UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-K

Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act
of 1934 (Fee Required) for the fiscal year ended April 1, 1995

Commission file Number 0-17795

CIRRUS LOGIC, INC.
(Exact name of registrant as specified in its charter.)

CALIFORNIA 77-0024818
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)

3100 West Warren Avenue, Fremont, CA 94538
(Address of principal executive offices) (Zip Code)

Registrant's telephone number, including area code:
(510) 623-8300

Securities registered pursuant to Section 12(b) of the Act:
None
Securities registered pursuant to Section 12(g) of the Act:
Common Stock, No Par Value
(Title of Class)

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

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

Aggregate market value of the registrant's Common Stock held by non-
affiliates of the registrant as of June 2, 1995 was approximately
$1,090,750,000 based upon the closing price reported for such date on the
Nasdaq National Market. For purposes of this disclosure, shares of Common
Stock held by persons who hold more than 5% of the outstanding shares of
Common Stock and shares held by officers and directors of the Registrant have
been excluded because such persons may be deemed to be affiliates. This
determination is not necessarily conclusive.

The number of shares of the registrant's common stock, no par value, was
61,549,966 as of June 2, 1995. (On June 1, 1995, the Board of Directors
approved a two-for-one split of the Company's Common Stock. Shareholders of
record as of June 19, 1995 will receive certificates reflecting the
additional shares. These certificates will be distributed on July 17, 1995.
All references to the number of shares of Common Stock, warrants and
options to purchase shares of Common Stock, weighted average common and
common equivalent shares outstanding, and share prices have been restated to
reflect the two-for-one split.)

DOCUMENTS INCORPORATED BY REFERENCE

Portions of the Proxy Statement for the Registrant's 1995 Annual Meeting
of Shareholders to be held August 1, 1995 are incorporated by reference into
Part III of this Form 10-K.

PART I

ITEM 1. BUSINESS

Cirrus Logic, Inc., ("Cirrus Logic" or the "Company") was
incorporated in California on February 3, 1984, as the successor
to a research corporation which had been incorporated in Utah in
1981. The Company commenced operations in November 1984.

In October 1991, April 1992, February 1993, and August 1994,
the Company merged with Crystal Semiconductor Corporation
(Crystal), Acumos Incorporated (Acumos), Pacific Communication
Sciences, Inc. (PCSI), and PicoPower Technology, Inc. (PicoPower),
respectively. These mergers were tax free reorganizations and
were accounted for as poolings of interests. All of the
consolidated financial information reflects the combined
operations of the companies.

Cirrus Logic, Inc. (the "Company") operates principally in a
single industry segment. The Company is a leading manufacturer of
advanced integrated circuits for the desktop and portable
computing, telecommunications, and consumer electronics markets.
The Company applies its system-level expertise in analog and
digital design to innovate highly integrated, software-rich
solutions. Cirrus Logic offers a broad portfolio of products
including highly integrated chips, software, evaluation boards,
manufacturing kits, subsystem modules and telecommunications
system equipment. The Company performs its own wafer and product
testing, engineering support and quality and reliability
assurance, and uses subcontractors to manufacture wafers and
assemble products. The Company also manufactures Cellular Digital
Packet Data (CDPD) base station equipment for sale to cellular
telephone companies. This equipment enables the wireless
communications technologies necessary to develop the markets for
advanced integrated circuits.

Multimedia

The Company offers a broad range of multimedia products,
comprising primarily graphics, video, and audio integrated
circuits and software. These products bring T.V. quality video
and CD-quality audio to multimedia applications for PCs,
workstations, Videoconferencing systems and consumer electronics.

The Company's customers in the multimedia market are
predominantly PC Original Equipment Manufacturers (OEMs), as well
as some of the leading add-in board makers. As of fiscal 1995
year end these major OEM customers included Acer, Apple, AST,
Compaq, Hewlett-Packard, Intel, IBM, NEC, and Packard Bell, and
board makers included Aztech, Diamond Multimedia, and STB.

PC Graphics

The Company offers a broad range of products for desktop
display. The majority of the Company's revenues from desktop
graphics are from sales of its mid-range 32-bit and higher-end
64-bit DRAM accelerator architectures for mainstream PCs. These
products are implemented in several pin-compatible families which
offer a range of price / performance solutions for and graphics
board makers. The Company has begun adding video-related features
to the graphics capabilities of new products in each of these
families.

The Company is also among the leading suppliers of VGA
controllers for portable computers. Today, the Company's families
of LCD graphics controllers offer a broad range of price /
performance options, from 32-bit accelerator architectures with
high-resolution graphics and video features for high-end
multimedia color portable PCs, to low-cost small form-factor VGA
controllers for sub-notebook PCs. The Company has developed
proprietary techniques for achieving high-quality color and
monochrome shading on LCD panels, for simultaneous display on LCDs
and CRT monitors, and for low-voltage and mixed-voltage design for
power-sensitive applications.

Video

In the past, the Company marketed video products under the
Pixel Semiconductor brand name. During fiscal year 1995 this
brand name was de-emphasized, and these products are now marketed
under the Cirrus Logic corporate brand name.

The Company's video processors can re-size full motion video
to fit into display windows of various sizes and allow for
multiple video streams simultaneously. These products have been
adopted for several videoconferencing system designs. The
Company's MediaDAC controllers digitally mix video and graphics
for display on a PC monitor. One of the products in this line has
been developed with the cooperation of Compaq.

The Company also markets a single-chip T.V. Decoder, which
can take video input formatted for the major U.S. and
international standards, and decode it into signals used by the
Company's video and graphics controller chips. Along with this
product, the company has developed board-level visual display
subsystem modules that provide for live video input, viewing, and
capture by the PC user.

Increasingly, functions of the video chips are being
integrated into the Company's desktop and portable graphics
products.

Audio

The Company, through its Crystal Semiconductor subsidiary,
uses proprietary delta sigma technology to provide high quality
mixed signal audio functions supporting multiple PC multimedia
audio standards.

The Company believes that it is the leading supplier of
16-bit stereo audio codecs for the PC market. These products
provide the interface between the digital domain of the PC, and
the analog domain of microphones and stereo speakers.
Additionally, the Company provides wavetable sound/music synthesis
chips for the PC audio market. These digital signal processor
(DSP) -based devices offer sound-generation and audio effects
capabilities which were previously found only in
professional-quality keyboards and electronic pianos.

The Company also offers audio products for use in consumer
electronics such as digital audio tape (DAT) and digital compact
cassettes (DCC) as well as in broadcast and automotive audio
system applications.

Mass Storage

The Company supplies chips that perform the key electronics
functions contained in advanced disk drives. Since pioneering the
embedded disk drive controller in 1986, the Company has helped
facilitate the development of higher capacity 3.5-inch disk drives
for desktop computers and workstations. The Company has also
provided solutions for the 2.5-inch and 1.8-inch form factor
drives for portable computers. The Company continues to be a
leading supplier of controllers to the disk drive market. In
fiscal 1995, the Company continued on its strategy of expanding
its opportunity in the disk electronics market by offering
solutions in the areas of read channel and motion control
electronics.

The Company offers a broad family of controller products for
the AT, PCMCIA and Small Computer Systems Interface (SCSI)
interface standards. To achieve the high recording densities
required by smaller disk drives, the Company has pioneered a
number of controller innovations, including advanced Reed-Solomon
error correction codes and headerless format support. The Company
continues to offer further innovation in these areas.

In fiscal 1995 the Company, in partnership with Sony
Corporation (CD-ROM Division) commenced volume shipment of a CD-
ROM controller for the emerging ATAPI interface standard. This
device is being used on Sony 2X and 4X CD-ROM ATAPI drives. The
Company is continuing its investment in this area and has
announced higher performance next generation products.

The Company began volume shipments of its read channel
products in fiscal 1995, and was the first merchant supplier to
provide data detection technology known as partial-response,
maximum likelihood (PRML) for the 3.5-inch and smaller form factor
drives. Based on the Company's CMOS mixed signal technology, and
its proprietary SofTarget (TM) approach to PRML, these devices
substantially increase the amount of data that can be stored on a
disk platter using existing industry standard head and media
technology. Current customers for these products include Conner
Peripherals, Hewlett-Packard, Seagate, Toshiba and Integral.

The Company has also developed servo/motion controller
technology that allows integration of all the functions required
to position a read/write head. This will reduce the number of
components required to implement servo control while increasing
the storage capacity of the drive by allowing denser positioning
of tracks. Parts of this technology are already being used to
provide higher integration solutions to our customers. Unlike the
read channel or controller products, servo/motion controller
products require the disk drive manufacturer to make a substantial
investment in new architecture and software, which is likely to
delay revenue generation from this technology.

The Company's mass storage customers include most of the major
disk drive manufacturers.

Communications

The Company offers both wireless and wireline communications
products.

Wireless Communications Products

In wireless communications, the Company has emerged as the
technology leader for Cellular Digital Packet Data (CDPD), which
allows "packets" of digital data to be transmitted inexpensively
over existing Advanced Mobile Phone Service (AMPS) analog cellular
networks. PCSI was the original contractor selected by the CDPD
consortium to develop specifications and design the prototype
system for the CDPD concept. The Company has sold CDPD base
stations to cellular carriers, including McCaw, and AT&T Wireless
Systems. The Company has also begun shipments of subscriber units
for portable computers, including complete modules for IBM's
ThinkPad 750 notebook computer as well as the Company's "Ubiquity
2000," for use with any IBM compatible notebook computer. These
subscriber units provide CDPD packet data capability plus circuit-
switched analog-cellular voice and data communications allowing
the unit to be used in areas where CDPD has not been deployed.
Growth of the CDPD business depends on various factors, many of
which are outside the Company's control. There can be no
assurance as to the size or the timing of the development of the
CDPD market.

In digital cordless phones, the Company was selected by DDI,
a leading Japanese telecommunications firm, and Kyocera to develop
a complete chip set for use by Japanese manufacturers of Personal
Handyphone Service (PHS) handsets and base stations. During
fiscal year 1995, PCSI began shipping chip sets in volume to serve
this emerging market. This chip set includes CMOS, BiCMOS,
Bipolar and GaAs circuits, operates at 2.7 volts, and transmits
and receives 1.9 gigahertz signals. Sales of digital cordless
phone products will depend upon the establishment of
infrastructure and services which are beyond PCSI's control.
Sales and distribution of the chipsets in Japan will be conducted
through PCSI's Japanese partner, Kyocera.

PCSI also has developed chip sets for the U.S. IS54 digital
cellular phones.

Wireline Communications Products

For wireline communications, the Company introduced the
industry's first two-chip intelligent fax/data/voice modem in
1992. More recently, the Company introduced a three-chip, high-
performance version with enhanced error correction and data
compression. The high level of integration makes these products
ideal for small form factor PCMCIA cards.

The Company also provides serial and parallel I/O devices
that allow multi-channel, multi-protocol communications. These
devices are used in terminal servers, communications servers,
single board computers, laser printers and workstations.
Customers include Compaq, Motorola, Xylogics and Xyplex.

Crystal is a leading supplier of monolithic T-1 line
interface transceivers for telecommunications equipment and CMOS
ethernet local area network line interface circuits.

PCSI supplies the Clarity series of wide area network system
products. The Clarity products compress multiple channels of fax,
data and voice over one high speed line and enable corporate users
to reduce communication costs between distant geographical
locations.

System Controllers and Host Adapters

During fiscal year 1995 the Company merged with PicoPower
Technology, Inc. PicoPower operations have been integrated into
the Company, while the PicoPower brand name has been retained for
the Company's line of system controller chips. These products are
used, along with microprocessors and memory components from other
IC vendors, to construct the system and internal bus functions of
the PC. The Company's PicoPower products use proprietary power
management techniques to help PC OEMs reduce the overall power
consumption of their systems. The primary customers have been
OEMs designing high-performance battery-operated portable PCs.

The Company also offers two lines of host-adapter products
for the PC market. The Company believes it is the leading
supplier of host adapters for the PC-Card (formerly called PCMCIA)
standard. These products are used to provide plug-in slots into
which users can install credit-card sized modules to add extra
function to their PC. The PC-Card standard has been adopted by
major PC OEMs as the expansion standard of choice for notebook and
subnotebook PCs, PDAs, and other portable computing and
communications devices.

The Company's IDE host adapter chips are used to control the
interface to advanced storage devices in the PC market, such as
hard disk drives and CD-ROM drives. The primary customers for
these products are PC OEMs.

Data Acquisition

Through its Crystal subsidiary, the Company has established a
broad line of analog-to-digital converters consisting of general-
purpose and low-frequency measurement devices. These circuits use
a combination of self-calibrating digital correction and delta
sigma architectures to improve accuracy and eliminate expensive
discrete analog components. The product family includes more than
twenty products used in industrial automation, instrumentation,
medical, military and geophysical applications. The technology
developed for the Company's data acquisition products is the
foundation of the mixed signal technology used throughout the
Company.

New Product Activities

The Company has begun shipping column-driver chips for active
matrix LCD (liquid crystal display) panels. These advanced
mixed-signal devices are used by panel manufacturers to provide
greater color depth, lower power consumption, and smaller
form-factors in their high-end portable computer displays.

The Company has begun shipping solid-state memory storage
controllers. These chips provide the interface for flash-memory
components from other IC vendors, allowing the PC to treat
solid-state memory modules as if they were conventional hard-disk
drives, either through the IDE interface or through a PC-Card
slot. The company has also developed a complete PC-Card solution
using its solid-state memory storage controller chips.

