbursement for expenses for attendance at directors’ meetings, for serving on committees and for discharging their duties; provided that nothing herein contained shall be construed to preclude any director from serving the Corporation in any other capacity and receiving compensation therefor.

Section 3.13 COMMITTEES. The Board may, by resolution passed by a majority of the whole Board, designate one or more committees, each committee to consist of one or more of the directors of the Corporation. The Board may designate one or more directors as alternate members of any committee, who may replace any absent or disqualified member at any meeting of the committee. In the absence or disqualification of a member of the committee, the member or members thereof present at any meeting and not disqualified from voting, whether or not he or they constitute a quorum, may unanimously appoint another member of the Board of Directors to act at the meeting in place of any such absent or disqualified member. Any such committee, to the extent permitted by law and provided in the resolution of the Board, shall have and may exercise all the powers and authority of the Board in the management of the business and affairs of the Corporation, and may authorize the seal of the Corporation to be affixed to all papers which may require it.

Unless the Board otherwise provides, each committee designated by the Board may make, alter and repeal rules for conduct of its business. In the absence of such rules each committee shall conduct its business in the same manner as the Board conducts its business pursuant to these Bylaws. Any such committee shall keep written minutes of its meetings and report the same to the Board when required.

Section 3.14 OFFICERS OF THE BOARD. A Chairman of the Board or a Vice Chairman may be appointed from time to time by the Board and shall have such powers and duties as shall be designated by the Board.

Section 3.15 CHAIRMAN OF THE BOARD. The Chairman of the Board, if any, shall preside at all meetings of the stockholders and the Board and exercise and perform such other powers and duties with respect to the administration of the business and affairs of the Corporation as may from time to time be assigned to him by the Board or as is prescribed by the Bylaws.

ARTICLE IV

OFFICERS

Section 4.01 OFFICERS. The officers of the Corporation shall be a Chief Executive Officer, President, a Secretary and a Treasurer. The Corporation may also have, at the discretion of the Board, one or more Vice Presidents, one or more Assistant Vice Presidents, one or more Assistant Secretaries, one or more Assistant Treasurers and such other officers as may be appointed in accordance with the provisions of Section 4.03 of these Bylaws. One person may hold two or more offices.

Section 4.02 ELECTION AND TERM. The officers of the Corporation, except such officers as may be appointed in accordance with the provisions of Section 4.03 or Section 4.05 of these Bylaws, shall be chosen annually by the Board, and each shall hold his office until he shall resign or shall be removed or otherwise disqualified to serve, or until his successor shall be elected and qualified.

Section 4.03 SUBORDINATE OFFICERS. The Board may appoint, or may authorize the Chief Executive Officer to appoint, such other officers as the business of the Corporation may require, each of whom shall have such authority and perform such duties as are provided in these Bylaws or as the Board or theChief Executive

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Officer from time to time may specify, and shall hold office until he shall resign or shall be removed or otherwise disqualified to serve.

Section 4.04 REMOVAL AND RESIGNATION. Any officer may be removed, with or without cause, by a majority of the directors at the time in office, at any regular or special meeting of the Board, or, except in case of an officer chosen by the Board, by the Chief Executive Officer upon whom such power of removal may be conferred by the Board.

Any officer may resign at any time by giving written notice to the Board, the Chairman of the Board, the Chief Executive Officer or the Secretary of the Corporation. Any such resignation shall take effect at the date of the receipt of such notice or at any later time specified therein; and unless otherwise specified therein, the acceptance of such resignation shall not be necessary to make it effective.

Section 4.05 VACANCIES. A vacancy in any office because of death, resignation, removal, disqualification or any other cause shall be filled in the manner prescribed in the Bylaws for the regular appointments to such office.

Section 4.06 CHIEF EXECUTIVE OFFICER. The Chief Executive Officer of the Corporation shall, subject to the control of the Board, have general supervision, direction and control of the business and affairs of the Corporation. In the absence of a Chairman or Vice Chairman of the Board, he shall preside at all meetings of stockholders and the Board. He shall have the general powers and duties of management usually vested in the chief executive officer of a corporation, and shall have such other powers and duties with respect to the administration of the business and affairs of the Corporation as may from time to time be assigned to him by the Board or as prescribed by the Bylaws.

