ITEM 1. BUSINESS
General
Integrated Device Technology, Inc. was incorporated in California in 1980 and reincorporated in Delaware in 1987. The terms the "Company" and "IDT" refer to Integrated Device Technology, Inc. and its consolidated subsidiaries, unless the context indicates otherwise. IDT designs, develops, manufactures and markets high-performance integrated circuits and subsystems using advanced CMOS (Complimentary Metal Oxide Silicon) and BiCMOS (a combination of bipolar and CMOS) process technologies. The Company's strategy is to offer proprietary and enhanced industry-standard products that improve the performance of systems incorporating high-performance microprocessors.
IDT markets its products for use in workstation/server, personal computer, telecommunications, office automation, and military applications. The Company offers products in four areas: SRAM (Static Random Access Memory) components and modules, specialty memory products, logic circuits and RISC (Reduced Instruction Set Computers) microprocessors and subsystems. IDT's products are essentially all catalog items as opposed to custom circuits designed for a single customer application.
The Company attempts to differentiate itself from competitors through unique architecture, enhanced system cost/performance, and packaging options.
Products and Markets
IDT offers over 3,000 product configurations in four families: SRAM components and modules, specialty memory products, logic circuits, and RISC microprocessors and subsystems. During fiscal 1994, these product families accounted for 33%, 29%, 21% and 17%, respectively, of total revenues. The Company markets its products primarily to OEMs in the workstation/server, personal computer, telecommunications, office automation and military markets. IDT's product design efforts are focused on developing proprietary components and integrating its components into single devices, modules or subsystems to meet the needs of customers.
SRAMs
SRAMs are memory circuits used for storage and retrieval of data during a computer system's operation. SRAMs do not require electrical refreshment of the memory contents to ensure data integrity, allowing them to operate at high speeds. SRAMs are delineated by density (number of bits of data stored) and organization (number of bits of data available in one access, i.e. width). SRAMs incorporate substantially more circuitry than DRAMs, resulting in higher production costs for a given amount of memory, and generally command higher selling prices than the equivalent sized DRAM. The SRAM market is fragmented by differing speed, power, density, organization and packaging demands. As a result, there exist a number of niche markets for SRAMs.
In order to meet varying customer needs, the Company uses both CMOS and BiCMOS process technologies and markets 16K (Kilobyte), 64K, 256K, and 1 Meg (Megabyte) SRAMs in a number of speed, power, organization and packaging configurations. IDT's SRAMs are used in products in all markets served by the Company.
IDT is a leader in cache SRAM memories, which increase microprocessor efficiency by temporarily storing the most frequently used instructions and data. IDT cache SRAMs are optimized to enhance the performance of Intel 486-based systems, as well as the Intel Pentium and the PowerPC microprocessors.
IDT markets a family of cache-memory modules to several large personal computer OEMs, incorporating IDT's 71589 (32K X 9) and 71B74 (8K X 8) static memories in particular.
Specialty Memory Products
The Company's proprietary specialty memory products include FIFOs and multi-port memory products that offer high-performance features which allow communications and computer systems to operate more efficiently.
FIFOs are used as rate buffers to transfer large amounts of data at high speeds between separate devices or pieces of equipment operating at different speeds within a system. IDT's FIFOs are manufactured using primarily CMOS process technology. FIFOs are used in all markets served by the Company.
Synchronous memories use clock edges to trigger read and write signals. By transferring data on clock edges, a system's timing can be more easily designed.
The Company is a leading supplier of both synchronous and asynchronous high-performance FIFOs and has increasingly focused its resources on the design of synchronous FIFOs which are faster and provide an easier user interface.
Multi-port memory products are used to speed data transfers and act as the link between multiple processors or between microprocessors and peripherals when the order of data to be transferred needs to be controlled. IDT's multi-port memory products are available with arbitration logic functions built in which resolve conflicts between devices seeking to access the same data. IDT's multi-port memory products are used in peripheral interface, communications and networking products, including hubs, routers and bridges. IDT's family of multi-port memory products is comprised of synchronous and asynchronous dual-port, and asynchronous four-port devices. The Company also offers a new device, known as a SARAM, which combines the flexibility of a multi-port product with the ease of a FIFO.
Logic Circuits
Logic circuits control data communications between various elements of electronic systems, such as between a microprocessor and a memory circuit. IDT offers high-speed byte-wide and double density CMOS logic circuits which support bus and backplane interfaces, memory interfaces and other logic support applications where high-speed, low power and high-output drive are critical.
IDT's 16-bit family of logic products has gained market acceptance and is available in small packages which enable board area to be significantly reduced. IDT also supplies a series of 8-bit and 16-bit 3.3 volt logic products and a 3.3 volt to 5 volt translator circuit directed at the growing notebook and laptop computer markets. The Company also markets a family of clock drivers and clock generators. These devices, placed at critical positions in a circuit, correct the degradation of timing that occurs the further the impulse travels from the main system clock. IDT's logic circuits are used in all markets served by the Company.
RISC Microprocessor Components and Subsystems
Microprocessors act as the CPU (central processing unit) of computer systems. In January 1988, IDT became a licensed manufacturer of MIPS RISC microprocessors. RISC processors utilize a smaller instruction set, containing only the most frequently used instructions, than traditional CISC (Complex Instruction Set Computers) processors. This simplified instruction set executes an instruction in a single cycle and is therefore much faster than CISC processors which require multiple cycles. The Company's RISC microprocessor components are used in the office automation, telecommunications, server/workstation and personal computer markets. 			 IDT manufactures MIPS 32-bit and 64-bit standard microprocessors. The Company also sells several proprietary 32-bit derivative products for the embedded controller market, including its R3051 with on-circuit memory and its R3081 with floating point functions and on-circuit memory. IDT has licensed Siemens to manufacture and market R3051 products worldwide. The Company has also entered into a license agreement with Toshiba, pursuant to which Toshiba can manufacture and market R3081 products and, in the future, R3051 products, and an OEM private labeling agreement with respect to the Company's R3051 and R3081 products. In addition, IDT entered into an agreement with Adobe Systems to define, develop and manufacture a variety of products that allow OEMs to evaluate laser printer feature/price/ performance combinations using Adobe software and IDT's embedded controllers.
The Company recently announced and is shipping its newest RISC microprocessor based on the MIPS architecture, the R4600 Orion*. The R4600 is a full 64-bit MIPS instruction set architecture microprocessor targeted at the desktop PC and high-end embedded control markets. The R4600 is the first microprocessor designed for IDT by Quantum Effect Design (QED), a consolidated subsidiary, initially to address applications arising from Microsoft's porting of its WindowsNT operating system to the MIPS RISC architecture platform. The Orion has also proved attractive to customers in embedded control applications.
RISC subsystems are board level products that contain MIPS RISC microprocessors, cache SRAMs, logic circuits and supporting software. These products are used in development systems for the evaluation and design of hardware and software or are integrated into customers' end-user systems, thereby reducing design cycle time. IDT also markets RISC subsystems used by several OEMs that provide performance enhancements to standard products. IDT believes that there are significant opportunities in the development of custom solutions for computer and peripherals companies based upon IDT's MIPS architecture expertise, its expertise in laser printer controls and its several alliances with software developers.
There can be no assurance that MIPS RISC technology will continue to be successful or that other technologies will not become more accepted.
* R4600 and Orion are trademarks of Integrated Device Technology, Inc.
Manufacturing
Wafer fabrication involves a highly sophisticated, complex process that is extremely sensitive to contamination. Integrated circuit manufacturing costs are primarily determined by circuit size because the "yield" of good circuits per wafer generally increases as a function of smaller die. Other factors affecting costs include wafer size, number of process steps, costs and sophistication of manufacturing equipment, packaging type, process complexity and cleanliness. IDT's manufacturing process is complex, involving a number of steps including wafer fabrication, plastic or ceramic packaging, burn-in and final test. From time to time the Company has experienced manufacturing problems which have caused delays in shipments or increased costs. There can be no assurance that IDT will not experience manufacturing problems in the future.
The Company utilizes proprietary CMOS and BiCMOS process technologies. The Company's current CMOS and BiCMOS technologies permit sub-micron geometries. BiCMOS, a more costly process, is used for applications requiring higher speeds. The Company anticipates that it will use its BiCMOS technologies for those applications requiring highest speed. Because BiCMOS is a more costly manufacturing process, these devices must sell for substantial premiums to compensate for their higher costs.
The Company currently operates two submicron wafer fabrication facilities in San Jose and Salinas, California. The Salinas facility, first placed in production in 1985, has a 20,000 square foot class 3 five-inch wafer fabrication line. The Company plans to expand production capacity by converting this facility to six-inch wafer manufacturing. The San Jose facility has a 25,000 square foot class 1 (less than one particle 0.5 micron or greater in size per cubic foot) six-inch wafer fabrication line which was first placed in production in March 1991. The San Jose facility currently operates at approximately 70% of its ultimate capacity, whereas the Salinas facility runs at approximately 95% of capacity. IDT has attempted to procure some of its older designed die through outside foundries. However, the Company has experienced difficulty in procuring the state-of-the-art wafers required by its products. IDT is actively investigating increasing its wafer fabrication capacity through increasing equipped production capacity at its San Jose and Salinas facilities, acquiring existing facilities or construction of a new factory, which might involve one or more strategic partners.
In addition, IDT operates a 100,000 square foot component assembly and test facility in Penang, Malaysia. The Company has announced plans to construct an additional 40,000 square foot building on its vacant land in Penang to further expand its test and assembly operations there. More than 85% of IDT's products are tested in its Malaysian facility. IDT also uses subcontractors, principally in Korea and the Philippines, to perform some assembly operations. If IDT were unable to assemble or test products offshore, or if air transportation to these locations were curtailed, the Company's operations could be materially adversely affected. Additionally, foreign manufacture exposes IDT to political and economic risks, including expropriation, foreign government regulations, currency controls, exchange rate fluctuations and changes in tax and freight rates and exemptions for taxes and tariffs. IDT is insured for certain of these risks. In addition to this offshore assembly and test capability, the Company has capacity for low-volume, quick turn assembly in Santa Clara as well as limited test capability in Santa Clara, San Jose and Salinas. Assembly and test of memory modules and RISC subsystems takes place at subcontractors and in the Company's facilities in both San Jose and Santa Clara.