The Company is engaged in developing new products for PDAs
(Personal Digital Assistants) and ultra-portable computing and
communications devices. The Company is working with Apple
Computer, and has provided prototype chips for the next generation
of Apple's Newton PDA. To support its strategy for ultra-
portables and embedded control applications, the Company has
obtained under license RISC (reduced instruction set computing)
microprocessor technology for use in its products. The ultimate
results of the Company's efforts in the PDA and ultra-portables
arena will be dependent on many factors, including the success of
the Company's technological development efforts and its customers'
ability to stimulate demand for this product class. There can be
no assurance the Company will develop significant revenues in this
market.

Sales, Marketing and Technical Support

The Company maintains a major account team and a direct
domestic and international sales force for its PC-related
products. The major account team services the top PC and disk
drive manufacturers. The domestic sales force includes a network
of regional direct sales offices located in Northern and Southern
California and in Colorado, Florida, Illinois, Massachusetts, New
Jersey, Oregon, Pennsylvania, and Texas. International sales
offices and organizations are located in Singapore, Japan, Taiwan,
Korea, Hong Kong, the United Kingdom, Germany, France, Italy and
Barbados. The Company supplements its direct sales force with
sales representative organizations and distributors. Technical
support staff are located at the sales offices and also at the
Company's facilities in Fremont, California; Broomfield, Colorado;
San Diego, California; Austin and Plano, Texas; and Raleigh, North
Carolina.

The Company's subsidiaries, Crystal and PCSI, maintain
separate, smaller sales forces for products sold to the industrial
market and communications systems markets, respectively.

In fiscal year 1995, no customer represented 10% or more of
net sales. IBM accounted for approximately 10% of net sales in
fiscal 1994. Conner Peripherals and Seagate each accounted for
more than 10% of net sales in fiscal years 1993. No other
customer represented 10% or more of net sales during these
periods. The Company is continuing its efforts to expand its
customer base. However, the loss of a significant customer or a
significant reduction in such a customer's orders would have an
adverse effect on the Company's sales.

Export sales information is incorporated by reference from the
section entitled "Management's Discussion and Analysis of
Financial Condition and Results of Operations" in Part II hereof.

Backlog

Sales are made primarily pursuant to standard short-term
purchase orders for delivery of standard products. The quantity
actually purchased by the customer, as well as the shipment
schedules, are frequently revised to reflect changes in the
customer's needs. Accordingly, the Company believes that its
backlog at any given time is not a meaningful indicator of future
revenues.

Research and Development

The Company believes that it must continually introduce new
products to take advantage of market opportunities and maintain
its competitive position. Research and development efforts
concentrate on the design and development of new products for each
market and on the continued enhancement of the Company's design
automation system. Expenditures for research and development in
fiscal 1995, 1994 and 1993 were approximately $165.6 million,
$126.6 million and $73.4 million, respectively. The Company
expects that its research and development spending will continue
to increase for the foreseeable future. At April 1, 1995, the
Company had 1,075 employees engaged in research and development
activities. The Company's future success is highly dependent upon
its ability to develop complex new products, to transfer new
products to production in a timely fashion, to introduce them to
the marketplace ahead of the competition and to have them selected
for design into products of leading systems manufacturers.

Manufacturing

Most of the Company's wafers currently are manufactured to
the Company's specifications by ten outside wafer suppliers
utilizing a total of fourteen foundries. The Company's products
are not dependent on a single semiconductor foundry or process
because its design system has the flexibility to generate tooling
for a variety of manufacturing environments. Products can be
transferred from one qualified foundry or process to another for
cost, capacity or performance reasons without experiencing
significant manufacturing delays. This allows the Company to
convert to new process technologies as they become available. The
majority of the Company's products are manufactured using 0.8- and
0.6-micron CMOS process technologies, although some products use
Bipolar, BiCMOS and GaAs processes.

During September 1994, the Company and IBM completed a series
of agreements pertaining to joint manufacturing. In January 1995,
under the terms of the agreements, a new joint venture called
MiCRUS began manufacturing semiconductor wafers for each parent
company using IBM's submicron wafer processing technology. MiCRUS
leased an existing 175,000 square-foot IBM facility located at the
Hudson Valley Research Park in East Fishkill, New York. Focusing
initially on manufacturing CMOS wafers with line widths in the 0.6
to 0.5 micron range, the joint venture plans to be in volume
production of both IBM and Cirrus Logic products by end of fiscal
year 1996. These superfine tolerances will enable high-
performance chips to match the higher clock speeds of the new
generation microprocessors. IBM and Cirrus Logic own 52% and 48%
of MiCRUS, respectively. By becoming an owner in the MiCRUS plant
the Company can produce high density wafers at lower cost with
direct control over delivery schedules. The term of the joint
venture, initially set for eight years, may be extended by mutual
accord. The Company has a commitment to purchase 50% of the
output of the facility over the life of the joint venture.
Activities of the joint venture are focused on the manufacture of
semiconductor wafers, and do not encompass direct product
licensing or product exchanges between the Company and IBM.
MiCRUS is now ramping steadily to high-volume production, a goal
that is expected to be reached by the end of fiscal year 1996.
The Company has agreed with IBM to increase production capacity by
an additional 30 percent.

In order to maintain high quality and production yields, the
Company employs its own staff of production, engineering and
planning personnel. Before initiating production at any wafer
supplier, the staff characterizes and qualifies the supplier's
production process to determine that the supplier's quality
standards are sufficient to produce high-quality wafers in volume.
This process takes from six to nine months. The Company then
monitors wafer production and tests all finished wafers in the
Company's own test facilities.

The Company contracts with eleven assembly vendors to package
the wafer die into finished products. The Company qualifies and
monitors assembly vendors using procedures similar in scope to
those used for wafer procurement. Assembly vendors provide fixed-
cost-per-unit pricing, as is common in the semiconductor industry.
The Company tests finished product and performs quality and
reliability testing in the Company's own facility.

The Company is working with its wafer suppliers to obtain
additional production so that the Company can meet customer demand
and shorten delivery schedules. The Company is also working to
qualify new foundries to provide additional manufacturing capacity
which the Company believes will be required to enable it to meet
customer future requirements. If there are significant delays in
obtaining additional production from current foundries or in
obtaining production from new foundries, the Company could be
forced to delay shipments of its products, which would adversely
affect its operating results.

The Company's reliance on third party wafer suppliers
involves several risks, including the absence of adequate
guaranteed capacity, the possible unavailability of or delays in
obtaining access to certain process technologies, and reduced
control over delivery schedules, manufacturing yields and costs.
The Company may be particularly sensitive to these risks because
its wafer suppliers are currently producing at or near their full
scheduled capacity. The Company's results of operations could be
adversely affected if new suppliers are not qualified in time to
meet production requirements or if particular suppliers are unable
to provide a sufficient and timely supply of product, whether
because of capacity constraints, unexpected disruptions at the
plants, or other reasons, or if the Company is forced to purchase
wafers from higher cost foundries or to pay expediting charges to
obtain additional supply.

Most of the Company's contracts with its suppliers do not
provide for the suppliers to supply, or for the Company to
purchase, substantial minimum wafer quantities. Instead,
production schedules are mutually agreed based upon forecasts for
the next six to twelve months. However, during September 1993,
the Company entered into a 3-year volume purchase agreement with
one wafer supplier. Under the terms of the agreement, the Company
must purchase certain minimum quantities of wafers. If the
Company does not purchase these minimum quantities, it would be
required to pay a reduced amount for any shortfall not sold by the
supplier to other customers. The Company estimates that under the
remaining term of the agreement, which expires in March 1997, it
is obliged to purchase approximately $70.0 million of product.

The Company has previously engaged in, and is continuing to
pursue, discussion with respect to a variety of potential
transactions to satisfy its future production requirements. The
Company's long-term strategic objective is to better service its
wafer production by reducing its dependence on outside wafer
suppliers. Among the transactions the Company has considered in
the past and expects to evaluate in the future are increased use
of "take or pay contracts" that commit the Company to purchase
specified quantities of wafers over long periods, equity
investments in or loans to wafer manufacturing companies in
exchange for guaranteed production, joint ventures to own and
operate wafer manufacturing facilities and acquisition or
construction of wafer fabrication facilities. The Company
believes that it will ultimately enter into one or more of these
arrangements.

In addition to the IC product manufacturing conducted by the
Company, the Company's PCSI subsidiary also performs final
assembly and testing of its systems products, including its
Clarity wide area network products and CDPD base station and
subscriber units.

Competition

Markets for the Company's products are highly competitive and
the Company expects that competition will increase. The Company
competes with other semiconductor suppliers who offer standard
semiconductors, application specific integrated circuits and fully
customized integrated circuits, including both chip and board-
level products. A few customers also develop integrated circuits
that compete with the Company's products. The Company's
competitive strategy has been to provide lower cost versions of
existing products and new, more advanced products for customers'
new designs.

While no single company competes with the Company in all of
the Company's product lines, the Company faces significant
competition in each of its product lines. The Company expects to
face additional competition from new entrants in each of its
markets, which may include both large domestic and international
semiconductor manufacturers and smaller, emerging companies.

The principal competitive factors in the Company's markets
include quality of hardware/software design and end-market systems
expertise; product benefits that are characterized by performance,
features, quality and compatibility with standards; access to
advanced process and packaging technologies at competitive prices;
and sales and technical support. The Company believes its
competitive strengths include its core technologies, proprietary
design automation system, knowledge of systems requirements within
its target markets, and ability to provide complete solutions that
enhances the customer's design cycles.

Competition typically occurs at the design stage, where the
customer evaluates alternative design approaches that require
integrated circuits. Because its products have not been available
from second sources, the Company generally does not face direct
competition in selling its products to a customer once its
integrated circuits have been designed into that customer's
system. Nevertheless, because of shortened product life cycles
and even shorter design-in cycles, the Company's competitors have
increasingly frequent opportunities to achieve design wins in next
generation systems. In the event that competitors succeed in
supplanting the Company's products, the Company's market share may
not be sustainable and net sales, gross margin, and earnings would
be adversely affected.

Technology, Patents, Licenses and Trademarks

In addition to its design system technology, the Company has
built a substantial expertise and intellectual property portfolio
in the areas of analog to digital and digital to analog
conversion, graphics, multimedia, mass storage and communications
through internal R&D and a program of strategic acquisitions.

In its early years, the Company's primary core technology was
its Storage Logic Array (S/LA) design automation system, developed
by the Company's founder, Dr. Suhas Patil, and licensed from MIT.
To maintain rapid product development cycles, the Company has
continued to enhance its design system with both internal
developments and the integration of commercially available tools.
The Company now has a comprehensive system that supports a variety
of design methodologies and environments. This has been
instrumental in the Company's ability to merge designs from its
various units, including newly acquired subsidiaries, and to
integrate all products into its manufacturing system.

In January 1990, the Company acquired Data Systems
Technology, Inc., a Colorado based technology company with
expertise in magnetic recording, data encoding and error detection
and correction schemes. This site now serves as the Company's
research and development center for its advanced mass storage read
channel and servo controller products.

In June 1991, the Company acquired Pixel Semiconductor of
Plano, Texas to provide technology for real-time full-motion video
data management. Pixel's technology is fundamental to the
Company's products for PC-based video and video conferencing.

In October 1991, the Company merged with Crystal
Semiconductor of Austin, Texas, a leader in analog and mixed
signal (analog plus digital) technology. Crystal's base
technologies include audio, delta sigma analog/digital conversion,
data and clock recovery and a number of patented design techniques
collectively called SmartAnalog. Crystal's primary product lines
include data acquisition, telecommunication and digital audio
products for PC, automotive, and consumer applications. Crystal's
technology has been fundamental in developing the Company's
fax/data/voice modem and mass storage read/write channel
products.

In December 1991, the Company acquired R. Scott Associates,
Inc. (RSA), a North Carolina company with communication protocol
software technology. RSA's technology has been incorporated into
the Company's fax/data/voice modem and wireless communications
products. RSA has since acquired Data Pumps International, Inc.,
a Florida company specializing in digital signal processing
algorithms for telecommunications.

In April 1992, the Company merged with Acumos Incorporated, a
California company developing technology and products for highly
integrated graphics controllers for desktop PCs.

In February 1993, the Company merged with Pacific
Communication Sciences, Inc. (PCSI) of San Diego, California.
PCSI brings to the Company an extensive technology and system
expertise in RF and digital wireless communications. PCSI
products and technology serve the CDPD and digital cellular
markets in the U.S. and the digital cordless markets in the U.S.
and Japan.

In August 1994, the Company merged with PicoPower Technology,
Inc, (PicoPower), which specializes in system power management and
advanced core logic for personal computers. PicoPower's system
controller chips implement proprietary power-saving technologies -
such as heat control, passive and active power management, and
battery life extension - that address power consumption at the
system level without compromising system performance.

To protect its products, the Company relies heavily on trade
secrets, patents, copyrights, mask work and trademark laws. The
Company applies for patents and copyrights arising from its R&D
and intends to continue this practice in the future to protect its
products and technologies. As of April 1, 1995, the Company held
90 registered U.S. patents and had applications pending for an
additional 220 U.S. patents. The Company has also licensed a
variety of technologies from outside parties to complement its
own.

Employees

As of April 1, 1995, the Company had 2,331 full-time equivalent
employees, of whom 1,075 were engaged in research and product
development, 472 in sales, marketing and technical support, 554 in
manufacturing and 230 in finance and administration. The
Company's future success will depend, in part, on its ability to
continue to attract, retain and motivate highly qualified
technical, marketing, engineering and management personnel. None
of the Company's employees are represented by any collective
bargaining agreements and the Company has never experienced a work
stoppage. The Company believes that its employee relations are
good.