Section 4.07 PRESIDENT. The President, shall exercise and perform such powers and duties with respect to the administration of the business and affairs of the Corporation as from time to time may be assigned to him by the Chief Executive Officer, by the Chairman of the Board, if any, by the Board or as is prescribed by the Bylaws. In the absence or disability of the Chief Executive Officer, the President shall perform all of the duties of the Chief Executive Officer and when so acting shall have all of the powers of and be subject to all the restrictions upon the Chief Executive Officer.

Section 4.08 VICE PRESIDENT. The Vice President(s), if any, shall exercise and perform such powers and duties with respect to the administration of the business and affairs of the Corporation as from time to time may be assigned to each of them by the Chief Executive Officer, by the President, by the Chairman of the Board, if any, by the Board or as is prescribed by the Bylaws. In the absence or disability of the President, the Vice Presidents, in order of their rank as fixed by the Board, or if not ranked, the Vice President designated by the Board, shall perform all of the duties of the President and when so acting shall have all of the powers of and be subject to all the restrictions upon the President.

Section 4.09 SECRETARY. The Secretary shall keep, or cause to be kept, a book of minutes at the principal office for the transaction of the business of the Corporation, or such other place as the Board may order, of all meetings of directors and stockholders, with the time and place of holding, whether regular or special, and if special, how authorized and the notice thereof given, the names of those present at directors’ meetings, the number of shares present or represented at stockholders’ meetings and the proceedings thereof.

The Secretary shall keep, or cause to be kept, at the principal office for the transaction of the business of the Corporation or at the office of the Corporation’s transfer agent, a share register, or a duplicate share register, showing the names of the stockholders and their addresses, the number and classes of shares held by each, the number and date of certificates issued for the same, and the number and date of cancellation of every certificate surrendered for cancellation.

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The Secretary shall give, or cause to be given, notice of all the meetings of the stockholders and of the Board required by these Bylaws or by law to be given, and he shall keep the seal of the Corporation in safe custody, and shall have such other powers and perform such other duties as may be prescribed by the Board or these Bylaws. If for any reason the Secretary shall fail to give notice of any special meeting of the Board called by one or more of the persons identified in Section 3.09 of these Bylaws, or if he shall fail to give notice of any special meeting of the stockholders called by one or more of the persons identified in Section 2.02 of these Bylaws, then any such person or persons may give notice of any such special meeting.

Section 4.10 TREASURER. The Treasurer shall keep and maintain or cause to be kept and maintained, adequate and correct accounts of the properties and business transactions of the Corporation, including accounts of its assets, liabilities, receipts, disbursements, gains, losses, capital, surplus and shares. Any surplus, including earned surplus, paid-in surplus and surplus arising from a reduction of capital, shall be classified according to source and shown in a separate account. The books of account at all reasonable times shall be open to inspection by any director.

The Treasurer shall deposit all moneys and other valuables in the name and to the credit of the Corporation with such depositories as may be designated by the Board. He shall disburse the funds of the Corporation as may be ordered by the Board, shall render to the President, to the Chief Executive Officer and to the directors, whenever they request it, an account of all of his transactions as Treasurer and of the financial condition of the Corporation, and shall have such other powers and perform such other duties as may be prescribed by the Board or these Bylaws.

Section 4.11 COMPENSATION. The compensation of the officers of the Corporation, if any, shall be fixed from time to time by the Board.

ARTICLE V

CONTRACTS, CHECKS, DRAFTS, BANK ACCOUNTS, ETC.

Section 5.01 EXECUTION OF CONTRACTS. The Board, except as otherwise provided in these Bylaws, may authorize any officer or officers, agent or agents, to enter into any contract or execute any instrument in the name and on behalf of the Corporation, and such authority may be general or confined to specific instances; and unless so authorized by the Board or by these Bylaws, no officer, agent or employee shall have any power or authority to bind the Corporation by any contract or engagement or to pledge its credit or to render it liable for any purpose or in any amount.