Raw Material Availability
Generally the Company has been able to arrange for multiple sources of supply, but the number of vendors capable of delivering certain raw materials, such as silicon wafers, ultra-pure metals, chemicals and gases is very limited. Some of the Company's packages, while not unique, have very long lead times and are available from only a few suppliers. While IDT has not experienced any difficulties recently, from time to time vendors have extended lead times or limited supply to the Company due to capacity constraints. These circumstances could reoccur and could adversely affect IDT.
Environmental Compliance
IDT's manufacturing sites are subject to numerous environmental laws and regulations, particularly with respect to industrial waste and emissions. Compliance with these laws and regulations has not had a material impact on the Company's capital expenditures, earnings or competitive position. There can be no assurance that changes in such laws and regulations or problems at the Company's facilities would not have adverse effects in the future.
Marketing and Customers
IDT markets and sells its products primarily to original equipment manufacturers (OEMs) through a variety of channels, including a direct sales force, distributors and independent sales representatives.
The Company's direct sales personnel are located at the Company's headquarters and in 17 sales offices in key domestic geographic areas and are primarily responsible for marketing and sales in those areas. Distributors typically maintain an inventory of IDT products and often handle small or rush orders. Pursuant to distribution agreements, the Company grants distributors the right to return slow moving products for credit against other products and offers protection to the distributors against inventory obsolescence or price reductions. IDT utilizes two national and four regional distributors in the United States. Subsequent to the close of fiscal 1994, the Company announced that it had franchised a third national distributor for IDT's products. These distributors generally carry a wide variety of products, including products offered by IDT's competitors. Independent sales representatives generally take orders on an agency basis and the Company ships directly to the customer. The representatives receive commissions on all products shipped to customers in their geographic area.
International sales are controlled by IDT's subsidiaries located in France, Germany, Hong Kong, Italy, Japan, Sweden and the United Kingdom. The majority of export sales is through international distributors, which tend not to carry inventory or carry significantly smaller levels compared to domestic distributors. During fiscal 1994, 1993 and 1992, export sales accounted for 32%, 36% and 30% of total revenues, respectively. See Note 12 "Industry Segment, Foreign Operations" of Notes to the Consolidated Financial Statements. Sales outside the United States are typically denominated in local currencies, except for those made through IDT's Hong Kong subsidiary which are denominated in U.S. dollars. Export sales are subject to certain risks, including currency controls and fluctuations, changes in local economic conditions, import and export controls, and changes in tax laws, tariffs and freight rates.
No single customer or distributor accounted for more than 10% of net revenues in fiscal 1993 and 1992. During fiscal 1994, two of the Company's national distributors became one entity and accounted for 15% of net revenues. If these two distributors had been a single entity during fiscal 1993 and 1992, it would have accounted for 16% and 17%, respectively, of IDT's total revenues.
Backlog
IDT manufactures and markets primarily standard parts. Sales are made pursuant to standard purchase orders, which are frequently revised during the agreement term to reflect changes in the customer's requirements. The Company has also entered into master purchase agreements with several of its OEM customers. These agreements do not require the OEMs to purchase minimum quantities of the Company's products. Product deliveries are scheduled upon the Company's receipt of purchase orders under the related OEM agreements. Generally, these purchase orders and OEM agreements also allow customers to reschedule delivery dates and cancel purchase orders without significant penalties. Orders are frequently rescheduled, revised or canceled. In addition, distributor orders are subject to price adjustments both prior to, and occasionally after, shipment. For these reasons, IDT believes that its backlog, while useful for scheduling production, is not necessarily a reliable indicator of future revenues. 								 Research and Development
The markets serviced by IDT are characterized by rapid technological changes and advances. IDT's competitive position has been established, to a large extent, through its emphasis on the development of proprietary products as well as enhanced performance industry standard products. In addition, the Company continues to refine its CMOS and BiCMOS process technologies to increase the speed and density of circuits in order to provide its customers with advanced products that will enhance their competitive positions. IDT's current activities are focused on the design of new circuits with higher performance capabilities utilizing consistently reproducible low-cost manufacturing technologies.
In fiscal 1992, the Company purchased approximately 48% of the common stock and a majority of the preferred stock of Quantum Effect Design, Inc. (QED), a newly formed corporation. Pursuant to a development agreement between the Company and QED, QED is developing derivative products based on MIPS new 64-bit microprocessor, initially to address applications arising from the porting of Microsoft's Windows NT operating system to the MIPS RISC platform. IDT will own such derivative products, subject to the payment of royalties and other fees to QED. In an effort to increase market acceptance of these products as they are developed, IDT has licensed Toshiba and NKK to manufacture and market these products. The first of these products, the R4600 Orion processor, was successfully introduced in fiscal 1994. There can be no assurance that QED will successfully develop other such products or that any such products will be accepted in the market.
The Company believes that a continued high level of research and development expenditure is necessary to retain its competitive position. The Company spent 19%, 23% and 26% of net sales on research and development in fiscal 1994, 1993, and 1992, respectively.
Employees
At April 3, 1994, IDT and its subsidiaries employed approximately 2,615 people worldwide. IDT's success depends in part on its ability to attract and retain qualified personnel. Since its founding, the Company has implemented policies enabling its employees to share in IDT's success. Examples are available stock option, stock purchase, profit sharing and special bonus plans for key contributors. IDT has never had a work stoppage, no employees are represented by a collective bargaining agreement, and the Company considers its employee relations to be good.
Competition
The semiconductor industry is highly competitive and is characterized by rapid technological advances, cyclical market patterns, price erosion, evolving industry standards, occasional shortages of materials and high capital equipment costs. Many of the Company's competitors have substantially greater technical, marketing, manufacturing and financial resources than IDT. In addition, there are several foreign competitors, some of whom receive assistance from their host governments in the form of research and development loans and grants and reduced capital costs. The Company competes in different product areas, to varying degrees, on the basis of price, performance, availability and quality.
IDT's competitive strategy is to focus on markets which characteristically have less foreign competition and to differentiate its products through high performance, unique configurations and proprietary features or to offer industry standard products with higher speeds and/or lower power consumption. There can be no assurance that price competition, introductions of new products by IDT's competitors, delays in product introductions by IDT or other competitive factors will not have a material adverse effect on the Company in the future.
Intellectual Property and Licensing
IDT has obtained 37 patents in the United States, 9 patents abroad and has approximately 100 inventions in various stages of the patent application process. The Company intends to continue to increase the scope of its patents. There can be no assurance that any patents issued to the Company will not be challenged, invalidated or circumvented, or that the rights granted thereunder will provide competitive advantages to the Company. The Company also relies on trade secret, copyright, and trademark laws to protect its products, and a number of the Company's circuit designs are registered pursuant to the Semiconductor Chip Protection Act of 1984. This Act gives protection similar to copyright protection for the patterns which appear on integrated circuits and prohibits competitors from making photographic copies of such circuits.
IDT has been notified that it may be infringing patents issued to others and in the past has been involved in patent litigation, which adversely affected its operating results. There can be no assurance that additional intellectual property claims will not be made against the Company in the future. The Company believes that licenses, to the extent required, will be available in connection with these claims. No assurance can be given, however, that the terms of any offered license will be favorable. Should licenses from any such claimant be unavailable, the Company may be required to discontinue its use of certain processes or the manufacture, use and sale of certain of its products or to develop noninfringing technology. If IDT is unable to obtain any necessary licenses, pass any increased cost of patent licenses on to its customers, or develop noninfringing technology, the Company could be materially adversely affected.
In 1988, IDT entered into a manufacturing, marketing and purchase agreement with MIPS Computer Systems which allows IDT to manufacture and market the complete MIPS family of RISC microprocessors and related software and to modify the MIPS microprocessors to create subsets and supersets.
The Company, consistent with normal industry practices, entered into two five-year patent cross-license agreements during fiscal 1993, in settlement of patent litigation with AT&T and Texas Instruments (TI). Under the agreement with AT&T, IDT made a lump-sum payment and issued shares of its Common Stock to AT&T, granted a discount on future purchases, and gave credit for future purchases of technology on a non-exclusive basis. Under the agreement with TI, IDT granted to TI a license to certain IDT technology and products, guaranteed TI that it will realize certain revenues from the technology and products, and is required to develop certain products which will be manufactured and sold by both IDT and TI.
During fiscal 1993, the Company entered into a five-year patent cross-license agreement with Motorola which obligated the Company to pay royalties dependent upon the level of the Company's profitability. The agreement specifies minimum annual royalties and maximum royalties over the term of the agreement. See Note 13 "Cross License Agreement" of Notes to the Consolidated Financial Statements.
ITEM 2.
ITEM 2. PROPERTIES
The Company presently occupies six major facilities in California and Malaysia as follows:
Facility Square Feet Location Wafer fabrication, SRAM and multi-port memory operations 95,000 Salinas Logic and RISC microprocessor operations 62,000 Santa Clara Administration and sales 43,700 Santa Clara Administration and RISC SubSystems 50,000 Santa Clara Assembly and test 100,000 Penang, Malaysia Wafer fabrication, process technology development, FIFO, memory subsystems operations and research and development 136,000 San Jose
IDT leases its Salinas and Santa Clara facilities under leases expiring through 2000. IDT is currently negotiating the renewal of its Salinas lease. Each of IDT's other leases has a renewal option for a term of five years. The Company owns its Malaysian and San Jose facilities, although the Malaysian facility is subject to long-term ground leases and the San Jose facility is subject to a mortgage. IDT leases offices for its sales force in 17 domestic locations as well as London, Milan, Munich, Paris, Stockholm, Hong Kong and Tokyo. See Note 7 - "Commitments" of Notes to Consolidated Financial Statements for information concerning IDT's obligations under operating and capital leases. The Company believes its existing facilities and equipment, coupled with its announced capacity expansion in Malaysia and the planned conversion of its Salinas wafer fabrication line to six-inch wafer manufacturing capability along with continued capacity increases in test equipment, are adequate to meet its current requirements. IDT is also investigating either acquiring wafer fabrication capacity from existing facilities or contemplating constructing a new factory, which might involve one or more strategic partners.
