- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------

FORM 10-Q

[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934

FOR THE QUARTERLY PERIOD ENDED JUNE 29, 2001

[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934

FOR THE TRANSITION PERIOD FROM TO .

COMMISSION FILE NUMBER: 000-29617

INTERSIL CORPORATION
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

<Table>

DELAWARE 59-3590018
(STATE OR OTHER JURISDICTION OF (IRS EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
</Table>

7585 IRVINE CENTER DRIVE
SUITE 100
IRVINE, CALIFORNIA 92618
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES, INCLUDING ZIP CODE)

REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (949) 341-7000

Indicate by check mark whether the registrant (formally named Intersil
Holding Corporation) (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 [ ]

The number of shares outstanding of the issuer's classes of common stock as
of the close of business on August 3, 2001:

<Table>
<Caption>
TITLE OF EACH CLASS NUMBER OF SHARES
------------------- ----------------

Class A Common Stock, par value $.01 per share.............. 73,972,186

Class B Common Stock, par value $.01 per share.............. 31,571,048
</Table>

- --------------------------------------------------------------------------------
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2

INTERSIL CORPORATION

INDEX

<Table>
<Caption>
PAGE
----

PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Condensed Consolidated Statements of Operations and
Comprehensive Income for the 13 Weeks and the 26 Weeks Ended
June 29, 2001 and June 30, 2000............................. 2
Condensed Consolidated Balance Sheets as of June 29, 2001
and December 29, 2000....................................... 4
Condensed Consolidated Statements of Cash Flows for the 26
Weeks ended June 29, 2001 and June 30, 2000................. 5
Notes to Condensed Consolidated Financial Statements........ 6
Item 2. Management's Discussion and Analysis of Financial Condition
And Results of Operations................................... 10
Item 3. Quantitative and Qualitative Disclosures about Market
Risk........................................................ 17
PART II. OTHER INFORMATION
Item 1. Legal Proceedings........................................... 17
Item 4. Submission of Matters to a Vote of Security Holders......... 18
Item 6. Exhibits and Reports on Form 8-K............................ 19
SIGNATURES............................................................ 20
</Table>

1
3

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

INTERSIL CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

<Table>
<Caption>
13 WEEKS ENDED 26 WEEKS ENDED
-------------------- --------------------
JUNE 29, JUNE 30, JUNE 29, JUNE 30,
2001 2000 2001 2000
-------- -------- -------- --------
(UNAUDITED)
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

REVENUE
Product sales........................................... $118,295 $138,246 $246,061 $255,901
COSTS AND EXPENSES
Cost of product sales................................... 58,775 75,804 144,401 143,129
Research and development................................ 28,411 19,829 55,195 37,895
Selling, general & administrative....................... 24,226 28,769 49,884 54,370
Intangible amortization................................. 10,952 3,581 22,614 5,544
Impairment of long-lived assets......................... -- -- 7,583 --
Restructuring........................................... -- -- 32,419 --
Other................................................... -- (136) -- 1,177
-------- -------- -------- --------
OPERATING INCOME (LOSS)................................... (4,069) 10,399 (66,035) 13,786
Loss on sale of Malaysian operation..................... -- 24,825 -- 24,825
Interest expense........................................ 139 4,158 1,726 17,099
Interest income......................................... (6,730) (1,938) (11,500) (3,209)
Impairment on investments............................... -- -- 8,242 --
-------- -------- -------- --------
Income (loss) before sale of certain assets, income
taxes and extraordinary item.......................... 2,522 (16,646) (64,503) (24,929)
Operating results of certain operations disposed of
during 2001
Net sales............................................. -- 52,983 38,429 106,203
Costs and expenses.................................... -- (38,489) (41,079) (78,303)
-------- -------- -------- --------
-- 14,494 (2,650) 27,900
Gain on sale of certain operations...................... -- -- 168,437 --
-------- -------- -------- --------
-- 14,494 165,787 27,900
-------- -------- -------- --------
Income (loss) before income taxes and extraordinary
item.................................................. 2,522 (2,152) 101,284 2,971
Income taxes............................................ 1,295 (3,963) 49,465 (1,688)
-------- -------- -------- --------
Income before extraordinary item........................ 1,227 1,811 51,819 4,659
Extraordinary item -- loss on extinguishment of debt,
net of tax effect..................................... -- -- (12,185) (25,518)
-------- -------- -------- --------
Net income (loss)......................................... 1,227 1,811 39,634 (20,859)
Preferred dividends..................................... -- -- -- (1,540)
-------- -------- -------- --------
Net income (loss) to common shareholders.................. $ 1,227 $ 1,811 $ 39,634 $(22,399)
======== ======== ======== ========
Basic income (loss) per share
Income before extraordinary item........................ $ 0.01 $ 0.02 $ 0.49 $ 0.03
Extraordinary item...................................... -- -- (0.11) (0.30)
-------- -------- -------- --------
Net income (loss)....................................... $ 0.01 $ 0.02 $ 0.38 $ (0.27)
======== ======== ======== ========
Diluted income (loss) per share
Income before extraordinary item........................ $ 0.01 $ 0.02 $ 0.47 $ 0.03
Extraordinary item...................................... -- -- (0.11) $ (0.27)
-------- -------- -------- --------
Net income (loss)....................................... $ 0.01 $ 0.02 $ 0.36 $ (0.24)
======== ======== ======== ========
Weighted average common shares outstanding (in millions):
Basic................................................... 105.5 92.6 105.4 84.4
======== ======== ======== ========
Diluted................................................. 108.9 99.9 108.7 91.5
======== ======== ======== ========
</Table>

See notes to condensed consolidated financial statements.

2
4

INTERSIL CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

Net income (loss)........................................... $1,227 $1,811 $39,634 $(20,859)
Other comprehensive income (loss):
Currency translation adjustments.......................... (8) 1,606 (240) 1,356
------ ------ ------- --------
Comprehensive income (loss)................................. $1,219 $3,417 $39,394 $(19,503)
====== ====== ======= ========
</Table>

See notes to condensed consolidated financial statements.