Section 5.02 CHECKS, DRAFTS, ETC. All checks, drafts or other orders for payment of money, notes or other evidence of indebtedness, issued in the name of or payable to the Corporation, shall be signed or endorsed by such person or persons and in such manner as, from time to time, shall be determined by resolution of the Board. Each such person shall give such bond, if any, as the Board may require.

Section 5.03 DEPOSIT. All funds of the Corporation not otherwise employed shall be deposited from time to time to the credit of the Corporation in such banks, trust companies or other depositories as the Board may select, or as may be selected by any officer or officers, assistant or assistants, agent or agents, attorney or attorneys, of the Corporation to whom such power shall have been delegated by the Board. For the purpose of deposit and for the purpose of collection for the account of the Corporation, the President, the Chief Executive Officer, any Vice President or the Treasurer (or any other officer or officers, assistant or assistants, agent or agents, or attorney or attorneys of the Corporation who shall be determined by the Board from time to time) may endorse, assign and deliver checks, drafts and other orders for the payment of money which are payable to the order of the Corporation.

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Section 5.04 GENERAL AND SPECIAL BANK ACCOUNTS. The Board from time to time may authorize the opening and keeping of general and special bank accounts with such banks, trust companies or other depositories as the Board may select or as may be selected by an officer or officers, assistant or assistants, agent or agents, or attorney or attorneys of the Corporation to whom such power shall have been delegated by the Board. The Board may make such special rules and regulations with respect to such bank accounts, not inconsistent with the provisions of these Bylaws, as it may deem expedient.

ARTICLE VI

SHARES AND THEIR TRANSFER

Section 6.01 CERTIFICATES FOR STOCK. Every owner of stock of the Corporation shall be entitled to have a certificate or certificates, in such form as the Board shall prescribe, certifying the number and class of shares of the stock of the Corporation owned by him. The certificates representing shares of such stock shall be numbered in the order in which they shall be issued and shall be signed in the name of the Corporation by the Chairman of the Board, the President or a Vice President and by the Secretary or an Assistant Secretary or by the Treasurer or an Assistant Treasurer. Any or all of the signatures on the certificates may be a facsimile. In case any officer, transfer agent or registrar who has signed or whose facsimile signature has been placed upon any such certificate shall thereafter have ceased to be such officer, transfer agent or registrar before such certificate is issued, such certificate may nevertheless be issued by the Corporation with the same effect as though the person who signed such certificate, or whose facsimile signature shall have been placed thereupon, were such officer, transfer agent or registrar at the date of issue. A record shall be kept of the respective names of the persons, firms or corporations owning the stock represented by such certificates, the number and class of shares represented by such certificates, respectively, and the respective dates thereof, and in case of cancellation, the respective dates of cancellation. Every certificate surrendered to the Corporation for exchange or transfer shall be cancelled, and no new certificate or certificates shall be issued in exchange for any existing certificate until such existing certificate shall have been so cancelled, except in cases provided for in Section 6.04 of these Bylaws.

Section 6.02 TRANSFER OF STOCK. Transfer of shares of stock of the Corporation shall be made only on the books of the Corporation by the registered holder thereof, or by his attorney thereunto authorized by power of attorney duly executed and filed with the Secretary, or with a transfer clerk or a transfer agent appointed as provided in Section 6.03 of these Bylaws, and upon surrender of the certificate or certificates for such shares properly endorsed and the payment of all taxes thereon. The person in whose name shares of stock stand on the books of the Corporation shall be deemed the owner thereof for all purposes as regards the Corporation. Whenever any transfer of shares shall be made for collateral security, and not absolutely, such fact shall be stated expressly in the entry of transfer if, when the certificate or certificates shall be presented to the Corporation for transfer, both the transferor and the transferee request the Corporation to do so.

Section 6.03 REGULATIONS. The Board may make such rules and regulations as it may deem expedient, not inconsistent with these Bylaws, concerning the issue, transfer and registration of certificates for shares of the stock of the Corporation. The Board may appoint, or authorize any officer or officers to appoint, one or more transfer clerks or one or more transfer agents and one or more registrars, and may require all certificates for stock to bear the signature or signatures of any of them.