ITEM 3.
ITEM 3. LEGAL PROCEEDINGS
There are no material pending legal proceedings, other than ordinary routine litigation incidental to the business, to which the Registrant or any of its subsidiaries is a party, or of which any of their property is the subject.
ITEM 4.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITYHOLDERS
No matters were submitted to a vote of the Company's securityholders during the last quarter of the fiscal year ended April 3, 1994.
Executive Officers of the Registrant The following information as of May 3, 1994 is provided with respect to each executive officer of the Company.
Name Age Position
D. John Carey 58 Chairman of the Board Leonard C. Perham 51 Chief Executive Officer, President William Cortelyou 38 Vice President, Wafer Operations Robin H. Hodge 54 Vice President, Assembly and Test Alan H. Huggins 41 Vice President, Memory Division Larry T. Jordan 49 Vice President, Marketing Daniel L. Lewis 45 Vice President, Sales Chuen-Der Lien 38 Vice President, Technology Development Jack Menache 51 Vice President, General Counsel and 						 Secretary Richard R. Picard 46 Vice President, Logic and Microprocessor 						 Products William D. Snyder 49 Vice President, Finance and 						 Chief Financial Officer
Background of Executive Officers
Mr. Carey served as Chief Executive Officer from 1982 until his resignation in April 1991 and was President from 1982 until 1986. He was elected to the Board of Directors in 1980 and has been Chairman of the Board since 1982.
Mr. Perham joined IDT in October 1983 as Vice President and General Manager, SRAM Division. In October 1986, Mr. Perham was appointed President and Chief Operating Officer of the Company. In April 1991, Mr. Perham was elected Chief Executive Officer.
Mr. Cortelyou joined the Company in 1982. In January 1990, he was elected Vice President, Wafer Operations, Salinas. Mr. Cortelyou currently serves as Vice President, Wafer Operations.
Mr. Hodge joined IDT as Director of Assembly Operations in 1989. In January 1990, Mr. Hodge was elected Vice President, Assembly Operations. Mr. Hodge currently serves as Vice President, Assembly and Test. From 1983 until joining IDT, Mr. Hodge was director of Assembly Operations for Maxim Integrated Products.
Mr. Huggins joined IDT in 1983 and was elected as Vice President in 1987. Mr. Huggins currently serves as Vice President, Memory Division.
Mr. Jordan joined IDT in July 1987 as Vice President of Marketing.
Mr. Lewis joined IDT in 1984 as Eastern Area Sales Manager. In 1991, he was elected as Vice President, Sales.
Dr. Lien joined IDT in 1987. He was elected Vice President, Technology Development in 1992.
Mr. Menache joined IDT as vice President, General counsel and Secretary in September 1989. From April 1989 until joining IDT, he was General Counsel of Berg & Berg Developers. From 1986 until April 1989, he was Vice President, General Counsel and Secretary of The Wollongong Group Inc.
Mr. Picard joined IDT in 1985. In 1989 he was elected Vice President, Static RAM Product Line. Mr. Picard currently serves as Vice President, Logic and Microprocessor Products.
Mr. Snyder joined the Company as Treasurer in 1985. In May 1990, he was elected Vice President, Corporate Controller, and in September 1990 Mr. Snyder was elected Vice President, Finance and Chief Financial Officer.
ITEM 5.
ITEM 5. MARKET FOR REGISTRANT'S COMMON STOCK AND RELATED STOCKHOLDER 	 MATTERS
Quarterly Market and Dividend Information
			 Year Ended April 3, 1994 		First Second Third Fourth 		 Quarter Quarter Quarter Quarter
Bid Quotations Low $ 6 1/4 $ 10 3/8 $ 11 1/2 $ 13 1/2 High 11 3/8 19 1/2 19 3/4 34 3/8
			 Year Ended March 28, 1993
Bid Quotations Low $ 3 3/4 $ 3 1/2 $ 4 $ 6 1/4 High 6 5 6 3/4 8 3/8
The Company's Common Stock is traded in the over-the-counter market under the symbol "IDTI". The table sets forth the range of high and low bid quotations per share of Common Stock for each quarter, as reported by the National Association of Securities Dealers Automatic Quotation (NASDAQ) System.
As of April 3, 1994 there were 868 shareholders of record.
The Company has not regularly paid cash dividends. It is the present policy of the Company to reinvest earnings in the Company to finance expansion of the Company's operations, and the Company does not expect to pay dividends for the foreseeable future.
ITEM 6.
ITEM 6. SELECTED FINANCIAL DATA
(in thousands, except per share and employee data)
					 Fiscal Year Ended
		 April 3 March 28 March 29 March 31 April 1 		 1994 1993 1992 1991 1990
Revenues $330,462 $236,263 $202,734 $198,559 $209,475 Net income (loss) $ 40,165 $ 5,336 $(32,808) $ 1,226 $ 17,007 Net income (loss) per share $ 1.21 $ .18 $ (1.25) $ .05 $ .66 Shares used in computing net income (loss) per share 33,116 29,701 26,255 26,070 25,668 Total assets $349,571 $239,994 $229,730 $258,626 $261,538 Long-term obligations, excluding current portion $ 37,462 $ 48,987 $ 53,050 $ 62,664 $ 68,083 Shareholders' equity $224,367 $117,760 $104,602 $134,524 $130,704 Research and development expenses $ 64,237 $ 53,461 $ 52,044 $ 50,848 $ 41,644 Number of employees 2,615 2,414 2,159 2,052 2,090
ITEM 7.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND 	 RESULTS OF OPERATIONS
The following table contains certain amounts, and the amounts as a percentage of revenues, reflected in the Company's consolidated financial statements of operations for the 1994, 1993, and 1992 fiscal years.
(dollars in millions) 1994 % 1993 % 1992 %
Net revenues $330.4 100.0 $236.3 100.0 $202.7 100.0
Cost of revenues 159.6 48.3 132.3 56.0 126.8 62.6
Operating expenses: Research and development 64.2 19.4 53.5 22.6 52.0 25.7 Selling, general and administrative 54.3 16.5 39.5 16.7 48.7 24.0 Restructuring charge 4.5 2.2
Operating income (loss) 52.3 15.8 11.0 4.7 (29.3) (14.5)
Net interest expense 2.1 0.6 4.7 2.0 5.5 2.7
Provision (benefit) for income taxes 10.0 3.0 1.0 0.4 (2.0) (1.0)
Net income (loss) $40.2 12.2 $5.3 2.3 $(32.8) (16.2)
Overview
Fiscal 1994 was an outstanding year in virtually every respect. IDT recorded record revenue, pretax income as a percentage of revenue, earnings per share, revenue per employee and new orders. As a result of a secondary stock offering and an improvement in operating cash flow, IDT's cash, cash equivalents and short-term investments improved by approximately $97 million over the prior year, while total liabilities increased less than $3 million. Demand was strong in the U.S. across all products. For the second consecutive year, European sales increased, driven in part by strong demand from the telecommunications sector. Late in the year Japanese orders showed signs of recovery. As IDT utilized more of its installed manufacturing capacity, significantly improved gross margins were realized. Finally the Company released several significant new products including the R4600, or Orion microprocessor.
Results of Operations
Net revenue in fiscal 1994 was $330.4 million, a 40% increase over 1993 revenue of $236.3 million and a 63% increase over fiscal 1992 revenue of $202.7 million. Growth in fiscal 1994 was across all product segments, with the microprocessor segment most pronounced on a percentage basis. In mid-year, prices on certain products rose dramatically due to concerns about availability of plastic packaged products, but by year end prices returned to normal levels. Demand outstripped supply on some products and IDT responded by ordering incremental wafer fabrication equipment, some of which will be received in fiscal 1995. Fiscal 1993 revenue growth was attributed to increases in demand for products across all market segments.
As a percentage of net revenues, gross margin was 51.7% in fiscal 1994 compared to 44.0% in fiscal 1993 and 37.4% for fiscal 1992. The improvement in fiscal 1994 can be attributed to greater capacity utilization, which in turn lowered average wafer manufacturing costs, significant increases in die per wafer due to wafer fabrication process improvements, and a mix shift to products with higher average selling prices, particularly microprocessors. In fiscal 1992, gross margin was negatively influenced by $14.9 million of charges associated with writeoffs of inventory and underutilized capital equipment. Were it not for those charges, fiscal 1992 gross margin would have been similar to fiscal 1993.
Research and development (R & D) expense increased 20% in fiscal 1994 compared to fiscal 1993, but decreased as a percentage of net revenue from 22.6% of 1993 revenue to 19.4% of fiscal 1994 revenue. 1992 R & D spending was 25.7% of revenue. The Company continues to invest in process technology and introduced CEMOS 7, a .6 micron technology used in a substantial portion of its manufacturing process. As previously mentioned, a number of new products, highlighted by the R4600 Orion microprocessor, were introduced in fiscal 1994. During fiscal 1995, IDT expects R & D spending to decrease slightly as a percentage of revenue while increasing in dollars. The Company believes that continued high levels of investment in R & D, both internally and with technology partners, leads to new processes and products, both of which are critical elements in offering proprietary products, resulting in enhanced gross margins.
Selling, general and administrative (SG&A) expenses increased 37% compared to fiscal 1993. This was due in part to increases in bonuses for management, employee profit sharing and the variable selling expenses associated with a 40% revenue increase. SG&A spending declined slightly from 16.7% of fiscal 1993 revenue to 16.5% of fiscal 1994 revenue. Fiscal 1992 SG&A costs, which were significantly impacted by patent litigation expenses and an increase in the provision for bad debts, were 24.0% of revenue. Patent litigation expenses accrued in fiscal 1992 were resolved in fiscal 1993 and, as a consequence, the reversal of a portion of the 1992 accruals benefited fiscal 1993 results.