3
5

INTERSIL CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

<Table>
<Caption>
JUNE 29, DECEMBER 29,
2001 2000
----------- ------------
(UNAUDITED)
(IN THOUSANDS)

ASSETS
Current Assets
Cash and cash equivalents................................. $ 633,290 $ 352,597
Trade receivables, less allowances for collection loss
($2,135 as of June 29, 2001 and $736 as of December 29,
2000)................................................... 62,332 123,979
Inventories............................................... 72,526 126,198
Prepaid expenses and other current assets................. 12,499 10,569
Deferred income taxes..................................... 21,804 27,756
---------- ----------
Total Current Assets.................................... 802,451 641,099
Other Assets
Property, plant & equipment, less allowances for
depreciation ($53,744 as of June 29, 2001 and $55,673 as
of December 29, 2000)................................... 132,644 235,559
Intangibles, less accumulated amortization ($45,227 as of
June 29, 2001 and $27,057 as of December 29, 2000)...... 262,071 307,183
Other..................................................... 33,845 45,927
---------- ----------
Total Other Assets...................................... 428,560 588,669
---------- ----------
Total Assets................................................ $1,231,011 $1,229,768
========== ==========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities
Trade payables............................................ $ 33,424 $ 43,209
Retirement plan accruals.................................. 4,449 5,507
Accrued compensation...................................... 22,346 28,203
Accrued interest and sundry taxes......................... 4,075 6,684
Exit costs................................................ 10,880 --
Restructuring costs....................................... 20,384 --
Other accrued items....................................... 34,573 26,039
Distributor reserves...................................... 4,297 8,002
Unearned service income................................... -- 6
Income taxes payable...................................... 39,497 --
Long-term debt -- current portion......................... -- 484
---------- ----------
Total Current Liabilities............................... 173,925 118,134
Other Liabilities
Deferred income taxes..................................... 6,144 35,632
Long-term debt............................................ -- 64,966
SHAREHOLDERS' EQUITY
Preferred Stock, $.01 par value, 100,000 shares
authorized, no shares issued or outstanding............. -- --
Class A Common Stock, $.01 par value, voting; 300,000,000
shares authorized, 73,916,118 shares issued and
outstanding at June 29, 2001 and 68,099,740 shares
issued and outstanding at December 29, 2000............. 739 680
Class B Common Stock, $.01 par value, non-voting;
300,000,000 shares authorized, 31,571,048 shares issued
and outstanding at June 29, 2001 and 37,206,996 shares
issued and outstanding at December 29, 2000............. 316 372
Additional paid-in capital................................ 1,057,570 1,051,213
Retained earnings (deficit)............................... 3,936 (35,699)
Unearned compensation..................................... (2,379) (3,857)
Accumulated other comprehensive (loss) income............. (1,913) (1,673)
---------- ----------
1,058,269 1,011,036
Treasury shares, at cost, 318,000 shares.................. (7,327) --
---------- ----------
Total Shareholders' Equity.................................. 1,050,942 1,011,036
---------- ----------
Total Liabilities and Shareholders' Equity.................. $1,231,011 $1,229,768
========== ==========
</Table>

See notes to condensed consolidated financial statements.

4
6

INTERSIL CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

<Table>
<Caption>
26 WEEKS ENDED
----------------------
JUNE 29, JUNE 30,
2001 2000
--------- ---------
(UNAUDITED)
(IN THOUSANDS)

OPERATING ACTIVITIES:
Net income (loss)......................................... $ 39,634 $ (20,859)
Adjustments to reconcile net income (loss) to net cash
provided by operating activities
Depreciation and amortization............................. 36,247 34,944
Provisions for inventory obsolescence..................... 19,182 18,326
Restructuring and impairments............................. 48,244 --
Gain on sale of certain operations........................ (168,437) --
Write-off of unearned compensation........................ -- 878
Loss on sale of Malaysian operation....................... -- 24,825
Deferred income taxes..................................... (23,536) (4,680)
Changes in assets and liabilities:
Trade receivables......................................... 61,647 (16,285)
Inventories............................................... (6,817) 885
Prepaid expenses.......................................... (1,930) (3,226)
Trade payables and accrued liabilities.................... (20,997) 9,791
Income taxes.............................................. 38,979 1,163
Other..................................................... 4,038 3,509
--------- ---------
Net cash provided by operating activities.............. 26,254 49,271
INVESTING ACTIVITIES:
Proceeds from sale of certain operations.................... 338,016 52,500
Property, plant and equipment............................... (19,076) (26,179)
--------- ---------
Net cash provided by investing activities.............. 318,940 26,321
FINANCING ACTIVITIES
Proceeds from offering.................................... -- 513,114
Proceeds from exercise of stock plans..................... 5,200 1,985
Repurchase of treasury stock.............................. (7,327) --
Payments of borrowings.................................... (61,545) (420,060)
--------- ---------
Net cash provided by (used in) financing activities.... (63,672) 95,039
Effect of exchange rates on cash and cash equivalents..... (829) 1,187
--------- ---------
Net increase in cash and cash equivalents.............. 280,693 171,818
Cash and cash equivalents at the beginning of the
period................................................ 352,597 40,122
--------- ---------
Cash and cash equivalents at the end of the period..... $ 633,290 $ 211,940
========= =========
Supplemental Disclosures -- Non-Cash Activities:
Exchange of common stock for preferred stock.............. $ -- $ 89,500
========= =========
Additional paid-in capital from tax benefit on exercise of
non-qualified stock options............................ $ 1,160 $ 2,132
========= =========
Common stock issued in acquisition of No Wires Needed,
B.V. .................................................. $ -- $ 111,348
========= =========
Preferred stock received from sale of Malaysian
operation.............................................. $ -- $ 15,800
========= =========
</Table>

See notes to condensed consolidated financial statements.

5
7

INTERSIL CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE A -- BASIS OF PRESENTATION

The condensed consolidated balance sheet of Intersil Corporation
("Intersil" or the "Company") as of June 29, 2001, and the condensed
consolidated statements of operations for the 13 weeks and 26 weeks ended June
29, 2001 and June 30, 2000 and the condensed consolidated statements of cash
flows for the 26 weeks ended June 29, 2001 and June 30, 2000 have been prepared
by the Company, without audit. In the opinion of management, all adjustments
(which are of a normal recurring nature) necessary to present fairly the
financial position, results of operations and cash flows at June 29, 2001, and
for all periods presented, have been made. The condensed consolidated balance
sheet at December 29, 2000, has been derived from the Company's audited
consolidated financial statements at that date.

The accompanying unaudited condensed consolidated financial statements have
been prepared in accordance with the instructions to Form 10-Q and Rule 10-01 of
Regulation S-X. Accordingly, they do not include all of the information and
footnotes required by accounting principles generally accepted in the United
States for complete financial statements. This report should be read in
conjunction with the consolidated financial statements and notes thereto
included in the Company's Transition Report on Form 10-K for the 26 weeks ended
December 29, 2000.