Section 6.04 LOST, STOLEN, DESTROYED AND MUTILATED CERTIFICATES. In any case of loss, theft, destruction, or mutilation of any certificate of stock, another may be issued in its place upon proof of such loss, theft, destruction, or mutilation and upon the giving of a bond of indemnity to the Corporation in such form and in such sums as the Board may direct; provided, however, that a new certificate may be issued without requiring any bond when, in the judgment of the Board, it is proper to do so.

Section 6.05 REPRESENTATION OF SHARES OF OTHER CORPORATIONS. The Chief Executive Officer, the President or any Vice President and the Secretary or any Assistant Secretary of this

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Corporation are authorized to vote, represent and exercise on behalf of this Corporation all rights incident to all shares of any other corporation or corporations standing in the name of this Corporation. The authority herein granted to said officers to vote or represent on behalf of this Corporation any and all shares held by this Corporation in any other corporation or corporations may be exercised either by such officers in person or by any person authorized so to do by proxy or power of attorney duly executed by said officers.

ARTICLE VII

INDEMNIFICATION

Section 7.01 ACTIONS OTHER THAN BY OR IN THE RIGHT OF THE CORPORATION. The Corporation shall indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (other than an action by or in the right of the Corporation) by reason of the fact that he is or was a director, officer, employee or agent of the Corporation, or is or was serving at the request of the Corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise or as a member of any committee or similar body, against expenses (including attorneys’ fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by him in connection with such action, suit or proceeding if he acted in good faith and in a manner he 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 reasonable cause to believe his conduct was unlawful. The termination of any action, suit or proceeding by judgment, order, settlement, conviction, or upon a plea of nolo contendere or its equivalent, shall not, of itself, create a presumption that the person did not act in good faith and in a manner which he reasonably believed to be in, or not opposed to, the best interests of the Corporation, and, with respect to any criminal action or proceeding, that he had reasonable cause to believe that his conduct was unlawful.

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Section 7.02 ACTIONS BY OR IN THE RIGHT OF THE CORPORATION. The Corporation shall indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action or suit by or in the right of the Corporation to procure a judgment in its favor by reason of the fact that he is or was a director, officer, employee or agent of the Corporation, or is or was serving at the request of the Corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, or as a member of any committee or similar body, against expenses (including attorneys’ fees) actually and reasonably incurred by him in connection with the defense or settlement of such action or suit if he acted in good faith and in a manner he reasonably believed to be in, or not opposed to, the best interests of the Corporation, except that no indemnification shall be made in respect of any claim, issue or matter as to which such person shall have been adjudged to be liable to the Corporation unless and only to the extent that the Court of Chancery or the court in which such action or suit was brought shall determine upon application that, despite the adjudication of liability but in view of all the circumstances of the case, such person is fairly and reasonably entitled to indemnity for such expenses which the Court of Chancery or such other court shall deem proper.

Section 7.03 DETERMINATION OF RIGHT OF INDEMNIFICATION. Any indemnification under Section 7.01 or 7.02 of these Bylaws (unless ordered by a court) shall be made by the Corporation only as authorized in the specific case upon a determination that indemnification of the director, officer, employee or agent is proper in the circumstances because he has met the applicable standard of conduct set forth in Sections 7.01 and 7.02 of these Bylaws. Such determination shall be made (i) by the Board by a majority vote of a quorum consisting of directors who were not parties to such action, suit or proceeding, or (ii) if such a quorum is not obtainable, or, even if obtainable, a quorum of disinterested directors so directs, by independent legal counsel in a written opinion, or (iii) by the stockholders.

Section 7.04 INDEMNIFICATION AGAINST EXPENSES OF SUCCESSFUL PARTY. Notwithstanding the other provisions of this Article VII, to the extent that a director, officer, employee or agent of the Corporation has been successful on the merits or otherwise in defense of any action, suit or proceeding referred to in Section 7.01 or 7.02 of these Bylaws, or in defense of any claim, issue or matter therein, he shall be indemnified against expenses (including attorneys’ fees) actually and reasonably incurred by him in connection therewith.