EXECUTIVE OFFICERS OF THE REGISTRANT

The following sets forth certain information with regard to
executive officers of Cirrus Logic, Inc. (ages are as of April 30,
1995):

Michael L. Hackworth (age 54), a founder of the Company, has
served as President, Chief Executive Officer and a director since
January 1985.

Suhas S. Patil (age 50), a founder of the Company, has served as
Chairman of the Board and director since Cirrus Logic was founded.
He served as Vice President, Research and Development until March
1990 when he became Executive Vice President, Products and
Technology.

George N. Alexy (age 46) joined the Company in 1987 as Vice
President, Marketing. In May 1993, he was promoted to Senior Vice
President, Marketing. Previously, he was employed by Intel
Corporation, most recently as Product Marketing Manager, High
Performance Microprocessors.

Douglas J. Bartek (age 45) joined the Company in 1992 as Vice
President and General Manager, User Interface Division, as a
result of the merger with Acumos Incorporated (Acumos), where he
was President and Chief Executive Officer. He was promoted to
Senior Vice President and General Manager, User Interface Division
in May 1993 and in September 1993 his title was changed to
President, User Interface Products. Prior to Acumos, he was a
Senior Vice President and a General Manager at VLSI Technology,
Inc.

William H. Bennett (age 50) joined the Company in 1989 as Vice
President, Human Resources. From 1987 to 1989, he was employed by
System Industries, Inc., as Vice President, Human Resources.

Michael L. Canning (age 54) joined the Company in 1985 as Vice
President, Manufacturing and from 1990 to 1993 he was Executive
Vice President, Operations. He is currently President, Mass
Storage Products. Previously, he was employed by Teledyne
Semiconductor as President and General Manager.

William D. Caparelli (age 51) joined the Company in 1988 as Vice
President, Worldwide Sales. In May 1993 he was promoted to Senior
Vice President, Worldwide Sales. From 1985 to 1988, he served as
Vice President, North American Sales, of VLSI Technology, Inc.

James H. Clardy (age 60) is President of Crystal Semiconductor
Corporation (Crystal) which merged with the Company in October
1991. In July 1993, he was appointed a corporate officer of the
Company. Previously, he was Vice President of Sector Operations
with Harris Semiconductor.

David L. Lyon (age 46) has been a director of the Company since
1993 and President of Pacific Communication Sciences, Inc. (PCSI)
since March 1987. PCSI merged with Cirrus Logic, Inc. in February
1993. In May 1994, he was appointed a corporate officer of the
Company. Previously, he was a Vice President of M/A-Com
Telecommunications Company.

Kenyon Mei (age 49) joined the Company in 1985 as Vice President,
Engineering. In May 1993, he was promoted to Senior Vice
President, Engineering and General Manager, Personal Systems
Business Unit.

H. Ravindra (age 46), a founder of the Company, served as
Director, Research and Development from 1984 to April 1990 when
he was promoted to Vice President, Research and Development. In
September 1994, he was appointed an officer of the Company.

Sena C. Reddy (age 46) joined the Company in 1985 as Fab
Operations Manager. In 1990, he was promoted to Vice President,
Manufacturing and in 1993, he was promoted to Senior Vice
President, Manufacturing.

Sam S. Srinivasan (age 50) joined the Company in 1988 as Vice
President, Finance, Chief Financial Officer, Treasurer and
Secretary. In May 1993, he was promoted to Senior Vice President,
Finance and Administration, Chief Financial Officer, Treasurer and
Secretary.

ITEM 2. PROPERTIES

The Company's principal facilities, located in Fremont,
California, consist of approximately 390,000 square feet of office
space leased pursuant to an agreement which expires in 2006 and
2007 with a renewal option. This space is used for manufacturing,
product development, sales, marketing and administration. An
additional 90,000 square feet is planned for occupancy at the
Fremont site in the first quarter of fiscal 1996 under similar
lease terms. The Company has an option to expand at the Fremont
site.

The Company's Austin, Texas facilities consist of
approximately 162,000 square feet. The leases expire in July 1997
with two three-year options that could extend the term to July
2003. Additionally, the Company has signed a lease for 88,000
square feet for occupancy during the third quarter of fiscal year
1996. This lease will expire in 2005. The Company's San Diego,
California facilities consist of approximately 153,000 square feet
of office space leased pursuant to leases that expire in 2006.

The Company also has facilities located in Broomfield,
Colorado; Nashua, New Hampshire; Raleigh, North Carolina; King of
Prussia, Pennslyvania; Fort Worth and Plano, Texas and Seattle,
Washington. The Company also leases sales and sales support
offices in the United States in California, Colorado, Florida,
Illinois, Massachusetts, Oregon, Pennsylvania and Texas and
internationally in Korea, Singapore, Japan, Hong Kong, Taiwan, the
United Kingdom, Germany, France and Barbados. The Company plans
to add additional manufacturing and sales offices to support its
growth.

ITEM 3. LEGAL PROCEEDINGS

On May 7, 1993, the Company was served with two shareholder
class action lawsuits filed in the United States District Court
for the Northern District of California. The lawsuits, which name
the Company and several of its officers and directors as
defendants, allege violations of the federal securities laws in
connection with the announcement by Cirrus Logic of its financial
results for the quarter ended March 31, 1993. The complaints do
not specify the amounts of damages sought. The Company believes
that the allegations of the complaints are without merit, and the
Company intends to vigorously defend itself. The Company believes
that the ultimate resolution of this matter will not have a
material adverse effect on its financial position, results of
operations, or cash flows.

Crystal has been named in a suit alleging infringement of a
patent and claiming damages of $4.8 million before trebling.
Crystal has filed a counterclaim alleging infringement of three of
its patents. A jury trial is scheduled to begin in August 1995,
unless a settlement is reached by the two parties. While the
Company cannot accurately predict the eventual outcome of the
suit, management believes that the likelihood of an outcome
resulting in a material adverse effect on the Company's
consolidated financial position, results of operations, or cash
flows is remote.

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

None.

PART II

ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED
STOCKHOLDER MATTERS

The Company's Common Stock is traded on the Nasdaq National Market
under the symbol "CRUS." The following table shows for the
periods indicated the high and low closing prices for the Common
Stock.

High Low
Fiscal year ended March 31, 1993
First quarter $10.07 $ 8.25
Second quarter 15.00 8.44
Third quarter 18.13 13.63
Fourth quarter 19.75 12.00
Fiscal year ended April 2, 1994
First quarter 12.50 7.25
Second quarter 17.07 8.07
Third quarter 18.50 15.38
Fourth quarter 22.19 16.50
Fiscal year ended April 1, 1995
First quarter 19.07 14.00
Second quarter 17.35 12.69
Third quarter 15.57 10.63
Fourth quarter 19.13 11.50

At April 1, 1995, there were approximately 1,370 holders of record
of the Company's Common Stock.

The Company has not paid cash dividends on its Common Stock and
presently intends to continue a policy of retaining any earnings
for reinvestment in its business.

ITEM 6. SELECTED CONSOLIDATED FINANCIAL DATA

(Amounts in thousands, except per share amounts and employees)

Fiscal years ended
------------------------------------------------------
1995 1994 1993 1992 1991
---------- ---------- ---------- ---------- ----------

Operating summary:
Net sales $889,022 $557,299 $356,478 $217,574 $177,515

Costs and expenses:
Cost of sales 512,509 298,582 193,759 110,599 85,452
Research and development 165,622 126,632 73,447 41,833 31,470
Selling, general and administrative 126,666 91,887 54,924 39,459 32,983
Non-recurring costs 3,856 - - - -
Merger costs 2,418 - 3,400 2,455 -

Operating income 77,951 40,198 30,948 23,228 27,610
Foreign currency transaction gains 4,999 - - - -
Gain on sale of equity investment - 13,682 - - -
Interest income (expense), net 6,688 2,084 1,597 1,858 2,582
Income before income taxes and cumulative
effect of accounting change 89,638 55,964 32,545 25,086 30,192
Provision for income taxes 28,236 18,146 12,321 8,801 10,822
Income before cumulative effect of accounting
change 61,402 37,818 20,224 16,285 19,370
Cumulative effect of change in method of
accounting for income taxes - 7,550 - - -
Net income $61,402 $45,368 $20,224 $16,285 $19,370
Income per common and common equivalent share
before cumulative effect of accounting change $0.96 $0.67 $0.39 $0.33 $0.44
Cumulative effect of accounting change per
common and common equivalent share - 0.13 - - -
Net income per common and common equivalent share $0.96 $0.80 $0.39 $0.33 $0.44

Weighted average common and common equivalent
shares outstanding 63,680 56,402 52,424 49,180 44,420

Financial position at year end:
Total assets $673,534 $517,931 $258,292 $172,070 $129,878
Working capital 251,619 273,527 98,500 76,291 70,431
Capital lease obligations, excluding current 9,602 7,753 5,282 5,478 1,724
Long-term debt, excluding current 16,603 11,392 12,812 8,082 10,395
Total liabilities 254,518 173,616 114,876 63,142 48,068
Shareholders' equity 419,016 344,315 143,416 108,928 81,810

Current Ratio 2.10 2.77 2.02 2.54 2.96
Employees 2,331 1,854 1,369 981 761
<FN>
The number of weighted average common and common equivalent shares outstanding has been
restated for all periods to reflect the two-for-one split of the Company's Common Stock
approved by the Board of Directors on June 1, 1995.

In October 1991, April 1992, February 1993, and August 1994, the Company
merged with Crystal Semiconductor Corporation, Acumos Incorporated, Pacific
Communication Sciences, Inc., and PicoPower Technology, Inc., respectively.
All of the consolidated financial information reflects the combined operations
of the companies.

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

ANNUAL RESULTS OF OPERATIONS

On June 1, 1995, the Board of Directors approved a two-for-
one split of the Company's Common Stock. Shareholders of record
as of June 19, 1995 will receive certificates reflecting the
additional shares. These certificates will be distributed on July
17, 1995. All references to the number of shares of Common Stock,
warrants and options to purchase shares of Common Stock, weighted
average common and common equivalent shares outstanding, and share
prices have been restated to reflect the two-for-one split.

During the first quarter of fiscal 1994, the Company changed
its reporting period from a 12 month year ending March 31 to a
fiscal year of 52 or 53 weeks ending on the Saturday closest to
March 31. Accordingly, fiscal years 1995 and 1994 ended on April
1, 1995 and April 2, 1994, respectively.

In August 1994, Cirrus Logic merged with PicoPower
Technology, Inc. (PicoPower) of San Jose, California. Cirrus
Logic issued 2,609,238 shares of Common Stock in exchange for all
of the outstanding preferred and common stock of PicoPower in a
transaction accounted for as a pooling of interests and structured
as a tax-free reorganization. In addition, Cirrus Logic agreed to
assume all outstanding options and a warrant to purchase stock of
PicoPower, which represented the right to purchase 793,766 shares
of Cirrus Logic Common Stock. In April 1992 and February 1993,
the Company merged with Acumos Incorporated (Acumos) and Pacific
Communication Sciences, Inc. (PCSI), respectively. These mergers
were tax free reorganizations and were accounted for as poolings
of interests. All financial information includes the combined
operations of the companies.

Net Sales

Net sales for fiscal 1995 were $889.0 million, an increase of
60% over the $557.3 million for fiscal 1994 and 149% over the
$356.5 million for fiscal 1993.

The net sales increase in fiscal 1995 compared to 1994 was
largely due to an increase in sales of graphics, audio, mass
storage and wireless communications products. Graphics and mass
storage product revenue grew because of an increase in unit sales
to the desktop personal computer market segment. Audio product
sales grew because of an increase in sales of 16-bit audio codec
products. Wireless communications product sales grew primarily
because of Cellular Digital Packet Data (CDPD) base station
installations, beginning in the second quarter of fiscal 1995.

The net sales increase in fiscal 1994 compared to 1993 was
largely due to an increase in sales of graphics, audio and data
acquisition products partially offset by a decline in sales of
mass storage products. Graphics product revenue grew because of
an increase in unit sales to the desktop personal computer market
segment. Audio product sales grew as a result of increased unit
sales of 16-bit audio products. Mass storage revenues declined
for several reasons, including an inventory correction in the disk
drive industry, decrease in market share, and reductions in unit
shipments by disk drive customers of the Company.

Export sales, principally in Asia, including sales to
overseas operations of domestic corporations, were approximately
$497 million in fiscal 1995 compared to approximately $323 million
in fiscal 1994 and approximately $200 million in fiscal 1993. The
Company's sales are currently denominated in U.S. dollars and
Japanese yen. The Company may purchase hedging instruments to
reduce short-term foreign currency exposure related to certain
cash and trade receivables denominated in the Japanese yen.

In fiscal year 1995, no customer accounted for 10% or more of
net sales. Sales to International Business Machines Corporation
(IBM) were approximately 10% of net sales in fiscal year 1994. In
fiscal year 1993, sales to Conner Peripherals, Inc. (Conner) and
Seagate Technology, Inc. (Seagate) were approximately 20% and 10%
of net sales, respectively.

Gross Margin

The gross margin percentage was 42.4% in fiscal year 1995,
compared to 46.4% and 45.7% in fiscal years 1994 and 1993,
respectively.