On March 16, 2001, the Company sold the assets of its Discrete Power
products group to Fairchild Semiconductor Corporation ("Fairchild"). The
condensed consolidated balance sheet as of June 29, 2001 has been reduced by the
assets purchased and liabilities assumed by Fairchild.

The results of operations for the 13 weeks and 26 weeks ended June 29,
2001, are not necessarily indicative of results that may be expected for any
other interim period or for the full calendar year.

NOTE B -- INVENTORIES

Inventories are summarized below (in thousands):

<Table>
<Caption>
JUNE 29, DECEMBER 29,
2001 2000
----------- ------------
(UNAUDITED)

Finished products................................... $ 36,592 $ 51,583
Work in progress.................................... 74,327 94,477
Raw materials and supplies.......................... 3,721 9,002
-------- --------
114,640 155,062
Less inventory reserves............................. (42,114) (28,864)
-------- --------
$ 72,526 $126,198
======== ========
</Table>

At June 29, 2001 and December 29, 2000, Intersil was committed to purchase
$7.1 million and $24.4 million, respectively, of inventory from suppliers.
Management believes the cost of this inventory approximates current market
value.

6
8
INTERSIL CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

NOTE C -- EARNINGS PER SHARE

The following table sets forth the computation of basic and diluted
earnings (loss) per share (in thousands, except per share amounts).

<Table>
<Caption>
13 WEEKS ENDED 26 WEEKS ENDED
------------------- -------------------
JUNE 29, JUNE 30, JUNE 29, JUNE 30,
2001 2000 2001 2000
-------- -------- -------- --------
(UNAUDITED)

Numerator:
Net income (loss) available to common shareholders
(numerator for basic and diluted earnings per
share)............................................ $ 1,227 $ 1,811 $ 39,634 $(22,399)
-------- ------- -------- --------
Denominator:
Denominator for basic earnings per share-weighted
average common shares............................. 105,461 92,575 105,393 84,374
Effect of dilutive securities:
Stock options..................................... 1,419 1,406 1,294 1,249
Warrants.......................................... 2,051 5,925 2,057 5,926
-------- ------- -------- --------
Denominator for diluted earnings per share-adjusted
weighted average common shares.................... 108,931 99,906 108,744 91,549
======== ======= ======== ========
Basic earnings (loss) per share........................ $ 0.01 $ 0.02 $ 0.38 $ (0.27)
======== ======= ======== ========
Diluted earnings (loss) per share...................... $ 0.01 $ 0.02 $ 0.36 $ (0.24)
======== ======= ======== ========
</Table>

NOTE D -- MARKETABLE SECURITIES AND INVESTMENT IMPAIRMENT

Marketable securities consist of shares of ChipPAC, Inc. ("ChipPAC") common
stock that have been classified as other assets. They are recorded at fair
value, which is determined based on quoted market prices. On August 8, 2000,
ChipPAC completed its initial public offering and Intersil's investment in
ChipPAC preferred stock was converted to an investment in ChipPAC common stock.

During the 13 weeks ended March 30, 2001, the Company recorded an
impairment charge of $8.2 million ($4.0 million after tax) related to its
investment in ChipPAC common stock which reflected an other than temporary
decline in value based on two consecutive quarters where the quoted market price
was less than the carrying value.

NOTE E -- COMMON STOCK

In March 2001, the Board of Directors authorized a stock repurchase program
under which the Company may repurchase up to $50 million of its outstanding
common stock. The number of shares to be repurchased and timing of purchases
will be based on a variety of factors, including general market conditions, and
the market price and trading volume of its shares. As of June 29, 2001, 318,000
shares at an approximate cost of $7.3 million had been repurchased and are held
as treasury stock.

7
9
INTERSIL CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

NOTE F -- SALE OF CERTAIN OPERATIONS

On March 16, 2001, the Company sold the assets of its Discrete Power
products group to Fairchild for a purchase price of $338.0 million in cash and
the assumption by Fairchild of certain liabilities of the product group. As a
result of the sale, the Company recognized a gain of $168.4 million ($81.8
million after tax), which was net of the assets purchased and liabilities
assumed by Fairchild, transaction fees and other exit costs associated with the
sale. The exit costs include employee termination benefits that will be incurred
within one year from the sale date. A summary of the exit costs and the
remaining accrual follows:

<Table>
<Caption>
BALANCE
JUNE 29,
ADDITIONS UTILIZATION 2001
--------- ----------- --------
(IN MILLIONS)

Exit costs
Employee termination costs.............................. $ 5.4 $ (2.4) $ 3.0
Information technology costs............................ 7.4 (0.7) 6.7
Asset removal and related costs......................... 16.7 (15.9) 0.8
Lease termination and other location closing costs...... 0.7 (0.3) 0.4
----- ------ -----
$30.2 $(19.3) $10.9
===== ====== =====
</Table>

At the date of the sale, Fairchild made offers of employment to a portion
of the Intersil employees who supported the Discrete Power products group.
Approximately 185 employees who were not offered jobs with Fairchild or who did
not accept an employment offer were notified that their employment would be
terminated and of the specifics of their severance benefits. Those positions
included manufacturing, selling and general and administrative employees with
158 of the employees being located in the United States, 22 in Europe and 5 in
Asia. As of July 19, 2001, approximately 71% of the affected employees had been
terminated with the balance to be terminated before March 31, 2002.

Other exit costs included information technology costs required to cover
transferred software license fees and system modifications necessary to support
the business transition activity. A transition services agreement provided that
Intersil provide systems support to Fairchild for up to twelve months from the
date of sale. Intersil wrote off $14.8 million of intangible assets as well as
other miscellaneous assets attributable to the Discrete Power products group.
Intersil also identified approximately five foreign sales offices that it would
close as a result of the sale. These offices will be closed prior to March 31,
2002.