Section 7.05 ADVANCE OF EXPENSES. Expenses incurred by an officer or director in defending a civil or criminal action, suit or proceeding may be paid by the Corporation in advance of the final disposition of such action, suit or proceeding as authorized by the Board upon receipt of an undertaking by or on behalf of the director or officer, to repay such amount if it shall ultimately be determined that he is not entitled to be indemnified by the Corporation as authorized in this Article VII. Such expenses incurred by other employees and agents may be so paid upon such terms and conditions, if any, as the Board deems appropriate.

Section 7.06 OTHER RIGHTS AND REMEDIES. The indemnification and advancement of expenses provided by, or granted pursuant to, the other Sections of this Article VII shall not be deemed exclusive and are declared expressly to be nonexclusive of any other rights to which those seeking indemnification or advancements of expenses may be entitled under any bylaw, agreement, vote of stockholders or disinterested directors or otherwise, both as to action in his official capacity and as to action in another capacity while holding such office.

Section 7.07 INSURANCE. Upon resolution passed by the Board, the Corporation may purchase and maintain insurance on behalf of any person who is or was a director, officer, employee or agent of the Corporation, or is or was serving at the request of the Corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise or as a member of any committee or similar body against any liability asserted against him and incurred by him in any such capacity, or arising out of his status as such, whether or not the Corporation would have the power to indemnify him against such liability under the provisions of this Article VII.

Section 7.08 CONSTITUENT CORPORATIONS. For the purposes of this Article VII, references to “the Corporation” include in addition to the resulting corporation, any constituent corporation

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(including any constituent of a constituent) absorbed in a consolidation or merger which, if its separate existence had continued, would have had power and authority to indemnify its directors, officers and employees or agents, so that any person who is or was a director, officer, employee or agent of such constituent corporation or is or was serving at the request of such constituent corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise or as a member of any committee or similar body shall stand in the same position under the provisions of this Article VII with respect to the resulting or surviving corporation as he would have with respect to such constituent corporation if its separate existence had continued.

Section 7.09 EMPLOYEE BENEFIT PLANS. For the purposes of this Article VII, references to “other enterprises” shall include employee benefit plans; references to “fines” shall include any excise taxes assessed on a person with respect to any employee benefit plan; and references to “serving at the request of the Corporation” shall include any service as a director, officer, employee or agent of the Corporation which imposes duties on, or involves services by, such director, officer, employee or agent with respect to an employee benefit plan, its participants or beneficiaries; and a person who acted in good faith and in a manner he reasonably believed to be in the interest of the participants and beneficiaries of an employee benefit plan shall be deemed to have acted in a manner “not opposed to the best interests of the Corporation” as referred to in this Article VII.

Section 7.10. BROADEST LAWFUL INDEMNIFICATION. In addition to the foregoing, the Corporation shall, to the broadest and maximum extent permitted by Delaware law, as the same exists from time to time (but, in case of any amendment to or change in Delaware law, only to the extent that such amendment or change permits the Corporation to provide broader rights of indemnification than is permitted to the Corporation prior to such amendment or change), indemnify each person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative by reason of the fact that he is or was a director or officer of the Corporation, or is or was serving at the request of the Corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, against expenses (including attorneys’ fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by him in connection with such action, suit or proceeding. In addition, the Corporation shall, to the broadest and maximum extent permitted by Delaware law, as the same may exist from time to time (but, in case of any amendment to or change in Delaware law, only to the extent that such amendment or change permits the Corporation to provide broader rights of payment of expenses incurred in advance of the final disposition of an action, suit or proceeding than is permitted to the Corporation prior to such amendment or change), pay to such person any and all expenses (including attorneys’ fees) incurred in defending or settling any such action, suit or proceeding in advance of the final disposition of such action, suit or proceeding upon receipt of an undertaking by or on behalf of the director or officer, to repay such amount if it shall ultimately be determined by a final judgment or other final adjudication that he is not entitled to be indemnified by the Corporation as authorized in this Section 7.10. The first sentence of this Section 7.10 to the contrary notwithstanding, the Corporation shall not indemnify any such person with respect to any of the following matters: (i) remuneration paid to such person if it shall be determined by a final judgment or other final adjudication that such remuneration was in violation of law; or (ii) any accounting of profits made from the purchase or sale by such person of the Corporation’s securities within the meaning of Section 16(b) of the Securities Exchange Act of 1934 and amendments thereto or similar provisions of any federal, state or local statutory law; or (iii) actions brought about or contributed to by the dishonesty of such person, if a final judgment or other final adjudication adverse to such person establishes that acts of active and deliberate dishonesty were committed or attempted by such person with actual dishonest purpose and intent and were material to the adjudication; or (iv) actions based on or attributable to such person having gained any personal profit or advantage to which he was not entitled, in the event that a final judgment or other final adjudication adverse to such person establishes that such person in fact gained such personal profit or other advantage to which he was not entitled; or (v) any matter in respect of which a final decision by a court with competent jurisdiction shall determine that indemnification is unlawful; provided, however, that the Corporation shall perform its obligations under the second sentence of this Section 7.10 on behalf of such person until such time as it shall be ultimately determined by a final judgment or other final adjudication that he is not entitled to be indemnified by the Corporation as authorized by the first sentence of this Section 7.10 by virtue of any of the preceding clauses (i), (ii), (iii), (iv) or (v).