IDT incurred approximately $4.5 million of restructuring charges in fiscal 1992 associated with the closing of its oldest wafer fabrication line and a reduction in workforce. No such expense was incurred in either fiscal 1993 and 1994.
Fiscal 1994 interest expense declined to $5.2 million compared to $5.9 million and $7.0 million in fiscal years 1993 and 1992, respectively. Interest expense has decreased as IDT's asset secured debt has declined. IDT continues to incur interest on a long-term obligation associated with a patent cross-license which did not exist in fiscal 1992 and insignificant in fiscal 1993. The Company expects a small decline in interest expense in fiscal 1995 as reduced debt balances will more than offset accretion of the long-term obligation.
Interest income and other, net increased to $3.1 million in fiscal 1994 compared to $1.1 million and $1.6 million in fiscal years 1993 and 1992, respectively. Fiscal 1994 was favorably impacted by higher cash balances available for investment, gains on the disposition of assets, and royalty income. IDT expects interest income and other, net to increase in fiscal 1995 due to significantly higher cash balances available for investment.
The effective tax rate in fiscal 1994 was 20%. Because of tax benefits available from the Company's Malaysian operation, valuation allowances which could be reversed and other tax credits available at both the federal and state level the Company does not expect to record the full statutory (35%) tax rate in fiscal 1995.
Liquidity and Capital Resources
The Company's financial position improved considerably during fiscal 1994. Cash and cash equivalents and short-term investments rose by $97.4 million to $121.8 million. Working capital increased from $51.4 million to $143.2 million. The current ratio improved from 1.84 to 2.81. This growth was due to improved profitability, a secondary stock offering yielding net proceeds of approximately $46.8 million and a dramatic improvement in accounts receivable turnover, which ended below 45 days outstanding on a trailing twelve month basis.
During fiscal 1994 IDT made cash payments of $38.1 million for additional capital equipment principally for its wafer fabrication operations. The Company paid down $23.3 million of equipment secured debt. A significant source of funds was IDT's several employee stock plans which generated an additional $8.9 million cash.
IDT's operating plan for fiscal 1995 provides for capital equipment expenditures of approximately $65 million, principally for additional equipment for the San Jose wafer fabrication plant and the conversion of the Salinas wafer fabrication line to six-inch capability. The Company expects to fund this expansion through existing cash balances, cash flow from operations and equipment secured or other debt financings.
Factors Affecting Future Results
During fiscal 1994, IDT experienced consistently improved quarterly financial results and stronger bookings. Nonetheless the Company and semiconductor industry in general are subject to a number of uncertainties. IDT is impacted by shortening product life cycles, continuous evolution of process technology, the ability to secure intellectual property rights, high fixed costs and the need for large additions of wafer fabrication capacity as well as general world economic conditions. In the semiconductor industry generally, revenues are generated after a considerable amount of time and financial resources are invested in product and process development. There can be no assurance that IDT's efforts will result in successful new products. In addition, a significant number of the Company's growth opportunities are dependent on successful penetration of new, high volume desk top computer, workstation, telecommunications and office automation segments of the electronics market where the Company will face substantial competition from many well-funded competitors.
No assurance can be given that market demand or customer acceptance will be realized; that such demand will be sustainable; that competitors will not force prices to fall to unacceptable levels or take market share from the Company; or that IDT can achieve or maintain profits in these markets. Also, some of the Company's customers in these markets are less well established, which could subject IDT to increased credit risk.
IDT intends to convert its Salinas wafer fabrication line from a five inch to six inch facility in fiscal 1995. Problems with the installation of new equipment or conversion of old equipment could cause disruptions in the manufacturing flow, thus adversely impacting revenues.
IDT's stock price has been subject to considerable volatility. If revenues or earnings fail to meet expectations of the investment community, there could be an immediate and significant impact on the price for IDT's stock.
ITEM 8
ITEM 8 FINANCIAL STATEMENTS AND SUPPLEMENTARY FINANCIAL INFORMATION
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS AND FINANCIAL STATEMENT SCHEDULES COVERED BY REPORT OF INDEPENDENT ACCOUNTANTS
Consolidated Financial Statements included in Item 8:
Report of Independent Accountants
Consolidated Balance Sheets at April 3, 1994 and March 28, 1993
Consolidated Statements of Operations for each of the three fiscal years in the period ended April 3, 1994
Consolidated Statements of Cash Flows for each of the three fiscal years in the period ended April 3, 1994
Consolidated Statements of Shareholder's Equity for each of the three fiscal years in the period ended April 3, 1994
Notes to consolidated financial statements
Schedules for each of the three years in the period ended April 3, 1994 included in Item 14(d):
I Short-term investments V Property, plant and equipment VI Accumulated depreciation and amortization of property, plant 	 and equipment VIII Valuation and qualifying accounts IX Short-term borrowings X Supplementary income statement information
All other schedules have been omitted since the required information is not present or is not present in amounts sufficient to require submission of the schedules, or because the information required is included in the consolidated financial statements or notes thereto.
Report of Price Waterhouse, Independent Accountants To the Shareholders and Board of Directors of Integrated Device Technology, Inc.
In our opinion, the consolidated financial statements listed in the accompanying index present fairly, in all material respects, the financial position of Integrated Device Technology, Inc. and its subsidiaries at April 3, 1994 and March 28, 1993, and the results of their operations and their cash flows for each of the three years in the period ended April 3, 1994, in conformity with generally accepted accounting principles. These financial statements are the responsibility of the Company's management; our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these statements in accordance with generally accepted auditing standards which require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for the opinion expressed above.
PRICE WATERHOUSE San Jose, California April 27, 1994
CONSOLIDATED BALANCE SHEETS
					 April 3, 1994 March 28, 1993 (In thousands, except share data) 				 ASSETS Current assets: Cash and cash equivalents $88,490 $22,529 Short-term investments 33,351 1,877 Accounts receivable, net of allowance for returns and doubtful accounts of $4,129 and $2,994 40,643 43,190 Inventory 29,855 27,237 Deferred tax assets 26,276 15,270 Prepayments and other current assets 3,858 2,825 		 Total current assets 222,473 112,928 		 Property, plant and equipment , net 120,838 118,837 Other assets 6,260 8,229
TOTAL ASSETS $349,571 $239,994
LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Accounts payable $15,925 $15,819 Accrued compensation and related expense 16,528 7,399 Deferred income on shipments to distributors 17,592 10,450 Income taxes payable 1,964 878 Other accrued liabilities 13,032 7,524 Current portion of long-term obligations 14,184 19,467
Total current liabilities 79,225 61,537
Long-term obligations 37,462 48,987
Deferred tax liabilities 8,517 11,710
Commitments and contingencies 		 Shareholders' equity : Preferred stock; $.001 par value: 5,000,000 shares authorized; no shares issued Common stock; $.001 par value: 65,000,000 shares authorized; 33,405,552 and 28,377,721 shares issued and outstanding 33 28 Additional paid-in capital 160,221 93,731 Retained earnings 64,517 24,352 Cumulative translation adjustment (404) (351)
Total shareholders' equity 224,367 117,760
		 TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $349,571 $239,994
The accompanying notes are an integral part of these financial statements.
CONSOLIDATED STATEMENTS OF OPERATIONS
					 FISCAL YEAR ENDED
			 April 3, 1994 March 28, 1993 March 29, 1992
(In thousands, except per share data) 				 Revenues $330,462 $236,263 $202,734 			 Cost of revenues 159,627 132,285 126,819
Gross profit 170,835 103,978 75,915 			 			 Operating expenses: Research and development 64,237 53,461 52,044 Selling, general and administrative 54,329 39,511 48,721 Restructuring charge 4,466
Total operating expenses 118,566 92,972 105,231 			 Operating income (loss) 52,269 11,006 (29,316) 			 Interest expense (5,165) (5,855) (7,045) 			 Interest income and other, net 3,102 1,127 1,593
			 Income (loss) before provision (benefit) for income taxes 50,206 6,278 (34,768) 			 Provision (benefit) for income taxes 10,041 942 (1,960)
Net income (loss) $40,165 $5,336 ($32,808)
Net income (loss) per share $ 1.21 $ .18 $ (1.25)
Shares used in computing net income (loss) per share 33,116 29,701 26,255
The accompanying notes are an integral part of these financial statements.
CONSOLIDATED STATEMENTS OF CASH FLOWS 					 FISCAL YEAR ENDED
(In thousands) April 3, March 28, March 29, 	 				 1994 1993 1992 					 Operating activities: Net income (loss) $40,165 $5,336 ($32,808) Adjustments: Depreciation and amortization 37,594 37,140 40,787 Provision for losses on accounts receivable 476 (742) 1,222 Restructuring charges 4,466 			 Changes in assets and liabilities: Accounts receivable 2,071 (6,167) (1,926) Inventory (2,618) (3,843) 8,670 Deferred tax assets (10,897) 2,616 2,324 Other assets (1,247) (391) 2,180 Accounts payable 106 (804) 5 Accrued compensation and 	related expense 9,799 3,158 (157) Deferred income to distributors 7,142 1,093 610 Income taxes payable 11,574 477 722 Other accrued liabilities 5,885 (679) 5,816
Net cash provided by operating activities 100,050 37,194 31,911
Investing activities: Additions to property, plant and equipment (38,083) (28,188) (25,706) Proceeds from sale of equipment 671 178 416 Purchases of short-term investments (40,221) (4,927) (18,458) Proceeds from sales of short-term investments 8,747 4,110 27,624
Net cash used for investing activities (68,886) (28,827) (16,124)
Financing activities: Issuance of common stock, net 55,337 2,981 2,358 Proceeds from borrowings 2,731 32,161 11,665 Payment on capital leases and other debt (23,271) (41,006) (21,423)
Net cash provided (used) for financing activities 34,797 (5,864) (7,400)
			 Net increase in cash and cash equivalents 65,961 2,503 8,387 			 Cash and cash equivalents at beginning of period 22,529 20,026 11,639
Cash and cash equivalents at end of period $88,490 $22,529 $20,026
			 Supplemental disclosure of cash flow information: Interest paid 4,713 5,893 6,876 Income taxes paid (refunded) 9,163 (2,050) (5,638) Issue of Common Stock for acquisition of technology 7,738 Tax benefits from exercise of Stock Options 10,488 582 477
The accompanying notes are an integral part of these financial statements.
