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                                                                   Exhibit 10.62

                                 August 6, 1998



Catalyst Semiconductor, Inc.
1250 Borregas Avenue
Sunnyvale, California
Attention:  Tom Gay

Dear Mr. Gay:

         Reference is hereby made to that certain Loan and Security Agreement,
dated June 19, 1997, by and between Catalyst Semiconductor, Inc., a Delaware
corporation ("Catalyst") and Coast Business Credit ("Coast"), (the "Agreement")
and that certain Loan and Security Agreement, CEFO Facility, dated June 19, 1997
between Catalyst and Coast (the "CEFO Agreement"). Initially capitalized terms
used in this forbearance letter which are not otherwise defined shall have the
meanings assigned to such terms in the Agreement and the CEFO Agreement, as
applicable.

         Catalyst has failed to comply with Section 6.1(a), 6.1(c), 6.1(f),
6.l(g) and 6.l(n) (Catalyst's Defaults under 6.1(a), 6.1(c), 6.1(f), 6.1(g) and
6.1(n) through June 30, 1998 are, the "Existing Defaults") of the Agreement and
the CEFO Agreement, in that Catalyst has failed to accurately report on the
Collateral, failed to file its 1OQ and 10K reports as required under Section
4.2, failed to promptly notify Coast in writing of changes to its officers and
directors as required under Section 4.5, and failed to adequately protect the
Collateral from material decreases in value to the point that Coast deems itself
insecure.

         The Existing Defaults constitute Events of Default under and as defined
in the Agreement and the CEFO Agreement. The occurrence of such Events of
Default entitles Coast, at its election and without demand, to immediately
terminate its obligations under the Agreement and the CEFO Agreement to make
Loans to Catalyst, or to declare the obligations to be due and payable, or both.

         Catalyst has requested that Coast forbear taking action on the Existing
Defaults. Coast is willing to and does hereby forbear taking action on the
Existing Defaults until September 30, 1998, provided that a non-refundable fee
of $33,750 which is fully earned up front and paid to Coast no later than August
5, 1998. Any Event of Default that is not an Existing Default shall not be
subject to this forbearance.



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Tom Gay
August 6, 1998
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         The forbearance set forth hereinabove shall be limited precisely as
written and shall not be deemed to (a) be a waiver or modification of any other
term or condition of the Agreement, the CEFO Agreement or any other loan
document or (b) prejudice any right or remedy which coast may now have or may
have in the future (except to the extent such right or remedy is based upon the
foregoing Existing Default) under or in connection with the Agreement, the CEFO
Agreement or any loan document.

         Please acknowledge your receipt of this forbearance letter and
acceptance of the foregoing terms and conditions by signing and dating the
enclosed counterpart of this forbearance letter where indicated below and
returning same to the undersigned as soon as possible.

                                        Very truly yours,


                                        COAST BUSINESS CREDIT


                                        By: /s/ JEFFREY CRISTOL
                                        Name:  Jeffrey Cristol
                                        Title:  Vice President


Acknowledged and Agreed to as of the 
11th day of August, 1998.

CATALYST SEMICONDUCTOR, INC.


By:  //s// T. E. Gay

Title: CFO