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Section 7.11. TERM. The indemnification and advancement of expenses provided by, or granted pursuant to, this Article VII shall, unless otherwise provided when authorized or ratified, continue as to a person who has ceased to be a director, officer, employee or agent and shall inure to the benefit of the heirs, executors and administrators of such a person.

Section 7.12 SEVERABILITY. If any part of this Article VII shall be found, in any action, suit or proceeding or appeal therefrom or in any other circumstances or as to any particular officer, director, employee or agent to be unenforceable, ineffective or invalid for any reason, the enforceability, effect and validity of the remaining parts or of such parts in other circumstances shall not be affected, except as otherwise required by applicable law.

Section 7.13 AMENDMENTS. The foregoing provisions of this Article VII shall be deemed to constitute an agreement between the Corporation and each of the persons entitled to indemnification hereunder, for as long as such provisions remain in effect. Any amendment to the foregoing provisions of this Article VII which limits or otherwise adversely affects the scope of indemnification or rights of any such persons hereunder shall, as to such persons, apply only to claims arising, or causes of action based on actions or events occurring, after such amendment and delivery of notice of such amendment is given to the person or persons so affected. Until notice of such amendment is given to the person or persons whose rights hereunder are adversely affected, such amendment shall have no effect on such rights of such persons hereunder. Any person entitled to indemnification under the foregoing provisions of this Article VII shall, as to any act or omission occurring prior to the date of receipt of such notice, be entitled to indemnification to the same extent as had such provisions continued as Bylaws of the Corporation without such amendment.

ARTICLE VIII

MISCELLANEOUS

Section 8.01 SEAL. The Board shall provide a corporate seal, which shall be in the form of a circle and shall bear the name of the Corporation and words and figures showing that the Corporation was incorporated in the State of Delaware and showing the year of incorporation.

Section 8.02 WAIVER OF NOTICES. Whenever notice is required to be given under any provision of these bylaws, the Certificate of Incorporation or by law, a written waiver signed by the person entitled to notice or a waiver submitted by such person by electronic transmission, whether before or after the time stated therein, shall be deemed equivalent to notice. Attendance of a person at a meeting shall constitute a waiver of notice of such meeting, except when a person attends a meeting for the express purpose of objecting at the beginning of the meeting, to the transaction of any business because the meeting is not lawfully called or convened. Neither the business to be transacted at, nor the purpose of, any regular or special meeting of the stockholders, directors, or members of a committee of directors need be specified in any written waiver of notice unless required by the Certificate of Incorporation.

Section 8.03 LOANS AND GUARANTIES. To the extent permitted by applicable law, the Corporation may lend money to, or guarantee any obligation of, and otherwise assist any officer or other employee of the Corporation or of its subsidiaries, including any officer who is a director, whenever, in the judgment of the Board, such loan, guaranty or assistance may reasonably be expected to benefit the Corporation. The loan, guaranty, or other assistance may be with or without interest, and may be unsecured or secured in such manner as the Board shall approve, including, without limitation, a pledge of shares of stock of the Corporation.