During fiscal year 1995, the gross margin percentage declined
from a high of 47.8% in the first fiscal quarter to a low of 39.1%
in the fourth fiscal quarter. During fiscal year 1994, the gross
margin percentage increased from a low of 38.0% in the first
fiscal quarter to 48.5% in the fourth fiscal quarter. The decline
in the gross margin percentage for fiscal year 1995 compared to
fiscal year 1994 was mostly the result of expediting expenses
related to premiums paid to suppliers to increase production of
the Company's products, higher wafer costs caused by the increased
use of more expensive suppliers, low yield on several new products
ramping into production, and lower selling prices on certain
graphics and audio parts. Exacerbating the gross margin decline
was the insufficient supply of 0.6 micron wafers which made
necessary the use of less cost-effective 0.8 micron wafers to meet
expanded unit shipments. The decrease in the gross margin
percentage for fiscal year 1995 compared to fiscal year 1994 was
tempered by a $10 million charge to cost of sales in the first
quarter of fiscal year 1994 as a result of decreased demand for
certain of the Company's low-end mass storage products. One-time
royalty revenue of approximately $3 million was included in net
sales in the first quarter of fiscal year 1995. But, offsetting
this royalty revenue was an increased inventory reserve as a
result of decreased forecasted demand for certain of the Company's
16-bit audio codecs. Because of continuing cost and price
pressures, the Company does not expect an improvement in gross
margins unless significant expansion of 0.6 micron CMOS wafer
capacity, at anticipated costs, comes on-line in mid-year calendar
1995. There is no assurance this will occur.

For fiscal year 1994 compared to fiscal year 1993, sales of
newer products and cost reductions improved gross margin.
However, some of the Company's more mature products experienced
price declines offsetting a portion of these improvements. In the
first quarter of fiscal year 1994, a significant customer of the
Company decreased its forecasted demand for certain of the
Company's low-end mass storage products. Because of this decrease
in demand and rapidly changing and uncertain disk drive market
conditions, the Company increased inventory reserves late in the
first quarter of fiscal year 1994. During the fourth quarter of
fiscal year 1994, a customer of the Company decreased its
forecasted demand for certain of the Company's 16-bit audio
codecs. Because of the decrease in demand and uncertainties in
the customer's financial condition, the Company increased
inventory reserves during the fourth quarter of fiscal year 1994.
In fiscal year 1993, manufacturing costs (including expediting
charges) were higher, as the Company responded to meet strong
market demand with relatively short lead time. During the fourth
quarter of fiscal year 1993, the gross margin further declined
because of reduced forecasted demand for mass storage products,
which resulted in additional inventory reserves.

Research and Development Expenses

Research and development expenses expressed as a percentage
of net sales were 18.6%, 22.7% and 20.6% in fiscal years 1995,
1994 and 1993, respectively. Expenses increased in absolute
dollars in all of the fiscal years, as the Company continues to
invest in new product development. During fiscal years 1994 and
1993, research and development expenses increased at a greater
rate than net sales. Therefore, the amount as a percentage of net
sales declined in fiscal year 1995. The Company intends to
continue making substantial investments in research and
development and expects these expenditures will continue to
increase in absolute amounts.

Selling, General and Administrative Expenses

Selling, general and administrative expenses represented
approximately 14.2%, 16.5% and 15.4% in fiscal years 1995, 1994
and 1993, respectively. In fiscal year 1994, expenses increased
at a rate greater than sales. Therefore, the amount as a
percentage of net sales declined in fiscal year 1995. The
absolute spending increase in fiscal years 1995 and 1994 reflects
increased direct expenses for the expanding sales force, increased
marketing expenses for promotions and advertising, and increased
administrative and legal expenses. The Company expects these
expenses to increase in absolute terms during fiscal year 1996.

Non-recurring and Merger Costs

In the second quarter of fiscal year 1995, non-recurring and
merger costs were approximately $6.3 million. Non-recurring costs
of $3.9 million were primarily associated with the acquisition of
technology and marketing rights and the remaining minority
interest in a subsidiary, and the formation of the new joint
venture (MiCRUS) with IBM. Merger costs of approximately $2.4
million for the August 1994 combination of Cirrus Logic and
PicoPower included one-time costs for charges related to the
combination of the two companies, financial advisory services, and
legal and accounting fees.

During fiscal 1993, the Company incurred certain one-time
costs of approximately $3.4 million in connection with the Acumos
and PCSI mergers. These costs consisted principally of financial
advisory services, charges related to the combination of the
companies, and legal and accounting fees.

Interest Income

Interest income and other, net in fiscal year 1995 was $9.1
million compared to $4.3 million in fiscal 1994 and $3.2 million
in fiscal 1993. The increases in fiscal 1995 over fiscal 1994 and
fiscal 1994 over fiscal 1993 were primarily because of increased
cash equivalents and short-term investments principally resulting
from the stock offering in February 1994.

Foreign Currency Transaction Gains

During the fourth quarter of fiscal 1995, the Company
recorded foreign currency transaction gains of approximately $5.0
million. These gains occurred because of a decline in the U.S.
dollar against the Japanese yen and the impact of this decline on
certain yen denominated assets. Transaction gains and losses were
not material in fiscal years 1994 and 1993.

Gain on Sale of Investment

During fiscal years 1991 and 1992, the Company invested
approximately $1.7 million in Media Vision Technology, Inc. (Media
Vision) stock. The investment was accounted for by the cost
method and represented an approximate six percent interest in
Media Vision. In April 1993, the Company sold approximately 16%
of its original investment in Media Vision in an underwritten
public offering. In October 1993, the Company sold approximately
60% of its original investment in Media Vision in the open market.
In connection with the sales, the Company recorded gains of $2.5
million and $11.2 million in the first and third quarters of
fiscal year 1994, respectively.

Income Taxes

The provision for income taxes was 31.5% in fiscal 1995
compared to 32.4% and 37.9% in fiscal years 1994 and 1993,
respectively. The fiscal year 1995 rate declined from the fiscal
year 1994 rate primarily because of a decrease in state income
taxes due to benefits from investment tax credits. The 31.5%
effective tax rate is less than the U.S. statutory rate primarily
because of the research and development tax credit and certain
foreign earnings taxed at lower rates. The fiscal 1994 rate
declined from the fiscal 1993 rate primarily because of PCSI pre-
acquisition losses in fiscal 1993 which reduced reported earnings
but resulted in no fiscal 1993 tax reduction. The fiscal 1994
effective tax rate is comprised of a 33.3% annual effective tax
rate and a $500,000 non-recurring benefit in the quarter ended
October 2, 1993. This benefit is caused by increased deferred tax
assets and a larger prior year research and development tax credit
as a result of federal tax legislation in August 1993.

Cumulative Effect of Change in Accounting for Income Taxes

Effective April 1, 1993, the Company changed its method of
accounting for income taxes to the liability method required by
Statement of Financial Accounting Standards (SFAS) No. 109,
"Accounting for Income Taxes." As permitted by SFAS No. 109,
prior period's financial statements have not been restated. The
change had no material effect on income before provision for
income taxes for the fiscal year ended April 2, 1994. However,
the cumulative effect as of March 31, 1993 of adopting SFAS No.
109 increased net income by approximately $7.6 million, ($0.13 per
share for fiscal 1994 or $0.14 per share for the first quarter of
fiscal 1994).

The Company has considered available evidence supporting the
realizability of net deferred tax assets including carrybacks,
future reversal of temporary differences, and future taxable
income exclusive of temporary differences in the carryforward
period of loss and credit carryforwards. Based on these factors
and the Company's recent earnings history, the Company has
determined that it is more likely than not that the deferred tax
assets will be realized. The realizability of the deferred tax
asset will be evaluated on a quarterly basis.

LIQUIDITY AND CAPITAL RESOURCES

During fiscal year 1995, the Company generated $65.1 million
of cash and cash equivalents from its operating activities as
compared to $49.9 million during fiscal year 1994 and $28.2
million in fiscal year 1993. The fiscal year 1995 increase over
fiscal year 1994 and the fiscal year 1994 increase over fiscal
year 1993 were primarily because of increases in income from
operations and the non-cash effect of depreciation and
amortization, offset somewhat by the net change in operating
assets and liabilities.

As of April 1, 1995, the Company's principal sources of
liquidity included $187.0 million of cash and cash equivalents and
short-term investments. The Company also has a bank line of
credit of up to $25.0 million at the bank's prime rate. This line
expires in December 1995 and is subject to certain covenants,
including the maintenance of certain financial ratios, minimum
tangible net worth and profitable operations, as well as a
prohibition against the payment of cash dividends without prior
bank approval. The Company was in compliance with all covenants
as of April 1, 1995, and there were no outstanding borrowings.

Cash, cash equivalents and short-term investments decreased
$55.9 million from $242.9 million at April 2, 1994, to $187.0
million at April 1, 1995. During the same period accounts
receivable and inventories increased $76.4 million and $24.8
million, respectively, and accounts payable, accrued salaries and
benefits, income taxes payable and other accrued liabilities
increased $73.4 million. The Company believes accounts receivable
and inventories will increase in fiscal year 1996.

Cash expenditures for property and equipment and equipment
purchased under capital leases totaled $54.2 million in fiscal
year 1995 compared to $41.8 million in fiscal year 1994 and $34.1
million in fiscal year 1993. The expenditures in all years
consisted primarily of equipment used in product design and
testing. The Company intends to continue to invest in capital
equipment to support continued growth.

In January 1995, MiCRUS leased approximately $145 million of
wafer fabrication and infrastructure equipment pursuant to a lease
with a third party and guaranteed jointly and severally by the
Company and IBM. In addition, IBM and Cirrus Logic each expect to
provide MiCRUS with approximately $160 million of additional
capital equipment for the expansion of operations. The Company
expects to use lease financing to fund this expansion. Also, the
State of New York has offered to provide Cirrus Logic with up to
$40 million in long-term loans to fund a portion of the expansion
in addition to low cost power and certain tax abatements for new
investment in the State.

In December 1994, Cirrus Logic paid $63.8 million for the
joint venture investment and the manufacturing agreement. The
manufacturing agreement payment of $50 million will be charged to
the cost of production over the life of the venture based upon the
ratio of current units of production to current and anticipated
future units of production. The joint venture is accounted for on
the equity method and the results to date have not been material.

The Company's future capital requirements include financing
the growth of working capital items such as accounts receivable
and inventory and the purchase of manufacturing and test
equipment. In addition, the Company is continuing to pursue
potential transactions to satisfy its future production
requirements, including equity investments in, loans to or joint
ventures with wafer manufacturing companies and acquisition or
construction of wafer fabrication facilities. The Company has
acquired technology companies in the past and may do so in the
future. Such potential transactions may require substantial
capital resources, which may require the Company to seek
additional debt or equity financing.

FUTURE OPERATING RESULTS

The Company's products are in various stages of their product
life cycles. The Company's success is highly dependent upon its
ability to develop complex new products, to introduce them to the
marketplace ahead of the competition, and to have them selected
for design into products of leading systems manufacturers. These
factors have become increasingly important to the Company's
results of operations because the rate of change in the markets
served by the Company continues to accelerate. Since product life
cycles are continually becoming shorter, revenues may be affected
quickly if new product introductions are delayed. The Company's
gross margins also will depend on the Company's success at
introducing new products quickly and effectively because the gross
margins of semiconductor products decline as competitive products
are introduced. Also, the Company must deliver product to
customers according to customer schedules. If delays occur, then
revenues and gross margins for current and follow-on products may
be affected as customers may shift to competitors to meet their
requirements. There can be no assurance that the Company will
continue to compete successfully because of these factors.

The 2D graphics accelerators have replaced graphics
controllers as the mainstream PC graphics product. The market is
now changing to include accelerated CD-ROM video playback along
with accelerated graphics and, eventually, 3D acceleration
capability. The Company is striving to bring products to market
for these needs, but there is no assurance that it will succeed in
doing so in a timely manner. If the market for these products
does not develop or is delayed, or if these products are not
brought to the market in a timely manner or do not address the
market needs or cost or performance requirements, then net sales
would be adversely affected. Currently, the Company continues to
experience intense competition in the sale of graphics products.
If competitors are successful in supplanting the Company's
products, the Company's market share may not be sustainable and
net sales, gross margin, and earnings could be adversely
affected.

During fiscal 1994, the Company captured a large share of the
market for desktop graphics controllers and graphics accelerators.
The Company believes that it is unlikely to increase its market
share further, and that future growth in revenues from desktop
graphics products is likely only if the size of the market
continues to increase or if competitors fail or are delayed in
introducing new products. Several competitors have recently
introduced products and adopted pricing strategies that have
increased competition in the desktop graphics market and put
additional pressure on prices and gross margins. These factors
may adversely affect revenues and gross margins for graphics
accelerator products.

Most of the Company's revenues in the multimedia audio market
derive from sales of 16-bit audio codecs for PCs. However, the
market for these products is currently highly concentrated. Most
purchases of the Company's audio codecs are made by a small number
of add-in card manufacturers that produce after-market sound cards
for PCs. To date, sales of multimedia audio products have been
primarily in the consumer market, which is a smaller and more
volatile segment of the PC market. Future increases in revenues
from these products are likely to depend on the continuing growth
in the use of audio products in consumer and business applications
in the PC industry and selection of the Company's audio products
by more add-in card manufacturers and PC OEMs. If a competitor
succeeded in supplanting the Company's products at any of these
customers, the Company's market share could decline suddenly and
materially.

In the past, the Company's mass storage revenues have been
derived almost exclusively from disk drive controllers. Several
major disk drive customers source or are planning to source some
or all of their disk controller requirements internally. The
Company has recently expanded its line of disk drive products to
include read/write and motion controller chips. Future mass
storage revenues will be heavily dependent on the acceptance and
qualification of new controller chips as well as the read/write
and motion controller chips by the Company's customers. Volume
shipments of motion controller chips are not expected to occur in
the short term because the Company's customers must make a
substantial investment in new software development before they can
use this product.