NOTE G -- RESTRUCTURING AND OTHER NON-RECURRING CHARGES

In March 2001, the Board of Directors approved and the Company announced
several major restructuring activities to improve on-going operations and
product gross margins. The restructuring plans included the phased closure of
the Company's Findlay, Ohio manufacturing operation, the exit of the modem board
assembly manufacturing process in Scottsdale, Arizona and the exit of the
valued-added-reseller's channel in Europe for wireless access end products. As a
result of the restructuring, the Company recorded expenses of approximately
$32.4 million ($15.7 million after tax). The plans include certain exit costs
and employee termination benefits. Benefits from these restructurings will be
realized as each of the specific actions are

8
10
INTERSIL CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

completed in the form of reduced employee expenses, lower depreciation expense
and lower operating costs. A summary of the restructuring charges and the
remaining accrual follows:

<Table>
<Caption>
BALANCE
JUNE 29,
ADDITIONS UTILIZATION 2001
--------- ------------ --------
(IN MILLIONS)

Restructuring costs
Employee termination costs
Findlay plant closure............................... $16.4 $ (1.3) $15.1
SiCOM board business exit........................... 0.3 (0.1) 0.2
NWN VAR business exit............................... 0.2 -- 0.2
----- ------ -----
16.9 (1.4) 15.5
Other exit costs
Findlay facility decommission costs................. 4.5 -- 4.5
SiCOM asset removal and related costs............... 10.0 (10.0) --
SiCOM contract cancellation costs................... 1.0 (0.6) 0.4
----- ------ -----
15.5 (10.6) 4.9
----- ------ -----
Total restructuring costs................................ $32.4 $(12.0) $20.4
===== ====== =====
</Table>

In connection with the announced restructurings, approximately 534
employees were notified that their employment would be terminated and of the
specifics of their severance benefits. Those positions included manufacturing,
selling and general and administrative employees with 521 of the employees being
located in the United States and 13 in Europe. As of July 19, 2001,
approximately 13% of the affected employees had been terminated; due to the
timing of the phased closure of the Findlay, Ohio manufacturing operation, the
remaining employees will be terminated over the next 15 months.

Other exit costs include costs to decommission (removal of semiconductor
specific equipment and leasehold improvements) the Findlay site to a marketable
condition. Intersil wrote off $9.5 million of intangible assets as well as other
miscellaneous assets attributable to the exit of the modem board assembly
manufacturing process. The Company plans to terminate some existing contracts in
connection with the planned exit of the modem board assembly manufacturing
process and has recognized the associated termination costs as part of this
restructuring. These contracts will be terminated prior to the end of the
calendar year.

In connection with the planned phased closure of the Findlay, Ohio
manufacturing operation, the Company recorded an impairment of $7.6 million
($3.7 million after tax) on the property, plant and equipment. The impairment
was determined by comparing the carrying value of the assets to an appraised
value on the land, equipment and buildings and the expected future undiscounted
net cash flows from the equipment to be disposed.

NOTE H -- EXTRAORDINARY ITEM

In March 2001, the Company tendered all of the $61.4 million in outstanding
13.25% senior subordinated notes. The Company recorded an extraordinary charge
of $19.7 million ($12.2 million after tax) related to premiums paid on
repurchase and the write-off of deferred financing fees.

9
11

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS

CAUTIONARY STATEMENT

The following discussion should be read in conjunction with, and is
qualified in its entirety by reference to our Condensed Consolidated Financial
Statements, including the Notes thereto. The information contained in this
Quarterly Report on Form 10-Q is not a complete description of our business or
the risks associated with an investment in our common stock. You should
carefully review and consider the various disclosures made by Intersil in this
report and in our other reports filed with the Securities and Exchange
Commission, including our Transition Report on Form 10-K for the year ended
December 29, 2000, our subsequent Quarterly Report on Form 10-Q, and reports on
Form 8K, that discuss our business, results of operations, and financial
condition in greater detail. Except for historical information, the discussions
in this section contain forward-looking statements that involve risks and
uncertainties. Actual results could differ materially from those discussed
below.

This Quarterly Report contains statements relating to expected future
results and business trends of the Company that are based upon our current
estimates, expectations, and projections about our industry, and upon
management's beliefs, and certain assumptions we have made, that are
"forward-looking statements" as defined in Section 27A of the Securities Act of
1933 and Section 21E of the Securities Exchange Act of 1934. Words such as
"anticipates," "expects," "intends," "plans," "believes," "seeks," "estimates,"
"may," "will," and variations of these words or similar expressions are intended
to identify "forward looking statements." In addition, any statements that refer
to expectations, projections, or other characterizations of future events or
circumstances, including any underlying assumptions, are "forward looking
statements." Such statements are not guarantees of future performance and are
subject to certain risks, uncertainties, and assumptions that are difficult to
predict. Therefore, our actual results may differ materially and adversely from
those expressed in any "forward looking statement" as a result of various
factors. These factors include, but are not limited to: global economic and
market conditions, including the cyclical nature of the semiconductor industry
and the markets addressed by the Company's and its customers' products; demand
for, and market acceptance of, new and existing products; successful development
of new products; the timing of new product introductions; the successful
integration of acquisitions; the availability and extent of utilization of
manufacturing capacity and raw materials; the need for additional capital;
pricing pressures and other competitive factors; changes in product mix;
fluctuations in manufacturing yields; product obsolescence; the ability to
develop and implement new technologies and to obtain protection of the related
intellectual property. The information contained in this Quarterly Report is not
a complete description of our business or the risks associated with an
investment in our common stock. These forward-looking statements are made only
as of the date hereof, and the Company undertakes no obligation to update or
revise the forward-looking statements, whether as a result of new information,
future events or otherwise.

OVERVIEW

We are a systems oriented designer and manufacturer of analog and digital
integrated circuits for the wireless access and communications analog markets.
We provide system level solutions for the communications semiconductor market.
Communications semiconductors enable the convergence of voice, data and video.
Within communications, we are focused on several key markets including high data
rate wireless connectivity, power management and wireless and wired software
design to deliver chip sets, component software and licensable applicable
designs for communications equipment customers.

10
12

QUARTERLY RESULTS

The following table sets forth the unaudited historical quarterly revenue
of our product groups excluding the Discrete Power product group, which we sold
to Fairchild Semiconductor Corporation ("Fairchild") in March 2001:

<Table>
<Caption>
COMBINED
CALENDAR YEAR CALENDAR YEAR
1999 CALENDAR YEAR 2000 2001
-------------- --------------------------------- ---------------
Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2
----- ------ ------ ------ ------ ------ ------ ------
(IN MILLIONS)

REVENUE
Wireless Access............................ $11.9 $ 14.9 $ 22.1 $ 29.8 $ 51.4 $ 59.8 $ 35.9 $ 32.4
Communications Analog...................... 33.0 33.1 44.3 54.3 56.6 51.9 42.6 39.8
Other Analog............................... 44.1 55.4 51.3 54.1 58.2 53.1 49.3 46.1
----- ------ ------ ------ ------ ------ ------ ------
Total.................................... $89.0 $103.4 $117.7 $138.2 $166.2 $164.8 $127.8 $118.3
===== ====== ====== ====== ====== ====== ====== ======
</Table>

During the first half of calendar year 2001, the semiconductor industry has
experienced a slowdown in both the wireless access and communications analog
market. Additionally, we have experienced slowing demand for our other analog
products aimed primarily at the automotive and industrial markets.