Section 8.04 GENDER. All personal pronouns used in these Bylaws shall include the other genders, whether used in the masculine, feminine or neuter gender, and the singular shall include the plural, and vice versa, whenever and as often as may be appropriate.

Section 8.05 AMENDMENTS. These Bylaws, or any of them, may be rescinded, altered, amended or repealed, and new Bylaws may be made (i) by the Board, by vote of a majority of the number of

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directors then in office as directors, acting at any meeting of the Board or (ii) by the stockholders, by the vote of a majority of the outstanding shares of voting stock of the Corporation, at an annual meeting of stockholders, without previous notice, or at any special meeting of stockholders, provided that notice of such proposed amendment, modification, repeal or adoption is given in the notice of special meeting; provided, however, that Section 2.02 of these Bylaws can only be amended if that Section as amended would not conflict with the Corporation’s Certificate of Incorporation. Any Bylaw made or altered by the stockholders may be altered or repealed by the Board or may be altered or repealed by the stockholders.

END

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EX-10.11

Exhibit 10.11

Arrangement with Jason Carlson

As an inducement for Mr. Carlson to join Semtech Corporation, the Company agreed that should Mr. Carlson be promoted to Chief Executive Officer, a decision that is entirely dependent upon Mr. Carlson’s performance and the discretion of the Board of Directors of the Company, his salary would be increased by $50,000 annually and he would be granted options to purchase an additional 250,000 shares of the Company’s common stock. Should Mr. Carlson’s services be terminated by the Board of Directors, he will be granted a severance allowance equal to six months salary (currently valued at $150,000) and benefits continuation upon signing of a non-compete agreement and a full release of all claims and obligations. Vesting of stock options would cease as of the last day that services are actively provided to the Company.

EX-21.1

Exhibit 21.1

Subsidiaries of Semtech Corporation

Semtech Corpus Christi Corporation (a Texas corporation)

Semtech Corpus Christi, S.A. de C.V. (una Sociedad Mercantil de Nacionalidad Mexicana)

Semtech New York Corporation (a Delaware corporation), doing business as Semtech, Semtech HID, Semtech HID and System Management, Semtech Human Input Device and System Management, USAR Systems, USAR

Semtech San Diego Corporation (a California corporation), doing business as Edge Semiconductor Corporation, Edge Semiconductor, Semtech High Performance Products, Semtech ATE Division, Semtech San Diego, Semtech

Semtech (International) AG (a Swiss company limited by shares)

Acapella Limited (a private limited company under the Companies Act 1985 of the United Kingdom, registered in England and Wales)

Semtech France SARL

Semtech Germany GmbH

Semtech Limited (a private limited company under the Companies Act 1948 to 1967 of the United Kingdom, registered in Scotland)

Semtech Switzerland GmbH (a Swiss limited liability company)

EX-23.1

Exhibit 23.1

CONSENT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS

We consent to the incorporation by reference in the following Registration Statements:

(i) the Registration Statement on Form S-8 of Semtech Corporation (File No. 033-85156), filed October 14, 1994 with respect to registration of 300,000 shares of the Company’s common stock for the Company’s 1994 Long-Term Stock Incentive Plan;

(ii) the Registration Statement on Form S-8 of Semtech Corporation (File No. 033-85158), with respect to registration of 100,000 shares of the Company’s common stock for the Company’s 1994 Non-Employee Directors’ Stock Option Plan;

(iii) the Registration Statement on Form S-8 of Semtech Corporation (File No. 333-00597), filed January 31, 1996 with respect to registration of 400,000 shares of the Company’s common stock for the Company’s 1994 Long-Term Stock Incentive Plan;

(iv) the Registration Statement on Form S-8 of Semtech Corporation (File No. 333-00599), filed January 31, 1996 with respect to registration of 150,000 shares of the Company’s common stock for the Company’s 1994 Non-Employee Directors Stock Option Plan;

(v) the Registration Statement on Form S-8 of Semtech Corporation (File No. 333-27777) filed May 23, 1997 with respect to registration of 800,000 shares of the Company’s common stock for the 1994-Long Term Stock Incentive Plan;

(vi) the Registration Statement on Form S-8 of Semtech Corporation (File No. 333-44033), filed January 9, 1998 with respect to registration of 800,000 shares of the Company’s common stock for the Company’s 1994 Long-Term Stock Incentive Plan;