The disk drive market has historically been characterized by
a relatively small number of disk drive manufacturers and by
periods of rapid growth followed by periods of oversupply and
contraction. As a result, suppliers to the disk drive industry
experience large and sudden fluctuations in product demand.
Furthermore, the price competitive nature of the disk drive
industry continues to put pressure on the price of all disk drive
components.

Sales of the Company's CDPD products commenced during the
quarter ended October 1, 1994, but the growth of the business
remains dependent on various factors, many of which are outside
the Company's control. The Company's subsidiary, PCSI, is
investing heavily in research and development and is now
manufacturing and selling CDPD base stations to carriers to
provide the communication infrastructure in anticipation of a
developing market for the use of CDPD technology. If the CDPD
market does not develop, then future net sales, gross margin, and
earnings would be adversely affected.

Sales of digital cordless phone products, which were
developed by PCSI for the Japanese market, will depend upon the
establishment of infrastructure and services which are beyond
PCSI's control. All sales will be conducted through the Company's
Japanese marketing partners, which will limit the Company's gross
margins for its digital cordless products.

As is common in the computer industry, the Company frequently
ships more product in the third month of each quarter than in
either of the first two months of the quarter, and shipments in
the third month are higher at the end of that month. This pattern
is likely to continue. The concentration of sales in the last
month of the quarter may cause the Company's quarterly results of
operations to be more difficult to predict. Moreover, if
sufficient turns business does not materialize or a disruption in
the Company's production or shipping occurs near the end of a
quarter, the Company's revenues for that quarter could be
materially reduced.

The Company must order wafers and build inventory well in
advance of product shipments. There is a risk that the Company
will forecast incorrectly and produce excess or insufficient
inventories of particular products because the Company's markets
are volatile and subject to rapid technology and price changes.
This inventory risk is heightened because certain of the Company's
customers place orders with short lead times and because sales to
these customers have increased as a percentage of total sales. To
the extent the Company produces excess or insufficient inventories
of particular products, the Company's revenues and earnings could
be adversely affected.

Most of the Company's wafers currently are manufactured to
the Company's specifications by outside suppliers. The Company
uses other outside vendors to package the wafer die into
integrated circuits, and the Company tests most of its
semiconductor products at its Fremont, California and Austin,
Texas facilities. The Company's reliance on third party suppliers
involves several risks, including the absence of adequate
guaranteed capacity, the possible unavailability of or delays in
obtaining access to certain process technologies, and reduced
control over delivery schedules, manufacturing yields and costs.
The Company may be particularly sensitive to these risks because
its wafer suppliers are currently producing at or near their full
scheduled capacity. The Company's results of operations could be
adversely affected if new suppliers are not qualified in time to
meet production requirements or if particular suppliers are unable
to provide a sufficient and timely supply of product, whether
because of capacity constraints, unexpected disruptions at the
plants, or other reasons, or if the Company is forced to purchase
wafers from higher cost foundries or to pay expediting charges to
obtain additional supply, or if the Company's test facilities were
disrupted for an extended period of time. Certain of the
Company's products are manufactured using 0.8 and 0.6-micron CMOS
process technologies. Industry demand for these process
technologies is strong and, continuing through fiscal year 1996,
the Company believes that there is a shortage of manufacturing
capacity to produce wafers using these processes. In addition,
the Company believes there is a shortage of assembly capacity for
packaging wafer die. Since the Company does not have guaranteed
manufacturing commitments from most vendors, there is a risk that
these vendors could suddenly decide not to supply wafers or
package die. Because of this supply shortage, there is an
increased risk that certain products will not be readily available
for sale according to customer schedules and a risk that the
Company's wafer cost will increase. Net sales and gross margin
could be adversely affected by the supply shortage, which could be
exacerbated if vendors encounter delivery problems. The Company's
results of operations also could be adversely affected if the
Company's suppliers are subject to injunctions arising from
alleged violations of third party intellectual property rights.
The enforcement of such an injunction could impede a supplier's
ability to provide wafers to the Company.

The Company is contractually committed to purchase one-half
of the wafers produced by MiCRUS. If MiCRUS is able to produce
wafers at or below prices generally prevalent in the market, the
Company will benefit. If, however, MiCRUS is not able to produce
wafers at competitive prices, the Company's results of operations
will be correspondingly affected. MiCRUS will not begin delivery
of wafers until fiscal 1996. The ramp-up of such a large
operation inevitably involves risks, and there can be no assurance
that MiCRUS' manufacturing costs will be competitive.

As a party to the MiCRUS joint venture, the Company also will
share in the risks encountered by wafer manufacturers generally,
including timely development of products using the manufacturing
technology, unexpected disruptions to the manufacturing process,
the difficulty of maintaining quality and consistency,
particularly at the smaller submicron levels, dependence on
equipment suppliers, high capital costs, environmental hazards and
regulation, and technological obsolescence.

In order to obtain an adequate supply of wafers, the Company
has considered and will continue to consider various possible
transactions, including the increased use of "take or pay"
contracts that commit the Company to purchase specified quantities
of wafers over extended periods, equity investments in or loans to
wafer manufacturing companies in exchange for guaranteed
production, the formation of joint ventures to own and operate
wafer manufacturing facilities and the acquisition or construction
of wafer fabrication facilities.

During September 1993, the Company entered into a 3-year
volume purchase agreement with a wafer vendor. Under the terms of
the agreement, the Company must purchase certain minimum
quantities of wafers. If the Company does not purchase these
minimum quantities, it may be required to pay a reduced amount for
any shortfall not sold by the vendor to other customers.

The Company and certain of its customers from time to time
have been notified that they may be infringing certain patents and
other intellectual property rights of others. Because successive
generations of the Company's products tend to offer an increasing
number of functions, there is a likelihood that more of these
claims will occur as the products become more highly integrated.
Further, customers have been named in suits alleging infringement
of patents by customer products. Certain components of these
products have been purchased from the Company and may be subject
to indemnification provisions made by the Company to the
customers. The Company has not been named in any such suits.
Although licenses are generally offered in such situations, there
can be no assurance that litigation will not be commenced in the
future regarding patents, mask works, copyrights, trademarks,
trade secrets, or indemnification liability, or that any licenses
or other rights can be obtained on acceptable terms.

While the Company cannot accurately predict the eventual
outcome of the suit or other alleged infringement matters
mentioned above, management believes that the likelihood of an
outcome resulting in a material adverse effect on the Company's
consolidated financial position, results of operations, or cash
flows is remote. Should an unfavorable outcome occur, it could
have an adverse effect on the Company's future operations and/or
liquidity. Also, efforts of defending the Company against future
lawsuits, if any, would use cash and management resources.

Sales of the Company's products depend largely on sales of
PCs. The Company believes that a slowdown in sales in the PC
market would adversely affect the Company's sales and earnings.
The growth in the PC market was exceptionally strong during fiscal
year 1995. This growth has created a strong demand for the
Company's products. However, should the PC market decline or
experience slower growth, then a decline in the order rate for the
Company's products could occur during a period of inventory
correction by the PC and peripheral device manufacturers. This
could result in a decline in revenue or a slower rate of revenue
growth during the inventory correction period. The Company could
likewise experience a concomitant decrease in gross margin and
operating profit. A downturn in the PC market could also affect
the financial health of some of the Company's customers, which
could affect the Company's ability to collect outstanding accounts
receivable from these customers. Furthermore, the intense price
competition in the PC industry is expected to continue to put
pressure on the price of all PC components.

Because most of the Company's subcontractors are located in
Japan and other Asian countries, the Company's business is subject
to risks associated with many factors beyond its control, such as
fluctuation in foreign currency rates, instability of foreign
economies and governments, and changes in U.S. and foreign laws
and policies affecting trade and investment. Although the Company
buys limited amounts of hedging instruments to reduce its exposure
to currency exchange rate fluctuations, the Company's competitive
position can be affected by the exchange rate of the U.S. dollar
against other currencies, particularly the yen.

The semiconductor and communication technologies industries
are intensely competitive and are characterized by price erosion
and rapid technological change. Competitors consist of major
domestic and international companies, many of which have
substantially greater financial and other resources than the
Company with which to pursue engineering, manufacturing, marketing
and distribution of their products. Emerging companies are also
increasing their participation in the market, as well as customers
who develop their own integrated circuit products. The ability of
the Company to compete successfully in the rapidly evolving area
of high-performance integrated circuit technology depends
significantly on factors both within and outside of its control,
including but not limited to, success in designing, manufacturing
and marketing new products, protection of Company products by
effective utilization of intellectual property laws, product
quality, reliability, ease of use, price, diversity of product
line, efficiency of production, the pace at which customers
incorporate the Company's integrated circuits into their products,
success of the customers' products and general economic
conditions. Also, the Company's future success will depend, in
part, on its ability to continue to retain, attract and motivate
highly qualified personnel. Because of this and other factors,
past results may not be a useful predictor of future results.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

CONSOLIDATED STATEMENTS OF INCOME
(Thousands, except per share amounts)

Fiscal years ended
-----------------------------
April 1, April 2, March 31,
1995 1994 1993
--------- --------- ---------

Net sales $889,022 $557,299 $356,478

Operating costs and expenses:
Cost of sales 512,509 298,582 193,759
Research and development 165,622 126,632 73,447
Selling, general and administrative 126,666 91,887 54,924
Non-recurring costs 3,856 - -
Merger costs 2,418 - 3,400
--------- --------- ---------
Total operating costs and expenses 811,071 517,101 325,530
--------- --------- ---------
Operating income 77,951 40,198 30,948
Foreign currency transaction gains 4,999 - -
Gain on sale of equity investment - 13,682 -
Interest income and other, net 9,129 4,280 3,207
Interest expense (2,441) (2,196) (1,610)
--------- --------- ---------
Income before income taxes and cumulative effect
of acccounting change 89,638 55,964 32,545
Provision for income taxes 28,236 18,146 12,321
--------- --------- ---------
Income before cumulative effect of accounting change 61,402 37,818 20,224
Cumulative effect as of March 31, 1993, of change
in method of accounting for income taxes - 7,550 -
--------- --------- ---------
Net income $61,402 $45,368 $20,224
========= ========= =========
Income per common and common equivalent share
before cumulative effect of accounting change $0.96 $0.67 $0.39
Cumulative effect of accounting change per
common and common equivalent share - 0.13 -
--------- --------- ---------
Net income per common and common equivalent share $0.96 $0.80 $0.39
========= ========= =========
Weighted average common and common equivalent
shares outstanding 63,680 56,402 52,424
========= ========= =========
<FN>
See accompanying notes.

CONSOLIDATED BALANCE SHEETS
(Thousands)

April 1, April 2,
1995 1994
---------- ----------

Assets
Current assets:
Cash and cash equivalents $106,882 $193,825
Short-term investments 80,144 49,083
Accounts receivable, less allowance for doubtful
accounts of $9,439 in 1995 and $8,237 in 1994 161,333 84,885
Inventories 103,642 78,805
Other current assets 27,931 21,400
---------- ----------
Total current assets 479,932 427,998
---------- ----------
Property and equipment, at cost:
Machinery and equipment 148,753 102,106
Furniture and fixtures 12,825 9,177
Leasehold improvements 11,757 7,889
---------- ----------
173,335 119,172
Less accumulated depreciation and amortization (73,091) (48,748)
---------- ----------
Property and equipment, net 100,244 70,424
Joint venture manufacturing agreement,
net of accumulated amortization of $65 49,935 -
Investment in joint venture 13,800 -
Deposits and other assets 29,623 19,509
---------- ----------
$673,534 $517,931
========== ==========

Liabilities and Shareholders' Equity

Current liabilities:
Accounts payable $140,445 $88,951
Accrued salaries and benefits 32,508 24,157
Current maturities of long-term debt and
capital lease obligations 11,481 11,007
Income taxes payable 22,322 16,892
Other accrued liabilities 21,557 13,464
---------- ----------
Total current liabilities 228,313 154,471
---------- ----------

Capital lease obligations 9,602 7,753
Long-term debt 16,603 11,392

Commitments and contingencies

Shareholders' equity:
Convertible preferred stock, no par value; 5,000
shares authorized, none issued - -
Common stock, no par value, 140,000 shares
authorized, 60,594 shares issued and
outstanding in 1995 and 59,222 in 1994 283,741 270,442
Retained earnings 135,275 73,873
---------- ----------
Total shareholders' equity 419,016 344,315
---------- ----------
$673,534 $517,931
========== ==========
<FN>
See accompanying notes.