The semiconductor industry has historically experienced declining selling
prices over the past 15 years, and we expect that trend to continue in the
future. We expect to realize productivity gains that will offset the decline in
average selling prices and therefore we do not anticipate a significant adverse
effect on our financial condition.

11
13

RESULTS OF OPERATIONS

The following table sets forth statement of operations data as a percentage
of revenue for the periods indicated:

<Table>
<Caption>
13 WEEKS ENDED 26 WEEKS ENDED
------------------- -------------------
JUNE 29, JUNE 30, JUNE 29, JUNE 30,
2001 2000 2001 2000
-------- -------- -------- --------

REVENUE
Wireless Access......................................... 27.4% 21.6% 27.8% 20.3%
Communication Analog.................................... 33.6 39.3 33.5 38.5
Other Analog............................................ 39.0 39.1 38.7 41.2
----- ----- ----- -----
Total................................................ 100.0 100.0 100.0 100.0
COSTS AND EXPENSES
Cost of product sales................................... 49.7 54.8 58.7 55.9
Research and development................................ 24.0 14.3 22.4 14.8
Selling, general & administrative....................... 20.5 20.8 20.3 21.2
Intangible amortization................................. 9.3 2.6 9.2 2.2
Impairment of long-lived assets......................... -- -- 3.1 --
Restructuring........................................... -- -- 13.2 --
Other................................................... -- (0.1) -- 0.5
----- ----- ----- -----
OPERATING INCOME (LOSS)................................... (3.4) 7.5 (26.9) 5.4
Loss on sale of Malysian operation...................... -- 18.0 -- 9.7
Interest expense........................................ 0.1 3.0 0.7 6.7
Interest income......................................... (5.7) (1.4) (4.7) (1.3)
Impairment on investments............................... -- -- 3.3 --
----- ----- ----- -----
Income (loss) before sale of certain assets, income
taxes and extraordinary item......................... 2.1 (12.0) (26.3) (9.7)
Operating results of certain operations disposed of
during 2001
Net sales............................................ -- 38.3 15.6 41.5
Costs and expenses................................... -- (27.8) (16.7) (30.6)
----- ----- ----- -----
-- 10.5 (1.1) 10.9
Gain on sale of certain operations...................... -- -- 68.5 --
----- ----- ----- -----
-- 10.5 67.4 10.9
----- ----- ----- -----
Income (loss) before income taxes and extraordinary
item................................................. 2.1 (1.6) 41.1 1.2
Income taxes............................................ 1.1 (2.9) 20.1 (0.7)
----- ----- ----- -----
Income before extraordinary item........................ 1.0 1.3 21.0 1.8
Extraordinary item -- loss on extinguishment of debt,
net of tax effect.................................... -- -- (5.0) (10.0)
----- ----- ----- -----
Net income (loss)......................................... 1.0% 1.3% 16.0% (8.2)%
===== ===== ===== =====
</Table>

Note: Amounts may not add due to rounding.

Revenue

Revenue for the 13 weeks ended June 29, 2001 decreased 14.4% to $118.3
million from $138.2 million during the 13 weeks ended June 30, 2000. Revenue for
the 26 weeks ended June 29, 2001 decreased 3.8% to $246.1 million from $255.9
million during the 26 weeks ended June 30, 2000. The decline in both periods
resulted from the overall semiconductor industry slowdown during the first half
of calendar year 2001. Wireless Access sales increased 8.7% and 31.6% for the 13
weeks and 26 weeks ended June 29, 2001 versus the same time periods in calendar
year 2000 due to continued market penetration of our PRISM(R) products.

12
14

Geographically, 36.3%, 21.4% and 42.3% of product sales were derived in
North America, Europe and Asia, respectively, during the 13 weeks ended June 29,
2001 compared to 51.3%, 16.0% and 32.7% during the 13 weeks ended June 30, 2000.
For the 26 weeks ended June 29, 2001, 36.5%, 22.9% and 40.6% of product sales
were derived in North America, Europe and Asia, respectively, compared to 52.4%,
17.9% and 29.7% during the 26 weeks ended June 30, 2000.

Gross Margin

Cost of product sales consists primarily of purchased materials, labor and
overhead (including depreciation) associated with product manufacturing, plus
royalty, warranty and sustaining engineering expenses pertaining to products
sold. In the 13 weeks ended June 29, 2001, gross margin on product sales
declined 4.6% to $59.5 million from $62.4 million in the 13 weeks ended June 30,
2000. Gross margin on product sales declined 9.8% to $101.7 million in the 26
weeks ended June 29, 2001 from $112.8 million in the 26 weeks ended June 30,
2000. As a percent of sales, gross margin was 50.3% and 41.3% during the 13
weeks and 26 weeks ended June 29, 2001, respectively, compared to 45.2% and
44.1% during the 13 weeks and 26 weeks ended June 30, 2000, respectively. We
recorded an inventory charge of $19.2 million in the quarter ended March 30,
2001 due to the exit of product lines and obsolescence related to changing
market conditions. We anticipate that future gross profit percentages will
continue to be affected by factors such as product mix, the timing of new
product introductions, market conditions and manufacturing volume.

Research and Development ("R&D")

R&D expenses consist primarily of salaries and selected costs of employees
engaged in product/process research, design and development activities, as well
as related subcontracting activities, prototype development, cost of design
tools and technology license agreement expenses. R&D expenses increased 43.4% to
$28.4 million during the 13 weeks ended June 29, 2001 from $19.8 million during
the 13 weeks ended June 30, 2000 and 45.6% to $55.2 million during the 26 weeks
ended June 29, 2001 from $37.9 million during the 26 weeks ended June 30, 2000.
The increase was the result of our continued investment in PRISM(R) chip sets,
broadband wireless access products and in power management integrated circuits,
focusing on communications and computing products. As a percent of sales, R&D
expenses increased to 24.0% for the 13 weeks ended June 29, 2001 from 14.3% for
the 13 weeks ended June 30, 2000 and to 22.4% for the 26 weeks ended June 29,
2001 from 14.8% for the 26 weeks ended June 30, 2000. We expect R&D expenses to
remain close to this level for the remainder of 2001.