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
				 Additional Cumulative Total 		 Common Stock Paid-In Retained Translation Shareholders' 		 Shares Amount Capital Earnings Adjustment Equity (In thousands, except share data)
Balance, March 31, 1991 25,889,601 $26 $82,834 $51,824 ($160) $134,524 						 Issuance of common stock 664,130 1 2,358 2,359 Tax benefits of stock option transactions 477 477 Translation adjustment 50 50 Net loss (32,808) (32,808) 						 Balance, March 29, 1992 26,553,731 27 85,669 19,016 (110) 104,602 						 						 Issuance of common stock 1,823,990 1 7,480 7,481 Tax benefits of stock option transactions 582 582 Translation adjustment (241) (241) Net income 5,336 5,336 						 Balance, March 28, 1993 28,377,721 28 93,731 24,352 (351) 117,760 						 						 Issuance of common stock 2,027,831 2 9,241 9,243 Issuance of common stock at $15.71 per share, pursuant to public offering, net of expenses of $366 3,000,000 3 46,761 46,764 Tax benefits of stock option transactions 10,488 10,488 Translation adjustment (53) (53) Net income 40,165 40,165 						 Balance, April 3, 1994 33,405,552 $33 $160,221 $64,517 ($404) $224,367
The accompanying notes are an integral part of these financial statements.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1 Summary of Significant Accounting Policies
Basis of Presentation The consolidated financial statements include the accounts of Integrated Device Technology, Inc. (IDT or "the Company") and all of its subsidiaries. All significant intercompany accounts and transactions have been eliminated.
Fiscal year The Company's fiscal year ends on the Sunday nearest March 31. Fiscal years 1993 and 1992 each included 52 weeks. The fiscal year ended on April 3, 1994 was a 53-week year. The fiscal year end of certain of the Company's foreign subsidiaries are March 31, and the results of their operations as of their fiscal year end have been combined with the Company's results of operations as of April 3, 1994. Transactions during the intervening period were not significant.
Cash, Cash Equivalents and Short-term Investments Cash equivalents are highly liquid investments with original maturities of three months or less at the time of acquisition or with guaranteed on-demand buy-back provisions. Short-term investments are valued at amortized cost, which approximates market and consist primarily of time deposits, corporate notes, and treasuries. Short-term investments have maturities greater than three months and less than one year. Cash equivalents and short-term investments included certificates of deposit totaling $10,603,000 and $9,349,000 at April 3, 1994 and March 28, 1993, respectively.
The Company will adopt Statement of Financial Accounting Standards (FAS) 115, "Accounting for Certain Investments in Debt and Equity Securities" effective April 4, 1994 as required by that pronouncement. The Statement requires reporting of investments as either held to maturity, trading or available for sale. The Company's investments will be classified as available for sale. The effect of adoption was not material as of April 3, 1994.
Inventory Inventory is stated at the lower of standard cost (which approximates actual cost on a first-in, first-out basis) or market. Market is based upon estimated realizable value reduced by normal gross margin. Inventory at April 3, 1994 and March 28, 1993 was:
(in thousands) April 3, 1994 March 28, 1993 Inventory: Raw materials $ 2,834 $ 3,117 Work-in-process 10,201 13,494 Finished goods 16,820 10,626
				 $ 29,855 $ 27,237 		
Property, Plant and Equipment Property, plant and equipment are stated at cost. Depreciation is computed for property, plant and equipment using the straight-line method over estimated useful lives of the assets. Leasehold improvements and leasehold interests are amortized over the shorter of the estimated useful lives of the assets or the remaining term of the lease. Accelerated methods of depreciation are used for tax computations. Property, plant and equipment at April 3, 1994 and March 28, 1993 were:
(in thousands) April 3, 1994 March 28, 1993 Property, plant and equipment: Land $ 4,382 $ 4,382 Machinery and equipment 248,095 217,167 Building and leasehold improvements 40,063 39,896 Construction-in-progress 76 10
				 292,616 261,455
Accumulated depreciation and amortization (171,778) (142,618)
				 $ 120,838 $ 118,837 				 Income Taxes The Company adopted Statement of Financial Accounting Standards (FAS) 109, "Accounting for Income Taxes" in the year ended March 28, 1993. The Company elected to apply the provisions of FAS 109 retroactively to the beginning of its year ended March 29, 1992. The adoption of FAS 109 changed the Company's method of accounting for income taxes from the deferred method to an asset and liability approach. The asset and liability approach requires that the expected future tax consequences of temporary differences between book and tax bases of assets and liabilities be recognized as deferred tax assets and liabilities.
Net Income (Loss) Per Share Net income (loss) per share is computed using the weighted average number of shares of common stock outstanding during the year, plus incremental common equivalent shares, if dilutive. Common stock equivalents consist of stock options (using the treasury stock method).
Revenue Recognition Revenue from product sales is generally recognized upon shipment and a reserve is provided for estimated returns and discounts. A portion of the Company's sales are made to distributors under agreements which allow certain rights of return and price protection on products unsold by the distributors; such sales and profits thereon are deferred until the products are resold by the distributors.
Reclassifications Certain amounts in prior fiscal years' consolidated financial statements and notes have been reclassified to conform with fiscal 1994 presentation.
Translation of Foreign Currencies Amounts denominated in foreign currencies have been translated in accordance with Statement of Financial Accounting Standards (FAS) 52. The functional currency for the Company's sales operations is the applicable local currency with the exception of the Hong Kong sales subsidiary whose functional currency and reporting currency is the U.S. dollar. For subsidiaries whose functional currency is the local currency, gains and losses resulting from translation of these foreign currencies into U.S. dollars are accumulated in a separate component of shareholders' equity. For the Malaysian manufacturing and the Hong Kong sales subsidiaries, where the functional currency is the U.S. dollar, gains and losses resulting from the process of remeasuring foreign currency financial statements into U.S. dollars are included in income. Aggregate net foreign currency transaction gains (losses) totaled $(232,000), $(93,000) and $(141,000) in fiscal 1994, 1993 and 1992, respectively. The effect of foreign currency exchange rate fluctuations on cash balances held in foreign currencies have not been material.
Foreign Exchange Contracts The Company enters into forward exchange contracts to hedge against the short-term impact of foreign currency fluctuations on certain assets denominated in foreign currencies. The total amount of these contracts is offset by the underlying assets denominated in foreign currencies. The gains or losses on these contracts are included in income as the exchange rates change and are offset by gains and losses on the underlying assets being hedged. At April 3, 1994, the Company had $12 million of forward exchange contracts outstanding, with maturity dates through July 1994. The Company does not anticipate non-performance by the counterparties to these contracts.
Concentration of Credit Risk and Off-Balance-Sheet Risk The Company markets high-speed integrated circuits to OEMs and distributors primarily in the United States, Europe, and the Far East. The Company performs on-going credit evaluations of its customers' financial conditions and limits the amount of credit extended when deemed necessary but generally does not require collateral. Management believes that any risk of loss is significantly reduced due to the diversity of its products, customers and geographic sales areas. The Company maintains a provision for potential credit losses.
The Company sells a significant portion of its products through third- party distributors. As a result of the merger of two of the Company's national distributors, the receivable balance from the merged company is significant in aggregate for fiscal 1994. If the financial condition and operations of this distributor deteriorate below critical levels, the Company's operating results could be adversely affected. This distributor receivable balance represented 11% and 9% of total accounts receivable at April 3, 1994 and March 28, 1993, respectively.
The Company invests its cash and cash equivalents in time deposits, money market funds and commercial paper. Securities comprising cash equivalents and short-term investments are maintained with high quality institutions, the composition and maturities of which are regularly monitored by management. Generally, these securities maintain a highly liquid market and may be redeemed upon demand and, therefore, bear minimal risk. The Company has not experienced any material losses on its investments.
NOTE 2 Restructuring and Significant Other Events
In fiscal year 1992, the Company recorded $4.5 million of charges to net income relating to the abandonment of IDT's original wafer processing facility and product line reorganizations. The Company has substantially completed this restructuring.
Also in fiscal 1992, due to changes in the market, the Company revised its estimated useful lives and the future realizable values of several items. These charges included a $7.2 million writeoff of excess inventory and $5.4 million of writeoffs and changes in useful lives of underutilized capital assets. Also, due to specific events during the second fiscal quarter, the Company provided a $1.3 million reserve for doubtful accounts and recorded $6.4 million of accrued legal expenses. Subsequent developments and resolution of one of these legal matters led the Company to recognize a $1 million benefit during fiscal 1993.
NOTE 3 Other Assets - Intangibles
During fiscal 1993, IDT entered into various royalty-free patent cross- license agreements. The patents licenses granted to IDT under these agreements have been recorded at their cost of approximately $8,200,000 and are being amortized on a straight-line basis over five years. The amortization relating to patents licenses was $1,647,000 and $780,000 at April 3, 1994 and March 28, 1993, respectively.
NOTE 4 Long-Term Obligations
The Company leases certain equipment under long-term leases or finances purchases of equipment under bank financing agreements. Leased assets and assets pledged under financing agreements which are included under property, plant and equipment are as follows:
(in thousands) April 3, 1994 March 28, 1993
Building improvements $ 6,907 $ 6,907 Machinery and equipment 65,403 86,091 Accumulated depreciation and amortization (43,949) (49,001)
					28,361 43,997
The capital lease agreements and equipment financings are collateralized by the related leased equipment and contain certain restrictive covenants.