CONSOLIDATED STATEMENTS OF CASH FLOWS
(Thousands)

Fiscal Years Ended
--------------------------------
April 1, April 2, March 31,
1995 1994 1993
---------- ---------- ----------

Cash flows from operating activities:
Net income $61,402 $45,368 $20,224
Acumos Incorporated net income for the
quarter ended March 31, 1992 - - 110
Pacific Communication Sciences, Inc. net loss
for the quarter ended March 31, 1992 - - (627)
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization 34,329 26,315 14,437
Compensation related to the issuance of
certain employee stock options 3,109 641 745
Gain on sale of equity investment - (13,682) -
Cumulative effect of accounting change - (7,550) -
Changes in operating assets and liabilities:
Accounts receivable (76,448) (20,163) (27,114)
Inventories (24,837) (28,850) (24,728)
Other current assets (3,650) (6,751) (1,504)
Accounts payable 51,494 25,531 33,832
Accrued salaries and benefits 8,351 11,401 8,007
Income taxes payable 3,262 10,058 4,989
Other accrued liabilities 8,093 7,535 (133)
---------- ---------- ----------
Net cash provided by operating activities 65,105 49,853 28,238
---------- ---------- ----------
Cash flows from investing activities:
Purchase of short-term investments available for sale (193,901) (211,367) (200,527)
Proceeds from sale of short-term investments available for sale 187,900 200,332 194,657
Purchase of short-term investments held to maturity (158,748) - -
Proceeds from short-term investments held to maturity 133,688 - -
Purchase of long-term investments - - (35,138)
Proceeds from sale of long-term investments - - 45,188
Proceeds from sale of equity investment - 14,753 -
Joint venture manufacturing agreement (50,000) - -
Investment in joint venture (13,800) - -
Additions to property and equipment (47,313) (35,677) (26,711)
Increase in deposits and other assets (19,429) (7,725) (7,151)
---------- ---------- ----------
Net cash used by investing activities (161,603) (39,684) (29,682)
---------- ---------- ----------
Cash flows from financing activities:
Borrowings on long-term debt 13,292 6,673 15,625
Payments on long-term debt (8,688) (6,726) (9,647)
Payments on capital lease obligations (3,919) (3,330) (5,810)
Borrowings on short-term debt - 10,000 -
Payments on short-term debt - (10,000) -
Issuance of common stock in public offering, net of issuance costs - 136,025 -
Issuance of common stock, net of issuance costs and
repurchases 8,870 15,428 11,176
Collections on shareholder notes receivable - - 293
---------- ---------- ----------
Net cash provided by financing activities 9,555 148,070 11,637
---------- ---------- ----------
Net (decrease) increase in cash and cash equivalents (86,943) 158,239 10,193
Cash and cash equivalents at beginning of year 193,825 35,586 25,393
---------- ---------- ----------
Cash and cash equivalents at end of year $106,882 $193,825 $35,586
========== ========== ==========
Non-cash investing and financing activities:
Equipment purchased under capital leases $6,849 $6,158 $7,438
Tax benefit of stock option exercises 1,320 3,437 2,067
Cash payments for:
Interest 2,464 2,181 1,543
Income taxes 24,974 12,750 9,358
<FN>
See accompanying notes.

CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
Three Years Ended April 1, 1995
(Thousands)

Notes
Common Stock Receivable
------------------- Retained from
Shares Amount Earnings Shareholders Total
--------- --------- ---------- ------------ -------------

Balance, March 31, 1992 46,468 $100,423 $8,798 ($293) $108,928
Issuance of stock under stock plans
and other, net of repurchases 2,238 6,703 --- --- 6,703
Issuance of stock by PCSI 336 3,443 --- --- 3,443
Issuance of stock by PicoPower 924 1,530 --- --- 1,530
Compensation related to the
issuance of certain employee options --- 745 --- --- 745
Collection of shareholders receivable --- --- --- 293 293
Net income --- --- 20,224 --- 20,224
Acumos net income for the
quarter ended March 31, 1992 --- --- 110 --- 110
PCSI net loss from operations for the
quarter ended March 31, 1992 --- --- (627) --- (627)
Tax benefit of stock option exercises --- 2,067 --- --- 2,067
--------- --------- ---------- ------------ -------------
Balance, March 31, 1993 49,966 114,911 28,505 --- 143,416
Issuance of stock in public
offering (net of issuance costs of $7,362) 6,940 136,025 --- --- 136,025
Issuance of stock by PicoPower 506 5,028 --- --- 5,028
Issuance of stock under stock plans
and other, net of repurchases 1,810 10,400 --- --- 10,400
Compensation related to the
issuance of certain employee options --- 641 --- --- 641
Net income --- --- 45,368 --- 45,368
Tax benefit of stock option exercises --- 3,437 --- --- 3,437
--------- --------- ---------- ------------ -------------
Balance, April 2, 1994 59,222 270,442 73,873 --- 344,315
Issuance of stock under stock plans ---
and other, net of repurchases 1,372 8,870 --- --- 8,870
Compensation related to the ---
issuance of certain employee options --- 3,109 --- --- 3,109
Net income --- --- 61,402 --- 61,402
Tax benefit of stock option exercises --- 1,320 --- --- 1,320
--------- --------- ---------- ------------ -------------
Balance, April 1, 1995 60,594 $283,741 $135,275 --- $419,016
========= ========= ========== ============ =============

<FN>
See accompanying notes.

CIRRUS LOGIC, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Description of Business and Major Customer Information

In fiscal 1995, no customer accounted for 10% or more of net
sales. In fiscal 1994, one customer comprised 10% of net sales.
In fiscal 1993, two other customers comprised 21% and 10% of net
sales. No other customer represented 10% or more of the Company's
net sales during these periods.

Export sales, principally in Asia, including sales to
overseas operations of domestic corporations, represented 56%, 58%
and 56% of net revenues in fiscal 1995, 1994 and 1993,
respectively. There are no restrictions on the transfer of funds
in international markets.

Basis of Presentation

The consolidated financial statements include the accounts of
the Company and its wholly owned subsidiaries. Significant
intercompany accounts and transactions have been eliminated.
Accounts denominated in foreign currencies have been remeasured in
accordance with Statement of Financial Accounting Standards (SFAS)
No. 52, "Foreign Currency Translation," using the U.S. dollar as
the functional currency. Translation adjustments relating to
Cirrus Logic K.K., whose functional currency is the Japanese yen,
have not been material.

During the first quarter of fiscal 1994, the Company changed
its reporting period from a 12 month year ending March 31 to a
fiscal year of 52 or 53 weeks ending on the Saturday closest to
March 31.

In April 1992 and February 1993, the Company merged with
Acumos Incorporated (Acumos) and Pacific Communication Sciences,
Inc. (PCSI), respectively. These mergers were tax free
reorganizations and were accounted for as poolings of interests.
All of the consolidated financial information includes the
operations of Acumos and PCSI.

In August 1994, Cirrus Logic merged with PicoPower
Technology, Inc. (PicoPower) of San Jose, California. Cirrus
Logic issued 2,609,238 shares of Common Stock in exchange for all
of the outstanding preferred and common stock of PicoPower in a
transaction accounted for as a pooling of interests. In addition,
Cirrus Logic agreed to assume all outstanding options and a
warrant to purchase stock of PicoPower, which represented the
right to purchase 793,766 shares of Cirrus Logic Common Stock.
All financial information has been restated to reflect the
combined operations of the companies. The table below shows the
composition of combined net sales, net income and net income per
common and common equivalent share for the pre-merger periods
indicated (in thousands, except per share amounts).

Quarter Fiscal Years Ended
Ended --------------------
July 2, April 2, March 31,
---------- --------- ---------
(Unaudited)
Net sales:
Cirrus Logic $ 175,961 $ 544,077 $ 354,770
PicoPower 9,036 13,222 1,708
---------- --------- ---------
$ 184,997 $ 557,299 $ 356,478
========== ========= =========
Net income:
Cirrus Logic $ 15,009 $ 44,632 $ 20,593
PicoPower 566 736 (369)
---------- --------- ---------
$ 15,575 $ 45,368 $ 20,224
========== ========= =========
Net income per common and
common equivalent share $ 0.24 $ 0.80 $ 0.39
========== ========= =========

Weighted average common and common
equivalent shares outstanding:

Cirrus Logic 60,414 53,456 50,894
PicoPower 3,326 2,946 1,530
---------- --------- ---------
63,740 56,402 52,424
========== ========= =========

Cash Equivalents and Investments

Cash equivalents consist primarily of over-night deposits,
commercial paper, U.S. Government Treasury instruments, and money
market funds with original maturities of three months or less at
date of purchase. Short-term investments have maturities greater
than three months but less than one year and consist of U.S.
Government Treasury instruments, money market preferred stock,
auction preferred stock, municipal bonds, certificates of deposit
and commercial paper.

Securities Held-to-Maturity and Available-for-Sale

Effective April 3, 1994, the Company adopted Statement of
Financial Accounting Standards (SFAS) No. 115, "Accounting for
Certain Investments in Debt and Equity Securities," which creates
certain classification categories for such investments, based on
the nature of the securities and the intent and investment goals
of the Company. In accordance with SFAS No. 115, prior period
financial statements have not been restated to reflect the change
in accounting principle. The cumulative effect as of April 2,
1994 of adopting SFAS No. 115 was immaterial.

Under SFAS No. 115, management determines the appropriate
classification of certain debt and equity securities at the time
of purchase as either held-to-maturity, trading or available-for-
sale and reevaluates such designation as of each balance sheet
date.

Held-to-maturity securities are stated at cost, adjusted for
amortization of premiums and accretion of discounts to maturity.
Such amortization, as well as any interest on the securities, is
included in interest income and other, net. Held-to-maturity
securities include only those securities the Company has the
positive intent and ability to hold to maturity.

Securities not classified as held-to-maturity are classified
as available-for-sale. Available-for-sale securities are carried
at fair value, with unrealized gains and losses, net of tax,
reported as a separate component of shareholders' equity.
Realized gains and losses, declines in value judged to be other
than temporary, and interest on available-for-sale securities are
included in interest income and other, net.

Foreign Exchange Contracts

The Company may enter into foreign currency exchange or
option contracts to hedge certain of its foreign currency
exposures. Market value gains and losses on the forward contracts
are recorded as offsets to the foreign exchange gains or losses on
the hedged foreign currency transactions. During fiscal years
1995, 1994 and 1993, foreign currency contracts, when used, were
used, to hedge inventory purchases.

During fiscal 1995, the Company recorded $4,999,000 of
transaction gains pertaining to the remeasurement of certain
unhedged balance sheet accounts denominated in Japanese yen.
Transactions gains and losses were immaterial in fiscal years 1994
and 1993. In April 1995, the Company purchased a foreign currency
option contract to hedge certain balance sheet accounts
denominated in yen. The option is for approximately 3.5 billion
yen and expires in June 1995.

Inventories

Inventories are stated at the lower of standard cost, which
approximates actual cost on a first-in, first-out basis, or market
and are comprised of the following (in thousands):

April 1, April 2,
1995 1994
--------- --------
Work-in-process $ 84,920 $ 62,833
Finished goods 18,722 15,972
--------- --------
$ 103,642 $ 78,805
========= ========

Property and Equipment

Property and equipment is recorded at cost. Depreciation and
amortization is provided on a straight-line basis over estimated
useful lives ranging from three to five years, or over the life of
the lease for equipment under capitalized leases, if shorter.
Leasehold improvements are amortized over the term of the lease or
their estimated useful life, whichever is shorter.

Concentration of Credit Risk

Financial instruments which potentially subject the Company
to concentrations of credit risk consist primarily of cash
equivalents, short-term investments and trade accounts receivable.
By policy, the Company places its investments only with high
credit quality financial institutions and, other than U.S.
Government Treasury instruments, limits the amounts invested in
any one institution or in any type of instrument. Almost all of
the Company's trade accounts receivable are derived from sales to
manufacturers of computer systems and subsystems. The Company
performs ongoing credit evaluations of its customers' financial
condition and limits its exposure to accounting losses by limiting
the amount of credit extended whenever deemed necessary and
generally does not require collateral.

Revenue Recognition

Revenue from product sales direct to customers is recognized
upon shipment. Certain of the Company's sales are made to
distributors under agreements allowing certain rights of return
and price protection on products unsold by distributors.
Accordingly, the Company defers revenue and gross profit on such
sales until the product is sold by the distributors.

Non-recurring and Merger Costs

In the quarter ended October 1, 1994, non-recurring and
merger costs were approximately $6.3 million. Non-recurring costs
of $3.9 million were primarily associated with the acquisition of
certain technology and marketing rights and the remaining minority
interest in a subsidiary, and the formation of the MiCRUS joint
venture with International Business Machines Corporation (IBM).
Merger costs of approximately $2.4 million for the August 1994,
combination of Cirrus Logic and PicoPower included one-time costs
for charges related to the combination of the two companies,
financial advisory services, and legal and accounting fees.

Income Taxes

During fiscal 1994, the Company implemented SFAS No. 109,
"Accounting for Income Taxes," effective as of the beginning of
the year. Prior periods were accounted for under SFAS No. 96 and
have not been restated. The cumulative effect of this accounting
change, a result of recognizing tax benefits which had been
unrecognized prior to April 1, 1993, increased net income for
fiscal 1994 by $7,550,000, or $0.13 per share. There was no
effect on income before income taxes from the adoption of SFAS
No. 109.

Net Income Per Common and Common Equivalent Share

Net income per common and common equivalent share is based on
the weighted average common shares outstanding and dilutive common
equivalent shares (using the treasury stock or modified treasury
stock method, as required). Common equivalent shares include
dilutive stock options and warrants. Dual presentation of primary
and fully diluted income per share is not shown on the face of the
income statement because the differences are insignificant.

2. FINANCIAL INSTRUMENTS

Fair Values of Financial Instruments

The following methods and assumptions were used by the
Company in estimating its fair value disclosures for financial
instruments:

Cash and cash equivalents: The carrying amount reported in
the balance sheet for cash and cash equivalents approximates
its fair value.

Investment securities and other non-current marketable
equity securities: The fair values for marketable debt and
equity securities are based on quoted market prices.

Commercial and standby letters of credit: The fair values of
commercial and standby letters of credit are based on quoted
market prices.

Foreign currency exchange contracts: The fair values of the
Company's foreign currency exchange forward contracts are
estimated based on quoted market prices of comparable
contracts, adjusted through interpolation where necessary for
maturity differences.

Long-term debt: The fair value of long-term debt is
estimated based on current interest rates available to the
Company for debt instruments with similar terms and remaining
maturities.

