November 21, 2001 – Fremont, CA – Exar Corp. has reported that its bipolar wafer supplier has decided to discontinue its domestic wafer foundry. According to the company, the wafer foundry supports Exar’s bipolar, custom, and standard products.

This supply disruption may hurt Exar’s inventory levels in the near-term, Dow Jones reported. Exar is a designer and developer of analog and mixed-signal ICs for high-speed broadband communications and video imaging markets.

Although this supply issue isn’t expected to have a short-term impact on revenue, long-term supply of certain products could be affected, according to Exar.

Exar said a decrease in demand may continue to negatively affect its revenue and gross profit for a significant portion of the fiscal year ending March 31, 2002.

The company attributes the declines to general economic weakness, uncertainty and terrorist or military activities that have occurred, the company said.

In addition, Exar said telecommunications carriers have delayed or reduced capital expenditures, thus significantly decreasing the demand for semiconductor components.

The company has taken actions to control costs and reduce operating expenses while maintaining its focus on developing and marketing new broadband transmission products, according to Exar.

The company anticipates that it will continue to finance its operations with cash flows from operations, cash and investment balances, and some combination of long-term debt and/or lease financing and additional sales of equity securities.At Sept. 30, Exar had $396.8 million of total cash, equivalents and both short-term and long-term investments.