Selling, General and Administrative ("SG&A")

SG&A costs, which include marketing, selling, general and administrative
expenses decreased 16.0% to $24.2 million during the 13 weeks ended June 29,
2001 from $28.8 million during the 13 weeks ended June 30, 2000 and decreased
8.3% to $49.9 million during the 26 weeks ended June 29, 2001 from $54.4 million
during the 26 weeks ended June 30, 2000. The declines were due to implementation
of defined restructuring activities and general cost control initiatives. As a
percentage of sales, SG&A costs decreased to 20.5% for the 13 weeks ended June
29, 2001 from 20.8% for the 13 weeks ended June 30, 2000 and decreased to 20.3%
for the 26 weeks ended June 29, 2001 from 21.2% for the 26 weeks ended June 30,
2000. We expect SG&A expenses to decline in 2001 upon the completion of our
restructuring activities.

Amortization

Amortization of intangible assets increased to $11.0 million and $22.6
million for the 13 weeks and 26 weeks ended June 29, 2001, respectively, from
$3.6 million and $5.5 million for the same time periods in calendar year 2000.
The increase was the result of goodwill and other certain intangible assets that
were recorded in connection with the acquisitions of No Wires Needed, B.V. in
May 2000 and SiCOM, Inc. in October 2000. These assets are being amortized over
their useful lives ranging from five to 11 years.

13
15

Restructuring and Other Charges

In March 2001, the Board of Directors approved and we announced several
major restructuring activities to improve on-going operations and product gross
margins. The restructuring plans included the phased closure of the our Findlay,
Ohio manufacturing operation, the exit of the modem board assembly manufacturing
process in Scottsdale, Arizona and the exit of the value-added-reseller's
channel in Europe for wireless access end products. As a result of the
restructuring, we recorded expenses of approximately $32.4 million ($15.7
million after tax) in the current quarter. The plans include certain exit costs
and employee termination benefits. Benefits from these restructurings will be
realized as each of the specific actions are completed in the form of reduced
employee expenses, lower depreciation expense and lower operating costs. A
summary of the restructuring charges and the remaining accrual follows:

<Table>
<Caption>
BALANCE
ADDITIONS UTILIZATION JUNE 29, 2001
--------- ------------ -------------
(IN MILLIONS)

Restructuring costs
Employee termination costs
Findlay plant closure....................... $16.4 $ (1.3) $15.1
SiCOM board business exit................... 0.3 (0.1) 0.2
NWN VAR business exit....................... 0.2 -- 0.2
----- ------ -----
16.9 (1.4) 15.5
Other exit costs
Findlay facility decommission costs......... 4.5 -- 4.5
SiCOM asset removal and related costs....... 10.0 (10.0) --
SiCOM contract cancellation costs........... 1.0 (0.6) 0.4
----- ------ -----
15.5 (10.6) 4.9
----- ------ -----
Total restructuring costs........................ $32.4 $(12.0) $20.4
===== ====== =====
</Table>

In connection with the announced restructurings, approximately 534
employees were notified that their employment would be terminated and of the
specifics of their severance benefits. Those positions included manufacturing,
selling and general and administrative employees with 521 of the employees being
located in the United States and 13 in Europe. As of July 19, 2001,
approximately 13% of the affected employees had been terminated, due to the
timing of the phased closure of the Findlay, Ohio manufacturing operation, the
remaining employees will be terminated over the next 15 months.

Other exit costs include costs to decommission (removal of semiconductor
specific equipment and leasehold improvements) the Findlay site to a marketable
condition. Intersil wrote off $9.5 million of intangible assets as well as other
miscellaneous assets attributable to the exit of the modem board assembly
manufacturing process. We plan to terminate some existing contracts in
connection with the planned exit of the modem board assembly manufacturing
process and have recognized the associated termination costs as part of this
restructuring. These contracts will be terminated prior to the end of the
calendar year.

In connection with the planned phased closure of the Findlay, Ohio
manufacturing operation, we recorded an impairment of $7.6 million ($3.7 million
after tax) on the property, plant and equipment. The impairment was determined
by comparing the carrying value of the assets to an appraised value on the land
and buildings and the expected future undiscounted net cash flows from the
equipment to be disposed.

Impairment on Investments

Marketable securities consist of shares of ChipPAC, Inc. common stock that
have been classified as other assets. They are recorded at fair value, which is
determined based on quoted market prices.

During the 13 weeks ended March 30, 2001, we recorded an impairment charge
of $8.2 million ($4.0 million after tax) related to its investment in ChipPAC,
Inc. common stock which reflected an other than temporary decline in value based
on two consecutive quarters where the quoted market price was less than the
carrying value.

14
16

Gain on Sale of Certain Operations

On March 16, 2001, we sold the assets of our Discrete Power products group
to Fairchild Semiconductor Corporation ("Fairchild") for a purchase price of
$338.0 million in cash and the assumption by Fairchild of certain liabilities of
the product group. As a result of the sale, we recognized a gain of $168.4
million ($81.8 million after tax), which was net of the assets purchased and
liabilities assumed by Fairchild, transaction fees and other exit costs
associated with the sale. The exit costs include employee termination benefits
that will be incurred within one year from the sale date. A summary of the exit
costs and the remaining accrual follows:

<Table>
<Caption>
BALANCE
ADDITIONS UTILIZATION JUNE 29, 2001
--------- ----------- -------------
(IN MILLIONS)

Exit costs
Employee termination costs...................... $ 5.4 $ (2.4) $ 3.0
Information technology costs.................... 7.4 (0.7) 6.7
Asset removal and related costs................. 16.7 (15.9) 0.8
Lease termination and other location closing
costs........................................ 0.7 (0.3) 0.4
----- ------ -----
$30.2 $(19.3) $10.9
===== ====== =====
</Table>

At the date of the sale, Fairchild made offers of employment to a portion
of our employees who supported the Discrete Power products group. Approximately
185 employees who were not offered jobs with Fairchild or who did not accept an
employment offer were notified that their employment would be terminated and of
the specifics of their severance benefits. Those positions included
manufacturing, selling and general and administrative employees with 158 of the
employees being located in the United States, 22 in Europe and 5 in Asia. As of
July 19, 2001, approximately 71% of the affected employees had been terminated
with the balance to be terminated before March 31, 2002.