The carrying amounts and fair values of the Company's
financial instruments at April 1, 1995 are as follows (in
thousands):

Carrying Amount Fair Value
--------------- ----------

Cash and cash equivalents $ 106,882 $ 106,882
Investment securities:
U.S. Government Treasury
instruments 43,328 43,334
U.S. Government Agency
instrument 1,000 996
Municipal auction preferred stock 5,000 5,000
Auction preferred stock 18,000 18,000
Commercial paper 1,969 1,969
Certificates of deposit 1,997 1,997
Municipal bonds 8,850 8,781
Long-term debt 23,856 23,856

The carrying amounts and fair values of the Company's
financial instruments at April 2, 1994 are as follows (in
thousands):

Carrying Amount Fair Value
--------------- ----------

Cash and cash equivalents $ 187,875 $ 187,875
Investment securities:
U.S. Government Treasury
instruments 32,083 32,132
Auction preferred stock 17,000 17,000
Other non-current marketable equity 1,089 2,182
Foreign currency exchange forward
contracts -- 2,711
Long-term debt 19,252 19,690

Investments

The following is a summary of available-for-sales and held-
to-maturity securities at April 1, 1995 (in thousands):

Gross Gross Estimated
Unrealized Unrealized Fair
Cost Gains Losses Value
-------- ------ ------ --------
Available-for-Sale:
Municipal auction
preferred stock $ 5,000 $ - $ - $ 5,000
Auction preferred stock 18,000 - - 18,000
-------- ------ ------ --------
Total $ 23,000 $ - $ - $ 23,000
======== ====== ====== ========

Held-to-Maturity:
U.S. Government
Treasury instruments $ 47,273 $ 16 $ 4 $ 47,285
U.S. Government
Agency instruments 1,000 - 4 996
Commercial paper 10,874 42 - 10,916
Certificates of deposit 1,997 - - 1,997
Municipal bonds 8,850 - 69 8,781
-------- ------ ------ --------
Total $ 69,994 $ 58 $ 77 $ 69,975
======== ====== ====== ========

There have been no gross realized gains or losses on
available-for-sale securities to date. The available-for-sale
securities do not have contracted maturity dates. Held-to-
maturity securities have contracted maturities of less than one
year at April 1, 1995.

The following is a reconciliation of the investment
categories to the balance sheet classification at April 1, 1995
(in thousands):

Cash and Cash Short-term
Equivalents Investment Total
----------- ----------- ---------
Cash $ 94,032 $ - $ 94,032
Available-for-sale
securities - 23,000 23,000
Held-to-maturity
securities 12,850 57,144 69,994
----------- ----------- ---------
$ 106,882 $ 80,144 $ 187,026
=========== =========== =========

3. JOINT VENTURE AND RELATED MANUFACTURING AGREEMENT

In January 1995, MiCRUS leased approximately $145 million of
wafer fabrication and infrastructure equipment pursuant to an
operating lease with a third party and guaranteed jointly and
severally by the Company and IBM. In addition, IBM and Cirrus
Logic each expect to provide MiCRUS with approximately $160
million of additional capital equipment for the expansion of
operations. The Company expects to use lease financing to fund
this expansion. Also, the State of New York has offered to
provide Cirrus Logic with up to $40 million in long-term loans to
fund a portion of the expansion in addition to low cost power and
certain tax abatements for new investment in the State.

4. INVESTMENTS

During fiscal years 1991 and 1992, the Company invested
approximately $1,660,000 in Media Vision, Inc. (Media Vision)
Preferred Stock. The investment was accounted for by the cost
method and represented an approximate six percent interest in
Media Vision. In fiscal 1994, the Company sold approximately 76%
of its original investment in Media Vision in an initial public
offering in April 1993 and in October 1993 in the open market.
The Company realized a gain of $13,682,000 on these sales in
fiscal year 1994.

5. OBLIGATIONS UNDER CAPITAL LEASES

The Company has capital lease agreements for machinery and
equipment as follows (in thousands):

April 1, April 2,
1995 1994
--------- ---------

Capitalized cost $ 18,798 $ 16,231
Accumulated amortization (8,482) (6,658)
--------- ---------
$ 10,316 $ 9,573
========= =========

Amortization expense on assets capitalized under capital
lease obligations is included in depreciation and amortization.
The lease agreements are secured by the leased property.

Future minimum lease payments under capital leases for the
following fiscal years, together with the present value of the net
minimum lease payments as of April 1, 1995, are (in thousands):

1996 $ 4,904
1997 4,466
1998 3,431
1999 2,172
2000 629
---------
Total minimum lease payments 15,602
Less amount representing interest (1,772)
---------
Present value of net minimum lease payments 13,830
Less current maturities (4,228)
---------
Capital lease obligations $ 9,602
=========

6. LONG-TERM DEBT

Long-term debt consists of the following (in thousands):

April 1, April 2,
1995 1994
--------- ---------

Installment notes with interest
rates ranging from 6.35% to 12.6% $ 23,356 $ 18,252
Installment purchase contract with
officer of subsidiary 500 1,000
Less current maturities (7,253) (7,860)
--------- ---------
Long-term debt $ 16,603 $ 11,392
========= =========

Principal payments for the following fiscal years are (in
thousands):

1996 $ 7,253
1997 5,563
1998 5,644
1999 2,997
2000 2,399
--------
$ 23,856
========

At April 1, 1995, installment notes are secured by machinery
and equipment with a net book value of $18,940,000 ($11,430,000 at
April 2, 1994).

7. BANK ARRANGEMENTS

The Company has a commitment for a bank line of credit up to
a maximum of $25,000,000, at the bank's prime rate (9.00% at April
1, 1995). There were no outstanding borrowings under this
arrangement at April 1, 1995, and the amount available, net of
outstanding letters of credit, was approximately $5,599,000. The
line expires in December 1995. Terms of the above arrangement
require compliance with certain covenants including the
maintenance of certain financial ratios, minimum tangible net
worth and profitable operations on a quarterly basis as well as a
prohibition against the payment of cash dividends without prior
bank approval. The Company was in compliance with all covenants
at April 1, 1995.

The Company has outstanding letters of credit with banks
which are denominated in Japanese yen and U.S. dollars totaling
approximately $14,691,000 at April 1, 1995. Such letters of
credit secure inventory purchases.

In addition, the Company has a separate standby letter of
credit of $10,000,000 with a wafer vendor to secure inventory
purchases under a wafer supply agreement (see note 8).

8. COMMITMENTS

Facilities and Equipment Under Operating Lease Agreements

The Company leases its facilities and certain equipment under
operating lease agreements, some of which have renewal options.
Certain of these arrangements provide for lease payment
increases based upon future fair market rates. The aggregate
minimum future rental commitments under all operating leases for
the following fiscal years are (in thousands):

1996 $ 9,322
1997 7,985
1998 7,269
1999 7,060
2000 7,005
Thereafter 42,675
--------
Total minimum lease payments $ 81,316
========

Total rent expense was approximately $10,242,000, $6,264,000
and $4,404,000 for fiscal years 1995, 1994 and 1993, respectively.

Wafer Supply Agreement

During September 1993, the Company entered into a 3-year
volume purchase agreement with a wafer vendor. Under the terms of
the agreement, the Company must purchase certain minimum
quantities of wafers. The Company estimates that under the
remaining term of the agreement, which expires in March 1997, it
is obliged to purchase approximately $70.0 million of product. If
the Company does not purchase the minimum quantities, it may be
required to pay a reduced amount for any shortfall not sold by the
vendor to other customers. During fiscal year 1995, the Company
purchased $17.4 million of product under this supply agreement.

9. EMPLOYEE BENEFIT PLANS

The Company and its subsidiaries have adopted 401(k) Profit
Sharing Plans ("the Plans") covering substantially all of their
qualifying domestic employees. Under the Plans, employees may
elect to reduce their current compensation by up to 15%, subject
to annual limitations, and have the amount of such reduction
contributed to the Plans. The Plans permit, but do not require,
additional discretionary contributions by the Company on behalf of
all participants. During fiscal years 1995 and 1994, the Company
and its subsidiaries matched employee contributions up to various
maximums per plan for a total of approximately $1,849,000 and
$1,290,000, respectively (none in fiscal 1993). The Company
intends to continue the contributions in fiscal 1996.

10. SHAREHOLDERS' EQUITY

Warrant

The Company has an outstanding warrant to purchase 60,000
shares of Common Stock at $12.00 per share. The warrant expires
in June 1995.

Employee Stock Purchase Plan

In March 1989, the Company adopted the 1989 Employee Stock
Purchase Plan. As of April 1, 1995, 422,090 shares of Common
Stock are reserved for future issuance. During fiscal 1995, 1994
and 1993, 461,252, 409,234 and 259,098 shares, respectively, were
issued under the Employee Stock Purchase Plan.

The Board of Directors recommended for shareholder approval
an additional 800,000 shares of Common Stock for issuance under
the Employee Stock Purchase Plan.

Stock Option Plans

The Company has various stock option plans (the "Option
Plans") under which officers, key employees, non-employee
directors and consultants may be granted qualified and non-
qualified options to purchase shares of the Company's authorized
but unissued Common Stock. The price of the options is at not
less than 85% of the fair market value of the stock on date of
grant. Options are generally exercisable immediately but are
subject to repurchase if exercised prior to vesting and currently
expire no later than ten years from date of grant.

Under other option plans, the Company also has issued non-
qualified stock options to purchase a total of 631,156 shares at
prices ranging from $0.06 to $6.50 per share, subject to a vesting
schedule of three and one-half or four years and 23,000 shares as
stock grants to employees at no cost which vest over five years.
A restricted stock purchase agreement for 10,000 shares which
vests over two years has been issued to a consultant. The Company
recognizes as compensation expense the excess of the fair market
value at the date of grant over the exercise price of such options
and grants. The compensation expense is amortized ratably over
the vesting period of the options.

The Board of Directors recommended for shareholder approval
an additional 1,880,000 shares of Common Stock for issuance under
the Option Plans.

Additional information relative to stock option activity is
as follows (in thousands):
Outstanding Options
Options --------------------
Available for Number of Aggregate
Grant Shares Price
----------- ------- ----------
Balance, March 31, 1992 1,238 6,572 $ 23,610
Shares authorized for issuance 2,560 - -
Options granted (3,520) 3,520 36,285
Options exercised - (2,088) (3,647)
Options cancelled 106 (150) (879)
----------- ------- ----------
Balance, March 31, 1993 384 7,854 55,369
Shares authorized for issuance 4,170 - -
Options granted (4,200) 4,200 47,075
Options exercised - (1,360) (7,355)
Options cancelled 292 (322) (3,125)
----------- ------- ----------
Balance, April 2, 1994 646 10,372 91,964
Shares authorized for issuance 4,796 - -
Options granted (4,228) 4,228 57,574
Options exercised - (898) (3,337)
Options cancelled 272 (314) (4,407)
----------- ------- ----------
Balance, April 1, 1995 1,486 13,388 $ 141,794
=========== ======= ==========

As of April 1, 1995, approximately 14,874,000 shares of
Common Stock were reserved for issuance under the Option Plans.

11. INCOME TAXES

Income before income taxes and cumulative effect of
accounting change consists of (in thousands):

1995 1994 1993
--------- --------- ---------

United States $ 57,541 $ 40,196 $ 23,962
Foreign 32,097 15,768 8,583
--------- --------- ---------
Total $ 89,638 $ 55,964 $ 32,545
========= ========= =========

The provision for income taxes consists of (in thousands):

1995 1994 1993
---------- ---------- ----------
Federal
Current $ 27,829 $ 20,245 $ 11,817
Prepaid (2,180) (5,910) (2,074)
---------- ---------- ----------
25,649 14,335 9,743

State
Current 2,936 4,911 2,453
Prepaid (1,308) (1,820) --
---------- ---------- ----------
1,628 3,091 2,453

Foreign
Current 959 720 125
---------- ---------- ----------
Total $ 28,236 $ 18,146 $ 12,321
========== ========== ==========

The provision for income taxes differs from the amount
computed by applying the statutory federal rate to pretax income
as follows:

1995 1994 1993
------- ------- -------
U.S. federal statutory income tax
rate 35.0% 35.0% 34.0%
Provision for state income taxes,
net of federal benefit 1.4% 3.6% 6.0%
Utilization of federal net operating
loss carryforwards -- -- (3.7%)
Foreign earnings taxed at lower rates (3.0%) (3.4%) (7.9%)
Pre-merger subsidiary losses -- -- 7.1%
Non-deductible merger costs 0.7% -- 1.8%
Research and development credits
(flow-through method) (4.6%) (4.7%) (0.8%)
Other 2.0% 1.9% 1.4%
------- ------- -------
Provision for income taxes 31.5% 32.4% 37.9%
======= ======= =======

The Company does not provide U.S. federal income taxes on the
unremitted earnings of foreign subsidiaries which it intends to
permanently reinvest in the operations of such subsidiaries. The
total unremitted earnings for which no U.S. federal tax has been
provided as of April 1, 1995, is approximately $27 million.

Under SFAS No. 109, deferred income tax assets and
liabilities reflect the net tax effects of tax carryforwards and
temporary differences between the carrying amounts of assets and
liabilities for financial reporting and the amounts used for
income tax purposes.