Future minimum payments under capital leases and equipment financing agreements, at varying interest rates (4.9% - 11%), are as follows:
(Fiscal Year) (in thousands) 1995 $ 14,339 1996 5,898 1997 3,075 1998 1,486 1999 3
Total minimum payments 24,801
Less interest 2,420
Present value of net minimum payments 22,381
Less current portion 12,878
						 $ 9,503
During fiscal 1993, IDT recorded a long-term obligation in connection with the dismissal of certain litigation and entering into a patent cross-license agreement. The present values of the amount due at the end of the license term were $7,471,000 and $7,041,000 at April 3, 1994 and March 28, 1993, respectively. During the year, this amount payable has been reduced by an amount of royalty income pursuant to certain guaranteed revenues realized on sales of IDT's products. The Company is accreting $3.3 million in future interest charges from the recorded amount at April 3, 1994 to the amount due at the end of the term using the effective interest method.
NOTE 5 Long-Term Debt
Long-term debt consists of the following:
(in thousands) April 3, 1994 March 28, 1993
Mortgage payable bearing interest at 9.625% due in monthly installments of $142,000 including interest through April 1, 2005. The note is secured by property and improvements in San Jose, California. $ 11,543 $ 12,152
Term loan payable to a Malaysian bank at 8% due in monthly installments of $54,000 					 791 1,448
					 12,334 13,600
Less current portion 1,306 1,188
					 11,028 12,412 							 Principal payments required in the next five years and beyond are as follows (in thousands): $1306 (1995), $790 (1996), $752 (1997), $828 (1998), $8,658 (Beyond 1998).
NOTE 6 Lines of Credit
The Company's Malaysian subsidiary has unsecured revolving lines of credit that allow borrowings up to $2,500,000 with three local banks. These lines have no expiration date. At April 3, 1994, there were no outstanding borrowings against these lines. The borrowing rate for these lines would be incurred at the local bank's cost of funds plus 0.75% to 1% (8.80-9.25% on April 3, 1994).
In fiscal 1994, the Company's Japanese subsidiary had an unsecured revolving line of credit that allowed borrowings up to approximately $1,940,000. The line of credit automatically extends until the Company requests termination. As of April 3, 1994, no amounts were outstanding under this line of credit. The borrowing rate for this line of credit is the local bank's short-term prime rate existing at the borrowing date plus 0.2%. At April 3, 1994, this short-term borrowing rate was 3.2%.
The Company also has foreign exchange contract facilities with several banks that allow the Company to enter into foreign exchange contracts of up to $30,000,000, of which $18,026,000 was available at April 3, 1994.
NOTE 7 Commitments
Lease Commitments The Company leases most of its administrative and several manufacturing facilities under operating lease agreements which expire through 1996. Two facilities were leased from a principal shareholder. The annual rent paid to this shareholder totaled approximately $1,396,000, $1,396,000 and $1,995,000 in fiscal 1994, 1993 and 1992, respectively. One shareholder lease expired during fiscal 1992 and the other will expire in June 1995.
The aggregate minimum rent commitments under all operating leases are as follows:
(Fiscal Year) (in thousands) 1995 $ 4,122 1996 2,902 1997 2,217 1998 1,924 1999 1,933 2000 and thereafter 1,980
						 $ 15,078
Rent expense for the years ended April 3, 1994, March 28, 1993, and March 29, 1992 totaled approximately $3,488,000, $3,303,000 and $3,839,000, respectively.
As of April 3, 1994, four secured standby letters of credit were outstanding totaling $1,937,000. Three letters of credit are held in connection with the Company's workers compensation insurance and mature on June 30, 1994, June 30, 1995 and June 30, 1996. The fourth letter of credit secures the credit facility for the Company's Japanese subsidiary and matured on April 4, 1994.
NOTE 8 Fair Value Disclosures of Financial Instruments
The estimated fair value of financial instruments has been determined by the Company, using available market information and valuation methodologies. However, considerable judgment is required in interpreting market data to develop the estimates of fair value. Accordingly, the estimates presented herein are not necessarily indicative of the amounts that the Company could realize in a current market exchange. The use of different market assumptions and/or estimation methodologies could have a material effect on the estimated fair value amounts.
The amounts reported for cash and cash equivalents, short-term investments, foreign exchange contracts, and the Malaysian term loan were considered to be a reasonable estimate of their fair value.
The fair values of short-term and long-term debt were based upon estimated interest rates available to the Company for issuance of debt with similar terms and remaining maturities for existing asset-secured equipment loans and capital leases. The estimated fair value of the Company's short-term and long-term debt at April 3, 1994 was $20,784,000. The fair value for the mortgage loan is $10,748,000 estimated using discounted cash flow analysis based on an estimated interest rate of 7.5% percent for similar types of borrowing arrangements.
The fair value estimates presented herein were based upon information available to management as of April 4, 1994. Although management is not aware of any factors that would materially affect the estimated fair value amounts, such amounts have not been comprehensively revalued for purposes of the consolidated financial statements since that date, and current estimates of fair value may differ significantly from the amounts presented herein.
NOTE 9 Shareholders' Equity
Stock Option Plans The Company has stock option plans under which key employees, officers, directors and consultants may be granted options to purchase shares of the Company's common stock at prices which are not less than fair market value at the date of grant. Options granted are generally exercisable in 25% increments each year beginning one year after the grant date.
At April 3, 1994, options for 1,172,000 shares were exercisable at an aggregate exercise price of $4,856,000. At March 28, 1993, options for 2,093,853 shares were exercisable at an aggregate exercise price $7,692,000.
Activity under the plans is summarized as follows:
					Options Outstanding 		 Options 		 Available for Number Price per Share Aggregate 		 Issuance Price
Balance, March 31, 1991 1,463,734 4,391,764 $ 3.25 - $14.25 16,832,000 Additional Authorization 1,500,000 Granted (2,697,815) 2,697,815 $ 3.75 - $ 9.50 14,459,000 Surrendered, canceled or expired 1,807,581 (1,809,971) $ 3.25 - $14.25 (11,321,000) Exercised ( 464,036) $ 3.25 - $ 5.13 ( 1,683,000)
Balance, March 29, 1992 2,073,500 4,815,572 $ 3.25 - $13.25 18,287,000 Additional Authorization Granted (1,358,323) 1,358,323 $ 3.625- $ 8.25 6,701,000 Surrendered, canceled or expired 254,930 ( 447,625) $ 3.25 - $13.25 (1,810,000) Exercised ( 529,371) $ 3.25 - $ 7.50 (1,933,000)
Balance, March 28, 1993 970,107 5,196,899 $ 3.25 - $12.125 21,245,000 Additional Authorization 975,000 Granted (1,850,234) 1,850,234 $ 7.00 - $25.375 26,599,000 Surrendered, canceled or expired 284,010 (287,423) $ 3.25 - $22.125 (1,738,000) Exercised (1,780,613) $ 3.25 - $17.625 (6,695,000)
Balance, April 3, 1994 378,883 4,979,097 $ 3.25 - $25.375 39,411,000
Stock Purchase Plan The Company has a stock purchase plan under which employees and officers may purchase shares of the Company's Common Stock. The purchase price at which shares may be purchased under this plan is 85% of the lower of the fair market value on the first or last day of each quarterly plan period. As of April 3, 1994 and March 28, 1993, 1,457,771 and 1,277,328 shares,respectively, had been purchased by employees, net of repurchases by the Company, under the terms of the plan agreements. At April 3, 1994, 567,229 shares were reserved and available for issuance under this plan.
Stockholder Rights Plan In February 1992, the Board approved certain amendments to the Company's Stockholder Rights Plan. Under the plan, the Company declared a dividend of one preferred share purchase right (a "Right") for each outstanding share of common stock. Each Right entitles the holder, under certain circumstances, to purchase common stock of the Company with a value of twice the exercise price of the Right. In addition, the Board of Directors may, under certain circumstances, cause each Right to be exchanged for one share of common stock or substitute consideration. The Rights are redeemable by the Company and expire in 1998.
NOTE 10 Employee Benefits Profit Sharing Plan
Prior to September 24, 1993, under the profit sharing plan, the Board of Directors could authorize semiannual contributions of up to 10% of pre-tax earnings, before profit sharing, in connection with the Company's Profit Sharing Plan. Half of the annual contribution, net of expenses, was in the form of cash payments directly to all domestic and Malaysian employees meeting certain service criteria, and the residual half was contributed directly to the Company's Long-Term Incentive Plan.
The Company received approval from the IRS to terminate the Long-term Incentive Plan effective September 24, 1993. Effective this date, all shares were 100% vested and no additional shares of IDT stock will be added to this account. Beginning September 27, 1993, all IDT employees will receive an increase in their cash profit sharing from 5% to 7% and an additional 1% of pre-tax profits will be divided equally among all domestic employees and placed in their accounts under the Company 401(k) plan.
Administrative expenses are netted against the profit sharing plan contribution. Contributions for the years ended April 3, 1994 and March 28, 1993 were $5,128,000 and $477,000 respectively. There were no contributions for the year ended March 29, 1992.