Other exit costs included information technology costs required to cover
transferred software license fees and system modifications necessary to support
the business transition activity. A transition services agreement provided that
we provide systems support to Fairchild for up to twelve months from the date of
sale. We wrote off $14.8 million of intangible assets as well as other
miscellaneous assets attributable to the Discrete Power products group. We also
identified approximately five foreign sales offices that we would close as a
result of the sale. These offices will be closed prior to March 31, 2002.

Interest Income/Expense

Interest income increased to $6.7 million and $11.5 million for the 13
weeks and 26 weeks ended June 29, 2001 from $1.9 million and $3.2 million for
the same time periods in calendar year 2000. The increase was due to the
increase in available cash and cash equivalents from the sale of the Discrete
Power products group. Interest expense decreased to $0.1 million and $1.7
million for the 13 weeks and 26 weeks ended June 29, 2001 from $4.2 million and
$17.1 million for the 13 weeks and 26 weeks ended June 30, 2000. The decrease
was due to the continuous reduction and eventual elimination of our long-term
debt during calendar year 2000 and into the first quarter of calendar year 2001.

Tax Expense

The tax provisions for the 13 weeks and 26 weeks ended June 29, 2001 are
not comparable to the tax provisions for the 13 weeks and 26 weeks ended June
30, 2000 due to the gain generated from the sale of our Discrete Power products
group and the other restructuring activities that were recorded during the first
quarter of calendar year 2001.

15
17

Extraordinary Item

During the 13 weeks ended March 30, 2001, we repurchased all $61.4 million
of our outstanding 13.25% senior subordinated notes in the open market. These
repayments included certain pre-payment penalties and accrued interest. In
connection with the early extinguishment of debt, we recorded extraordinary
charges (net of tax effect) of $12.2 million. The extraordinary charges
consisted of the write-off of deferred financing fees and premiums paid on
repurchase.

Backlog

We had backlog at June 29, 2001 of $131.9 million compared to $256.9
million at December 29, 2000. Approximately $72.3 million of our December
backlog was related to our Discrete Power products group which was sold during
the first quarter of calendar year 2001.

LIQUIDITY AND CAPITAL RESOURCES

Our capital requirements depend on a variety of factors, including but not
limited to, the rate of increase or decrease in our existing business base; the
success, timing and amount of investment required to bring new products on-line;
revenue growth or decline; and potential acquisitions. We anticipate that our
operating cash flow and our cash on hand will be sufficient to meet our working
capital and capital expenditure needs for the foreseeable future. As of June 29,
2001 our total shareholders' equity was $1,050.9 million.

Net cash provided by operating activities for the 26 weeks ended June 29,
2001 was $26.3 million. Net cash provided by investing activities for the 26
weeks ended June 29, 2001 was $318.9 million, primarily from the proceeds of the
sale of our Discrete Power products group to Fairchild. Net cash used in
financing activities for the 26 weeks ended June 29, 2001 was $63.7 million,
primarily from the repayment of all of our outstanding debt. Our cash balance at
June 29, 2001 was $633.3 million.

Our Revolving Credit Facility contains financial covenants and restrictions
including restrictions on our ability to pay cash dividends or to effect mergers
or acquisitions, incur certain indebtedness or to make certain investments
without the bank's prior approval. We are currently in compliance with such
financial covenants and restrictions.

Receivables and Inventories

Trade accounts receivable less the allowance for collection losses totaled
$62.3 million at June 29, 2001 compared to $124.0 million at December 29, 2000.
Inventories decreased to $72.5 million at June 29, 2001 from $126.2 million at
December 29, 2000. The decreases were primarily due to the sale of our Discrete
Power products group to Fairchild along with the associated receivables, assets
and inventory.

Distributor reserves fluctuate from year to year based on the level of
inventory at distributors. The reserve decreased 46.3% to $4.3 million at June
29, 2001 from $8.0 million at December 29, 2000 resulting from the sale of the
Discrete Power products group.

Capital Expenditures

Capital expenditures for the 13 weeks and 26 weeks ended June 29, 2001 were
$10.2 million and $19.1 million, respectively, compared to $13.5 million and
$26.2 million for the 13 weeks and 26 weeks ended June 30, 2000, respectively.

Recent Developments

On May 23, 2001, Intersil's shareholders approved the change of the
Company's name from "Intersil Holding Corporation" to "Intersil Corporation". In
addition, the name of Intersil Corporation, a wholly owned subsidiary of
Intersil, was changed to "Intersil Communications, Inc." The Company's name was
changed because Intersil is not simply a holding company, but is actively
involved in the operations and supervision of management of its business, some
of which is conducted through its subsidiaries.

16
18

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We, in the normal course of doing business, are exposed to the risks
associated with foreign currency exchange rates and changes in interest rates.
We employ established policies and procedures governing the use of financial
instruments to manage our exposure to these risks.

At June 29, 2001 we had open foreign exchange contracts with a notional
amount of $12.0 million, which was to hedge anticipated foreign cash flow
commitments up to six months. As hedges on anticipated foreign cash flow
commitments do not qualify for deferral, gains and losses on changes in the fair
market value of the foreign exchange contracts are recognized in income. Total
net gains on foreign exchange contracts for the 13 weeks and 26 weeks ended June
29, 2001 were $1.9 million and $2.5 million, respectively. During the 13 weeks
and 26 weeks ended June 29, 2001 we purchased and sold $12.4 million and $34.9
million, respectively, of foreign exchange forward contracts. The derivatives
were also recognized on the balance sheet at their fair value of $0.6 million at
June 29, 2001.

Our hedging activities provide only limited protection against currency
exchange risks. Factors that could impact the effectiveness of our hedging
programs include accuracy of sales estimates, volatility of currency markets and
the cost and availability of hedging instruments. A 10% adverse change in
currency exchange rates for our foreign currency derivatives held at June 29,
2001, would have an impact of approximately $1.2 million on the fair values of
these instruments. This qualification of exposure to the market risk associated
with foreign exchange financial instruments does not take into account the
offsetting impact of changes in the fair values of foreign denominated assets,
liabilities and firm commitments.

PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

HARRIS CORPORATION V. GIESTING & ASSOCIATES, INC.