Significant components of the Company's deferred tax assets
and liabilities are (in thousands):

April 1, April 2,
1995 1994
-------- --------
Deferred tax assets:
Inventory valuation $ 9,443 $ 8,253
Accrued expenses and allowances 13,853 8,490
Net operating loss carryforwards 3,051 4,643
Research and development credit
carryforwards 2,190 2,190
Other 2,077 873
-------- --------
Total deferred tax assets 30,614 24,449
-------- --------
Deferred tax liabilities:
Depreciation 5,057 2,973
Other 920 327
-------- --------
Total deferred tax liabilities 5,977 3,300
-------- --------
Total net deferred tax assets $ 24,637 $ 21,149
======== ========

During fiscal 1993, deferred or prepaid income taxes were
provided in accordance with SFAS No. 96 for significant temporary
differences. The prepaid tax expense for fiscal 1993 included
$1,967,000 for accrued expenses and allowances not currently
deductible and $107,000 of other items.

As a result of the 1993 PCSI merger, the Company has net
operating loss carryforwards for federal tax purposes of
approximately $8.5 million, expiring from 2002 through 2008.
These net operating loss carryforwards are available to offset
future consolidated taxable income only to the extent contributed
by PCSI and are subject to an annual limitation of approximately
$2.6 million because of the "change in ownership" rules under
Section 382 of the Internal Revenue Code.

12. LEGAL MATTERS

The Company and certain of its customers from time to time
have been notified that they may be infringing certain patents and
other intellectual property rights of others. Further, customers
have been named in suits alleging infringement of patents by the
customer products. Certain components of these products have been
purchased from the Company and may be subject to indemnification
provisions made by the Company to the customers. The Company has
not been named in any such suits. Although licenses are generally
offered in such situations, there can be no assurance that
litigation will not be commenced in the future regarding patents,
mask works, copyrights, trademarks, trade secrets, or
indemnification liability, or that any licenses or other rights
can be obtained on acceptable terms.

REPORT OF ERNST & YOUNG LLP
Independent auditors
The Board of Directors and Shareholders, Cirrus Logic, Inc.

We have audited the accompanying consolidated balance sheets of Cirrus
Logic, Inc. as of April 1, 1995 and April 2, 1994, and the related
consolidated statements of income, shareholders' equity, and cash flows
for each of the three years in the period ended April 1, 1995. Our audits
also included the financial statement schedule listed in the Index at Item
14(a). These financial statements and schedule are the responsibility of
the Company's management. Our responsibility is to express an opinion on
these financial statements and schedule based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the consolidated financial position of Cirrus Logic,
Inc. at April 1, 1995 and April 2, 1994, and the consolidated results of its
operations and its cash flows for each of the three years in the period ended
April 1, 1995, in conformity with generally accepted accounting principles.
Also, in our opinion, the related financial statement schedule, when considered
in relation to the basic financial statements taken as a whole, presents
fairly in all material respects the information set forth therein.

As discussed in Note 1 to the consolidated financial statements, in fiscal 1994
the Company changed its method of accounting for income taxes.

/s/Ernst & Young LLP

San Jose, California
April 25, 1995

CONSOLIDATED SUPPLEMENTARY FINANCIAL DATA
(Amounts in thousands except per share amounts)
(Unaudited)

Fiscal years by quarter
----------------------------------------------------------------------------
1995 1994
------------------------------------ ------------------------------------
4th 3rd 2nd 1st 4th 3rd 2nd 1st *

Operating summary:
Net sales $273,215 $228,599 $202,211 $184,997 $175,369 $154,068 $127,402 $100,460
Cost of sales 166,509 135,658 113,715 96,627 90,377 79,264 66,665 62,276
Non-recurring costs - - 3,856 - - - - -
Merger costs - - 2,418 - - - - -
Operating income (loss) 21,012 19,725 15,788 21,426 21,358 18,266 8,387 (7,813)
Gain on sale of equity investment - - - - - 11,226 - 2,456
Income (loss) before income taxes 27,601 21,142 18,045 22,850 22,279 30,048 9,119 (5,482)
Income (loss) before effect of accounting change 18,907 14,482 12,438 15,575 14,816 20,029 6,622 (3,649)
Cumulative effect of change in method
of accounting for income taxes - - - - - - - 7,550
Net income $18,907 $14,482 $12,438 $15,575 $14,816 $20,029 $6,622 $3,901

Income (loss) per common and common equivalent share
before cumulative effect of accounting change $0.29 $0.23 $0.20 $0.24 $0.24 $0.35 $0.12 ($0.07)

Cumulative effect of accounting change per common and
common equivalent share - - - - - - - $0.14

Net income per common and common equivalent share $0.29 $0.23 $0.20 $0.24 $0.24 $0.35 $0.12 $0.07

Weighted average common and common equivalent shares
outstanding 64,472 63,300 63,206 63,740 61,456 56,740 54,600 52,810
<FN>
The number of weighted average common and common equivalent shares outstanding has been restated for all periods to reflect
the two-for-one split of the Company's Common Stock approved by the Board of Directors on June 1, 1995.

In October 1991, April 1992, February 1993, and August 1994, the Company merged with Crystal Semiconductor Corporation,
Acumos Incorporated, Pacific Communication Sciences, Inc., and PicoPower Technology, Inc., respectively. All of
the consolidated financial information reflects the combined operations of the companies.

* A significant customer of the Company decreased its forecasted demand for certain of the Company's low-end mass
storage products. Because of this decrease in demand and rapidly changing and uncertain disk drive market conditions,
the Company charged $10 million to cost of sales late in the first quarter of fiscal year 1994.

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

None.

PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

(a) Executive Officers - See the section entitled "Executive
Officers of the Registrant" in Part I, Item 1 hereof.

(b) Directors - The information required by this Item is
incorporated by reference to the section entitled "Election
of Directors" in the Registrant's Proxy Statement.

ITEM 11. EXECUTIVE COMPENSATION

The information required by this Item is incorporated by reference
to the sections entitled "Executive Compensation" and various
stock benefit plan proposals in the Registrant's Proxy Statement.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT

The information required by this Item is incorporated by reference
to the sections entitled "Share Ownership of Directors, Executive
Officers and Certain Beneficial Owners" of the Registrant's Proxy
Statement.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

The information required by this Item is incorporated by reference
to the section entitled "Executive Compensation" in the
Registrant's Proxy Statement.

PART IV

ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON
FORM 8-K

(a) The following documents are filed as part of this Report:

1. Financial Statements

The following consolidated financial statements of the Registrant
and Report of Ernst & Young LLP, Independent Auditors are included
herewith:

(i) Consolidated Balance Sheets as of April 1, 1995 and
April 2, 1994.

(ii) Consolidated Statements of Income for the years ended
April 1, 1995, April 2, 1994 and March 31, 1993.

(iii) Consolidated Statements of Shareholders' Equity for the
years ended April 1, 1995, April 2, 1994 and
March 31, 1993.

(iv) Consolidated Statements of Cash Flows for the years ended
April 1, 1995, April 2, 1994 and March 31, 1993.

(v) Notes to Consolidated Financial Statements.

(vi) Report of Ernst & Young LLP, Independent Auditors.

2. Financial Statement Schedules

The following consolidated financial statement schedule is filed
as part of this report and should be read in conjunction with the
consolidated financial statements:

Schedule

II Valuation and Qualifying Accounts

All other schedules 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
notes thereto.

CIRRUS LOGIC INC.

SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS

Balance Charged to Balance
at Beginning Costs and at Close
Item of Period Expenses Deductions (1) of Period
- ----------------------- ------------- ----------- ------------ ------------
(Amounts in thousands)

1993
Allowance for doubtful
accounts $2,682 $2,433 ($488) $4,627

1994
Allowance for doubtful
accounts $4,627 $3,688 ($78) $8,237

1995
Allowance for doubtful
accounts $8,237 $4,631 ($3,429) $9,439

(1) Uncollectible accounts written off, net of recoveries

3. Exhibits

The following exhibits are filed as part of or incorporated by
reference into this Report:

3.1 (1) Restated Articles of Incorporation of Registrant, as
amended.

3.2 (1) Form of Restated Articles of Incorporation of
Registrant.

3.3 (1) By-laws of Registrant, as amended.

4.0 (1) Article III of Restated Articles of Incorporation of
Registrant (See Exhibits 3.1 and 3.2).

10.1 Amended 1987 Stock Option Plan.

10.2 Amended 1989 Employee Stock Purchase Plan.

10.3 (1) Description of Executive Bonus Plan.

10.4 (1) Fourth Amendment to Preferred Shares Purchase
Agreements, Founders Registration Rights Agreements, and
Warrant Agreements and Consent between the Registrant
and certain shareholders of the Registrant dated May 15,
1987, as amended April 28, 1989.

10.5 (1) Form of Indemnification Agreement.

10.6 (1) License Agreement between Registrant and Massachusetts
Institute of Technology dated December 16, 1987.

10.7 (1) Lease between Prudential Insurance Company of America
and Registrant dated June 1, 1986.

10.8 (1) Lease between McCandless Technology Park, Milpitas, and
Registrant dated March 31, 1989.

10.9 (1) Agreement for Foreign Exchange Contract Facility between
Bank of America National Trust and Savings Association
and Registrant, dated April 24, 1989.

10.10 (2) 1990 Directors Stock Option Plan and forms of Stock
Option Agreement.

10.11 (2) Lease between Renco Investment Company and Registrant
dated December 29, 1989.

10.12 (3) Loan agreement between First Interstate Bank of
California and Silicon Valley Bank and Registrant, dated
September 29, 1990.

10.13 (2) Loan agreement between Orix USA Corporation and the
Registrant dated April 23, 1990.

10.14 (2) Loan agreement between USX Credit Corporation and
Registrant dated December 28, 1989.

10.15 (3) Loan agreement between Household Bank and Registrant
dated September 24, 1990.

10.16 (3) Loan agreement between Bank of America and Registrant
dated March 29, 1991.

10.17 (4) Equipment lease agreement between AT&T Systems Leasing
Corporation and Registrant dated December 2, 1991.

10.18 (4) Lease between Renco Investment Company and Registrant
dated May 21, 1992.

10.19 (5) Loan agreement between Deutsche Credit Corporation and
Registrant dated March 30, 1993.

10.20 (5) Lease between Renco Investment Company and Registrant
dated February 28, 1993.

10.21 (6) Lease between Renco Investment Company and Registrant
dated May 4, 1994.

10.22 (7) Participation Agreement dated as of September 1, 1994
among Registrant, International Business Machines
Corporation, Cirel Inc. and MiCRUS Holdings Inc.

10.23 (7) Partnership Agreement dated as of September 30, 1994
between Cirel Inc. and MiCRUS Holdings Inc.

10.24 Amended and Restated Credit Agreement between Registrant
and Bank of America dated January 31, 1995.

11.1 Statement re: Computation of Per Share Earnings.

21.1 Proxy Statement to the 1995 Annual Meeting of
Shareholders.

22.1 Subsidiaries of Registrant.

23.1 Consent of Ernst & Young LLP, Independent Auditors.

27 Article 5 Fin. Data Schedule for 4th Qtr 10-K

(1) Incorporated by reference to Registration Statement
No. 33-28583.

(2) Incorporated by reference to Registrant's Report on Form 10-K
for the fiscal year ended March 31, 1990.

(3) Incorporated by reference to Registrant's Report on Form 10-K
for the fiscal year ended March 31, 1991.

(4) Incorporated by reference to Registrant's Report on Form 10-K
for the fiscal year ended March 31, 1992.

(5) Incorporated by reference to Registrant's Report on Form 10-K
for the fiscal year ended March 31, 1993.

(6) Incorporated by reference to Registrant's Report on Form 10-K
for the fiscal year ended April 1, 1994.

(7) Incorporated by reference to Registrant's Report on Form 10-Q
for the quarterly period ended October 1, 1994.

(b) Reports on Form 8-K

None.

SIGNATURES

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

CIRRUS LOGIC, INC.
By: /s/ Sam Srinivasan
Sam S. Srinivasan
Senior Vice President, Finance and Administration, Chief
Financial Officer, Principal Accounting Officer, Treasurer
and Secretary.

KNOWN ALL PERSONS BY THESE PRESENTS, that each person whose
signature appears below constitutes and appoints Sam S.
Srinivasan, his attorney-in-fact, with the power of substitution,
for him in any and all capacities, to sign any amendments to this
report on Form 10-K and to file the same, with exhibits thereto
other documents in connection therewith, with the Securities and
Exchange Commission, hereby ratifying and confirming all that said
attorney-in-fact, or his substitute or substitutes, may do or
cause to be done by virtue hereof.

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:

/s/ Michael L. Hackworth /s/ C. Gordon Bell
Michael L. Hackworth C. Gordon Bell
President, Chief Executive Director, June 29, 1995
Officer and Director
June 29, 1995

/s/ Suhas S. Patil /s/ D. James Guzy
Suhas S. Patil D. James Guzy
Chairman of the Board, Director, June 29, 1995
Executive Vice President,
Products and Technology
and Director
June 29, 1995

/s/ David L. Lyon /s/ C. Woodrow Rea, Jr.
President of PCSI (a subsidiary C. Woodrow Rea, Jr.
of Cirrus Logic, Inc.) and Director, June 29, 1995
Director
June 29, 1995

/s/ Suhas S. Patil /s/ Walden C. Rhines
Suhas S. Patil Walden C. Rhines
Chairman of the Board, Director, June 29, 1995
Executive Vice President,
Products and Technology
and Director
June 29, 1995
/s/ Robert H. Smith
Robert H. Smith
Director, June 29, 1995

/s/ Sam S. Srinivasan
Sam S. Srinivasan
Senior Vice President,
Finance and Administration,
Chief Financial Officer,
Principal Accounting Officer,
Treasurer and Secretary
June 29, 1995