NOTE 11 Income Taxes
The components of income before provision (benefit) for income taxes are as follows: 			 April 3, March 28, March 29, (in thousands) 1994 1993 1992
United States $ 44,808 $ 2,240 $(37,858) Foreign 5,398 4,038 3,090
			 $ 50,206 $ 6,278 $(34,768) 			 			 The provisions (benefits) for income taxes consist of the following:
			 April 3, March 28, March 29, 			 1994 1993 1992
Current income taxes 	 (benefits): United States $ 14,699 ( 2,467) 242 State 4,039 0 0 Foreign 798 102 161
			 $ 19,536 $( 2,365) $ 403
Deferred (prepaid) 	 income taxes: United States $ (5,379) $ 3,307 $( 2,363) State (4,116) 0 0
			 $( 9,495) $ 3,307 $( 2,363)
Provision (benefit) 	 for income taxes $ 10,041 $ 942 $( 1,960)
Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. The significant components of deferred assets and liabilities are as follows:
					 April 3, 1994 March 28, 1993 (in thousands) Deferred tax assets: Deferred income on shipment to distributors $ 7,466 $ 4,330 Non-deductible accruals and reserves 13,527 8,313 Capitalized inventory and other expenses 4,071 6,014 Capitalized research & development 825 752 Other 273 746 Refund receivables 2,451 3,560
Total deferred tax asset $ 28,613 $ 23,715 Valuation allowance (2,337) ( 8,445)
Net deferred tax asset $ 26,276 $ 15,270
Deferred tax liabilities: Depreciation (8,517) (11,710)
Total deferred tax liability $ (8,517) $(11,710)
Net deferred tax asset $ 17,759 $ 3,560
The provision (benefit) for income taxes differs from the amount computed by applying the U.S. statutory income tax rate of 35% for the year ended April 3, 1994 (34% for the years ended March 28, 1993 and March 29, 1992) to income before the provision (benefit) for income taxes as follows:
		 				 April 3, March 28, March 29, (in thousands) 1994 1993 1992
Provision at U.S. Statutory rate $ 17,572 $ 2,134 $(11,821) Earnings of foreign subsidiaries considered permanently reinvested, less foreign taxes (951) (1,701) ( 232) General business credits (2,710) 0 ( 660) Tax rate differential (1,167) 574 3,220 State Tax 3,558 0 0 Valuation allowance (6,108) 414 8,031 Other (153) ( 479) ( 498)
Provision (benefit) for income taxes $10,041 $ 942 $( 1,960)
The Company's Malaysian subsidiary operated under a tax holiday which extended through July, 1993. Management believes it is likely that carryovers of depreciation from the tax holiday period along with expected additional depreciation grants will defer the time when the Malaysian subsidiary will first begin to pay local taxes beyond its year ended April 3, 1994.
The Company's intention is to permanently reinvest its earnings in all of its foreign subsidiaries. Accordingly, U.S. taxes have not been provided on approximately $19,700,000 of unremitted earnings, of which approximately $17,100,000 were earned by the Company's Malaysian subsidiary. Upon distribution of those earnings in the form of dividends or otherwise, the Company would be subject to both U.S. income taxes and various foreign country withholding taxes.
NOTE 12 Industry Segment, Foreign Operations and Significant Customers
IDT operates predominantly in one industry segment and is engaged in the design, development, manufacture and marketing of high-performance integrated circuits. No single customer or distributor accounted for more than 10% of net revenues in fiscal 1993 and 1992. During fiscal 1994, two of the Company's national distributors became one entity and accounted for 15% of net revenues. If these two distributors had been a single entity during fiscal 1993 and 1992, it would have accounted for 16% and 17%, respectively, of IDT's total revenues.
Major operations outside the United States include manufacturing facilities in Malaysia and sales subsidiaries in Japan, the Pacific Rim and throughout Europe.
At April 3, 1994 and March 28, 1993, total liabilities for operations outside of the United States were $20,704,000 and $20,152,000,respectively.
The following is a summary of IDT's operations by the geographic area for fiscal 1994, 1993 and 1992:
			 Transfers 		 Sales to Between Operating 	 Unaffiliated Geographic Net Income Identifiable (in thousands) Customers Areas Revenue ( Loss) Assets
Fiscal year ended April 3,
United States 223,600 42,500 266,100 70,788 197,385 Japan 29,959 29,959 ( 257) 8,033 Europe 60,064 3,274 63,338 677 8,182 Asia-Pacific 16,839 24,869 41,708 5,146 27,202 Eliminations (70,643) (70,643) ( 408) (24,470) Corporate (23,677) 133,239
Consolidated $330,462 $ 0 $330,462 $52,269 $349,571
Fiscal year ended March 28,
United States 152,303 23,585 175,888 22,159 198,993 Japan 23,022 23,022 ( 419) 5,651 Europe 33,907 2,847 36,754 374 8,028 Asia-Pacific 27,031 20,566 47,597 4,715 24,155 Eliminations (46,998) (46,998) ( 94) (24,081) Corporate (15,729) 27,248
Consolidated $236,263 $ 0 $236,263 $11,006 $239,994
Fiscal year ended March 29,
United States 140,999 21,616 162,615 ( 4,800) 190,801 Japan 23,018 23,018 41 6,192 Europe 26,861 2,838 29,699 303 5,703 Asia-Pacific 11,856 15,230 27,086 3,234 18,838 Eliminations (39,684) (39,684) ( 71) (26,172) Corporate (28,023) 34,368
Consolidated $202,734 $ 0 $202,734 $(29,316) $229,730
Transfers between geographic areas are accounted for at amounts which are generally above cost and consistent with the rules and regulations of governing tax authorities. Such transfers are eliminated in the consolidated financial statements. Operating income by geographic areas reflects foreign earnings reported by the foreign entities and does not include an allocation of general corporate expenses. Identifiable assets are those assets that can be directly associated with a particular foreign entity and thus do not include assets used for general corporate purposes: cash and cash equivalents, short-term investments and prepaid income taxes.
NOTE 13 Cross-license Agreement
During fiscal 1993, the Company entered into a patent cross-license agreement which obligated the payment of an amount of royalties dependent upon the level of the Company's profitability. The amount of royalties accrued during fiscal 1994 was approximately $4.4 million and has been included in other accrued liabilities. The Company will not be negatively impacted by any further royalty payment from this agreement beginning fiscal 1995.
					
		 SUPPLEMENTARY FINANCIAL INFORMATION 				 (Unaudited)
Quarterly Results of Operations (in thousands, except per share data)
			 Year Ended April 3, 1994
		 First Second Third Fourth 		 Quarter Quarter Quarter Quarter *
Revenues $72,766 $80,295 $85,330 $92,071
Gross profit 33,948 39,967 45,419 51,501
Net income 4,628 7,733 11,625 16,179
Net income per share $ .15 $ .24 $ .35 $ .45
			 Year Ended March 28, 1993
Revenues $53,758 $57,479 $60,590 $64,436
Gross profit 23,366 24,734 27,234 28,645
Net income 475 838 1,493 2,530
Net income per share $ .02 $ .03 $ .05 $ .08
* represents a 14-week quarter in fiscal 1994.
ITEM 9.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING 	 AND FINANCIAL DISCLOSURE
Not applicable.
	 				PART III
ITEM 10.
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
There is incorporated herein by reference the information required by this Item included in the Company's Proxy Statement for the 1994 Annual Meeting of Stockholders which will be filed with the Securities and Exchange Commission no later than 120 days after the close of the fiscal year ended April 3, 1994, and the information from the section entitled "Executive Officers of the Registrant" in Part I, Item 4 of this Report.
ITEM 11.
ITEM 11. EXECUTIVE COMPENSATION
There is incorporated herein by reference the information required by this Item included in the Company's Proxy Statement for the 1994 Annual Meeting of Stockholders.
ITEM 12.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
There is incorporated herein by reference the information required by this Item included in the Company's Proxy statement for the 1994 Annual Meeting of Stockholders.
ITEM 13.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
There is incorporated herein by reference the information required by this Item included in the Company's Proxy Statement for the 1994 Annual Meeting of Stockholders.
				 PART IV
ITEM 14.
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 	 8-K
(a) 1. Financial Statements 	 The following consolidated financial statements are included in 	 Item 8: 	 - Consolidated Balance Sheets at April 3, 1994 and March 28, 1993 	 - Consolidated Statements of Operations for each of the three 	 fiscal years in the period ended April 3, 1994 	 - Consolidated Statements of Shareholder's Equity for each of the 	 three fiscal years in the period ended April 3, 1994 	 - Consolidated Statements of Cash Flows for each of the three 	 fiscal years in the period ended April 3, 1994
(a) 2. Financial Statements Schedules 	 The following consolidated financial statement schedules are 	 included in Item 14(d): 	 Schedule I - Short-term Investments 	 Schedule V - Property, plant and equipment 	 Schedule VI - Accumulated depreciation and amortization of 			 property, plant and equipment 	 Schedule VIII - Valuation and qualifying accounts 	 Schedule IX - Short-term borrowings 	 Schedule X - Supplementary income statement information
	 Schedules other than those listed above have been omitted since 	 the required information is not present or not present in 	 amounts sufficient to require submission of the schedule, or 	 because the information required is included in the consolidated 	 financial statements or the notes thereto.
(a) 3. Listing of Exhibits
Exhibit No. Description Page
3.1* Restated Certificate of Incorporation (previously filed 	 as Exhibit 3A to Registration Statement on Form 8-B 	 [File No. 0-12695] dated September 23, 1987).
3.2* Certificate of Amendment of Restated Certificate of 	 Incorporation (previously filed as Exhibit 3.2 to Annual Report 	 on From 10-K [File No. 0-12695] for the Fiscal Year Ended 	 April 2, 1989).
3.3* Certificate of Designation, Preferences and Rights of 	 Series A Junior Participating Preferred Stock (previously filed 	 as Exhibit 3.3 to Annual Report on Form 10-K [File No. 0-12695] 	 for the Fiscal Year Ended April 2, 1989).
3.4* Bylaws dated January 25, 1993 (previously filed as Exhibit 3.4 	 to Annual Report on Form 10-K [File No. 0-12695] for the Fiscal 	 Year Ended March 28, 1993).
4.1* Amended and Restated Rights Agreement dated as of 	 February 27, 1992, between the Company and The First 	 National Bank of Boston (previously filed as Exhibit 	 4.1 to Current Report on Form 8-K [File No. 0-12695] 	 dated February 27, 1992).
10.1* Lease for 1566 Moffet Street, Salinas, California, dated 	 June 28, 1985 between the Company and Carl E. Berg and 	 Clyde J. Berg, dba Berg & Berg Developers (previously 	 filed as Exhibit 10.7 to Form S-1 Registration Statement 	 No. 33-3189).
10.2* Assignment of Lease dated October 30, 1985 between the 	 Company and Synertek Inc. relating to 2975 Stender Way, 	 Santa Clara, California (previously filed as Exhibit 10.4 	 to Annual Report on Form 10-K [File No. 0-12695] for the 	 Fiscal Year Ended April 1, 1990).
10.3* Assignment of Lease dated October 30, 1985 between the 	 Company and Synertek Inc. relating to 3001 Stender Way, 	 Santa Clara, California (previously filed as Exhibit 10.5 	 to Annual Report on Form 10-K [File No. 0-12695] for Fiscal 	 Year Ended April 1, 1990).