Reorganization of Harris Corporation's sales representatives resulted in
the termination of its sales representative agreement with Giesting &
Associates, Inc. ("Giesting") in September 1998. In January 1999, Giesting
asserted a variety of business tort, contract, and statutory claims against
Harris in the U.S. District Court for the Middle District of Florida. Intersil
assumed both the defense and liability for this litigation when it purchased the
semiconductor business from Harris Corporation, and continued the defense of the
case in Harris' name. The Court dismissed Giesting's tort claims (for fraud and
tortuous interference with contractual relations) and certain of its statutory
claims on motions to dismiss and for summary judgment. Giesting proceeded to
trial on the remainder of its contract and statutory claims in November 2000,
seeking damages in excess of $9 million. On November 21, 2000, the jury returned
a verdict in the amount of $748,336. On December 1, 2000, the District Court
entered judgment in that amount, and also awarded Giesting prejudgment interest
in the amount of $83,505. We continue to believe that Giesting's claims are
entirely without merit and have noticed our appeal and on June 29, 2001,
successfully acquired a supersedes bond staying enforcement of the judgment
pending appeal.

HARRIS CORPORATION V. ERICSSON, INC. AND TELEFONAKTIEBOLAGET LM ERICSSON

On November 23, 1998, Harris Corporation filed suit against Ericsson, Inc.
and Telefonaktiebolaget LM Ericsson for infringement of various cellular
technology patents. Ericsson counter sued and filed a Complaint against Harris
for infringement of certain telecommunication patents in the United States
District Court for the Eastern District of Texas. Shortly after Intersil
purchased the semiconductor business from Harris, Ericsson joined Intersil in
the suit by filing an Amended Complaint on October 15, 1999. After Discovery and
Depositions by the parties, only Ericsson's U.S. patent 4,961,222 remains in the
suit. Ericsson sought damages from Harris and Intersil, as well as injunctive
relief prohibiting sales of accused products. On June 3, 2001 the jury returned
a verdict against Harris and Intersil regarding patent infringement of
Intersil's 5513/5514/5518 SLIC families. The total amount awarded against Harris
is $4.1 million, and the amount against Intersil, $151,000. Intersil is subject
to indemnification by Harris for this amount, but the possibility of an
injunction exists against future affected SLIC sales. We will be discussing the
next steps going forward with Harris' counsel to ensure that our SLIC sales can
proceed unimpeded.

17
19

CLASS ACTION SECURITIES LAWSUITS

Intersil and certain of its present officers as well as its initial public
offering underwriter, Credit Suisse First Boston, have been named as defendants
in several putative securities class actions, the first of which was filed on
June 8, 2001 in the United States District Court for the Southern District of
New York. The complaints allege violations of Rule 10b-5 promulgated under the
Securities Exchange Act of 1934, based on, among other things, the dissemination
of statements containing material misstatements and/or omissions concerning the
commissions received by the underwriters of the initial public offering as well
as failure to disclose the existence of purported agreements by the underwriters
with some of the purchasers in these offerings to thereafter buy additional
shares of Intersil in the open market at pre-determined prices above the
offering prices. The plaintiffs seek class action certification and an award of
damages and litigation costs and expenses. Intersil believes the claims against
it are without merit and intends to vigorously defend them. Pursuant to its
Underwriting Agreement, Intersil has made claims for indemnity against its
underwriters in connection with any liability or expenses it may incur as a
result of these claims. Intersil has also, on its own behalf and on behalf of
the officers and directors named in the complaints, made claims under relevant
provisions of its directors' and officers' liability insurance policies.

PROXIM, INC. V. INTERSIL CORPORATION, ET. AL.

We have no material developments to report for the second quarter of 2001
(previously discussed on page 18 of Intersil's Quarterly Report on Form 10-Q for
the quarter ended March 30, 2001).

It is our belief that the above litigations will not have a material
adverse effect on our business, financial condition, results of operations or
cash flows.

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

The Company held its Annual Meeting of Shareholders on May 23, 2001. At
this meeting, the shareholders voted in favor of the following items listed in
the Proxy Statement dated April 27, 2001:

(1) ELECTION OF DIRECTORS

<Table>
<Caption>
FOR WITHHELD

James A. Urry................................ 62,244,919 78,459
Gary E. Gist................................. 62,245,625 77,753
Dr. Robert W. Conn........................... 2,248,754 74,624
Jan Peeters.................................. 62,248,454 74,924
Robert N. Pokelwaldt......................... 62,247,781 75,597
Gregory L. Williams.......................... 60,270,663 2,052,715
</Table>

(2) RATIFICATION OF THE APPOINTMENT OF ERNST & YOUNG AS OUR INDEPENDENT
CERTIFIED PUBLIC ACCOUNTANTS

<Table>
<Caption>
FOR AGAINST ABSTAIN

61,891,868 408,957 22,553
</Table>

(3) PROPOSAL TO APPROVE AN AMENDMENT TO OUR RESTATED CERTIFICATE OF
INCORPORATION TO CHANGE OUR NAME FROM "INTERSIL HOLDING CORPORATION" TO
"INTERSIL CORPORATION"

<Table>
<Caption>
FOR AGAINST ABSTAIN

62,306,481 5,371 11,526
</Table>

(4) PROPOSAL TO APPROVE AN AMENDMENT TO OUR 1999 EQUITY COMPENSATION PLAN TO
INCREASE THE NUMBER OF SHARES OF COMMON STOCK AUTHORIZED TO BE ISSUED UNDER
THE PLAN

<Table>
<Caption>
FOR AGAINST ABSTAIN NON VOTES

38,639,030 15,164,744 90,895 8,408,320
</Table>

18
20

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

a) EXHIBITS

None

b) REPORTS ON FORM 8-K

The Company filed a current report on Form 8-K on April 2, 2001 to disclose
the sale of its Discrete Power products group to Fairchild Semiconductor
Corporation, a Delaware corporation.

The Company filed a current report on Form 8-K on June 11, 2001 to disclose
the approval by the Company's shareholders and by Delaware's Secretary of State
to change the Company's name from Intersil Holding Corporation to Intersil
Corporation.

19
21

SIGNATURES

Pursuant to the requirements of the Securities and Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.

<Table>

Intersil Corporation
(Registrant)

Date August 7, 2001 /s/ DANIEL J. HENEGHAN
----------------------------------------------
Name: Daniel J. Heneghan
Title: Chief Financial Officer

Date August 7, 2001 /s/ STEPHEN M. MORAN
----------------------------------------------
Name: Stephen M. Moran
Title: Vice President, General
Counsel & Secretary
</Table>