(vii) the Registration Statement on Form S-8 of Semtech Corporation (File No. 333-80319), filed June 9, 1999 with respect to registration of 2,150,868 shares of the Company’s common stock for the Company’s Long-Term Stock Incentive Plan;

(viii) the Registration Statement on Form S-3 of Semtech Corporation (File No. 333-95183), filed January 21, 2000 with respect to registration of 495,403 shares of the Company’s common stock in conjunction with the acquisition of USAR Systems, Incorporated;

(ix) the Registration Statement on Form S-8 of Semtech Corporation (File No. 333-50448) filed November 22, 2000 with respect to registration of 4,000,000 shares of the Company’s common stock for the Company’s Non-Director and Non-Executive Officer Long-Term Stock Incentive Plan; and

(x) the Registration Statement on Form S-8 of Semtech Corporation (File No. 333-60396) filed May 8, 2001 with respect to registration of 4,000,000 shares of the Company’s common stock for the Company’s Non-Director and Non-Executive Officer Long-Term Stock Incentive Plan and 200,000 shares of the Company’s common stock for Non-Statutory Stock Option Grants made to Directors in December 1997

of our report dated March 28, 2003, with respect to the consolidated financial statements and schedule of Semtech Corporation included in the Annual Report (Form 10-K) for the year ended January 26, 2003.

/s/    ERNST & YOUNG LLP      

ERNST & YOUNG LLP

Los Angeles, California

April 18, 2003

EX-23.2

Exhibit 23.2

NOTICE REGARDING CONSENT OF ARTHUR ANDERSEN LLP

As disclosed in the Form 8-K filed by Semtech Corporation on June 25, 2002, Semtech dismissed Arthur Andersen LLP as its independent public accountants on June 18, 2002 and announced that it had engaged Ernst & Young LLP to replace Arthur Andersen LLP as its independent public accountants.

The Company’s understanding is that the staff of the Securities and Exchange Commission has taken the position that it will not accept consents from Arthur Andersen LLP if the engagement partner and the manager for the company’s audit are no longer with Arthur Andersen LLP. Both the engagement partner and the manager for the Semtech Corporation audit are no longer with Arthur Andersen LLP. As a result, Semtech has been unable to obtain Arthur Andersen LLP’s written consent to the incorporation by reference into registration statements filed by Semtech of its audit report with respect to Semtech’s financial statements as of January 27, 2002 and January 28, 2001 and for the years then ended.

Under these circumstances, Rule 437a under the Securities Act permits the Companyto file this Form 10-K without a written consent from Arthur Andersen LLP. As a result, however, Arthur Andersen LLP will not have any liability under Section 11(a) of the Securities Act for any untrue statements of a material fact contained in the financial statements audited by Arthur Andersen LLP or any omissions of a material fact required to be stated therein. Accordingly, you would be unable to assert a claim against Arthur Andersen LLP under Section 11(a) of the Securities Act for any purchases of securities under registration statements made on or after the date of this Form 10-K. To the extent provided in Section 11(b)(3)(C) of the Securities Act, however, other persons who are liable under Section 11(a) of the Securities Act, including Semtech’s officers and directors, may still rely on Arthur Andersen LLP’s original audit reports as being made by an expert for purposes of establishing a due diligence defense under Section 11(b) of the Securities Act.

EX-99.1

Exhibit 99.1

CERTIFICATIONS PURSUANT TO

18 U.S.C. SECTION 1350

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Annual Report of Semtech Corporation (the “Company”) on Form 10-K for the fiscal year ended January 26, 2003 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, John D. Poe, Chief Executive Officer of the Company, hereby certify pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

1. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: April 22, 2003

/s/    JOHN D. POE       

John D. Poe

Chief Executive Officer

In connection with the Annual Report of Semtech Corporation (the “Company”) on Form 10-K for the fiscal year ended January 26, 2003 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, David G. Franz, Jr., Chief Financial Officer, hereby certify pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

1. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: April 22, 2003

/s/    DAVID G. FRANZ, JR.       

David G. Franz, Jr.

Chief Financial Officer