10.4* Lease dated October 23, 1989 between Integrated Device 	 Technology International Inc. and RREEF USA FUND - III 	 relating to 2972 Stender Way, Santa Clara, California 	 (previously filed as Exhibit 10.6 to Annual Report on 	 Form 10-K [File No. 0-12695] for the Fiscal Year Ended 	 April 1, 1990).
10.5* First Deed of Trust and Assignment of Rents, Security Agreement 	 and Fixture Filing dated March 28, 1990 between the Company and 	 Santa Clara Land Title Company for the benefit of The Variable 	 Annuity Life Insurance Company relating to 2670 Seeley Avenue, 	 San Jose, California (previously filed as Exhibit 10.7 to Annual 	 Report on Form 10-K [File No. 0-12695] for the Fiscal Year Ended 	 April 1, 1990).
10.6 Amended and Restated 1984 Employee Stock Purchase Plan.**
10.7 Amended and Restated 1985 Incentive and Non-Qualified Stock 	 Option Plan, together with related form of Stock Option 	 Agreement.**
10.8* 1989 Nonemployee Director Stock Option Plan with related form of 	 Stock Option Agreement (previously filed as Exhibit 10.45 to 	 Annual Report on Form 10-K [File No. 0-12695] for the Fiscal 	 Year Ended April 1, 1990).**
10.9* Property Acquisition and Construction Management Agreement dated 	 February 1, 1989 between the Company and Baccarat Development 	 Partnership (previously filed as Exhibit 10.52 to Annual 	 Report on Form 10-K [File No. 0-12695] for the Fiscal Year 	 Ended April 1, 1990).
10.10* Form of Indemnification Agreement between the Company and its 	 directors and officers(previously filed as Exhibit 10.68 to 	 Annual Report on Form 10-K [File No. 0-12695] for the Fiscal 	 Year Ended April 2, 1989).**
10.11* Manufacturing, Marketing and Purchase Agreement between the 	 Company and MIPS computer Systems, Inc. dated January 16, 1988 	 (previously filed as Exhibit 10.12 to Annual Report on Form 	 10-K [File No. 0-12695] for the Fiscal Year Ended March 29, 1992) 	 (Confidential Treatment).
10.12* Preferred Stock Purchase Agreement dated January 14, 1992 among 	 the Company, Berg & Berg Enterprises, Inc. and Quantum Effect 	 Design, Inc. (previously filed as Exhibit 10.13 to Annual Report 	 on Form 10-K [File No. 0-12695] for the Fiscal Year Ended 	 March 29, 1992).
10.13* Patent License Agreement between the Company and American 	 Telephone and Telegraph Company dated May 1, 1992 (previously 	 filed as Exhibit 19.1 to Quarterly Report on Form 10-Q [File 	 No. 0-12695] for the Quarter Ended June 28, 1992) 	 (Confidential Treatment).
10.14* Patent License Agreement dated September 22, 1992 between the 	 Company and Motorola, Inc. (previously filed as Exhibit 19.1 	 to Quarterly Report on Form 10-Q [File No. 0-12695] for the 	 Quarter Ended September 27, 1992) (Confidential Treatment).
10.15* Agreement between the Company and Texas Instruments Incorporated 	 effective December 10, 1992, including all related exhibits, 	 among others, the Patent Cross-License Agreement and the OEM 	 Purchase Agreement (previously filed as Exhibit 19.1 to Quarterly 	 Report on Form 10-Q [File No. 0-12695] for the Quarter Ended 	 December 27, 1992) (Confidential Treatment).
22.1* Subsidiaries of the Company (previously filed as Exhibit 22.1 to 	 Annual Report on Form 10-K [File No. 0-12695] for the Fiscal 	 Year Ended March 28, 1993).
24.1 Consent of Price Waterhouse.
* These exhibits were previously filed with the Commission as indicated and are incorporated herein by reference.
** These exhibits are management contracts or compensatory plans or arrangements required to be filed pursuant to Item 14 (c) of Form 10-K.
(b) Reports on Form 8-K
Not applicable. 	 				SIGNATURES
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. 	
				 INTEGRATED DEVICE TECHNOLOGY, INC. 						 Registrant
May 20, 1994 By: /s/ Leonard C. Perham 					 Chief Executive Officer
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.
Signature Title Date
/s/ D. John Carey Chairman of the Board May 20, 1994 (D. John Carey)
/s/ Leonard C. Perham Chief Executive Officer May 20, 1994 (Leonard C. Perham) and Director (Principal 			 Executive Officer)
/s/ William D. Snyder Vice President, Chief May 20, 1994 (William D. Snyder) Financial Officer 			 (Principal Financial and 			 Accounting Officer)
/s/ Carl E. Berg Director May 20, 1994 (Carl E. Berg)
/s/ John C. Bolger Director May 20, 1994 (John C. Bolger)
/s/ Federico Faggin Director May 20, 1994 (Federico Faggin)
			 ITEM 14 (d)
FINANCIAL STATEMENTS AND SUPPLEMENTARY FINANCIAL INFORMATION
SCHEDULE I 		 INTEGRATED DEVICE TECHNOLOGY, INC. 		 SHORT-TERM INVESTMENTS
(in thousands) 						 Amount at which 							Each Security Name of Issuer and Issue Carried in Title of Each Issue the Balance Sheet (1)
April 3, 1994:
Certificates of Deposits $ 2,440 Corporate Notes 20,784 Corporate Paper 1,995 Treasuries 5,591 Agencies 2,541 			 		
TOTAL $ 33,351
(1) The cost of issue and carrying and market value of each issue at the balance sheet date are the same amounts as listed. No individual security issue exceeds 2% of total assets.
				
SCHEDULE V 		 INTEGRATED DEVICE TECHNOLOGY, INC. 		 PROPERTY, PLANT AND EQUIPMENT 								 			 Balance at Balance 			 Beginning of Additions Retirements at End (in thousands) Period at Cost and Sales of Period 				
Year Ended March 29, 1992: Land $ 4,382 $ $ $ 4,382 Machinery and Equipment 200,193 25,226 (30,772) 194,647 Building and Leasehold Improvements 44,062 372 ( 4,942) 39,492 Construction in Progress 11 108 119 				 			 248,648 25,706 (35,714) 238,640 				 Year Ended March 28, 1993: Land 4,382 4,382 Machinery and Equipment 194,647 27,850 ( 5,330) 217,167 Building and Leasehold Improvements 39,492 447 ( 43) 39,896 Construction in Progress 119 (109) 10 			 			 238,640 28,188 ( 5,373) 261,455 				 Year Ended April 3, 1994: Land 4,382 4,382 Machinery and Equipment 217,167 37,850 ( 6,922) 248,095 Building and Leasehold Improvements 39,896 167 40,063 Construction in Progress 10 66 76 				 			 $261,455 $38,083 ($6,922) $292,616 				 				
SCHEDULE VI 		 INTEGRATED DEVICE TECHNOLOGY, INC. 		ACCUMULATED DEPRECIATION AND AMORTIZATION OF 		 PROPERTY, PLANT AND EQUIPMENT
			 Balance at Additions Balance 			 Beginning Charged to Cost Retirements at End (in thousands) of Period and Expenses (1) and Sales of Period
Year Ended March 29, 1992: Machinery and Equipment $94,782 $36,098 ($29,192) $101,688 Building and Leasehold Improvements 10,753 4,306 ( 4,907) 10,152 				 			 105,535 40,404 (34,099) 111,840 				 Year Ended March 28, 1993: Machinery and Equipment 101,688 32,361 ( 5,153) 128,896 Building and Leasehold Improvements 10,152 3,613 ( 43) 13,722 				 			 111,840 35,974 ( 5,196) 142,618 				 Year Ended April 3, 1994: Machinery and Equipment 128,896 31,783 ( 6,249) 154,430 Building and Leasehold Improvements 13,722 3,626 17,348 					 			 $142,618 $35,409 ($6,249) $171,778
				
SCHEDULE VIII 		 INTEGRATED DEVICE TECHNOLOGY, INC. 		 VALUATION AND QUALIFYING ACCOUNTS 					 			 Balance at Additions Recoveries Balance 			 Beginning of Charged to Cost and at End (in thousands) Period and Expenses Write-offs of Period Allowance for returns and doubtful accounts
Year ended March 29, 1992 $2,514 $2,172 ($ 950) $3,736 				 Year ended March 28, 1993 $3,736 $258 ($1,000) $2,994 				 Year ended April 3, 1994 $2,994 $1,144 ($ 9) $4,129 					 Inventory Valuation Reserve 				 Year ended March 29, 1992 $6,042 $7,267 ($2,840) $10,469 				 Year ended March 28, 1993 $10,469 $3,647 ($2,286) $11,830 				 Year ended April 3, 1994 $11,830 $2,453 ($1,745) $12,538				
			
SCHEDULE IX 		 INTEGRATED DEVICE TECHNOLOGY, INC. 			 SHORT-TERM BORROWINGS
		 Balance Weighted Maximum Average Weighted 		 at Average Amount Amount Average 		 End Interest Outstanding Outstanding Interest Rate 		 of Period Rate During the During the During the (in thousands, Period Period (1) Period (2) except percentages)
Notes Payable to Bank:
Year ended March 29, 1992 $1,551 10.5% $1,551 $257 9.6% 							 Year ended March 28, 1993 $545 10.2% $1,908 $1,223 9.9% 							 Year ended April 3, 1994 $0 9.8% $1,448 $494 10.0%
(1) Computed by dividing the sum of the daily outstanding balances by the number of days such balances were outstanding. (2) Represents the effective annual interest rate on short-term borrowings for the period.
				
SCHEDULE X
	 	 INTEGRATED DEVICE TECHNOLOGY, INC. 		 SUPPLEMENTARY INCOME STATEMENT INFORMATION
			 Year Ended Year Ended Year Ended (in thousands) April 3, 1994 March 28, 1993 March 29, 1992
Maintenance and Repairs $6,702 $5,970 $7,328
Items omitted if less than 1% of revenues or separately reported in financial statements in Registrant's Annual Report to Shareholders.